SC TO-T

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE TO

Tender Offer Statement under Section 14(d)(1) or 13(e)(1)
of the Securities Exchange Act of 1934

NOVEN PHARMACEUTICALS, INC.

(Name of Subject Company (Issuer))

NORTHSTAR MERGER SUB, INC.

A Wholly-Owned Subsidiary of

HISAMITSU U.S., INC.

A Wholly-Owned Subsidiary of

HISAMITSU PHARMACEUTICAL CO., INC.

(Names of Filing Persons (Offerors))

COMMON STOCK, $0.0001 PAR VALUE
(Title of Class of Securities)

670009109
(CUSIP Number of Class of Securities)

Mr. Nobuo Tsutsumi, Ph.D.
General Manager of Legal Department
Hisamitsu Pharmaceutical Co., Inc.
Marunouchi, Chiyoda-ku 1-11-1
Tokyo, 100-6221, Japan
81-3-5293-1700

(Name, address, and telephone numbers of person authorized to receive notices and communications on behalf of filing persons)

Copy to:

Kevin A. Rinker, Esq.
Debevoise & Plimpton LLP
919 Third Avenue
New York, NY 10022
(212) 909-6000

CALCULATION OF FILING FEE

	Amount of Filing
Transaction Valuation(1)	Fee(2)
$407,383,098	$	22,732

(1)

Estimated for purposes of calculating the filing fee only. This amount is the sum of (i) 23,535,967 shares of Noven Pharmaceuticals, Inc. common stock (based on 25,028,987 outstanding as of July 9, 2009, less 1,240,000 shares owned by Hisamitsu Pharmaceutical Co., Inc. and 253,020 outstanding shares of restricted stock) by $16.50 per share, which is the offer price, plus (ii) $3,057,352 expected to be paid in connection with the cancellation of outstanding options, (iii) $10,982,460 to be paid in connection with the cancellation of outstanding stock appreciation rights, plus (iv) $825,000 expected to be paid in connection with cancellation of outstanding restricted stock units, and (v) $4,174,830 expected to be paid in connection with cancellation of shares of restricted stock.

(2)

The filing fee was calculated in accordance with Rule 0-11 under the Securities Exchange Act of 1934, as amended, and Fee Rate Advisory #5 for fiscal year 2009, issued March 11, 2009, by multiplying the transaction value by 0.0000558.

o   Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
Amount Previously Paid: n/a Filing Party: n/a
Form of Registration No.: n/a Date Filed: n/a

o   Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.

Check the appropriate boxes below to designate any transactions to which the statement relates:

þ   Third-party tender offer subject to Rule 14d-1.

o   Issuer tender offer subject to Rule 13e-4.

o   Going-private transaction subject to Rule 13e-3.

o   Amendment to Schedule 13D under Rule 13d-2.

Check the following box if the filing is a final amendment reporting the results of the tender offer.

If applicable, check the appropriate box(es) below to designate the appropriate rule provision(s) relied upon:

o   Rule 13e-4(i) (Cross-Border Issuer Tender Offer)

o   Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)

This Tender Offer Statement on Schedule TO (together with any amendments and supplements hereto, this “Schedule TO”) is filed by (i) Northstar Merger Sub, Inc., a Delaware corporation (the “Purchaser”) and wholly-owned subsidiary of Hisamitsu U.S., Inc., a Delaware corporation (“Holdings”) and wholly-owned subsidiary of Hisamitsu Pharmaceutical Co., Inc., a corporation organized under the laws of Japan (“Parent”), (ii) Holdings and (iii) Parent. This Schedule TO relates to the offer by the Purchaser to purchase all of the outstanding shares of common stock, par value $0.0001 per share, together with the associated Series A junior participating preferred stock purchase rights (the “Rights”) issued pursuant to the Rights Agreement (the “Rights Plan”), dated as of November 6, 2001, between the Company and American Stock Transfer & Trust, as amended (the “Shares”), of Noven Pharmaceuticals, Inc., a Delaware corporation (the “Company”), at a purchase price of $16.50 per Share net to the seller in cash, without interest and less any required withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase dated July 23, 2009 (together with any amendments and supplements thereto, the “Offer to Purchase”) and in the related Letter of Transmittal, copies of which are attached hereto as Exhibits (a)(1)(A) and (a)(1)(B), respectively.

Capitalized terms used and not defined herein shall have the meanings assigned to such terms in the Offer to Purchase.

Item 1.   Summary Term Sheet.

The information set forth in the section of the Offer to Purchase entitled “Summary Term Sheet” is incorporated herein by reference.

Item 2.   Subject Company Information.

(a) The name of the subject company and the issuer of the securities to which this Schedule TO relates is Noven Pharmaceuticals, Inc., a Delaware corporation. The Company’s principal executive offices are located at 11960 SW 144^th Street, Miami, Florida, 33186. The Company’s telephone number at such address is (305) 253-5099.

(b) This Schedule TO relates to the outstanding shares of common stock, par value $0.0001 per share of the Company, together with the Rights. Unless the context otherwise requires, all references to Shares include the Rights, and all references to the Rights include the benefits that may inure to holders of the Rights under the Rights Plan. The Company has advised Parent that, as of July 9, 2009 (i) 25,028,987 Shares were issued and outstanding, and (ii) 1,399,639 shares of the Company’s common stock were subject to outstanding options, 2,560,496 shares of the Company’s common stock were subject to outstanding stock appreciation rights and 50,000 shares of the Company’s common stock were subject to outstanding restricted stock units.

(c) The information set forth in the section in the Offer to Purchase entitled “Price Range of Shares; Dividends” is incorporated herein by reference.

Item 3.   Identity and Background of Filing Person.

(a) – (c) This Schedule TO is filed by Parent, Holdings and the Purchaser. The information set forth in the section of the Offer to Purchase entitled “Certain Information Concerning Parent, Holdings and the Purchaser,” and in Schedule I to the Offer to Purchase is incorporated herein by reference.

Item 4.   Terms of the Transaction.

The information set forth in the sections of the Offer to Purchase entitled “Summary Term Sheet,” “Terms of the Offer,” “Acceptance for Payment and Payment for Shares,” “Procedures for Accepting the Offer and Tendering Shares,” “Withdrawal Rights,” “Certain United States Federal Income Tax Consequences,” “Purpose of the Offer; Plans for the Company,” “Certain Effects of the Offer,” and “Certain Conditions of the Offer” is incorporated herein by reference.

2

Item 5.   Past Contacts, Transactions, Negotiations and Agreements.

The information set forth in the sections of the Offer to Purchase entitled “Summary Term Sheet,” “Introduction,” “Certain Information Concerning Parent, Holdings and the Purchaser,” “Background of the Offer; Past Contacts or Negotiations with the Company,” “Purpose of the Offer; Plans for the Company” and “The Transaction Agreements; Employment Agreement” is incorporated herein by reference.

Item 6.   Purposes of the Transaction and Plans or Proposals.

The information set forth in the sections of the Offer to Purchase entitled “Summary Term Sheet,” “Introduction,” “Price Range of Shares; Dividends,” “Certain Effects of the Offer,” “Purpose of the Offer; Plans for the Company” and “The Transaction Agreements; Employment Agreement” is incorporated herein by reference.

Item 7.   Source and Amount of Funds or Other Consideration.

The information set forth in the section of the Offer to Purchase entitled “Source and Amount of Funds” is incorporated herein by reference.

Item 8.   Interest in Securities of the Subject Company.

The information set forth in the section of the Offer to Purchase entitled “Certain Information Concerning Parent, Holdings and the Purchaser,” is incorporated herein by reference.

Item 9.   Persons/Assets Retained, Employed, Compensated or Used.

The information set forth in the section of the Offer to Purchase entitled “Fees and Expenses” is incorporated herein by reference.

Item 10.   Financial Statements.

Not applicable.

Item 11.   Additional Information.

(a)(1) The information set forth in the sections of the Offer to Purchase entitled “Certain Information Concerning Parent, Holdings and the Purchaser,” “Background of the Offer; Past Contacts or Negotiations with the Company,” “Purpose of the Offer; Plans for the Company” and “The Transaction Agreements; Employment Agreement” is incorporated herein by reference.

(a)(2) The information set forth in the sections of the Offer to Purchase entitled “Purpose of the Offer; Plans for the Company,” “Certain Conditions of the Offer” and “Certain Legal Matters; Regulatory Approvals” is incorporated herein by reference.

(a)(3) The information set forth in the sections of the Offer to Purchase entitled “Certain Conditions of the Offer” and “Certain Legal Matters; Regulatory Approvals” is incorporated herein by reference.

(a)(4) The information set forth in the section of the Offer to Purchase entitled “Certain Effects of the Offer,” is incorporated herein by reference.

(a)(5) The information set forth in the section of the Offer to Purchase entitled “Certain Legal Matters; Regulatory Approvals” is incorporated herein by reference.

(b) The information set forth in the Offer to Purchase is incorporated herein by reference.

3

Item 12.   Exhibits.

Exhibit		Exhibit Name
	(a)(1)(A)	Offer to Purchase dated July 23, 2009.
	(a)(1)(B)	Letter of Transmittal (including Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9).
	(a)(1)(C)	Notice of Guaranteed Delivery.
	(a)(1)(D)	Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.
	(a)(1)(E)	Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.
	(a)(5)(A)	Joint Press Release issued by Hisamitsu Pharmaceutical Co., Inc. and Noven Pharmaceuticals, Inc. on July 14, 2009, incorporated herein by reference to the Schedule TO filed by Hisamitsu Pharmaceutical Co., Inc. on July 14, 2009.
	(a)(5)(B)	Summary Newspaper Advertisement as published in The Wall Street Journal on July 23, 2009.
	(a)(5)(C)	Press Release issued by Hisamitsu Pharmaceutical Co., Inc. on July 23, 2009.
	(a)(5)(D)	Complaint of IBEW Local Union 98, filed in the Court of Chancery of the State of Delaware and dated July 15, 2009.
	(a)(5)(E)	Complaint of Arthur I. Murphy, Jr., filed in the Eleventh Judicial Circuit of Florida and dated July 15, 2009.
	(a)(5)(F)	Complaint of Louisiana Municipal Police Employees, filed in the Court of Chancery of the State of Delaware and dated July 16, 2009.
	(b)	Not applicable.
	(d)(1)	Agreement and Plan of Merger dated as of July 14, 2009, by and among Hisamitsu Pharmaceutical Co., Inc., Hisamitsu U.S., Inc., Northstar Merger Sub, Inc. and Noven Pharmaceuticals, Inc.
	(d)(2)	Confidentiality Agreement, dated as of June 25, 2008, between Hisamitsu Pharmaceutical Co., Inc. and Noven Pharmaceuticals, Inc.
	(d)(3)	Exclusivity Agreement, dated as of June 4, 2009, between Hisamitsu Pharmaceutical Co., Inc. and Noven Pharmaceuticals, Inc.
	(d)(4)	Amended and Restated Employment Agreement, dated July 14, 2009, between Noven Pharmaceuticals, Inc. and Jeffrey Eisenberg.
	(g)	Not applicable.
	(h)	Not applicable.

Item 13.   Information Required by Schedule 13E-3.

Not applicable.

4

SIGNATURE

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

HISAMITSU PHARMACEUTICAL CO., INC.

By:  /s/  Hirotaka Nakatomi

Name:     Hirotaka Nakatomi

Title:       President & Chief Executive Officer

Date:       July 23, 2009

HISAMITSU U.S., INC.

By:  /s/  Kosuke Sugiyama

Name:     Kosuke Sugiyama

Title:       President

Date:       July 23, 2009

NORTHSTAR MERGER SUB, INC.

By:  /s/  Kosuke Sugiyama

Name:     Kosuke Sugiyama

Title:       President

Date:       July 23, 2009

Signature Page to Schedule TO

5

EX-99.A.1.A

Exhibit (a)(1)(A)

Offer To Purchase For Cash

All Outstanding Shares of Common Stock

(including the associated preferred stock purchase rights)

of

NOVEN PHARMACEUTICALS, INC.

at

$16.50 NET PER SHARE

by

NORTHSTAR MERGER SUB, INC.

a wholly-owned subsidiary of

HISAMITSU U.S., INC.

a wholly-owned subsidiary of

HISAMITSU PHARMACEUTICAL CO., INC.

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, AUGUST 19, 2009, UNLESS THE OFFER IS EXTENDED.

The Offer (as defined below) is being made pursuant to an Agreement and Plan of Merger dated as of July 14, 2009 (the “Merger Agreement”), by and among Hisamitsu Pharmaceutical Co., Inc., a corporation organized under the laws of Japan (“Parent”), Northstar Merger Sub, Inc., a Delaware corporation (the “Purchaser”) and wholly-owned subsidiary of Hisamitsu U.S., Inc., a Delaware corporation (“Holdings”), and wholly-owned subsidiary of Parent, and Noven Pharmaceuticals, Inc., a Delaware corporation (the “Company”). The Purchaser is offering to purchase all outstanding shares of common stock of the Company, par value $0.0001 per share, together with the associated Series A junior participating preferred stock purchase rights (the “Rights”) issued pursuant to the Rights Agreement, dated as of November 6, 2001, between the Company and American Stock Transfer & Trust, as amended (the “Shares”), at a price of $16.50 per Share net to the seller in cash, without interest and less any required withholding taxes, upon the terms and subject to the conditions set forth in this Offer to Purchase and the related Letter of Transmittal (as defined below) (the “Offer”). The Offer is conditioned upon (i) the satisfaction of the Minimum Condition (as defined below) and (ii) the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”). The term “Minimum Condition” is defined in Section 15 — “Certain Conditions of the Offer” and generally requires that the number of outstanding Shares which have been validly tendered and not validly withdrawn prior to the expiration of the Offer (as it may be extended as described below) represents at least a majority of the Shares then outstanding (determined on a fully diluted basis after giving effect to the exercise or conversion of all options, rights and securities exercisable or convertible into such voting securities, other than the Rights, regardless of the conversion or exercise price, the vesting schedule or other terms and conditions thereof). The Offer is also subject to other important conditions set forth in this Offer to Purchase. See Section 15 — “Certain Conditions of the Offer.”

The Board of Directors of the Company, has unanimously (i) approved and declared advisable the Merger Agreement, the Offer, the merger of the Purchaser with and into the Company, with the Company as the surviving corporation (the “Merger”) and the other transactions contemplated by the Merger Agreement (the “Transactions”), (ii) determined that the terms of the Offer, the Merger and the other Transactions are fair to and in the best interests of the stockholders of the Company and (iii) recommended that the stockholders of the Company accept the Offer and tender their Shares pursuant to the Offer and, if required by applicable law, adopt the Merger Agreement and approve the Merger.

IMPORTANT

Any stockholder of the Company wishing to tender Shares in the Offer must (i) complete and sign the letter of transmittal that accompanies this Offer to Purchase (the “Letter of Transmittal”) in accordance with the instructions in the Letter of Transmittal and mail or deliver the Letter of Transmittal and all other required documents to the Depositary (as defined below) together with certificates representing the Shares tendered, (ii) follow the procedure for book-entry transfer described in Section 3 — “Procedures for Accepting the Offer and Tendering Shares” or (iii) request such stockholder’s broker, dealer, commercial bank, trust company or other nominee to effect the transaction for the stockholder. A stockholder whose Shares are registered in the name of a broker, dealer, commercial bank, trust company or other nominee must contact such person if such stockholder wishes to tender its Shares.

Any stockholder of the Company who wishes to tender Shares and cannot deliver certificates representing such Shares and all other required documents to the Depositary on or prior to the expiration time of the Offer or who cannot comply with the procedures for book-entry transfer on a timely basis may tender such Shares pursuant to the guaranteed delivery procedure described in Section 3 — “Procedures for Accepting the Offer and Tendering Shares.”

Questions and requests for assistance may be directed to the Information Agent (as defined below) at the address and telephone number set forth on the back cover of this Offer to Purchase. Additional copies of this Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery (as defined below) and other related materials may also be obtained from Georgeson, Inc., which is acting as the Information Agent. See the back cover of this Offer to Purchase. Stockholders may also contact their broker, dealer, commercial bank, trust company or other nominee for copies of these documents.

SUMMARY TERM SHEET

Northstar Merger Sub, Inc. (the “Purchaser”), a wholly-owned subsidiary of Hisamitsu U.S., Inc. (“Holdings”) and Hisamitsu Pharmaceutical Co., Inc. (“Parent”), is offering to purchase all of the outstanding Shares (as defined below) for $16.50 per Share net to the seller in cash, without interest and less any required withholding taxes, upon the terms and subject to the conditions set forth in this Offer to Purchase and the related Letter of Transmittal (the “Offer”). We are making the Offer pursuant to the Agreement and Plan of Merger, dated as of July 14, 2009, by and among Noven Pharmaceuticals, Inc. (the “Company”), Parent, Holdings and the Purchaser (the “Merger Agreement”). The following are answers to some of the questions you, as a stockholder of the Company, may have about the Offer. We urge you to read carefully the remainder of this Offer to Purchase and the accompanying letter of transmittal (the “Letter of Transmittal”) and the other documents to which we have referred you because this summary may not contain all of the information that is important to you. Additional important information is contained in the remainder of this Offer to Purchase and the Letter of Transmittal.

Who is offering to buy my securities?

Our name is Northstar Merger Sub, Inc., a Delaware corporation formed for the purpose of making this Offer. We are a wholly-owned subsidiary of Hisamitsu U.S., Inc., a Delaware corporation, which is a wholly-owned subsidiary of Hisamitsu Pharmaceutical Co., Inc., a corporation organized under the laws of Japan. See the “Introduction” to this Offer to Purchase and Section 8 — “Certain Information Concerning Parent, Holdings and the Purchaser.”

What are the classes and amounts of securities sought in the Offer?

We are seeking to purchase all of the outstanding shares of common stock, par value $0.0001 per share, together with the associated Series A junior participating preferred stock purchase rights (the “Rights”) issued pursuant to the Rights Agreement, dated as of November 6, 2001, between the Company and American Stock Transfer & Trust Company, as amended (the “Shares”). See the “Introduction” to this Offer to Purchase and Section 1 — “Terms of the Offer.”

How much are you offering to pay? What is the form of payment? Will I have to pay any fees or commissions?

We are offering to pay $16.50 per Share net to you in cash, without interest and less any required withholding taxes, upon the terms and subject to the conditions set forth in this Offer to Purchase and the related Letter of Transmittal. If you are the record owner of your Shares and you directly tender your Shares to us in the Offer, you will not have to pay brokerage fees or similar expenses. If you own your Shares through a broker, dealer, commercial bank, trust company or other nominee, and such person tenders your Shares on your behalf, your broker, dealer, commercial bank, trust company or other nominee may charge you a fee for doing so. You should consult your broker, dealer, commercial bank, trust company or other nominee to determine whether any charges will apply. See the “Introduction” to this Offer to Purchase.

Do you have the financial resources to make payment?

Yes. Parent, our ultimate parent company, will provide us with sufficient funds to purchase all Shares validly tendered in the Offer and not validly withdrawn. Parent will also fund our Merger with the Company, which is expected to follow the successful completion of the Offer in accordance with the terms and conditions of the Merger Agreement. The Offer is not subject to a financing condition. Parent intends to provide us with the necessary funds from cash on hand, lines of credit or other sources of immediately available funding. See Section 9 — “Source and Amount of Funds.”

i

Is your financial condition relevant to my decision to tender my Shares in the Offer?

No. We do not think our financial condition is relevant to your decision whether to tender Shares and accept the Offer because:

•  the Offer is being made for all outstanding Shares solely for cash;

•  in light of Parent’s financial capacity in relation to the amount of consideration payable in the Offer, we, through Parent, will have sufficient funds, lines of credit or other sources of funding immediately available to purchase all Shares validly tendered in the Offer and not validly withdrawn;

•  the Offer is not subject to any financing condition; and

•  if we consummate the Offer, we expect to acquire any remaining Shares not purchased in the Offer for the same cash price in the Merger.

See Section 9 — “Source and Amount of Funds.”

How long do I have to decide whether to tender my Shares in the Offer?

Unless we extend the Offer, you will have until 12:00 midnight, New York City time, on Wednesday, August 19, 2009 (which is the end of the day on August 19, 2009), to tender your Shares in the Offer. Furthermore, if you cannot deliver everything required to make a valid tender by that time, you may still participate in the Offer by using the guaranteed delivery procedure that is described in Section 3 — “Procedures for Accepting the Offer and Tendering Shares” of this Offer to Purchase prior to that time. See Section 1 — “Terms of the Offer” and Section 3 — “Procedures for Accepting the Offer and Tendering Shares.”

Can the Offer be extended and under what circumstances?

Yes. We have agreed in the Merger Agreement that so long as neither the Company nor Parent terminates the Merger Agreement in accordance with its terms:

•  We may, without the Company’s consent, extend the Offer (i) on one or more occasions for any period not exceeding seven business days for any extension, if at any then scheduled expiration of the Offer any of the conditions to our obligation to accept for payment and pay for the Shares validly tendered in the Offer are not satisfied or, if permitted under the Merger Agreement, waived and (ii) for any period or periods required by any applicable rule, regulation, interpretation or position of the Securities and Exchange Commission (the “SEC”) (or its staff) applicable to the Offer.

•  Subject to our termination rights as described in Section 11 — “The Transaction Agreements; Employment Agreement,” if requested by the Company, we must extend the Offer on one or more occasions for any period not exceeding seven business days for any extension, if at any then scheduled expiration of the Offer any of the conditions to our obligation to accept for payment and pay for the Shares validly tendered in the Offer are not satisfied or, if permitted under the Merger Agreement, waived. We will not, however, be required to extend the Offer beyond November 17, 2009 if the Minimum Condition is not satisfied at such time, and we will not in any event be required to extend the Offer beyond April 14, 2010.

See Section 1 — “Terms of the Offer” of this Offer to Purchase for more details on our obligation and ability to extend the Offer.

Will you provide a subsequent offering period?

If necessary to obtain at least ninety percent (90%) of the outstanding Shares, we may, in our sole discretion, provide for one or more subsequent offering periods (as described in Section 1 — “Terms of the Offer”) in accordance with Rule 14d-11 under the Exchange Act following our acceptance of the Shares in the Offer. During the subsequent offering period, if we provide one, you would be permitted to tender, but not withdraw, your Shares and receive $16.50 per Share net to you in cash, without interest and less any required

ii

withholding taxes, upon the terms and subject to the conditions set forth in this Offer to Purchase and the related Letter of Transmittal.

How will I be notified if the Offer is extended?

If we extend the Offer, we will inform American Stock Transfer and Trust Company, the Depositary for the Offer (the “Depositary”), of the extension and we will issue a press release announcing the extension not later than 9:00 a.m., New York City time, on the next business day after the day on which the Offer was scheduled to expire. See Section 1 — “Terms of the Offer.”

What are the most significant conditions to the Offer?

The Offer is conditioned upon, among other things,

•  satisfaction of the Minimum Condition, and

•  the expiration or termination of any applicable waiting period under the HSR Act.

The term “Minimum Condition” is defined in Section 15 — “Certain Conditions of the Offer” and generally requires that the number of outstanding Shares which have been validly tendered and not validly withdrawn prior to the expiration of the Offer (as it may be extended as described above) represents at least a majority of the Shares then outstanding (determined on a fully diluted basis after giving effect to the exercise or conversion of all options, rights and securities exercisable or convertible into such voting securities, other than the Rights and the option to purchase shares of common stock in certain circumstances granted by the Company to us in the Merger Agreement (See Section 1 — “Terms of the Offer”), regardless of the conversion or exercise price, the vesting schedule or other terms and conditions thereof).

The Offer is also subject to other conditions. We cannot waive the Minimum Condition without the prior written approval of the Company. However, we can waive any other conditions in our sole discretion without the Company’s consent. See Section 15 — “Certain Conditions of the Offer.”

How do I tender my Shares?

To tender your Shares, you must deliver the certificates representing your Shares or confirmation of a book-entry transfer of such Shares into the Depositary’s account at The Depository Trust Company, together with a completed Letter of Transmittal and any other documents required by the Letter of Transmittal, to the Depositary, prior to the expiration of the Offer. If your Shares are held in street name (that is, through a broker, dealer, commercial bank, trust company or other nominee), they can be tendered by your nominee through The Depository Trust Company. If you are unable to deliver any required document or instrument to the Depositary by the expiration of the Offer, you may still participate in the Offer by having a broker, a bank or other fiduciary that is an Eligible Institution (as defined below) guarantee on or prior to the expiration of the Offer that the missing items will be received by the Depositary within three Nasdaq Global Select Market trading days after the expiration of the Offer. For the tender to be valid, however, the Depositary must receive the missing items within that three trading day period. See Section 3 — “Procedures for Accepting the Offer and Tendering Shares.”

Until what time may I withdraw previously tendered Shares?

You may withdraw your previously tendered Shares at any time until the Offer has expired and, if we have not accepted your Shares for payment by September 21, 2009, you may withdraw them at any time after that date until we accept Shares for payment. This right to withdraw will not apply to Shares tendered in any subsequent offering period, if one is provided. See Section 4 — “Withdrawal Rights.”

How do I withdraw previously tendered Shares?

To withdraw previously tendered Shares, you must deliver a written notice of withdrawal, or a facsimile of such notice, with the required information to the Depositary while you still have the right to withdraw

iii

Shares. If you tendered Shares by giving instructions to a broker, dealer, commercial bank, trust company or other nominee, you must instruct the broker, dealer, commercial bank, trust company or other nominee to arrange for the withdrawal of your Shares and such broker, dealer, commercial bank, trust company or other nominee must effectively withdraw such Shares while you still have the right to withdraw Shares. See Section 4 — “Withdrawal Rights.”

What does the Company Board think of the Offer?

The Board of Directors of the Company has unanimously (i) approved and declared advisable the Merger Agreement, the Offer, the merger of the Purchaser with and into the Company (the “Merger”) and the other Transactions contemplated by the Merger Agreement (the “Transactions”), (ii) determined that the terms of the Offer, the Merger and the other Transactions are fair to and in the best interests of the stockholders of the Company, and (iii) recommended that the stockholders of the Company accept the Offer and tender their Shares pursuant to the Offer and, if required by applicable law, adopt the Merger Agreement and approve the Merger.

A description of the reasons for the Company Board’s approval of the Offer and the Merger is set forth in the Company’s Solicitation/Recommendation Statement on Schedule 14D-9 that is being mailed to the Company’s stockholders together with this Offer to Purchase. See the “Introduction” to this Offer to Purchase.

If the Offer is completed, will the Company continue as a public company?

No. Following the purchase of Shares in the Offer, we expect to consummate the Merger. If the Merger takes place, the Company will no longer be publicly owned. Even if for some reason the Merger does not take place, if we purchase all of the tendered Shares, there may be so few remaining stockholders and publicly held Shares that the Shares will no longer be eligible to be traded through the Nasdaq Global Select Market or other securities exchanges, there may not be an active public trading market for the Shares, and the Company may no longer be required to make filings with the SEC or otherwise comply with the SEC rules relating to publicly held companies. See Section 13 — “Certain Effects of the Offer.”

Will the Offer be followed by a Merger if all of the Shares are not tendered in the Offer?

Yes. If we accept for payment and pay for at least a majority of the Shares on a fully diluted basis, we expect to effect the Merger. If the Merger takes place, all remaining stockholders of the Company (other than us, Parent, the Company and any stockholders exercising their appraisal rights under Section 262 of the DGCL) will receive $16.50 per Share (or any other price per Share that is paid in the Offer) net in cash, without interest and less any required withholding taxes, and the Company will become a wholly-owned subsidiary of Parent. See the “Introduction” to this Offer to Purchase.

If I decide not to tender, how will the Offer affect my Shares?

If you decide not to tender your Shares in the Offer and the Merger occurs, your Shares will be converted into the right to receive an amount equal to the Offer Price payable in cash, without interest and less any required withholding taxes. Unless you validly exercise your appraisal rights under Section 262 of the DGCL, you will receive the same amount of cash per Share in the Merger that you would have received had you tendered your Shares in the Offer. If you do validly exercise your appraisal rights, then you may receive the judicially determined fair value of your Shares in cash.

Therefore, if the Merger takes place, and you do not validly exercise your appraisal rights under Section 262 of the DGCL, the only difference to you between tendering your Shares and not tendering your Shares is that you will be paid earlier if you tender your Shares. If you decide not to tender your Shares in the Offer and we purchase the Shares that are tendered, but the Merger does not occur, you will remain a stockholder of the Company. However, there may be so few remaining stockholders and publicly traded Shares that the Shares will no longer be eligible to be traded through the Nasdaq Global Select Market or other securities exchanges and there may not be an active public trading market for the Shares. Also, as described above, the Company may no longer be required to make filings with the SEC or otherwise comply with the

iv

SEC rules relating to publicly held companies. See the “Introduction” to this Offer to Purchase and Section 13 — “Certain Effects of the Offer.”

What is the market value of my Shares as of a recent date?

On July 13, 2009 the last trading day before we announced the execution of the Merger Agreement, the closing sale price of the Company’s common stock reported on the Nasdaq Global Select Market was $13.48 per Share. On July 22, 2009, the last trading day before we commenced the Offer, the last sale price of the Company’s common stock reported on the Nasdaq Global Select Market was $16.47 per Share. We encourage you to obtain a recent quotation for the Shares when deciding whether to tender your Shares. See Section 6 — “Price Range of Shares; Dividends.”

What are the United States Federal income tax consequences of having my Shares accepted for payment in the Offer or receiving cash in exchange for my Shares in the Merger?

The exchange of Shares for cash pursuant to the Offer or the Merger will be a taxable transaction for U.S. federal income tax purposes. If you hold Shares as capital assets for U.S. federal income tax purposes, you will generally recognize a capital gain or loss on a sale of the Shares for cash pursuant to the Offer or an exchange of Shares for cash pursuant to the Merger, in an amount equal to the difference, if any, between the cash amount received (determined before the deduction of any backup withholding tax) and your adjusted tax basis in the Shares. If you are a non-corporate holder that has held the Shares for more than one year, any such capital gain will generally be subject to U.S. federal income tax at a maximum rate of 15%. See Section 5 — “Certain United States Federal Income Tax Consequences.”

We urge you to consult your own tax advisors to determine the particular tax consequences to you of the Offer and the Merger (including the application and effect of any state, local or foreign income and other tax laws).

Who should I call if I have questions about the Offer?

You may call Georgeson Inc. at 888-897-6012 (toll-free). Georgeson Inc. is acting as the information agent (the “Information Agent”). See the back cover of this Offer to Purchase.

v

TABLE OF CONTENTS

SUMMARY TERM SHEET	i
INTRODUCTION	1
THE TENDER OFFER	2
1.  Terms of the Offer	2
2.  Acceptance for Payment and Payment for Shares	5
3.  Procedures for Accepting the Offer and Tendering Shares	6
4.  Withdrawal Rights	8
5.  Certain United States Federal Income Tax Consequences	9
6.  Price Range of Shares; Dividends	10
7.  Certain Information Concerning the Company	10
8.  Certain Information Concerning Parent, Holdings and the Purchaser	11
9.  Source and Amount of Funds	12
10. Background of the Offer; Past Contacts or Negotiations with the Company	13
11. The Transaction Agreements; Employment Agreement	16
12. Purpose of the Offer; Plans for the Company	26
13. Certain Effects of the Offer	27
14. Dividends and Distributions	28
15. Certain Conditions of the Offer	29
16. Certain Legal Matters; Regulatory Approvals	30
17. Fees and Expenses	32
18. Miscellaneous	33
SCHEDULE I	34

To the Holders of Shares of
Common Stock of the Company:

INTRODUCTION

Northstar Merger Sub, Inc., a Delaware corporation (the “Purchaser”) and wholly-owned subsidiary of Hisamitsu U.S., Inc., a Delaware corporation (“Holdings”) and wholly-owned subsidiary of Hisamitsu Pharmaceutical Co., Inc., a corporation organized under the laws of Japan (“Parent”), hereby offers to purchase (the “Offer”) all outstanding shares of common stock, par value $0.0001 per share, together with the associated Series A junior participating preferred stock purchase rights (the “Rights”) issued pursuant to the Rights Agreement, dated as of November 6, 2001, between the Company and American Stock Transfer & Trust, as amended on March 18, 2008 and July 14, 2009 (the “Shares”), of Noven Pharmaceuticals, Inc. (the “Company”), at a price of $16.50 per Share net to the seller in cash, without interest and less any required withholding taxes (the “Offer Price”), upon the terms and subject to the conditions set forth in this Offer to Purchase and in the related Letter of Transmittal that accompanies this Offer to Purchase (the “Letter of Transmittal”).

The Offer is being made pursuant to the Agreement and Plan of Merger dated as of July 14, 2009 (the “Merger Agreement”), by and among Parent, Holdings, the Purchaser and the Company. The Offer is conditioned upon, among other things, (i) the satisfaction of the Minimum Condition (as defined below) and (ii) the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”). The Offer is not conditioned upon Parent’s, Holdings’ or the Purchaser’s ability to finance the purchase of Shares pursuant to the Offer.

The term “Minimum Condition” is defined in Section 15 — “Certain Conditions of the Offer” and generally requires that the number of outstanding Shares which have been validly tendered and not validly withdrawn prior to the expiration of the Offer (as it may be extended as described below) represents at least a majority of the Shares then outstanding (determined on a fully diluted basis after giving effect to the exercise or conversion of all options, rights and securities exercisable or convertible into such voting securities, other than the Rights and the Top-Up Option (as defined below), regardless of the conversion or exercise price, the vesting schedule or other terms and conditions thereof). The Offer is also subject to other conditions set forth in this Offer to Purchase. See Section 15 — “Certain Conditions of the Offer.”

The Company has advised Parent that, as of July 9, 2009 (i) 25,028,987 Shares were issued and outstanding, of which 253,020 shares of Company Common Stock were Company Restricted Shares and (ii) 1,399,639 shares of the Company’s common stock were subject to outstanding options, 2,560,496 shares of the Company’s common stock were subject to outstanding stock appreciation rights and 50,000 shares of the Company’s common stock were subject to outstanding restricted stock units.

The Merger Agreement is more fully described in Section 11 — “The Transaction Agreements; Employment Agreement.”

Tendering stockholders who are record owners of their Shares and tender directly to American Stock Transfer and Trust Company, the Depositary for the Offer (the “Depositary”), will not be obligated to pay brokerage fees or commissions or, except as otherwise provided in Instruction 6 of the Letter of Transmittal, U.S. or Japanese stock transfer taxes with respect to the purchase of Shares by the Purchaser pursuant to the Offer. Stockholders who hold their Shares through a broker, dealer, commercial bank, trust company or other nominee should consult such institution as to whether it charges any service fees or commissions.

The Board of Directors of the Company (the “Company Board”), has unanimously (i) approved and declared advisable the Merger Agreement, the Offer, the Merger and the other Transactions contemplated by the Merger Agreement (the “Transactions”), (ii) determined that the terms of the Offer, the Merger and the other Transactions are fair to and in the best interests of the stockholders of the Company, and (iii) recommended that the stockholders of the Company accept the Offer and tender their Shares pursuant to the Offer and, if required by applicable law, adopt the Merger Agreement and approve the Merger.

1

A description of the reasons for the Company Board’s approval of the Offer and the Merger is set forth in the Company’s Solicitation/Recommendation Statement on Schedule 14D-9 that is being mailed to the Company’s stockholders together with this Offer to Purchase (the “Schedule 14D-9”).

The Merger Agreement provides that, subject to the conditions described in Sections 11 — “The Transaction Agreements; Employment Agreement” and 15 — “Certain Conditions of the Offer,” the Purchaser will be merged with and into the Company with the Company continuing as the surviving corporation as a wholly-owned subsidiary of Parent. Pursuant to the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each Share outstanding immediately prior to the Effective Time (other than (i) Shares held by the Company as treasury stock or owned by Parent, Holdings or the Purchaser or their respective subsidiaries, which will be cancelled and will cease to exist, and (ii) Shares owned by the Company’s stockholders who perfect their appraisal rights under the DGCL) will be converted into the right to receive $16.50 (or any other per Share price paid in the Offer) net in cash, without interest and less any required withholding taxes.

The Merger is subject to the satisfaction or waiver of certain conditions, including, if required, the adoption of the Merger Agreement by the affirmative vote of the holders of a majority of the outstanding Shares. The Company has agreed, if required by applicable law, to duly set a record date for, call, give notice of, convene and hold a meeting of its stockholders to be held as promptly as reasonably practicable after the first time that the Purchaser accepts for payment any Shares tendered and not validly withdrawn pursuant to the Offer (the “Acceptance Time”) for the purpose of considering and taking action upon the Merger Agreement. Parent has agreed to cause to be voted, all of the Shares then owned of record by it, the Purchaser or any of their other subsidiaries in favor of the adoption of the Merger Agreement and approval of the Merger. If the Minimum Condition and the other conditions to the Purchaser’s obligation to accept for payment and pay for the Shares tendered pursuant to the Offer (together with the Minimum Condition, the “Offer Conditions”) are satisfied and the Offer is completed, Parent, Holdings and the Purchaser will own a number of Shares sufficient to cause the Merger Agreement to be adopted without the affirmative vote or written consent of any other holder of Shares. See Section 11 — “The Transaction Agreements; Employment Agreement.”

This Offer to Purchase and the related Letter of Transmittal contain important information that should be read carefully before any decision is made with respect to the Offer.

THE TENDER OFFER

1.   Terms of the Offer.

Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), the Purchaser will accept for payment and pay for all Shares validly tendered prior to the expiration of the Offer and not validly withdrawn as permitted under Section 4 — “Withdrawal Rights.” The expiration time of the Offer (the “Expiration Time”) is 12:00 midnight, New York City time, on Wednesday August 19, 2009 (which is the end of the day on August 19, 2009), unless the Purchaser, in accordance with the Merger Agreement, extends the period during which the Offer is open, in which event the expiration time of the Offer means the latest time and date at which the Offer, as so extended, expires.

The Offer is conditioned upon (i) the satisfaction of the Minimum Condition (as defined below) and (ii) the expiration or termination of any applicable waiting period under the HSR Act. The term “Minimum Condition” is defined in Section 15 — “Certain Conditions of the Offer” and generally requires that the number of outstanding Shares which have been validly tendered and not validly withdrawn prior to the expiration of the Offer (as it may be extended as described below) represents at least a majority of the Shares then outstanding (determined on a fully diluted basis after giving effect to the exercise or conversion of all options, rights and securities exercisable or convertible into such voting securities, other than the Rights and the Top-Up Option regardless of the conversion or exercise price, the vesting schedule or other terms and conditions thereof). The Offer is also subject to other conditions set forth in this Offer to Purchase. See

2

Section 15 — “Certain Conditions of the Offer.” The Offer is not conditioned upon Parent’s, Holdings’ or the Purchaser’s ability to finance the purchase of Shares pursuant to the Offer.

Pursuant to the terms of the Merger Agreement, the Company has granted the Purchaser an irrevocable option (the “Top-Up Option”) to purchase a number of newly-issued Shares (the “Top-Up Shares”), in an amount equal to the lowest number of Shares that, when added to the number of Shares directly or indirectly owned by Parent at the time of any exercise of the option, will constitute one share more than 90% of the fully diluted Shares outstanding immediately after the issuance of the Top-Up Shares. The Top-Up Option is exercisable only once, in whole and not in part, and only at such time as Parent, directly or indirectly, owns at least 85.0% of the fully diluted Shares and following the expiration of the Offer and any subsequent offering period. Purchaser will pay the Offer Price for each Top-Up Share acquired upon exercise of the Top-Up Option, at its option, in cash or with a promissory note on terms reasonably satisfactory to the Company.

The Merger Agreement provides that the Purchaser may, without the Company’s consent, extend the Offer (i) on one or more occasions for any period not exceeding seven business days for any extension, if at any then scheduled expiration of the Offer any of the Offer Conditions are not satisfied or, if permitted under the Merger Agreement, waived and (ii) for any period or periods required by any applicable rule, regulation, interpretation or position of the Securities and Exchange Commission (the “SEC”) (or its staff) applicable to the Offer. Subject to the Purchaser’s, Holdings’ and Parent’s termination rights as described in Section 11 — “The Transaction Agreements; Employment Agreement,” if requested by the Company, the Purchaser must extend the Offer on one or more occasions for any period not exceeding seven business days for any extension, if at any then scheduled expiration of the Offer any of the Offer Conditions are not satisfied or, if permitted under the Merger Agreement, waived. The Purchaser will not, however, be required to extend the Offer beyond November 17, 2009 if the Minimum Condition is not satisfied at such time, and will not in any event be required to extend the Offer beyond April 14, 2010.

The Merger Agreement further provides that if necessary to acquire sufficient Shares (without regard to the exercise of the Top-Up Option (as defined in Section 11 — “The Transaction Agreements; Employment Agreement”)), such that Parent, Holdings, the Purchaser and their respective subsidiaries hold, in the aggregate, at least ninety percent (90%) of the outstanding Shares, the Purchaser may, in its sole discretion, provide for one or more subsequent offering periods (each a “Subsequent Offering Period”) in accordance with Rule 14d-11 under the Securities Exchange Act of 1934, as amended (together with the rules and regulations promulgated thereunder, the “Exchange Act”) (and one or more extensions thereof). The termination rights of the parties to the Merger Agreement are as set forth in the Merger Agreement and remain unaffected by the foregoing provisions in the Merger Agreement.

Any extension of the Offer will be followed as promptly as practicable by a public announcement. Such announcement will be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration time of the Offer. During any such extension, all Shares previously tendered and not validly withdrawn will remain subject to the Offer, subject to the rights of a tendering stockholder to withdraw such stockholder’s Shares except during any Subsequent Offering Period. Shares tendered pursuant to the Offer may be withdrawn at any time prior to the expiration time and, unless previously accepted for payment by the Purchaser pursuant to the Offer, may also be withdrawn at any time after September 21, 2009. If the initial offering period has expired and the Purchaser provides for a Subsequent Offering Period, Shares tendered during a Subsequent Offering Period may not be withdrawn.

For a withdrawal to be effective, a written, telegraphic or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase. Any such notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder of such Shares, if different from that of the person who tendered such Shares. If Share Certificates (as defined below) evidencing Shares to be withdrawn have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such Share Certificates, the serial numbers shown on such Share Certificates must be submitted to the Depositary and the signature(s) on the notice of withdrawal must be guaranteed by an Eligible Institution (as defined in Section 3 — “Procedures for Accepting the Offer and Tendering Shares” below),

3

unless such Shares have been tendered for the account of an Eligible Institution. If Shares have been tendered pursuant to the procedure for book-entry transfer as set forth in Section 3 — “Procedures for Accepting the Offer and Tendering Shares” below, any notice of withdrawal must also specify the name and number of the account at the Book-Entry Transfer Facility (as defined below) to be credited with the withdrawn Shares. All questions as to validity, form, eligibility (including time of receipt) and acceptance for payment of any tendered Shares will be determined by the Purchaser, in its sole discretion, which determination will be final and binding upon the tendering party.

Subject to the applicable rules and regulations of the SEC and the provisions of the Merger Agreement, Parent, Holdings and the Purchaser expressly reserve the right (in their sole discretion) to waive, in whole or in part, any Offer Condition, to increase the Offer Price or to make any other changes in the terms and conditions of the Offer, provided, however, that unless otherwise provided by the Merger Agreement or as previously approved in writing by the Company, the Purchaser may not (i) reduce the number of Shares subject to the Offer, (ii) reduce the Offer Price, (iii) waive or amend the Minimum Condition, (iv) add to the conditions set forth in Exhibit A to the Merger Agreement or modify any condition set forth in Exhibit A to the Merger Agreement in any manner adverse to the holders of Shares, (v) extend the Offer except as otherwise provided in the Merger Agreement (vi) change the form of consideration payable in the Offer or (vii) otherwise amend the Offer in any manner adverse to the holders of Shares.

The rights reserved by the Purchaser by the preceding paragraph are in addition to the Purchaser’s rights pursuant to Section 15 — “Certain Conditions of the Offer.” Any extension, delay, termination, waiver or amendment of the Offer will be followed as promptly as practicable by public announcement if required. Such announcement, in the case of an extension, will be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration of the Offer. Subject to applicable law (including Rules 14d-4(d) and 14d-6(c) under the Exchange Act), and without limiting the manner in which the Purchaser may choose to make any public announcement, the Purchaser will have no obligation to publish, advertise or otherwise communicate any such public announcement other than by issuing a press release to a national news service.

If the Purchaser extends the Offer, is delayed in its acceptance for payment of Shares or is unable to accept Shares for payment pursuant to the Offer for any reason, then, without prejudice to the Purchaser’s rights under the Offer, the Depositary may, nevertheless, on behalf of the Purchaser, retain tendered Shares, and such Shares may be withdrawn only to the extent that tendering stockholders are entitled to withdrawal rights as described below under Section 4 — “Withdrawal Rights.” However, the ability of the Purchaser to delay the payment for Shares that the Purchaser has accepted for payment is limited by Rule 14e-1(c) under the Exchange Act, which requires that a bidder pay the consideration offered or return the securities deposited by or on behalf of stockholders promptly after the termination or withdrawal of such bidder’s offer.

If, subject to the terms of the Merger Agreement, the Purchaser makes a material change in the terms of the Offer or the information concerning the Offer, or if it waives a material Offer Condition, the Purchaser will disseminate additional tender offer materials and extend the Offer if and to the extent required by Rules 14d-4(d), 14d-6(c) and 14e-1 under the Exchange Act. The minimum period during which an offer must remain open following material changes in the terms of such offer or the information concerning such offer, other than a change in the consideration offered, a change in the percentage of securities sought or inclusion of or changes to a dealer’s soliciting fee, will depend upon the facts and circumstances, including the relative materiality of the changes to the terms or information. With respect to a change in the consideration offered, a change in the percentage of securities sought or inclusion of or changes to a dealer’s soliciting fee, an offer generally must remain open for a minimum of 10 business days following the dissemination of such information to stockholders.

The Company has provided the Purchaser with the Company’s stockholder list and security position listings for the purpose of disseminating the Offer to holders of Shares. This Offer to Purchase and the related Letter of Transmittal, together with the Schedule 14D-9, will be mailed to record holders of Shares whose names appear on the Company’s stockholder list and will be furnished, for subsequent transmittal to beneficial owners of Shares, to brokers, dealers, commercial banks, trust companies and other nominees whose names, or

4

the names of whose nominees, appear on the stockholder list or, if applicable, who are listed as participants in a clearing agency’s security position listing.

2.   Acceptance for Payment and Payment for Shares.

Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), the Purchaser will accept for payment, purchase and pay for (as promptly as practicable), all Shares validly tendered prior to the expiration time of the Offer and not validly withdrawn prior to such expiration time. If the Purchaser provides a Subsequent Offering Period, the Purchaser will accept for payment and pay for (as promptly as practicable), all validly tendered Shares as they are received during the Subsequent Offering Period. See Section 1 — “Terms of the Offer.”

In all cases (including during any Subsequent Offering Period), payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (i) the certificates evidencing such Shares (the “Share Certificates”) or confirmation of a book-entry transfer of such Shares (a “Book-Entry Confirmation”) into the Depositary’s account at The Depository Trust Company (the “Book-Entry Transfer Facility”) pursuant to the procedures set forth in Section 3 — “Procedures for Accepting the Offer and Tendering Shares,” (ii) the Letter of Transmittal, properly completed and duly executed, with any required signature guarantees or, in the case of a book-entry transfer, an Agent’s Message (as defined below) in lieu of the Letter of Transmittal and (iii) any other documents required by the Letter of Transmittal. Accordingly, tendering stockholders may be paid at different times depending upon when the foregoing documents with respect to Shares are actually received by the Depositary.

The term “Agent’s Message” means a message, transmitted by the Book-Entry Transfer Facility to, and received by, the Depositary and forming a part of a Book-Entry Confirmation, that states that the Book-Entry Transfer Facility has received an express acknowledgment from the participant in the Book-Entry Transfer Facility tendering the Shares that are the subject of such Book-Entry Confirmation that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that the Purchaser may enforce such agreement against such participant. The term “Agent’s Message” also includes any hard copy printout evidencing such message generated by a computer terminal maintained at the Depositary’s office.

For purposes of the Offer (including during any Subsequent Offering Period), the Purchaser will be deemed to have accepted for payment, and thereby purchased, Shares validly tendered and not validly withdrawn as, if and when the Purchaser gives oral or written notice to the Depositary of the Purchaser’s acceptance for payment of such Shares pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, payment for Shares accepted for payment pursuant to the Offer will be made by deposit of the Offer Price for such Shares with the Depositary, which will act as agent for tendering stockholders for the purpose of receiving payments from the Purchaser and transmitting such payments to tendering stockholders whose Shares have been accepted for payment. If the Purchaser extends the Offer, is delayed in its acceptance for payment of Shares or is unable to accept Shares for payment pursuant to the Offer for any reason, then, without prejudice to the Purchaser’s rights under the Offer, the Depositary may, nevertheless, on behalf of the Purchaser, retain tendered Shares, and such Shares may only be withdrawn to the extent that tendering stockholders are entitled to withdrawal rights as described below under Section 4 — “Withdrawal Rights” and as otherwise required by Rule 14e-1(c) under the Exchange Act.

If any tendered Shares are not accepted for payment for any reason pursuant to the terms and conditions of the Offer, or if Share Certificates are submitted evidencing more Shares than are tendered, Share Certificates evidencing unpurchased Shares will be returned, without expense to the tendering stockholder (or, in the case of Shares tendered by book-entry transfer into the Depositary’s account at the Book-Entry Transfer Facility pursuant to the procedure set forth in Section 3 — “Procedures for Accepting the Offer and Tendering Shares,” such Shares will be credited to an account maintained at the Book-Entry Transfer Facility), promptly following the expiration or termination of the Offer.

5

3.   Procedures for Accepting the Offer and Tendering Shares.

Valid Tenders.  In order for Shares to be validly tendered pursuant to the Offer, either (i) the Letter of Transmittal, properly completed and duly executed, together with any required signature guarantees (or, in the case of a book-entry transfer, an Agent’s Message in lieu of the Letter of Transmittal) and any other documents required by the Letter of Transmittal must be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase and either (A) the Share Certificates evidencing such tendered Shares must be received by the Depositary at such address or (B) such Shares must be tendered pursuant to the procedure for book-entry transfer described below and a Book-Entry Confirmation must be received by the Depositary, in each case prior to the expiration time of the Offer (except with respect to any Subsequent Offering Period, if one is provided), or (ii) the tendering stockholder must comply with the guaranteed delivery procedures described below under “Guaranteed Delivery.”

Book-Entry Transfer.  The Depositary will establish an account with respect to the Shares at the Book-Entry Transfer Facility for purposes of the Offer within two business days after the date of this Offer to Purchase. Any financial institution that is a participant in the system of the Book-Entry Transfer Facility may make a book-entry delivery of Shares by causing the Book-Entry Transfer Facility to transfer such Shares into the Depositary’s account at the Book-Entry Transfer Facility in accordance with the Book-Entry Transfer Facility’s procedures for such transfer. However, although delivery of Shares may be effected through book-entry transfer at the Book-Entry Transfer Facility, either the Letter of Transmittal, properly completed and duly executed, together with any required signature guarantees, or an Agent’s Message in lieu of the Letter of Transmittal, and any other required documents, must, in any case, be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase prior to the expiration time of the Offer (except with respect to any Subsequent Offering Period, if one is provided), or the tendering stockholder must comply with the guaranteed delivery procedure described below. Delivery of documents to the Book-Entry Transfer Facility does not constitute delivery to the Depositary.

For Shares to be validly tendered during any Subsequent Offering Period, the tendering stockholder must comply with the foregoing procedures, except that required documents and certificates must be received during the Subsequent Offering Period.

Signature Guarantees.  No signature guarantee is required on the Letter of Transmittal (i) if the Letter of Transmittal is signed by the registered holder(s) (which term, for purposes of this Section 3, includes any participant in the Book-Entry Transfer Facility’s systems whose name appears on a security position listing as the owner of the Shares) of the Shares tendered therewith, unless such registered holder has completed either the box entitled “Special Delivery Instructions” or the box entitled “Special Payment Instructions” on the Letter of Transmittal or (ii) if the Shares are tendered for the account of a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a participant in the Securities Transfer Agents Medallion Program or any other “eligible guarantor institution,” as such term is defined in Rule 17Ad-15 of the Exchange Act (each an “Eligible Institution” and collectively “Eligible Institutions”). In all other cases, all signatures on a Letter of Transmittal must be guaranteed by an Eligible Institution. See Instruction 1 of the Letter of Transmittal. If a Share Certificate is registered in the name of a person or persons other than the signer of the Letter of Transmittal, or if payment is to be made or delivered to, or a Share Certificate not accepted for payment or not tendered is to be issued in, the name(s) of a person other than the registered holder(s), then the Share Certificate must be endorsed or accompanied by appropriate duly executed stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear(s) on the Share Certificate, with the signature(s) on such Share Certificate or stock powers guaranteed by an Eligible Institution as provided in the Letter of Transmittal. See Instructions 1 and 5 of the Letter of Transmittal.

Guaranteed Delivery.  If a stockholder desires to tender Shares pursuant to the Offer and the Share Certificates evidencing such stockholder’s Shares are not immediately available or such stockholder cannot deliver the Share Certificates and all other required documents to the Depositary prior to the expiration time of the Offer, or such stockholder cannot complete the procedure for delivery by book-entry transfer on a timely basis, such Shares may nevertheless be tendered; provided that all of the following conditions are satisfied:

•  such tender is made by or through an Eligible Institution;

6

•  a properly completed and duly executed notice of guaranteed delivery (the “Notice of Guaranteed Delivery”), substantially in the form made available by the Purchaser, is received prior to the expiration time of the Offer by the Depositary as provided below; and

•  the Share Certificates (or a Book-Entry Confirmation) evidencing all tendered Shares, in proper form for transfer, together with the Letter of Transmittal, properly completed and duly executed, with any required signature guarantees (or, in the case of a book-entry transfer, an Agent’s Message), and any other documents required by the Letter of Transmittal are received by the Depositary within three Nasdaq Global Select Market trading days after the date of execution of such Notice of Guaranteed Delivery.

The Notice of Guaranteed Delivery may be delivered by hand or transmitted by manually signed facsimile transmission or mailed to the Depositary and must include a guarantee by an Eligible Institution in the form set forth in the form of Notice of Guaranteed Delivery made available by the Purchaser.

Notwithstanding any other provision of this Offer, payment for Shares accepted pursuant to the Offer will in all cases only be made after timely receipt by the Depositary of (i) certificates evidencing such Shares or a Book-Entry Confirmation of a book-entry transfer of such Shares into the Depositary’s account at the Book-Entry Transfer Facility pursuant to the procedures set forth in this Section 3, (ii) the Letter of Transmittal, properly completed and duly executed, with any required signature guarantees or, in the case of a book-entry transfer, an Agent’s Message in lieu of the Letter of Transmittal and (iii) any other documents required by the Letter of Transmittal. Accordingly, tendering stockholders may be paid at different times depending upon when the foregoing documents with respect to Shares are actually received by the Depositary.

The method of delivery of Share Certificates, the Letter of Transmittal and all other required documents, including delivery through the Book-Entry Transfer Facility, is at the option and risk of the tendering stockholder, and the delivery will be deemed made only when actually received by the Depositary (including, in the case of a book-entry transfer, receipt of a Book-Entry Confirmation). If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery.

The tender of Shares pursuant to any one of the procedures described above will constitute the tendering stockholder’s acceptance of the Offer, as well as the tendering stockholder’s representation and warranty that such stockholder has the full power and authority to tender and assign the Shares tendered, as specified in the Letter of Transmittal. The Purchaser’s acceptance for payment of Shares tendered pursuant to the Offer will constitute a binding agreement between the tendering stockholder and the Purchaser upon the terms and subject to the conditions of the Offer.

Determination of Validity.  All questions as to the validity, form, eligibility (including time of receipt) and acceptance for payment of any tender of Shares will be determined by the Purchaser, in its sole discretion, which determination will be final and binding upon the tendering party. The Purchaser reserves the absolute right to reject any and all tenders determined by it not to be in proper form or the acceptance for payment of which may, in the opinion of the Purchaser, be unlawful. The Purchaser also reserves the absolute right to waive any defect or irregularity in the tender of any Shares of any particular stockholder, whether or not similar defects or irregularities are waived in the case of other stockholders. No tender of Shares will be deemed to have been validly made until all defects and irregularities have been cured or waived to the satisfaction of the Purchaser. None of the Purchaser, the Company, the Depositary, Georgeson Inc. (the “Information Agent”) or any other person will be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification.

Appointment.  By executing the Letter of Transmittal, the tendering stockholder will irrevocably appoint designees of the Purchaser as such stockholder’s proxies in the manner set forth in the Letter of Transmittal, each with full power of substitution, to the full extent of such stockholder’s rights with respect to the Shares tendered by such stockholder and accepted for payment by the Purchaser and with respect to any and all other Shares or other securities or rights issued or issuable in respect of such Shares. Such appointment will be

7

effective when, and only to the extent that, the Purchaser accepts for payment Shares tendered by such stockholder as provided herein. Upon such appointment:

•  all such powers of attorney and proxies will be considered irrevocable and coupled with an interest in the tendered Shares,

•  all prior powers of attorney, proxies and consents given by such stockholder with respect to such Shares or other securities or rights will, without further action, be revoked,

•  no subsequent powers of attorney, proxies, consents or revocations may be given by such stockholder (and, if given, will not be deemed effective), and

•  the designees of the Purchaser will thereby be empowered to exercise all voting and other rights with respect to such Shares and other securities or rights, including, without limitation, in respect of any annual, special or adjourned meeting of the Company’s stockholders, actions by written consent in lieu of any such meeting or otherwise, as they in their sole discretion deem proper.

The Purchaser reserves the right to require that, in order for Shares to be deemed validly tendered, immediately upon the Purchaser’s acceptance for payment of such Shares, the Purchaser must be able to exercise full voting, consent and other rights with respect to such Shares and other related securities or rights, including voting at any meeting of stockholders. The Offer does not constitute a solicitation of proxies, absent a purchase of Shares, for any meeting of the Company’s stockholders.

4.   Withdrawal Rights.

Except as otherwise described in this Section 4, tenders of Shares made pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may be withdrawn at any time prior to the expiration time of the Offer and, unless theretofore accepted for payment by the Purchaser pursuant to the Offer, may also be withdrawn at any time after September 21, 2009.

For a withdrawal to be effective, a written, telegraphic or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover page of this Offer to Purchase. Any such notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder of such Shares, if different from that of the person who tendered such Shares. If Share Certificates evidencing Shares to be withdrawn have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such Share Certificates, the serial numbers shown on such Share Certificates must be submitted to the Depositary and the signature(s) on the notice of withdrawal must be guaranteed by an Eligible Institution, unless such Shares have been tendered for the account of an Eligible Institution. If Shares have been tendered pursuant to the procedure for book-entry transfer as set forth in Section 3 — “Procedures for Accepting the Offer and Tendering Shares,” any notice of withdrawal must also specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares.

If the Purchaser extends the Offer, is delayed in its acceptance for payment of Shares or is unable to accept Shares for payment pursuant to the Offer for any reason, then, without prejudice to the Purchaser’s rights under the Offer, the Depositary may, nevertheless, on behalf of the Purchaser, retain tendered Shares, and such Shares may not be withdrawn except to the extent that tendering stockholders are entitled to withdrawal rights as described herein.

Withdrawals of Shares may not be rescinded.  Any Shares validly withdrawn will thereafter be deemed not to have been validly tendered for purposes of the Offer. However, withdrawn Shares may be re-tendered by again following one of the procedures described in Section 3 — “Procedures for Accepting the Offer and Tendering Shares” at any time prior to the expiration time of the Offer or during a Subsequent Offering Period, if any.

No withdrawal rights will apply to Shares tendered during a Subsequent Offering Period and no withdrawal rights apply during a Subsequent Offering Period with respect to Shares tendered in the Offer and accepted for payment. See Section 1 — “Terms of the Offer.”

8

All questions as to the form and validity (including time of receipt) of any notice of withdrawal will be determined by the Purchaser, in its sole discretion, whose determination will be final and binding upon the tendering party. None of the Purchaser, the Company, the Depositary, the Information Agent or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification.

5.   Certain United States Federal Income Tax Consequences.

The following is a general discussion of certain U.S. federal income tax consequences to holders whose Shares are tendered and accepted for payment pursuant to the Offer or whose Shares are converted into the right to receive cash in the Merger. As used herein, “holder” means a beneficial owner of Shares that is an individual citizen or resident of the United States; a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States or any State or the District of Columbia; a trust if it is subject to the primary supervision of a court within the United States and one or more U.S. persons have the authority to control all substantial decisions of the trust, or has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person; or an estate the income of which is subject to U.S. federal income tax regardless of its source. We base this discussion on the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), applicable current and proposed U.S. Treasury Regulations, judicial authority and administrative rulings and practice, all of which are subject to change, possibly on a retroactive basis.

This discussion assumes that a holder holds Shares as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion does not address all aspects of U.S. federal income tax that may be relevant to a holder in light of its particular circumstances, or that may apply to a holder that is subject to special treatment under the U.S. federal income tax laws (including, for example, insurance companies, dealers in securities or foreign currencies, traders in securities who elect the mark-to-market method of accounting, shareholders subject to the alternative minimum tax, persons that have a functional currency other than the U.S. dollar, tax-exempt organizations, financial institutions, mutual funds, non-U.S. persons, shareholders who hold Shares as part of a hedge, straddle, constructive sale or conversion transaction, shareholders who acquired Shares through the exercise of employee stock options or other compensation arrangements, or persons that are partners in an entity or arrangement treated as a partnership for U.S. federal income tax purposes that holds Shares). This discussion does not address the tax consequences of the Merger to holders of Shares who validly exercise dissenters’ or appraisal rights with respect to their Shares. In addition, the discussion does not address any tax considerations under state, local or non-U.S. laws or U.S. federal laws other than those pertaining to the U.S. federal income tax.

Consequences of the Offer and the Merger to Holders.  The receipt of cash pursuant to the Offer or the Merger by holders of Shares will be a taxable transaction for U.S. federal income tax purposes. In general, a holder of Shares will recognize gain or loss equal to the difference, if any, between (i) the amount of cash received in exchange for such Shares (determined before the deduction of any backup withholding tax) and (ii) the holder’s adjusted tax basis in such Shares. If a holder acquired different blocks of Shares at different times or different prices, the holder must calculate its gain or loss and determine its adjusted tax basis and holding period separately with respect to each block of Shares. If the holding period in the Shares surrendered in the Offer or the Merger is greater than one year, the gain or loss will be long-term capital gain or loss. If a holder is a non-corporate holder, any long-term capital gain will generally be subject to U.S. federal income tax at a maximum rate of 15%. Capital losses are subject to limitations on deductibility for both corporate and non-corporate holders.

U.S. Federal Income Tax Backup Withholding.  Under U.S. federal income tax law, the Depositary may be required to withhold and pay over to the U.S. Internal Revenue Service (“IRS”) a portion of the amount of any payments made pursuant to the Offer. Certain holders (including, among others, all corporations and certain foreign persons) may not be subject to backup withholding. To avoid backup withholding, a holder must provide the Depositary with (i) the holder’s correct taxpayer identification number (“TIN”) and certify under penalties of perjury that the TIN is correct and that the holder is not subject to backup withholding, or (ii) otherwise establish an adequate basis for exemption. If a holder does not provide its correct TIN with the

9

certifications described above or otherwise establish an adequate basis for exemption, the IRS may impose a penalty on the holder, and any payment made to the holder pursuant to the Offer may be subject to backup withholding. All holders surrendering Shares pursuant to the Offer that are U.S. persons should either complete and sign the Substitute Form W-9 included in the Letter of Transmittal or otherwise establish an adequate basis for exemption in a manner satisfactory to the Depositary. Foreign holders should complete and sign the appropriate Form W-8 (a copy of which may be obtained from the Depositary) in order to avoid backup withholding. These holders should consult their tax advisor to determine which Form W-8 is appropriate.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules from payments made to a holder may be refunded or credited against the holder’s U.S. federal income tax liability, if any, provided that the required information is furnished to the IRS.

The descriptions of U.S. Federal income tax consequences set forth herein are for general information only. Holders of Shares should consult their own tax advisor to determine the particular tax consequences to them, including the application and effect of any U.S. federal, state, local or non-U.S. income and other tax laws (including any possible changes in such laws), of the receipt of cash in exchange for Shares pursuant to the Offer or the Merger.

6.   Price Range of Shares; Dividends.

The Shares trade on the Nasdaq Global Select Market under the symbol “NOVN.” The following table sets forth, for the periods indicated, the reported high and low sale prices for the Shares on the Nasdaq Global Select Market during each quarter presented.

	High		Low
Fiscal Year Ended December 31, 2007
First Quarter		27.80		21.68
Second Quarter		26.15		22.23
Third Quarter		24.06		14.99
Fourth Quarter		16.88		12.65
Fiscal Year Ended December 31, 2008
First Quarter		14.46		8.71
Second Quarter		13.10		8.49
Third Quarter		13.44		9.45
Fourth Quarter		12.63		8.71
Fiscal Year Ended December 31, 2009
First Quarter		11.33		7.54
Second Quarter		14.71		9.14
Third Quarter (through July 22, 2009)		16.61		13.27

On July 13, 2009, the last trading day before the execution of the Merger Agreement was announced, the closing sale price of the Company’s common stock reported on the Nasdaq Global Select Market was $13.48 per Share. On July 22, 2009, the last trading day before the commencement of the Offer, the last sale price of the Company’s common stock reported on the Nasdaq Global Select Market was $16.47 per Share.

According to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008 (the “Form 10-K”), it has never declared or paid any cash dividend on the Shares.

Stockholders are urged to obtain a current market quotation for the Shares.

7.  Certain Information Concerning the Company.

General.  The Company is a Delaware corporation with its principal executive offices located at 11960 SW 144th Street, Miami, Florida, 33186. The Company’s telephone number at such address is (305) 253-5099. The following description of the Company and its business is qualified in its entirety by reference to the

10

Form 10-K. The Company is a specialty pharmaceutical company engaged in the research, development, manufacturing, licensing, marketing and sale of prescription pharmaceutical products. The business is focused in three principal areas: (i) Noven Transdermals, the Company’s transdermal drug delivery segment; (ii) Novogyne Pharmaceuticals (“Novogyne”), which is the name under which Vivelle Ventures LLC, a women’s health joint venture between the Company and Novartis Pharmaceuticals Corporation (“Novartis”), does business; and (iii) Noven Therapeutics, the Company’s specialty pharmaceutical segment.

Available Information.  The Shares are registered under the Exchange Act. Accordingly, the Company is subject to the information reporting requirements of the Exchange Act and, in accordance therewith, is required to file periodic reports, proxy statements and other information with the SEC relating to its business, financial condition and other matters. Such reports, proxy statements and other information can be inspected and copied at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549-0213. Information regarding the public reference facilities may be obtained from the SEC by telephoning 1-800-SEC-0330. The Company’s filings are also available to the public on the SEC’s internet site (http://www.sec.gov). Copies of such materials may also be obtained by mail from the Public Reference Section of the SEC at 100 F Street, N.E., Washington, D.C. 20549-0213 at prescribed rates.

Although the Purchaser has no knowledge that any such information is untrue, the Purchaser takes no responsibility for the accuracy or completeness of information contained in this Offer to Purchase with respect to the Company or any of its subsidiaries or affiliates or for any failure by the Company to disclose any events which may have occurred or may affect the significance or accuracy of any such information.

8.   Certain Information Concerning Parent, Holdings and the Purchaser.

General.  Parent is a corporation organized under the laws of Japan, with its principal executive offices located at Marunouchi, Chiyoda-ku 1-11-1, Tokyo, 100-6221, Japan. The telephone number of Parent is 81-3-5293-1700. Parent is a leading pharmaceutical company that develops and markets prescription and over-the-counter (“OTC”) pharmaceutical products using transdermal drug delivery technology. Its leading product in prescription pharmaceuticals is Mohrus^® series, ketoprofen patch for pain, and its leading brand in the OTC business is Salonpas^®.

The Purchaser is a Delaware corporation with its principal executive offices located at 3528 Torrance Blvd., Suite 112 Torrance, CA 90503 U.S.A. The telephone number of the Purchaser is (310) 540-1408. The Purchaser is a wholly-owned subsidiary of Parent. The Purchaser was formed solely for the purpose of engaging in the Offer, the Merger and the other transactions contemplated by the Merger Agreement and has not engaged, and does not expect to engage, in any other business activities.

Holdings is a Delaware corporation with its principal executive offices located at 3528 Torrance Blvd., Suite 112 Torrance, CA 90503 U.S.A. The telephone number of Holdings is (310) 540-1408. Holdings is a wholly-owned subsidiary of Parent. Holdings was formed solely for the purpose of engaging in the Offer, the Merger and the other transactions contemplated by the Merger Agreement and has not engaged, and does not expect to engage, in any other business activities.

The name, citizenship, business address, business phone number, present principal occupation or employment and past material occupation, positions, offices or employment for at least the last five years for each director of Parent, Holdings and the Purchaser and the name, citizenship, business address, business phone number, present principal occupation or employment and past material occupation, positions, offices or employment for at least the past five years of each of the executive officers of Parent, Holdings and the Purchaser and certain other information are set forth in Schedule I hereto.

Parent beneficially owns 1,240,000 Shares, constituting approximately 4.9% of the total outstanding Shares. Except as described in this Offer to Purchase and in Schedule I hereto (i) none of Parent, Holdings, the Purchaser or, to the best knowledge of Parent, Holdings and the Purchaser, any of the persons listed in Schedule I to this Offer to Purchase or any associate or majority-owned subsidiary of Parent, Holdings or the Purchaser or any of the persons so listed beneficially owns or has any right to acquire, directly or indirectly, any Shares and (ii) none of Parent, Holdings, the Purchaser, any of their affiliates or, to the best knowledge of

11

Parent, Holdings and the Purchaser, any of the persons or entities referred to above nor any director, executive officer or subsidiary of any of the foregoing has effected any transaction in the Shares during the past 60 days.

Except as provided in the Merger Agreement or as otherwise described in this Offer to Purchase, none of Parent, Holdings, the Purchaser or, to the best knowledge of Parent, Holdings and the Purchaser, any of the persons listed in Schedule I to this Offer to Purchase, has any contract, arrangement, understanding or relationship with any other person with respect to any securities of the Company, including, but not limited to, any contract, arrangement, understanding or relationship concerning the transfer or voting of such securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss, guarantees of profits, division of profits or loss or the giving or withholding of proxies.

Except as set forth in this Offer to Purchase, none of Parent, Holdings, the Purchaser or, to the best knowledge of Parent, Holdings and the Purchaser, any of the persons listed on Schedule I hereto, has had any business relationship or transaction with the Company or any of its executive officers, directors or affiliates that is required to be reported under the rules and regulations of the SEC applicable to the Offer. Except as set forth in this Offer to Purchase, there have been no negotiations, transactions or material contacts between Parent or any of its subsidiaries or, to the best knowledge of Parent, any of the persons listed in Schedule I to this Offer to Purchase, on the one hand, and the Company or its affiliates, on the other hand, concerning a merger, consolidation or acquisition, tender offer or other acquisition of securities, an election of directors or a sale or other transfer of a material amount of assets during the past two years. None of Parent, Holdings, the Purchaser or any of the persons listed in Schedule I has, during the past five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). None of Parent, Holdings, the Purchaser or any of the persons listed in Schedule I has, during the past five years, been a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, Federal or state securities laws, or a finding of any violation of Federal or state securities laws.

Available Information.  Pursuant to Rule 14d-3 under the Exchange Act, Parent, Holdings and the Purchaser filed with the SEC a Tender Offer Statement on Schedule TO (the “Schedule TO”), of which this Offer to Purchase forms a part, and exhibits to the Schedule TO. The Schedule TO and the exhibits thereto can be inspected and copied at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549-0213. Information regarding the public reference facilities may be obtained from the SEC by telephoning 1-800-SEC-0330. Copies of such materials may also be obtained by mail from the Public Reference Section of the SEC at 100 F Street, N.E., Washington, D.C. 20549-0213 at prescribed rates.

9.   Source and Amount of Funds.

The Offer is not conditioned upon Parent’s, Holdings’ or the Purchaser’s ability to finance the purchase of Shares pursuant to the Offer. Parent, Holdings and the Purchaser estimate that the total amount of funds required to purchase all of the Shares pursuant to the Offer and consummate the Merger is approximately $430,000,000, including related transaction fees and expenses. Parent will have sufficient funds to consummate the purchase of Shares in the Offer and the Merger and the other transactions described above, and will cause the Purchaser to have sufficient funds available to consummate such transactions. Parent expects to obtain the necessary funds from cash on hand, lines of credit or other immediately available sources of funding.

The Purchaser does not think its financial condition is relevant to the decision of holders of Shares whether to tender Shares and accept the Offer because:

•  the Offer is being made for all outstanding Shares solely for cash;

•  in light of Parent’s financial capacity in relation to the amount of consideration payable in the Offer, the Purchaser, through Parent, will have sufficient funds, lines of credit or other sources of funding immediately available to purchase all Shares validly tendered in the Offer and not validly withdrawn;

•  the Offer is not subject to any financing condition; and

12

•  if the Purchaser consummates the Offer, it expects to acquire any remaining Shares not purchased in the Offer for the same cash price in the Merger.

10.   Background of the Offer; Past Contacts or Negotiations with the Company.

Representatives of Parent and the Company have engaged in discussions from time to time with respect to an array of potential collaborations, including, among other things, contract manufacturing agreements, product development and license agreements and a broad product development and commercialization joint venture over approximately the last eight years. Over the course of these discussions, Parent had the opportunity to conduct a significant amount of preliminary due diligence with respect to the Company, focused primarily on the Company’s existing transdermal products and pipeline, and which also included tours of the Company’s manufacturing facilities, a limited review of the Company’s oral therapeutics business, and introductions to senior members of the Company’s management. In 2007, the companies entered into a confidentiality agreement as part of these discussions and negotiations, but no agreement, arrangement or understanding was reached by the companies during the time period covered by this confidentiality agreement.

In 2008, the companies entered into another confidentiality agreement, described in Section 11 — “The Transaction Agreements; Employment Agreement” below, as renewed discussions between the companies had progressed toward a potential strategic collaboration. Representatives of the Company and Parent were in contact intermittently throughout 2008 and the beginning of 2009 as they continued to discuss and negotiate a potential collaborative transaction; however, these discussions had been narrowed from the initial consideration of a broad range of potential collaborative projects to discussions regarding a manufacturing contract for a single product. At no time during the discussions which took place during this time period did Parent or the Company propose an acquisition of the Company by Hisamitsu.

On March 25, 2009, Hirotaka Nakatomi, President and Chief Executive Officer of Parent, sent a letter to Peter Brandt, the Company’s President and Chief Executive Officer, requesting a meeting to discuss an unspecified transaction proposal. Parent then indicated that it would like a representative of Lazard Fréres K.K. (“Lazard”) to attend the meeting as its financial advisor and clarified that Parent wished to discuss a potential combination of the Company and Parent.

On April 14, 2009, the meeting among representatives of each of the Company, Parent, Lazard and J.P. Morgan Securities Inc. (“J.P. Morgan”), financial advisor to the Company, took place in New York. During this meeting, representatives of Parent gave a presentation to management and delivered a letter from Mr. Nakatomi to Mr. Brandt containing a non-binding proposal for an acquisition of all the outstanding Shares of the Company at an offer price of $14.00 per Share in cash, subject to the execution of an exclusivity agreement and the satisfactory completion of due diligence. Mr. Nakatomi stated that Parent had sufficient cash on hand to complete the proposed acquisition and had established a credit line it could draw down if necessary. He also noted that if the transaction was consummated Parent intended to retain members of the Company’s current management and to expand each company’s current business into the other’s markets and diversify their respective product portfolios. The letter noted that the proposed offer price represented a 37.7% premium to the Company’s Share price of $10.17 on April 13, 2009, and a 41.1% premium to its one-month average price of $9.92. Mr. Nakatomi also explained his desire for Parent to commence due diligence by the end of April, to complete its due diligence in four weeks, and to execute a definitive agreement by the end of June. He proposed to structure the transaction as a cash tender offer followed by a second-step merger, which he believed could be completed by the end of July. The proposal also included a request for a 45-day exclusivity period and Mr. Nakatomi requested a response from Mr. Brandt regarding exclusivity that day or the following week. Mr. Brandt explained that the Company had not been exploring a sale at that time and that he would take Parent’s offer to the Company Board for consideration, after which time he would also respond to the request for an exclusivity agreement.

On the evening of April 23, 2009, representatives of J.P. Morgan informed Lazard that the proposal it submitted was not acceptable to the Company Board and invited Parent to a follow up meeting with management in order that they might present certain information not previously available to Parent. The representatives from Lazard stated that they believed Parent would likely accept an invitation to such a

13

meeting and asked for a written letter that could be delivered to Parent management with the information J.P. Morgan had conveyed, which was sent the following day. On April 27, 2009, Lazard sent a letter to J.P. Morgan indicating that the Parent team would welcome the opportunity to attend the presentation described in J.P. Morgan’s letter and suggesting that the meeting take place over two days, beginning on May 12, 2009.

On May 12 and 13, 2009, representatives of Parent participated in a video conference with members of the Company’s senior management. Representatives of Lazard and J.P. Morgan were also present during the conference. During the conference, the Company management delivered a presentation addressing the sustainability and growth opportunities of the Company’s existing business, elements of the Company’s pipeline which had not previously been disclosed publicly, undisclosed next generation platform technology and intellectual property in development, opportunities to apply the Company’s technology to Parent’s product line and the Company’s cost structure, including public company costs. The presentation emphasized the Company’s historical performance, strategy, value-drivers, future opportunities for growth in each of the companies’ current markets, and potential synergies to be obtained from a combination of the companies. At the conclusion of the presentation, management informed Parent that the Company Board would be holding regularly scheduled meetings on May 20 and 21, 2009, and requested that any revised proposal be submitted prior to May 20 so that the Company Board could consider such proposal at these meetings.

On May 19, 2009, Parent sent a letter to Mr. Brandt containing a revised proposal with an offer price of $15.50 per Share in cash, and otherwise subject to the same terms as those set forth in the letter containing the initial offer. The letter noted the premium of 44.3% to the Company’s May 18, 2009 closing Share price of $10.74, and the 49.4% premium to the Company’s one-month average Share price of $10.38, and conveyed Parent’s desire to proceed rapidly and exclusively in working toward a definitive agreement.

Representatives from Lazard contacted J.P. Morgan the next morning to confirm receipt of the revised offer letter and to inquire as to the sufficiency of the increased offer price. J.P. Morgan informed Lazard that the Board would likely continue to be disappointed in the offer price and explained that the Company Board would be taking into account the valuation information and financial forecasts for the Company it had recently reviewed, as well as the optimism of management with respect to the Company’s current pipeline.

Between May 20 and May 27, 2009, representatives of J.P. Morgan and Lazard had several calls and discussions regarding the Company’s valuation and the strong desire by Parent to move forward in negotiations on an exclusive basis. Throughout these discussions J.P. Morgan encouraged Lazard to persuade Parent to increase its offer price and return with a final revised bid in return for exclusivity in order to address the concerns of both companies and come to an agreement on preliminary transaction terms as rapidly as possible.

On May 27, 2009, Mr. Nakatomi sent a letter to Mr. Brandt containing a revised offer price of $16.50 per Share in cash, again subject to the same terms and conditions as the previous offers, except the letter again stated that a 45-day exclusivity period was required in return for the increased offer price. The letter also stated that Parent would expect the terms of the definitive acquisition agreement, particularly the amount of the termination fee and other “deal protection” terms, to reflect the full valuation reflected by Parent’s proposed offer price.

Mr. Brandt sent a letter to Mr. Nakatomi later that day and attached an executed 30-day exclusivity agreement to the letter, indicating that if the terms thereof were acceptable, Mr. Nakatomi should execute the letter agreement in turn, at which point Parent would be granted access to a populated electronic data room in order to commence its due diligence.

On June 3, 2009, the Company granted access to an electronic data room to various representatives of Parent and its outside advisors as the parties and their respective advisors negotiated the final terms of the exclusivity agreement and coordinated the execution thereof, and over the next several weeks, Parent conducted its due diligence review. Cravath, Swaine & Moore LLP (“Cravath”), legal counsel to the Company, also sent the first draft of the Merger Agreement to Debevoise & Plimpton LLP (“Debevoise”), U.S. legal counsel for Parent, and Nishimura & Asahi, Japanese legal counsel for Parent, for review. From June 3, 2009 through July 13, 2009, the management teams and legal and financial advisors of Parent and the Company had

14

several negotiations regarding the terms of the Merger Agreement and related documents. During that period, a number of drafts of the Merger Agreement and related documentation were negotiated and exchanged between the parties.

On June 8, 2009, the executed Exclusivity Agreement, effective until July 1, 2009, was delivered by the parties, as further described under Item 3 above.

On June 17 and 18, 2009, several representatives of Parent and its advisors visited Miami, Florida to perform an in-person review of the Company’s facilities and hold discussions with Company personnel and management.

The morning of June 25, 2009, representatives of Lazard contacted J.P. Morgan to convey the message that Parent was considering reducing its offer price by $0.50 per Share due to concerns about certain contingent liabilities and reservations regarding the actual amount of public company cost savings following the consummation of the proposed transactions. Later that evening, J.P. Morgan informed Lazard that the Company Board had been considering asking for an increase to the proposed offer price and that, therefore, any price reduction would be unacceptable to the Company Board. Later that day, after conveying J.P. Morgan’s response to Parent, Lazard again contacted J.P. Morgan and reaffirmed the previous $16.50 per share offer price, noting, however, that Parent would not consider any requests to increase this price.

During the period of time from May 26, 2009 to July 6, 2009, the trading price of the Company’s common stock increased from $10.80 on May 26 to $14.61 on July 6, with particularly heavy volume on June 26. Representatives of Parent expressed concern to Cravath and the Company that this increase, and other movements in the price of the Company’s common stock, including the decrease from the July 7 closing price of $14.36 per share to the July 10 closing price of $13.27 per share, may have been attributable, at least in part, to rumors relating to the negotiations between Parent and the Company.

On July 7 and 8, 2009, the legal representatives and advisors of each of the Company and Parent met in person in New York to negotiate and come to a preliminary agreement on the terms of the Merger Agreement, subject to a few outstanding items, including the size of the break-up fee and circumstances under which it would be payable, whether to include a material adverse effect condition to the Offer and any exceptions to the definition thereof, and the treatment of the potential trigger of the “buy/sell” provision in the Novogyne joint venture agreement with Novartis.

On July 8 and 9, 2009, representatives of Parent met with Messrs. Brandt and Eisenberg in order to discuss retention and post-closing employment matters, while the companies’ legal advisors continued to finalize the terms of the Merger Agreement. During these meetings, Mr. Brandt indicated that, after spending a great deal of time considering his professional objectives, he had determined that remaining with the Company as a subsidiary of Parent rather than an independent public company was inconsistent with these objectives, and therefore he was not interested in remaining with the Surviving Corporation for anything other than a transition period following the consummation of the proposed transactions. He also indicated that Mr. Eisenberg would be an appropriate candidate to take his place as President and Chief Executive Officer. The representatives of Parent expressed disappointment with Mr. Brandt’s decision, as Parent had previously informed the Company’s advisors that satisfactory employment arrangements with senior management, particularly Mr. Brandt, were an important element of the proposed transaction. Nevertheless, the representatives continued discussions with Mr. Eisenberg, noting that Mr. Brandt’s decision might cause Parent to withdraw its offer to purchase the Company or decrease its proposed offer price. On the second day of these meetings, the representatives of Parent agreed to work toward an agreement on terms of an employment agreement whereby Mr. Eisenberg would assume the roles of President and Chief Executive Officer of the Company following the Offer and Merger if Parent determined to proceed with the proposed transaction, and would expect to finalize such terms prior to any public announcement of the proposed transaction. The discussions between Mr. Eisenberg and representatives of Parent continued throughout the following weekend, with the parties substantially reaching an agreement on terms on Sunday afternoon, July 12, 2009.

On the evening of July 10, 2009, representatives of J.P. Morgan contacted Lazard and informed its representatives that the Company Board wanted Parent to increase the proposed offer price based on positive

15

Phase II clinical trial results for the Company’s Mesafem product under development which were unblinded to the Company earlier that day and reported by Joel Lippman, M.D., Vice President — Clinical Development & Chief Medical Officer of the Company. J.P. Morgan also explained that deal certainty continued to be a key issue for the Company Board. In return, Lazard explained that it did not think Parent would accept any increase in the offer price, but that some flexibility on deal certainty might be possible. In addition, Dr. Lippman spoke with the Lazard representatives in order to provide a brief overview of the results of the clinical trials for Mesafem and to express his willingness to review the data in more detail with Parent at any time.

Over the course of the next several days a number of conversations took place between representatives of the Company and Parent with respect to the Company’s request for an increase to the offer price, Parent’s consideration of a decrease to its offer price, the advisors’ respective assessments regarding the value of the Company and the outstanding issue in the draft of the merger agreement relating to deal certainty, among other things.

On July 12, 2009, Lazard contacted J.P. Morgan to convey the message from Parent that its offer price of $16.50 per Share was its best and final offer and that if the Company continued to seek a higher offer price Hisamitsu would discontinue any further discussions with respect to the proposed acquisition of the Company. However, the Lazard representatives indicated that Parent would accept the terms of the material adverse effect condition in the Merger Agreement proposed by the Company, allocating the risk of any generic challenge to the Company’s key products or adverse development with respect to the resolution of the peel force specifications for the Company’s Daytrana product to Parent.

During the afternoon of July 13, 2009, the Company informed Parent that the Company Board had approved the execution of the Merger Agreement.

On the morning of July 14, 2009, Parent’s board of directors approved the execution of the Merger Agreement and the Company, Parent, Holdings and Purchaser executed and delivered the Merger Agreement and Parent and the Company issued a joint press release announcing the execution of the Merger Agreement.

On July 23, 2009, Purchaser commenced the Offer.

11.   The Transaction Agreements; Employment Agreement.

The Merger Agreement

The following is a summary of the material provisions of the Merger Agreement. This summary does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, which is filed with the SEC as Exhibit (d)(1) to the Schedule TO and incorporated herein by reference, and which may be examined and copied as set forth in Section 8 — “Certain Information Concerning Parent, Holdings and the Purchaser” above. For a complete understanding of the Merger Agreement, you are encouraged to read the full text thereof.

The Offer.  The Merger Agreement provides for the commencement of the Offer no later than 10 business days after the date of the Merger Agreement. The obligations of Purchaser to accept for payment, and pay for, Shares tendered in the Offer are subject to the satisfaction or waiver of conditions described in Section 15 — “Certain Conditions of the Offer.” Parent, Holdings and Purchaser may, in their sole discretion, waive, in whole or in part, any condition or modify the terms of the Offer, except that, without the consent of the Company, Purchaser may not (i) reduce the number of Shares subject to the Offer, (ii) reduce the Offer Price, (iii) waive or amend the Minimum Condition, (iv) add to the conditions to the Offer or modify any condition in any manner adverse to the holders of Shares, (v) extend the Offer other than as provided in the Merger Agreement, (vii) change the form of consideration payable in the Offer or (viii) otherwise amend the Offer in any manner adverse to the holders of Shares.

Notwithstanding the foregoing, so long as neither the Company nor Parent terminates the Merger Agreement in accordance with its terms, Purchaser may extend the Offer for one or more consecutive increments of not more than seven business days each if any of the Offer conditions is not satisfied at the

16

initial scheduled expiration date of the Offer until such time as such conditions are satisfied or waived, and Purchaser may extend the Offer for the minimum period required by any rule, regulation, interpretation or position of the SEC or the staff thereof applicable to the Offer. In addition, if at the otherwise scheduled expiration date of the Offer any Offer condition is not satisfied, Purchaser shall extend the Offer at the request of the Company for one or more consecutive increments of not more than seven business days each (or for such longer period as may be agreed by Parent and the Company); subject to a 90-day limitation if the Minimum Condition has not been met. Furthermore, Purchaser may make available one or more “subsequent offering periods,” in accordance with Rule 14d-11 of the Exchange Act, of at least three and more not than 20 business days each.

Top-Up Option.  The Company granted Purchaser an irrevocable option to purchase, at a price per share equal to the Offer Price, newly issued shares of the Company’s common stock in an amount up to the lowest number of shares of the Company’s common stock (the “Top-Up Shares”) that, when added to the number of shares of the Company’s common stock then directly or indirectly owned by Parent, constitutes one share more than 90% of the fully diluted shares of the Company’s common stock outstanding after the issuance of the Top-Up Shares. The option is exercisable only once, in whole but not in part, at such time as Parent, Holdings and Purchaser directly or indirectly own at least 85% of the fully diluted shares of the Company’s common stock following the expiration of the Offer and any subsequent offering period.

The Merger.  The Merger Agreement provides that, subject to the satisfaction or waiver of certain conditions, following completion of the Offer and in accordance with Delaware General Corporation Law (“DGCL”), Purchaser will merge with and into the Company, with the Company continuing as the surviving corporation (the “Surviving Corporation”) of the Merger and an indirect wholly-owned subsidiary of Parent. At the Effective Time each share of the Company’s common stock (other than shares owned by Parent, Holdings, Purchaser or the Company, or held in the Company’s treasury or by stockholders who have properly perfected their statutory appraisal rights in accordance with Section 262 of the DGCL) shall automatically be converted into the right to receive an amount in cash equal to the Offer Price, less any applicable withholding taxes. Each share of the Company’s common stock owned by Parent, Holdings, Purchaser or the Company shall automatically be canceled and retired and shall cease to exist, and no consideration shall be delivered or deliverable in exchange therefor, and each share of the Company’s common stock owned by any subsidiary of the Company or Parent (other than Purchaser or Holdings) shall automatically be converted into one fully paid and nonassessable share of common stock, par value $0.01 per share, of the Surviving Corporation. The certificate of incorporation and bylaws of Purchaser in effect immediately prior to the Effective Time will be the certificate of incorporation and bylaws of the Surviving Corporation and the directors of Purchaser immediately prior to the Effective Time will be the initial directors of the Surviving Corporation until the earlier of their resignation or removal or until their respective successors are duly elected or appointed and qualified, as the case may be. The officers of the Company immediately prior to the Effective Time will be the officers of the Surviving Corporation.

Representations and Warranties.  In the Merger Agreement, the Company has made customary representations and warranties to Parent, Holdings and Purchaser, including representations relating to organization, standing and power, existence and good standing of the Company’s subsidiaries, capitalization, authorization and absence of conflicts with or consents required in connection with the Merger Agreement, SEC filings, disclosure documents and information provided, absence of certain changes or events, taxes, labor and employment matters, employee benefit programs, properties, material contracts, legal proceedings, compliance with applicable laws and regulations, environmental matters, intellectual property, suppliers, insurance, broker’s fees, and the opinion of the Company’s financial advisor.

“Company Material Adverse Effect” is defined in the Merger Agreement as any change, event, effect or occurrence that (i) has a material adverse effect on the business, assets, condition (financial or otherwise) or results of operations of the Company and its subsidiaries, taken as a whole, or (ii) prevents or materially delays the consummation of the Offer, the Merger and the other transactions contemplated by the Merger Agreement or the ability of the Company to perform its obligations under the Merger Agreement in any material respect; provided, however, that none of the following will be deemed either alone or in combination

17

to constitute, or will be taken into account in determining whether there has been, or would reasonably be expected to be, a Company Material Adverse Effect: any change, event, effect or occurrence that results from,

•  changes, circumstances or conditions generally affecting the industry in which the Company operates, general economic or regulatory, legislative or political conditions or securities, credit, financial or other capital markets conditions (including changes generally in prevailing interest rates, currency exchange rates, credit markets and price levels or trading volumes), or geopolitical conditions, the outbreak or escalation of hostilities, any acts of war, sabotage or terrorism, or any escalation or worsening of any such acts of war, sabotage or terrorism, in each case except to the extent that such effect has a disproportionate effect on the Company and its subsidiaries, taken as a whole, relative to others in the industries in which the Company and its subsidiaries operate;

•  any change in applicable law or U.S. generally accepted accounting principles (or authoritative interpretation thereof) or in the market price, credit rating or trading volume of the Company’s securities;

•  the execution and delivery, performance, or announcement or pendency of the Merger Agreement or the anticipated consummation of the Offer, the Merger and the other transactions contemplated by the Merger Agreement;

•  any failure by the Company to meet any internal or published projections, forecasts, estimates or predictions in respect of revenues, earnings or other financial or operating metrics for or during any period;

•  the serving upon the Company of an Offering Notice (as defined below) or any action or steps taken in connection therewith or with the sale, purchase and transfer of the Company’s or Novartis’ interest in Novogyne;

•  any challenge to, or litigation initiated against the Company, any of its subsidiaries or Novogyne relating to the Orange Book listed patents for Daytrana, Vivelle-Dot or CombiPatch or any paragraph IV filing or notice thereof relating to Daytrana, Vivelle-Dot or CombiPatch;

•  any adverse action taken, or any adverse determination or communication, by the Food and Drug Administration with respect to, or any withdrawal or recall of, Daytrana arising from or as a result of issues related to the peel force specifications of Daytrana; or

•  any suit, action or other legal proceeding arising out of or related to the Merger Agreement, the Offer, the Merger or the other transactions contemplated by the Merger Agreement.

In the Merger Agreement, Parent, Holdings and Purchaser have made customary representations and warranties to the Company, including representations relating to corporate organization, standing and power, authorization and absence of conflicts with or consent required in connection with the Merger Agreement, information supplied, broker’s fees, litigation, ownership of shares of the Company’s common stock, and availability of funds.

This summary of the representations and warranties and other terms of the Merger Agreement is intended solely to provide you with information regarding the terms of the Merger Agreement and is not intended to modify or supplement any factual disclosures about the Company in its public reports filed with the SEC. In particular, the Merger Agreement and any summary of its terms are not intended to be, and should not be relied upon as, disclosures regarding any facts or circumstances relating to the Company, Parent, Holdings or Purchaser. The representations and warranties contained in the Merger Agreement have been negotiated with the principal purpose of establishing the circumstances in which the Purchaser may have the right not to consummate the Offer, or in which a party may have the right to terminate the Merger Agreement if the representations and warranties of the other party prove to be untrue, due to a change in circumstance or otherwise, and to allocate risk between the parties, rather than establish matters as facts. The representations and warranties may also be subject to a contractual standard of materiality different from that generally applicable to stockholders of the Company.

18

Operating Covenants.  The Merger Agreement provides that, from the date thereof to the Effective Time, except as specifically contemplated by the Merger Agreement (including the disclosure letter delivered by the Company to Parent, Holdings and the Purchaser in connection with the Merger Agreement), the business of the Company and its subsidiaries will be conducted in the ordinary course in substantially the same manner as previously conducted and the Company shall use all reasonable efforts to preserve intact its current business organization and keep available the services of its officers and employees and preserve its relationships with those having material business dealings with the Company. In addition, between the date of the Merger Agreement and the Effective Time, the Company is subject to specified operating covenants and restrictions, including, but not limited to, restrictions relating to the declaration or payment of dividends, issuance, delivery, sale or grant of stock, rights linked to the value of Company Common Stock or convertible securities, redemption or repurchase of stock, amendment of charter documents or bylaws, acquisitions, adoption of collective bargaining agreements, employee compensation or benefits, hiring and promotion, changes to accounting methods or tax elections, sale, lease, disposition, pledge or encumbrance of any material properties or assets, indebtedness, capital expenditures in excess of $250,000 (other than in accordance with the Company’s 2009 capital expenditure budget), waiver of rights with respect to any claims or litigation, entry into or modification of material contracts, sale, transfer, assignment or disposition of material intellectual property, waiver of the benefits of or modification of standstill or similar agreements, engagement in other business, and any authorization, commitment or agreement to take any of the foregoing actions.

No Solicitation.  The Merger Agreement contains provisions prohibiting (subject to certain exceptions as described below and in the Merger Agreement) each of the Company and its subsidiaries, each of their respective directors, officers and employees, and any investment banker, attorney or other advisor or representative (collectively, “Representatives”) of the Company or any of its subsidiaries, from: (a) directly or indirectly soliciting, initiating or knowingly encouraging the submission of any Company Takeover Proposal (as defined below); (b) entering into any agreement or understanding with respect to any Company Takeover Proposal; or (c) directly or indirectly participating in any discussions or negotiations regarding, or furnishing to any person any information with respect to, or taking any other action to facilitate or encourage any inquiries or the making of any proposal that constitutes, or could reasonably be expected to lead to, any Company Takeover Proposal.

However, at any time prior to the date on which Shares are first accepted for payment pursuant to the Offer (the “Offer Closing Date”), in response to an unsolicited bona fide written Company Takeover Proposal that otherwise did not result from a breach of the provisions described above; and that the Company Board determines in good faith, after consultation with its outside counsel and independent financial advisor, constitutes or is reasonably likely to result in a Superior Company Proposal (as defined below), the Company may (a) furnish information with respect to the Company to the person making such proposal and its Representatives but only pursuant to a confidentiality agreement with such person with confidentiality and certain other terms no less favorable in the aggregate to the Company that its confidentiality agreement with Parent, so long as the Company also provides Parent, in accordance with the terms of the confidentiality agreement between the Company and Parent, any non-public information with respect to the Company provided to such other person which was not previously provided to Parent and (b) participate in discussions or negotiations with such person and its Representatives regarding such proposal.

The Merger Agreement also provides that the Company will advise Parent within 24 hours of the receipt of any Company Takeover Proposal or any inquiry with respect to or that could reasonably be expected to lead to any Company Takeover Proposal, the material terms and conditions of such proposal or inquiry and the identity of the person making such proposal or inquiry. In addition, the Company must keep Parent fully informed on a current basis as to the status and any related developments, discussions and negotiations related to any Company Takeover Proposal or inquiry.

The Board is restricted by the Merger Agreement from withdrawing or adversely modifying its recommendation, approving or recommending any Company Takeover Proposal (or any letter of intent or similar agreement relating to any Company Takeover Proposal), or resolving, agreeing or proposing publicly to take any such action, unless it receives an unsolicited Superior Company Proposal that did not otherwise result from a breach

19

of the non-solicitation restrictions in the Merger Agreement, or if an Intervening Event (as defined below) occurs.

In each case the Board must determine, in good faith and based on the advice of outside counsel, that it is necessary to withdraw or adversely modify its recommendation in order to comply with its fiduciary obligations, and must cause the Company to provide written notice to Parent that the Board intends to change its recommendation. In the case of an Intervening Event, the notice must include a description in reasonable detail thereof and, in the case of a Superior Company Proposal, the notice must specify the material terms and conditions thereof and attach a copy of the most current draft of any written agreement relating thereto, and the Company must negotiate in good faith with Parent for at least five business days following Parent’s receipt of such notice. After such period of time the Board may withdraw or adversely modify its recommendation only if, taking into account any changes to the Merger Agreement proposed by Parent, doing so remains necessary for the Board to comply with its fiduciary obligations. The Company shall keep confidential any proposals made by Parent to revise the terms of this Agreement, other than in the event of any amendment to the Merger Agreement and to the extent required to be disclosed in any filing with the SEC.

An “Intervening Event” is defined in the Merger Agreement as an event, fact, circumstance, development or other information, unknown to the Board as of the date of the Merger Agreement, which becomes known prior to the closing of the Offer; provided, however, that any change or development relating to any clinical trial of one or more products or product candidates of the Company or any of its subsidiaries or any determination or communication by the FDA or any other governmental entity relating to any product or product candidate of the Company or any of its subsidiaries will not constitute an Intervening Event.

A “Company Takeover Proposal” is defined in the Merger Agreement as any inquiry, proposal or offer from any person or group relating to (a) any direct or indirect acquisition or purchase, in a single transaction or a series of transactions, of (i) 10% or more of assets of the Company and its subsidiaries, taken as a whole, or (ii) 10% or more of the outstanding shares of any class of capital stock of the Company or (b) any tender offer, exchange offer, merger, consolidation, business combination, recapitalization, liquidation, dissolution, binding share exchange or similar transaction involving the Company, any of its subsidiaries or Novogyne, other than, in each case, the transactions contemplated by the Merger Agreement.

“Superior Company Proposal” is defined in the Merger Agreement as any bona fide Company Takeover Proposal that, if consummated, would result in the acquisition of all or substantially all of the equity securities or assets of the Company and its subsidiaries by a person or group on terms which the Board determines, in good faith, after consultation with the Company’s outside legal and financial advisors, would result in greater value to the stockholders of the Company from a financial point of view than the transactions contemplated by the Merger Agreement, taking into account all the terms and conditions of the proposal and the Merger Agreement (including any new proposal by Parent), that is reasonably capable of being completed, and that is not subject to any financing condition.

Company Stockholder Meeting; Board Recommendation.  The Merger Agreement provides that, if the adoption of the Merger Agreement by the Company’s stockholders is required by applicable law in order to consummate the Merger, the Company will, at Parent’s request, duly call, give notice of, convene and hold a meeting of its stockholders for the purpose of adopting the Merger Agreement. The Company has agreed to cause the Board, unless the Board has withdrawn or modified its approval or recommendation of the Merger Agreement pursuant to the terms thereof, to recommend approval of the Merger Agreement to the Company’s stockholders at any such meeting, and Parent has agreed to cause all shares of Company Common Stock then owned by Parent, Holdings, Purchaser or any other subsidiary of Parent to be voted in favor of adoption of the Merger Agreement.

Reasonable Efforts to Cause Merger to Occur.  The Merger Agreement requires each of the parties to use its reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated by the Merger Agreement, including observing all applicable waiting periods, obtaining all necessary actions or non-actions, waivers, consents and approvals, making all necessary registrations and filings, taking all reasonable steps as

20

may be necessary to obtain an approval or waiver from, or to avoid an action or proceeding by, any governmental entity, defending any legal proceedings, and executing and delivering any additional instruments necessary to consummate the transactions contemplated by or required in order to fully carry out the purposes of the Merger Agreement. However, Parent and its affiliates may not be required to agree to certain conditions that may be imposed by governmental authorities in the United States.

Equity Awards.  The Merger Agreement provides that, as of the Effective Time, each outstanding stock option, stock-settled stock appreciation right (“SAR”), restricted share or restricted stock unit (collectively, the “Equity Awards”) granted under the Company’s 1999 Long-Term Incentive Plan, as amended, or the Company’s 2009 Equity Incentive Plan, without regard to the extent then vested or exercisable, will be canceled and the holder of such Equity Award will become entitled to receive an amount in cash equal to (a) in the case of unexercised stock options and SARs, the excess, if any, of the Offer Price minus the exercise price per share of Company Common Stock subject to the stock option or SAR, multiplied by the number of shares of Company Common Stock subject to the stock option or SAR immediately prior to the Effective Time, and (b) in the case of outstanding restricted shares and restricted stock units, the Offer Price for each such restricted share or restricted stock unit held.

All amounts payable with respect to the above Equity Awards will be subject to any required tax withholding and will be paid without interest.

Rule 16b-3 Actions.  The Merger Agreement provides that the Company shall take all reasonable steps as may be required to cause any dispositions of the Company’s equity securities (including derivative securities) in connection with the Merger Agreement by each individual who is a director or officer of the Company subject to the reporting requirements of Section 16(a) of the Exchange Act to be exempt under Rule 16b-3 promulgated under the Exchange Act.

Employee Matters.  The Merger Agreement provides that, for a period of one year following the Effective Time, Parent will provide or cause the Surviving Corporation to provide to employees of the Company and its subsidiaries who remain in the employment of the Surviving Corporation and its subsidiaries (the “Continuing Employees”): (i) salary and incentive opportunities (including any value attributable to equity-based compensation) and (ii) employee benefits, that are substantially comparable in the aggregate to those provided to such employees by the Company or its subsidiaries during the 12-month period immediately prior to the Effective Time; provided, however, that neither Parent nor the Surviving Corporation nor any of their subsidiaries shall have any obligation to provide equity or equity-based compensation. To the extent any employee benefit plan of Parent or its subsidiaries is made available to any Continuing Employees, Parent shall cause to be granted to such Continuing Employees credit for service with the Company prior to the Effective Time (as well as service with any predecessor employer of the Company or any of its subsidiaries), and, with respect to welfare plans, Parent will waive all limitations on participation and coverage requirements to the extent such limitations and requirements were satisfied or did not apply to such employees under the welfare plans of the Company and provide credit for any deductibles and co-payments paid prior to the Effective Time.

Indemnification and Insurance.  The Merger Agreement provides that all rights to indemnification and exculpation for acts or omissions occurring at or prior to the Effective Time existing on the date of the Merger Agreement in favor of the current or former directors or officers of the Company and its subsidiaries, as provided in their respective organizational documents and any indemnification or other agreements of the Company, shall be assumed by the Surviving Corporation and continue in full force and effect in accordance with their terms.

In addition, for a period of not less than six years after the Effective Time, Parent shall cause to be maintained in effect the current or substantially similar policies of directors’ and officers’ liability insurance maintained by the Company with respect to claims arising from or related to facts or events which occurred at or prior to the Effective Time. However, Parent shall not be obligated to make annual premium payments for such insurance to the extent such premiums exceed 250% of the last annual premium paid by the Company for such insurance prior to the date of the Merger Agreement.

21

Directors.  The Merger Agreement provides that, subject to compliance with Section 14(f) of the Exchange Act, promptly upon payment for shares of Company Common Stock pursuant to the Offer, Purchaser will be entitled to designate such number of directors on the Company Board equal to at least that number of directors, rounded up to the next whole number, which is the product of (a) the total number of directors on the Company Board (giving effect to the directors elected pursuant to this provision) multiplied by (b) the percentage that, (i) the number of shares of Company Common Stock accepted and paid for by Purchaser plus the number of shares of Company Common Stock otherwise owned by Parent, Holdings, Purchaser or any other subsidiary of Parent bears to (ii) the number of shares of Company Common Stock outstanding. The Company has agreed, subject to applicable law, to take all action requested by Parent necessary to effect any such election or appointment, including, at the option of Parent, either increasing the size of the Company Board or obtaining the resignations of such number of its current directors, or both.

In the event Purchaser’s designees are elected or appointed to the Company Board, until the Effective Time the Company Board will have at least three directors who were directors on the date of the Merger Agreement and who will be independent for purposes of Rule 10A-3 under the Exchange Act (the “Continuing Directors”). If Parent’s designees to the Company Board constitute at least a majority thereof prior to the Effective Time, each of the following actions may be effected only if such action is approved by a majority of the Continuing Directors: (x) amendment or termination of the Merger Agreement, (y) exercise or waiver of any of the Company’s rights under the Merger Agreement, or (z) extension of the time for performance of any obligation of Parent or Purchaser under the Merger Agreement.

Rule 14d-10 Matters.  Prior to the scheduled expiration of the Offer, the Company will take all such steps as may be required to cause to be exempt under the safe harbor provisions of Rule 14d-10 of the Exchange Act any employment compensation, severance or other employee benefit arrangement that has been or will be entered into by the Company, Parent or any of their respective affiliates with current or future directors, officers or employees.

Vivelle Ventures LLC.  Pursuant to the Limited Liability Company Operating Agreement, dated as of May 1, 1999, between Novartis and the Company (the “LLC Operating Agreement”), which governs the Company’s Novogyne joint venture with Novartis, either the Company or Novartis may notify the other party of the price at which it would be willing to acquire 100% of the joint venture interests (the “Offering Notice”), affording the other party the option, within 45 days of receipt of the Offering Notice, to either purchase the other party’s interest or to sell its own interest to the other party at the price specified in the Offering Notice.

The Merger Agreement provides that, if Novartis serves an Offering Notice upon the Company, Parent will be permitted to make the determination as to whether to sell the Company’s interest or purchase Novartis’s interest (the “buy/sell determination”). However, if the Offer has not closed and has been extended beyond its initial expiration date because the Minimum Condition has not been satisfied, because any waiting period required under the HSR Act or under the Foreign Exchange and Foreign Trade Law of Japan (Law No. 228 of 1949) has not expired, or because of the existence of a legal restraint or a regulatory challenge to the transaction, the Company will be permitted to make the buy/sell determination. If the Offer has not closed and has been extended beyond its initial expiration date because Parent has asserted the failure of any of the other conditions to the Offer, Parent will be permitted to make the buy/sell determination, but will be required to waive all conditions to the Offer other than the Minimum Condition and the condition relating to the existence of a legal restraint. If the Company is entitled to make the buy/sell determination (or if Parent elects not to make the buy/sell determination) and the Company’s buy/sell determination is inconsistent with Parent’s buy/sell determination, Parent may terminate the Merger Agreement within five business days of receipt of notice from the Company of its buy/sell determination.

If the buy/sell determination is to purchase Novartis’s interest, the Company will be permitted to take all actions necessary or required to effectuate the sale, purchase and transfer of the relevant interest, including incurring indebtedness to finance such purchase, after reasonable consultation with the Parent. In addition, the Company will not serve an Offering Notice upon Novartis without the prior written consent of Parent and will not consent to any amendment of the LLC Operating Agreement or permit the managers designated by the Company to approve or consent to certain actions under the LLC Operating Agreement. The Merger

22

Agreement also provides that the Company, to the extent practicable, will keep Parent reasonably informed of any material action to be taken by the joint venture.

Patent Litigation.  The Merger Agreement provides that the Company will consult with Parent regarding, and, to the extent the Company controls the defense, permit Parent to participate in the defense of, any litigation initiated against the Company or any of its subsidiaries relating to the Orange Book listed patents for Daytrana, Vivelle-Dot and CombiPatch. Further, the Merger Agreement prohibits the Company from taking an action in connection with any such litigation that is reasonably likely to materially affect the outcome of such litigation without the prior written consent of Parent. The Company shall, to the extent practicable, consult with Parent regarding, and keep Parent fully informed of, any litigation initiated against Novogyne regarding the Orange Book listed patents for Vivelle-Dot or CombiPatch.

Conditions to the Merger.  The Merger Agreement provides that the respective obligations of each party to effect the Merger are subject to the satisfaction or waiver, on or prior to the closing date of the Merger, of the following conditions:

•  if required by law, the Merger Agreement shall have been adopted by the holders of a majority of the outstanding shares of the Company’s common stock;

•  any waiting period (and any extension thereof) applicable to the Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), shall have been terminated or shall have expired;

•  no order, decree or ruling issued by any governmental entity of competent jurisdiction or law or other legal prohibition preventing the consummation of the Merger shall be in effect; and

•  Purchaser shall have accepted shares of the Company’s common stock for payment pursuant to the Offer.

Termination.  The Merger Agreement may be terminated prior to the closing of the Offer by mutual written consent of all parties. The Merger Agreement may also be terminated by either Parent or the Company, if (i) the Offer has not closed within nine months from the date of the Merger Agreement (the “Outside Date”) or the Minimum Tender Condition has not been satisfied by the date that is 90 days after the initial expiration date of the Offer, unless the failure to consummate the Offer is the result of a material breach of this Agreement by the party seeking to terminate this Agreement, (ii) any governmental entity permanently prohibits the Merger through a final and non-appealable legal restraint, provided that the party seeking to terminate this Agreement shall have used its reasonable efforts to prevent the entry of any such Legal Restraint and to appeal as promptly as possible any such Legal Restraint that may be entered, or (iii) prior to the Offer Closing Date, either party breaches or fails to perform any of its representations, warranties or covenants set forth in the Merger Agreement in any material respect, which breach or failure to perform is not cured prior to the earlier of (a) 30 days after notice of breach or failure to perform is given or (b) the Outside Date.

Parent will have the right to terminate the Merger Agreement prior to the closing of the Offer, and the Company will be obligated to pay the termination fee described below, if the Board withdraws or adversely modifies its recommendation or fails to publicly reaffirm its recommendation within 10 business days (or, if shorter, such number of business days remaining prior to the Offer Closing Date) of Parent’s written request to do so following the public disclosure of a Company Takeover Proposal.

The Company will have the right to terminate the Merger Agreement prior to the closing of the Offer if the Board receives an unsolicited Superior Company Proposal which does not otherwise result from or cause a breach of the non-solicitation provisions described above, the Company complies with certain procedural and other requirements and the Company pays the termination fee described below.

Parent also has the termination rights described above under the heading “Vivelle Ventures LLC.”

Termination Fee/Expense Reimbursement.  The Merger Agreement provides that a termination fee of $17.15 million will be payable by the Company to Parent if the Company terminates the Merger Agreement to accept a Superior Company Proposal or the Board withdraws or adversely modifies its recommendation of the

23

Offer, Merger and other transactions contemplated by the Merger Agreement or fails to publicly reaffirm its recommendation with respect thereto, as described above.

The termination fee will also be payable by the Company if, after the date of the Merger Agreement, a Company Takeover Proposal or an intention to make a Company Takeover Proposal is publicly proposed or announced or otherwise becomes publicly known, the Minimum Condition is not satisfied at the final expiration date of the Offer, the Merger Agreement is terminated as a result of the expiration of the Offer, and, within 12 months of such termination, the Company enters into a definitive agreement to consummate, or consummates, any Company Takeover Proposal.

For the purposes of the foregoing, all references to 10% in the definition of “Company Takeover Proposal” set forth above shall be deemed references to 50%.

The Company will be required to reimburse Parent for all expenses incurred, up to $2,000,000, if the Minimum Condition is not satisfied at the final expiration date of the Offer, and the Merger Agreement is terminated as a result of the expiration of the Offer. Any Company Termination Fee due will be reduced by any expense reimbursement already paid.

If Parent accepts the termination fee, it will constitute Parent’s exclusive remedy for termination of the Merger Agreement by the Company to accept a Superior Proposal. However, the Company will be required to pay Parent’s reasonable costs and expenses incurred in connection with any proceedings commenced by Parent to enforce the Company’s obligation to promptly pay any required termination fee or expenses. Certain other fees incurred in connection with the transactions described in the Merger Agreement will be shared equally by Parent and the Company.

Amendment.  The Merger Agreement may be amended by the parties thereto at any time before or after adoption thereof by the Company’s stockholders, provided that (a) after adoption of the Merger Agreement by the stockholders of the Company (in the case that such adoption is required), no amendment may be made that by law requires further approval by the stockholders of the Company without the further approval of such stockholders, (b) no amendment shall be made to the Merger Agreement after the Effective Time and (c) except as otherwise provided in the Merger Agreement, no amendment of the Merger Agreement by the Company shall require the approval of the stockholders of the Company.

Confidentiality Agreement.

On June 25, 2008, the Company and Parent entered into a confidentiality agreement (the “Confidentiality Agreement”) in connection with ongoing discussions regarding a possible collaborative transaction or transactions between the parties, under which each party agreed to keep certain information concerning the other party which is furnished by or on behalf of the other party, and to use such information solely for the purposes of evaluating a possible negotiated transaction. Under this agreement, the parties also agreed that for a period expiring on the earlier of (a) June 25, 2010 and (b) the date of any public announcement of a partnership or collaboration agreement entered into between the parties, neither party would, among other things, purchase five percent or more of any class of securities of the other party registered under the Exchange Act, unless specifically invited in writing to do so by the other party.

The foregoing summary of the Confidentiality Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Confidentiality Agreement, which is filed with the SEC as Exhibit (d)(2) to the Schedule TO and incorporated herein by reference, and which may be examined and copied as set forth in Section 8 — “Certain Information Concerning Parent, Holdings and the Purchaser” above. For a complete understanding of the Confidentiality Agreement, you are encouraged to read the full text thereof.

Exclusivity Agreement.

The Company and Parent entered into an exclusivity letter agreement, dated June 4, 2009 (the “Exclusivity Agreement”), in connection with Parent’s commencement of its due diligence investigation of the Company and the negotiation of the Merger Agreement. The Exclusivity Agreement provides, among other

24

things, that for a period ending July 1, 2009, the Company shall not, nor shall it permit any of its officers, directors, agents, advisors, representatives or affiliates to, take any action to facilitate any inquiries or the making of any proposal that constitutes, or that could reasonably be expected to lead to, the acquisition of the Company.

The foregoing summary of the Exclusivity Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Exclusivity Agreement, which is filed with the SEC as Exhibit (d)(3) to the Schedule TO and incorporated herein by reference, and which may be examined and copied as set forth in Section 8 — “Certain Information Concerning Parent, Holdings and the Purchaser” above. For a complete understanding of the Exclusivity Agreement, you are encouraged to read the full text thereof.

Employment Agreement with Jeffrey F. Eisenberg.

On July 14, 2009, the Company and Jeffrey F. Eisenberg, the Company’s Executive Vice President, entered into an agreement (the “Employment Agreement”), which amended and restated Mr. Eisenberg’s existing employment agreement with the Company. When the Employment Agreement becomes effective, Mr. Eisenberg will serve as the President and Chief Executive Officer of the Company and will report solely to the Board of Directors of the Company and the Chief Executive Officer of Parent. Mr. Eisenberg will be based at the Company’s offices in New York or Miami, at his election.

The Employment Agreement becomes effective as of the earlier of the effective time of the Merger and the first business day following the day on which representatives of Parent hold a majority of seats on the Company’s board of directors (the “Effective Date”), and expires on the second anniversary of the effective time of the Merger. When effective, the Employment Agreement will supersede the prior letter agreement and change of control agreement between Mr. Eisenberg and the Company. On the second anniversary of the effective date of the Merger and each annual anniversary date thereafter, the term of the Employment Agreement will automatically be extended for a one-year period, unless either party delivers written notice at least 60 days prior to such anniversary.

Mr. Eisenberg will receive an annual base salary of $475,000, subject to annual review for merit increases, which base salary may not be decreased. He will also be entitled to participate in the Company’s annual incentive bonus plan, with annual target incentive bonuses for the years after 2009 of at least 75% of his annual base salary. Within 60 days of the Effective Time, the Company will establish a long-term incentive plan that is consistent with the terms and conditions agreed to between the Company and Parent and in which Mr. Eisenberg will participate.

If Mr. Eisenberg is terminated “without cause” or if he terminates the agreement for “good reason” during the two-year period following the Effective Date of the Merger, he will receive a lump sum payment equal to the sum of (i) two times the sum of (x) his annual base salary as in effect as of the date of termination and (y) his highest recent bonus, and (ii) his highest recent bonus prorated for the year of termination. He will also receive continued medical, welfare and fringe benefits for the remainder of the two-year period following the Effective Date of the Merger and outplacement services for one year at the highest level provided pursuant to Company plans, if such plans are in effect.

If Mr. Eisenberg is terminated without cause or if he terminates the agreement for good reason after the two-year period following the Effective Date of the Merger, he will receive a lump sum payment equal to 18 months of his annual base salary as in effect as of the date of termination and a prorated bonus for the year of termination, such bonus to be paid at the time it would have been paid had his employment continued. Mr. Eisenberg will be required to execute a waiver and release of claims to receive any severance benefits that are payable upon a termination without cause or for good reason.

If the Company declines to extend the term of the Employment Agreement, Mr. Eisenberg’s employment will terminate at the end of the then-current term of the Employment Agreement and it will be treated as if he were terminated without cause. If Mr. Eisenberg is terminated due to his death or Disability (as defined in the Employment Agreement), he will receive a prorated bonus for the year of termination, such bonus to be paid at the time it would have been paid had his employment continued.

25

Mr. Eisenberg will be subject to 18-month non-competition, non-solicitation, non-disruption and no-hire covenants following the termination of his employment for any reason and will be entitled to a full gross-up for any payments due as a result of the application of Section 280G of the Internal Revenue Code of 1986, as amended.

The foregoing summary of the Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Employment Agreement, which is filed with the SEC as Exhibit (d)(4) to the Schedule TO and incorporated herein by reference, and which may be examined and copied as set forth in Section 8 — “Certain Information Concerning Parent, Holdings and the Purchaser” above. For a complete understanding of the Employment Agreement, you are encouraged to read the full text thereof.

12.   Purpose of the Offer; Plans for the Company.

Purpose of the Offer.  The purpose of the Offer is to acquire control of, and the entire equity interest in, the Company. The purpose of the Merger is to acquire all outstanding Shares not tendered and purchased pursuant to the Offer or otherwise. If the Offer is successful, the Purchaser intends to consummate the Merger as soon as practicable after the acquisition of Shares in the Offer.

Statutory Requirements.  In general, under the DGCL, a merger of two Delaware corporations requires (i) the adoption of a resolution by the board of directors of each of the corporations desiring to merge approving an agreement and plan of merger containing provisions with respect to certain statutorily specified matters and (ii) the adoption of such agreement by the stockholders of each corporation by the affirmative vote of the holders of at least a majority of all of the outstanding shares of stock entitled to vote on such matter, unless otherwise provided for in that corporation’s certificate of incorporation or, in the case of a short-form merger, as described in the next paragraph. Accordingly, except in the case of a short-form merger, the affirmative vote of the Company’s stockholders representing at least a majority of all outstanding Shares is required in order to adopt the Merger Agreement. Assuming that the Minimum Condition is satisfied, upon consummation of the Offer, the Purchaser would own a number of Shares sufficient to enable it to satisfy the stockholder approval requirement to approve the Merger.

The DGCL also provides that, if a parent corporation owns at least 90% of each class of the stock of a subsidiary, that corporation can effect a short-form merger with that subsidiary without the action of the other stockholders of the subsidiary. Accordingly, if as a result of the Offer or otherwise, the Purchaser acquires or controls at least 90% of the outstanding Shares, the Purchaser could, and intends to, effect the Merger without prior notice to, or any action by, any other Company stockholder.

Plans for the Company.  Except as set forth in this Offer to Purchase, it is expected that, following the Merger, the business and operations of the Company will be continued substantially as they are currently being conducted. Notwithstanding the foregoing, Parent will continue to evaluate the business and operations of the Company during the pendency of the Offer and after the consummation of the Offer and the Merger and will take such actions as it deems appropriate under the circumstances then existing with a view to optimizing development of the Company’s potential in conjunction with Parent’s existing business.

Except as set forth in this Offer to Purchase, the Purchaser and Parent have no present plans, proposals or negotiations that relate to or would result in (i) any extraordinary corporate transaction involving the Company or any of its subsidiaries (such as a merger, reorganization or liquidation), (ii) any purchase, sale or transfer of a material amount of assets of the Company or any of its subsidiaries (iii) any material change in the Company’s present dividend rate or policy, or indebtedness or capitalization or (v) any other material change in the Company’s corporate structure or business.

Appraisal Rights.  No appraisal rights are available to the Company stockholders in connection with the Offer. However, if the Merger is consummated, a stockholder of the Company who has not tendered his or her Shares in the Offer or voted in favor of the Merger or consented thereto in writing will have rights under Section 262 of the DGCL to dissent from the Merger and demand appraisal of, and obtain payment in cash for the “fair value” of, that stockholder’s Shares. Those rights, if the statutory procedures are complied with, could

26

lead to a judicial determination of the fair value (immediately prior to the Effective Time) required to be paid in cash to dissenting stockholders of the Company for their Shares. Any such judicial determination of the fair value of the Shares would not necessarily include any element of value arising from the accomplishment or expectation of the Merger and could be based upon considerations other than, or in addition to, the Merger Consideration and the market value of the Shares, including asset values and the investment value of the Shares.

The value so determined could be more or less than, or the same as, the Offer Price or the Merger Consideration. If any Company stockholder who demands appraisal under Section 262 of the DGCL fails to perfect or effectively withdraws or loses his or her right to appraisal and payment under the DGCL, such holder’s Shares will thereupon be deemed to have been converted as of the Effective Time into the right to receive the Merger Consideration, without any interest thereon, in accordance with the Merger Agreement. A Company stockholder may withdraw his or her demand for appraisal by delivery to the Purchaser of a written withdrawal of his or her demand for appraisal within 60 days after the Effective Time or subsequently with the written approval of the surviving corporation. Failure to follow the steps required by Section 262 of the DGCL for perfecting appraisal rights may result in the loss of such rights.

THE PRESERVATION AND EXERCISE OF APPRAISAL RIGHTS REQUIRES STRICT ADHERENCE TO THE APPLICABLE PROVISIONS OF THE DGCL. FAILURE TO FULLY AND PRECISELY FOLLOW THE STEPS REQUIRED BY SECTION 262 OF THE DGCL FOR THE PERFECTION OF APPRAISAL RIGHTS WILL RESULT IN THE LOSS OF THOSE RIGHTS. THE FOREGOING SUMMARY OF THE RIGHTS OF DISSENTING STOCKHOLDERS UNDER THE DGCL IS NOT A COMPLETE STATEMENT OF THE PROCEDURES TO BE FOLLOWED BY STOCKHOLDERS DESIRING TO EXERCISE ANY APPRAISAL RIGHTS AVAILABLE UNDER THE DGCL AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE DGCL.

APPRAISAL RIGHTS CANNOT BE EXERCISED AT THIS TIME.  THE INFORMATION SET FORTH ABOVE IS FOR INFORMATIONAL PURPOSES ONLY WITH RESPECT TO ALTERNATIVES AVAILABLE TO STOCKHOLDERS IF THE MERGER IS CONSUMMATED. STOCKHOLDERS WHO WILL BE ENTITLED TO APPRAISAL RIGHTS IN CONNECTION WITH THE MERGER WILL RECEIVE ADDITIONAL INFORMATION CONCERNING APPRAISAL RIGHTS AND THE PROCEDURES TO BE FOLLOWED IN CONNECTION THEREWITH BEFORE SUCH STOCKHOLDERS HAVE TO TAKE ANY ACTION RELATING THERETO.

Going Private Transactions.  The SEC has adopted Rule 13e-3 under the Exchange Act, which is applicable to certain “going private” transactions, and which may under certain circumstances be applicable to the Merger or another business combination following the purchase of Shares pursuant to the Offer in which the Purchaser seeks to acquire the remaining Shares not held by it. The Purchaser believes that Rule 13e-3 will not be applicable to the Merger because it is anticipated that the Merger will be effected within one year following the consummation of the Offer and, in the Merger, stockholders will receive the same price per Share as that paid in the Offer.

13.   Certain Effects of the Offer.

Market for the Shares.  The purchase of Shares pursuant to the Offer will reduce the number of holders of Shares and the number of Shares that might otherwise trade publicly, which could adversely affect the liquidity and market value of the remaining Shares held by stockholders other than the Purchaser and Parent. The Purchaser cannot predict whether the reduction in the number of Shares that might otherwise trade publicly would have an adverse or beneficial effect on the market price for, or marketability of, the Shares or whether such reduction would cause future market prices to be greater or less than the Offer Price.

Stock Quotation.  The Shares are quoted on the Nasdaq Global Select Market. Depending upon the number of Shares purchased pursuant to the Offer, the Shares may no longer meet the requirements of the Nasdaq Global Select Market for continued quotation on the Nasdaq Global Select Market. The rules of the Nasdaq Global Select Market establish certain criteria that, if not met, could lead to the discontinuance of quotation of the Shares from the Nasdaq Global Select Market. Among such criteria are the number of

27

stockholders, the number of shares publicly held and the aggregate market value of the shares publicly held. If, as a result of the purchase of Shares pursuant to the Offer or otherwise, the Shares no longer meet the requirements of the Nasdaq Global Select Market for continued quotation and the quotation of the Shares is discontinued, the market for the Shares would be adversely affected.

Following the consummation of the Offer, it is possible that the Shares would be traded on other securities exchanges (with trades published by such exchanges), the Nasdaq SmallCap Market, the OTC Bulletin Board or in a local or regional over-the-counter market. The extent of the public market for the Shares would, however, depend upon the number of holders of Shares and the aggregate market value of the Shares remaining at such time, the interest in maintaining a market in the Shares on the part of securities firms, the possible termination of registration of the Shares under the Exchange Act, as described below, and other factors.

Margin Regulations.  The Shares are currently “margin securities” under the Regulations of the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”), which designation has the effect, among other effects, of allowing brokers to extend credit on the collateral of the Shares. Depending upon factors similar to those described above regarding the market for the Shares and stock quotations, it is possible that, following the Offer, the Shares would no longer constitute “margin securities” for the purposes of the margin regulations of the Federal Reserve Board and, therefore, could no longer be used as collateral for loans made by brokers.

Exchange Act Registration.  The Shares currently are registered under the Exchange Act. The purchase of the Shares pursuant to the Offer may result in the Shares becoming eligible for deregistration under the Exchange Act. Registration of the Shares may be terminated upon application by the Company to the SEC if the Shares are not listed on a national securities exchange and there are fewer than 300 record holders of Shares. Termination of registration of the Shares under the Exchange Act would substantially reduce the information that the Company is required to furnish to the Company stockholders and the SEC and would make certain provisions of the Exchange Act, such as the short-swing profit recovery provisions of Section 16(b) of the Exchange Act and the requirements of furnishing a proxy statement or information statement in connection with stockholders’ meetings pursuant to Section 14(a) or 14(c) of the Exchange Act and the related requirement of providing an annual report, no longer applicable to the Company. If the Shares are no longer registered under the Exchange Act, the requirements of Rule 13e-3 promulgated under the Exchange Act with respect to “going private” transactions would no longer be applicable to the Company. In addition, the ability of “affiliates” of the Company and persons holding “restricted securities” of the Company to dispose of the securities pursuant to Rule 144 promulgated under the U.S. Securities Act of 1933, as amended, may be impaired or, with respect to affiliates, eliminated. If registration of the Shares under the Exchange Act were terminated, the Shares would no longer be “margin securities” or eligible for stock exchange listing.

14.   Dividends and Distributions.

The Merger Agreement provides that from and after July 14, 2009 except as may be required by law, or with the prior written consent of Parent (which consent will not be unreasonably withheld or delayed) or as expressly contemplated or permitted by the Merger Agreement, neither the Company nor its subsidiaries will (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock, other than dividends and distributions by a direct or indirect wholly-owned subsidiary of the Company to its parent, (ii) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (iii) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any Company Subsidiary or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities, except for acquisitions of shares of capital stock of the Company in connection with withholding to satisfy tax obligations with respect to the exercise or vesting of equity awards, acquisitions of shares of capital stock of the Company in connection with the forfeiture of equity awards, or acquisitions of shares of capital stock of the Company in connection with the net exercise of equity awards, in each case

28

outstanding on the date of the Merger Agreement and in accordance with their terms as in effect on the date of the Merger Agreement.

15.   Certain Conditions of the Offer.

Notwithstanding any other provision of the Offer, subject to the Merger Agreement and any applicable rules and regulations of the SEC, the Purchaser will not be required to accept for payment or pay for any Shares tendered pursuant to the Offer if:

(a) the number of Shares validly tendered in the Offer and not withdrawn prior to any then scheduled Expiration Time does not represent at least a majority of the Shares then outstanding (determined on a fully diluted basis) (the “Minimum Condition”);

(b) any waiting period under the HSR Act, applicable to the Offer has not expired or terminated prior to the Expiration Time; or

(c) any of the following conditions exists at the Expiration Time:

(i) there shall be any Legal Restraint (as defined in the Merger Agreement) preventing the consummation of the Offer or the Merger in effect; provided that, subject to the proviso in Section 6.03(a) of the Merger Agreement limiting the actions to which Parent, Holdings and Merger Sub are required to take in connection with obtaining certain governmental approvals, the party seeking to assert this condition shall have used its reasonable efforts to prevent the entry of any such Legal Restraint and to appeal as promptly as possible any such Legal Restraint that may be entered;

(ii) there shall be pending any suit, action or proceeding by any United States Federal, state or local governmental entity challenging the acquisition by Parent or its affiliates of Shares or otherwise seeking to enjoin, restrain, prevent or prohibit the making or consummation of the Offer or the Merger that is reasonably likely to prevail; provided that the party seeking to assert this condition shall have used its reasonable efforts to consummate and make effective, in the most expeditious manner practicable, the Offer as required by Section 6.03(a) of the Merger Agreement;

(iii) any waiting period required under the Foreign Exchange and Foreign Trade Law of Japan (Law No. 228 of 1949, as amended) applicable to the purchase of shares of Company Common Stock pursuant to the Offer shall not have expired or been terminated; provided that the party seeking to assert this condition shall have used its reasonable efforts to consummate and make effective, in the most expeditious manner practicable, the Offer as required by Section 6.03(a) of the Merger Agreement;

(iv) (A) any representation and warranty of the Company in the Merger Agreement (other than those set forth in Sections 3.03, 3.04 (other than the representation set forth in the last sentence of Section 3.04(b)), 3.05(c), 3.06(d), 3.08(a) and 3.11(h) of the Merger Agreement) shall not be true and correct at such time, except to the extent such representation and warranty expressly relates to an earlier date (in which case on and as of such earlier date), other than for such failures to be true and correct that would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect (for purposes of determining the satisfaction of this condition, without regard to any qualifications or exceptions contained therein as to materiality or Company Material Adverse Effect), (B) any representation and warranty of the Company set forth in Sections 3.03, 3.04 (other than the representation set forth in the last sentence of Section 3.04(b)), 3.05(c) and 3.11(h) of the Merger Agreement shall not be true and correct in all material respects at such time, except to the extent such representation and warranty expressly relates to an earlier date (in which case on and as of such earlier date), and (C) any representation and warranty of the Company set forth in Section 3.06(d) or 3.08(a) of the Merger Agreement shall not be true and correct in all respects at such time, except to the extent such representation and warranty expressly relates to an earlier date (in which case on and as of such earlier date);

29

(v) the Company shall have failed to perform in all material respects all obligations to be performed by it under the Merger Agreement;

(vi) the Merger Agreement shall have been terminated in accordance with its terms;

(vii) there shall have occurred or exist any change, event, effect or occurrence since the date of the Merger Agreement that has had or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect; or

(viii) the Company shall have failed to furnish Parent with a certificate executed on behalf of the Company by the chief executive officer or chief financial officer of the Company certifying that the matters set forth in clauses (iv) and (v) of Exhibit A of the Merger Agreement have not occurred and continue to exist.

The foregoing conditions shall be in addition to, and not a limitation of, the rights of Parent, Holdings and the Purchaser to extend, terminate or modify the Offer pursuant to the terms and conditions of the Merger Agreement.

The foregoing conditions are for the sole benefit of Parent, Holdings and the Purchaser and, subject to the terms and conditions of the Merger Agreement, may be waived by Parent, Holdings and the Purchaser in whole or in part at any time and from time to time in their sole discretion (other than the Minimum Condition). The failure by Parent, Holdings, the Purchaser or any other affiliate of Parent at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right, the waiver of any such right with respect to particular facts and circumstances shall not be deemed a waiver with respect to any other facts and circumstances and each such right shall be deemed an ongoing right that may be asserted at any time and from time to time.

16.   Certain Legal Matters; Regulatory Approvals.

General.  Except as described in this Section 16, based on its examination of publicly available information filed by the Company with the SEC and other publicly available information concerning the Company, the Purchaser is not aware of any governmental license or regulatory permit that appears to be material to the Company’s business that might be adversely affected by the Purchaser’s acquisition of Shares as contemplated herein or of any approval or other action by any governmental, administrative or regulatory authority or agency, domestic or foreign, that would be required for the acquisition or ownership of Shares by the Purchaser, Holdings or Parent as contemplated herein. Should any such approval or other action be required, the Purchaser currently contemplates that, except as described below under “State Takeover Statutes,” such approval or other action will be sought. While the Purchaser does not currently intend to delay acceptance for payment of Shares tendered pursuant to the Offer pending the outcome of any such matter, there can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that if such approvals were not obtained or such other actions were not taken, adverse consequences might not result to the Company’s business, any of which under certain conditions specified in the Merger Agreement could cause the Purchaser to elect to terminate the Offer without the purchase of Shares thereunder. See Section 15 — “Certain Conditions of the Offer.”

State Takeover Statutes.  A number of states (including Delaware, where the Company is incorporated) have adopted laws that purport, to varying degrees, to apply to attempts to acquire securities of corporations that are incorporated in, or that have substantial assets, stockholders, principal executive offices or principal places of business in those states or whose business operations otherwise have substantial economic effects in such states. The Company, directly or through subsidiaries, conducts business in a number of states throughout the United States, some of which have enacted such laws. To the extent that certain provisions of these laws purport to apply to the Offer or any second-step merger, we believe that there are reasonable bases for contesting the application of such laws, including potential arguments as to their constitutionality. In 1982, in Edgar v. MITE Corp., the Supreme Court of the United States invalidated on constitutional grounds the Illinois Business Takeover Statute which, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult. However, in 1987, in CTS Corp. v. Dynamics Corp. of America, the

30

Supreme Court held that the State of Indiana could, as a matter of corporate law, constitutionally disqualify a potential acquiror from voting shares of a target corporation without the prior approval of the remaining stockholders where, among other things, the corporation is incorporated in, and has a substantial number of stockholders in, the state. Subsequently, in TLX Acquisition Corp. v. Telex Corp., a U.S. Federal district court in Oklahoma ruled that the Oklahoma statutes were unconstitutional as applied to corporations incorporated outside Oklahoma in that they would subject such corporations to inconsistent regulations. Similarly, in Tyson Foods, Inc. v. McReynolds, a U.S. Federal district court in Tennessee ruled that four Tennessee takeover statutes were unconstitutional as applied to corporations incorporated outside Tennessee. This decision was affirmed by the United States Court of Appeals for the Sixth Circuit. In 1988, a U.S. Federal district court in Florida held, in Grand Metropolitan PLC v. Butterworth, that the provisions of the Florida Affiliated Transactions Act and the Florida Control Share Acquisition Act were unconstitutional as applied to corporations incorporated outside of Florida.

Section 203 of the DGCL prevents certain “business combinations” with an “interested stockholder” (generally, any person who owns or has the right to acquire 15% or more of a corporation’s outstanding voting stock) for a period of three years following the time such person became an interested stockholder, unless, among other things, prior to the time the interested stockholder became such, the board of directors of the corporation approved either the business combination or the transaction in which the interested stockholder became such. The Company Board has taken all action necessary to exempt the Offer, the Merger, the Merger Agreement and the transactions contemplated thereby from the provisions of Section 203 of the DGCL, and such action is effective as of July 13, 2009.

The Purchaser is not aware of any other state takeover laws or regulations which are applicable to the Offer or the Merger and has not attempted to comply with any other state takeover laws or regulations. If any government official or third party should seek to apply any state takeover law to the Offer or the Merger or other business combination between the Purchaser or any of its affiliates and the Company, the Purchaser will take such action as then appears desirable, which action may include challenging the applicability or validity of such statute in appropriate court proceedings. In the event it is asserted that one or more state takeover statutes is applicable to the Offer or the Merger and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer or the Merger, the Purchaser might be required to file certain information with, or to receive approvals from, the relevant state authorities or holders of Shares, and the Purchaser might be unable to accept for payment or pay for Shares tendered pursuant to the Offer, or be delayed in continuing or consummating the Offer or the Merger. In that case, the Purchaser may not be obligated to accept for purchase, or pay for, any Shares tendered. See Section 15 — “Certain Conditions of the Offer.”

United States Antitrust Compliance.  Under the HSR Act, and the related rules and regulations that have been issued by the Federal Trade Commission (the “FTC”), certain acquisition transactions may not be consummated until certain information and documentary material has been furnished for review by the FTC and the Antitrust Division of the Department of Justice (the “Antitrust Division”) and certain waiting period requirements have been satisfied. These requirements apply to the Purchaser’s acquisition of the Shares in the Offer and the Merger.

Under the HSR Act, the purchase of Shares in the Offer may not be completed until the expiration of a 15-calendar day waiting period following the filing of certain required information and documentary material concerning the Offer with the FTC and the Antitrust Division, unless the waiting period is earlier terminated by the FTC and the Antitrust Division. Parent expects to file a Premerger Notification and Report Form under the HSR Act with the FTC and the Antitrust Division in connection with the purchase of Shares in the Offer and the Merger on July 27, 2009, and, expects the required waiting period with respect to the Offer and the Merger will expire at 11:59 p.m., New York City time, on or about August 11, 2009, unless earlier terminated by the FTC and the Antitrust Division, or Parent receives a request for additional information or documentary material prior to that time. If within the 15-calendar day waiting period either the FTC or the Antitrust Division requests additional information or documentary material from Parent, the waiting period with respect to the Offer and the Merger would be extended for an additional period of 10-calendar days following the date of Parent’s substantial compliance with that request. Only one extension of the waiting period pursuant to a

31

request for additional information is authorized by the HSR Act rules. After that time, the waiting period may be extended only by court order. The FTC or the Antitrust Division may terminate the additional 10-calendar day waiting period before its expiration. In practice, complying with a request for additional information and documentary material can take a significant period of time.

The FTC and the Antitrust Division may scrutinize the legality under the antitrust laws of proposed transactions such as the Purchaser’s acquisition of Shares in the Offer and the Merger. At any time before or after the purchase of Shares by the Purchaser, the FTC or the Antitrust Division could take any action under the antitrust laws that it either considers necessary or desirable in the public interest, including seeking to enjoin the purchase of Shares in the Offer and the Merger, the divestiture of Shares purchased in the Offer or the divestiture of substantial assets of Parent, the Company or any of their respective subsidiaries or affiliates. Private parties as well as state attorneys general also may bring legal actions under the antitrust laws under certain circumstances.

Other Foreign Laws.  The Company and Parent and certain of their respective subsidiaries conduct business in several foreign countries where regulatory filings or approvals may be required or desirable in connection with the consummation of the Offer or the Merger. Parent and the Company are analyzing the applicability of any such laws and currently intend to take such action as may be required or desirable.

If any such laws are applicable or any foreign governmental entity takes an action prior to the completion of the Offer, the Purchaser may not be obligated to accept for payment or pay for any Shares tendered. See Section 15 — “Certain Conditions of the Offer.”

Certain Legal Proceedings.

On July 15, 2009, a plaintiff filed a purported stockholder class action complaint in the Court of Chancery of the State of Delaware. The complaint, captioned IBEW Local Union 98 v. Noven Pharmaceuticals, Inc. et. al., (the “IBEW Complaint”) names as defendants the members of the Board of Directors, as well as the Company and Parent. The plaintiff claims that the Company’s directors breached their fiduciary duties to the Company’s stockholders, and further claims that Parent participated in or aided and abetted the purported breach of fiduciary duty. In support of the plaintiff’s claims, the complaint alleges that the proposed transaction between Company and Parent involves an unfair price, an inadequate sales process and unreasonable deal protection devices, among other things. The complaint seeks to enjoin the transaction and attorneys’ and other fees and costs, in addition to seeking other relief. A second plaintiff filed a purported stockholder class action complaint on July 15, 2009 in the Eleventh Judicial Circuit of Florida. The complaint, captioned Murphy v. Noven Pharmaceuticals, Inc., et. al. (the “Murphy Complaint”), names as defendants the Company and each of its Board members and asserts similar claims and requests for relief as those asserted in the IBEW Complaint. On July 16, 2009, a third plaintiff filed a purported stockholder class action complaint relating to the Offer. The complaint, captioned Louisiana Municipal Police Employees Retirement System v. Noven Pharmaceuticals, Inc. et. al. (the “Louisiana Municipal Police Employees Retirement System Complaint”, and together with the IBEW Complaint and the Murphy Complaint, the “Complaints”) and filed in the Court of Chancery of the State of Delaware, names as defendants the members of the Board of Directors as well as Company and Parent, and asserts claims and requests relief nearly identical to the IBEW complaint. Parent believes that the allegations set forth in each of the Complaints lack merit and will contest them vigorously.

The foregoing description of the Complaints is not intended to be complete and is qualified by reference to the IBEW Complaint, the Murphy Complaint and the Louisiana Municipal Police Employees Retirement System Complaint, copies of which are filed with the SEC as Exhibits (a)(5)(D), (a)(5)(E) and (a)(5)(F) to the Schedule TO, respectively.

17.   Fees and Expenses.

Parent, Holdings and the Purchaser have retained Georgeson Inc. to act as the Information Agent and American Stock Transfer and Trust Company to act as the Depositary in connection with the Offer. The Information Agent may contact holders of Shares by mail, telephone, telecopy, telegraph and personal

32

interview and may request banks, brokers, dealers and other nominees to forward materials relating to the Offer to beneficial owners of Shares.

The Information Agent and the Depositary each will receive reasonable and customary compensation for their respective services in connection with the Offer, will be reimbursed for reasonable expenses and will be indemnified against certain liabilities and expenses in connection therewith.

Neither Parent, Holdings nor the Purchaser will pay any fees or commissions to any broker or dealer or to any other person (other than to the Depositary and the Information Agent) in connection with the solicitation of tenders of Shares pursuant to the Offer. Banks, brokers, dealers and other nominees will, upon request, be reimbursed by the Purchaser for customary mailing and handling expenses incurred by them in forwarding offering materials to their customers.

18.   Miscellaneous.

The Purchaser is not aware of any state where the making of the Offer is prohibited by administrative or judicial action pursuant to any valid state statute. If the Purchaser becomes aware of any valid state statute prohibiting the making of the Offer or the acceptance of the Shares pursuant thereto, the Purchaser will make a good faith effort to comply with such statute or seek to have such statute declared inapplicable to the Offer. If, after such good faith effort, the Purchaser cannot comply with such state statute, the Offer will not be made to (nor will tenders be accepted from or on behalf of) holders of Shares in such state.

No person has been authorized to give any information or to make any representation on behalf of Parent or the Purchaser not contained herein or in the Letter of Transmittal, and, if given or made, such information or representation must not be relied upon as having been authorized. No broker, dealer, bank, trust company, fiduciary or other person will be deemed to be the agent of the Purchaser, the Depositary or the Information Agent for the purpose of the Offer.

Parent, Holdings and the Purchaser have filed with the SEC a Tender Offer Statement on Schedule TO pursuant to Rule 14d-3 of the Exchange Act, together with exhibits furnishing certain additional information with respect to the Offer, and may file amendments thereto. In addition, the Company has filed with the SEC a Schedule 14D-9, together with exhibits, pursuant to Rule 14d-9 under the Exchange Act, setting forth the recommendation of the Company Board with respect to the Offer and the reasons for such recommendation and furnishing certain additional related information. A copy of such documents, and any amendments thereto, may be examined at, and copies may be obtained from, the SEC in the manner set forth under Section 7 — “Certain Information Concerning the Company” above.

Northstar Merger Sub, Inc.

July 23, 2009

33

SCHEDULE I

DIRECTORS AND EXECUTIVE OFFICERS OF

PARENT, HOLDINGS AND THE PURCHASER

1. Directors and Executive Officers of Parent.  The following table sets forth the name, present principal occupation or employment and past material occupations, positions, offices or employment for at least the past five years for each director and the name, present principal occupation or employment and material occupations, positions, offices or employment for at least the past five years for each executive officer of Parent. The current business address of each such person, other than Mr. Kosuke Sugiyama and Mr. Mitsumasa Kabashima, is Hisamitsu Pharmaceutical Co., Inc., Marunouchi, Chiyoda-ku 1-11-1, Tokyo 100-6221, Japan, and the current business phone number for each of those people is 81-3-5293-1700. The current business address of Mr. Kosuke Sugiyama is 3528 Torrance Blvd., Suite 112 Torrance, CA 90503 U.S.A. and his current business phone number is 310-540-1408. The current business address of Mr. Mitsumasa Kabashima is Hikata, Ogoori-shi 892-1, Fukuoka, 838-0112, Japan and his current business phone number is 81-9-4273-3845. Each such person is a citizen of Japan.

	Present Principal Occupation or
	Employment; Material Positions Held
Name and Address	During the Past Five Years
Hirotaka Nakatomi	President of Parent since 1981, and Chief Executive Officer of Parent since 2003.
Tsukasa Yoshida	Senior Managing Director and Executive Officer of Parent since May 2008. From March 2003 until May 2008, Managing Director and Executive Officer of Parent.
Masahiro Ueda	Managing Director, Executive Officer and Head of International Division of Parent since May 2007. From March 2003 until May 2007, Director and Executive Officer of Parent.
Hidenori Hadate	Managing Director, Executive Officer and Manager of Public Relations of Parent since February 2009. From May 2008 until February 2009, Managing Director and Executive Officer of Parent. From May 2007 until May 2008, Director and Executive Officer of Parent. From April 2007 until May 2007, Executive Officer and Manager of Sales and Marketing of Parent. From February 2007 until April 2007, Executive Officer and Chief of Sales and Marketing of Parent. From June 2005 until February 2007, Executive Officer, Executive Secretary and Manager of Administration Division of Parent at Tokyo Headquarters. From February 2005 until June 2005, Executive Secretary and Manager of Administration Division of Parent in Tokyo. From 2003 until February 2005, Executive Secretary of Parent in Kyusyu.
Minoru Yoshida	Managing Director, Executive Officer and Manager of Sales and Marketing Division of Parent since May 2009. From May 2007 until May 2009, Director and Executive Officer of Parent. From April 2007 until May 2007, Executive Officer and Chief of Sales and Marketing of Parent. From August 2005 until April 2007, Executive Officer and Manager of Sales and Marketing Division of Parent. From April 2005 until August 2005, Executive Officer and Manager of Western Japan Management Department of Sales and Marketing Division (Ethical) of Parent. From 2003 until April 2005, Manager of Western Japan Management Department of Sales and Marketing Division (Ethical) of Parent.

34

	Present Principal Occupation or
	Employment; Material Positions Held
Name and Address	During the Past Five Years
Kazue Nakatomi	Managing Director, Executive Officer, Management of R&D Division and Head of Corporate Strategy Planning Division of Parent since May 2009. From May 2007 until May 2009, Director and Executive Officer of Parent. From February 2007 until May 2007, Head of Corporate Strategy Planning Division of Parent. From February 2006 until February 2007, Assistant Manager of Development Promotion Division of Parent. From March 2005 until February 2006, Branch Manager of the Second Branch in Tokyo of Parent. From August 2004 until March 2005, First Section of Kanto Management Department of Sales and Marketing Division of Parent. From 2003 until August 2004, Human Resources Division of Parent.
Tetsuo Akiyama	Director, Executive Officer and Manager of Sales and Marketing Division (Ethical) of Parent since May 2009. From May 2007 until May 2009, Senior Executive Officer and Manager of Sales and Marketing Division (Ethical) of Parent. From March 2003 until May 2007, Executive Officer and Manager of Sales and Marketing Division (Ethical) of Parent.
Kosuke Sugiyama	President and Chief Executive Officer of Hisamitsu America, Inc. since September 2002. Director of Parent since May 1999.
Mitsumasa Kabashima	Senior Executive Managing Director of Maruto Sangyo Co., Ltd. since May 2009. From May 2008 until May 2009, Managing Director of Maruto Sangyo Co., Ltd. Director of Parent since May 2007. From February 2007 until May 2007, Executive Officer and General Manager in Public Relations Department of Parent. From May 2003 until February 2007, Executive Officer and Manager of Sales and Marketing of Parent.

2. Directors and Executive Officers of the Purchaser.  The following table sets forth the name, present principal occupation or employment and past material occupations, positions, offices or employment for at least the past five years for each director and the name, citizenship, business address, business phone number, present principal occupation or employment and material occupations, positions, offices or employment for at least the past five years for each executive officer of the Purchaser. The current business address of Mr. Nobuo Tsutsumi is Hisamitsu Pharmaceutical Co., Inc., Marunouchi, Chiyoda-ku 1-11-1, Tokyo 100-6221, Japan, and his current business phone number is 81-3-5293-1700. The current business address of Mr. Kosuke Sugiyama is 3528 Torrance Blvd., Suite 112 Torrance, CA 90503 U.S.A. and his current business phone number is (310) 540-1408. Each such person is a citizen of Japan.

	Present Principal Occupation or
	Employment; Material Positions Held
Name and Address	During the Past Five Years
Kosuke Sugiyama	Director and Chief Executive Officer of Purchaser since July 2009. President and CEO of Hisamitsu America, Inc. since September 2002. Director of Parent since May 1999.
Nobuo Tsutsumi	Secretary of Purchaser since July 2009. Department General Manager, Legal Department of Parent since 1999.

3. Directors and Executive Officers of Holdings.  The following table sets forth the name, present principal occupation or employment and past material occupations, positions, offices or employment for at least the past five years for each director and the name, citizenship, business address, business phone number, present principal occupation or employment and material occupations, positions, offices or employment for at least the past five years for each executive officer of the Purchaser. The current business address of Mr. Nobuo Tsutsumi is Hisamitsu Pharmaceutical Co., Inc., Marunouchi, Chiyoda-ku 1-11-1, Tokyo 100-6221, Japan, and

35

his current business phone number is 81-3-5293-1700. The current business address of Mr. Kosuke Sugiyama is 3528 Torrance Blvd., Suite 112 Torrance, CA 90503 U.S.A. and his current business phone number is (310) 540-1408. Each such person is a citizen of Japan.

	Present Principal Occupation or
	Employment; Material Positions Held
Name and Address	During the Past Five Years
Kosuke Sugiyama	Director and President of Holdings since July 2009. President and CEO of Hisamitsu America, Inc. since September 2002. Director of Parent since May 1999.
Nobuo Tsutsumi	Secretary of Holdings since July 2009. Department General Manager, Legal Department of Parent since 1999.

36

The Letter of Transmittal and certificates evidencing Shares and any other required documents should be sent or delivered by each stockholder or its, his or her broker, dealer, commercial bank, trust company or other nominee to the Depositary at one of its addresses set forth below:

The Depositary for the Offer is:

American Stock Transfer and Trust Company

If delivering by mail:	If delivering by overnight courier:
American Stock Transfer & Trust Company, LLC Operations Center Attn: Reorganization Department P.O. Box 2042 New York, New York 10272-2042	American Stock Transfer & Trust Company, LLC Operations Center Attn: Reorganization Department 6201 15th Avenue Brooklyn, New York 11219

Questions or requests for assistance may be directed to the Information Agent at its telephone number and address set forth below. Questions or requests for assistance or additional copies of this Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery may also be addressed to the Information Agent. Stockholders may also contact their broker, dealer, commercial bank or trust company for assistance concerning the Offer.

The Information Agent for the Offer is:

Banks and Brokerage Firms, Please Call:

212-440-9800

All Others Call Toll-Free:

888-897-6012

EX-99.A.1.B

Exhibit (a)(1)(B)

LETTER OF TRANSMITTAL
To Tender Shares of Common Stock
(including the associated preferred stock purchase rights)
of
NOVEN PHARMACEUTICALS, INC.
at
$16.50 NET PER SHARE
Pursuant to the Offer to Purchase dated July 23, 2009
by
NORTHSTAR MERGER SUB, INC.
a wholly-owned subsidiary of
HISAMITSU U.S., INC.
a wholly-owned subsidiary of
HISAMITSU PHARMACEUTICAL CO., INC.

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, AUGUST 19, 2009, UNLESS THE OFFER IS EXTENDED.

The Depositary for the Offer is:

American Stock Transfer and Trust Company

If delivering by mail:
American Stock Transfer & Trust Company, LLC
Operations Center
Attn: Reorganization Department
P.O. Box 2042
New York, New York 10272-2042 If delivering by overnight courier:
American Stock Transfer & Trust Company, LLC
Operations Center
Attn: Reorganization Department
6201 15th Avenue
Brooklyn, New York 11219

Name(s) and Address of Registered Holder(s)
If there is any error in the name or address shown below, please make the necessary corrections

DESCRIPTION OF SHARES SURRENDERED
(Please fill in. Attach separate schedule if needed)

Certificate No(s)(1)	Number of Shares(2)
TOTAL SHARES F

(1)	Need not be completed by stockholders tendering by book-entry transfer.
(2)	Unless otherwise indicated, it will be assumed that all shares described above are being tendered. See Instruction 4 below.

Delivery of this Letter of Transmittal to an address other than as set forth above will not constitute a valid delivery to American Stock Transfer and Trust Company (the “Depositary”). You must sign this Letter of Transmittal in the appropriate space provided therefor below, with signature guarantee if required, and complete the Substitute Form W-9 set forth below, if required. The instructions set forth in this Letter of Transmittal should be read carefully before this Letter of Transmittal is completed.

The Offer (as defined below) is not being made to (nor will tender of Shares be accepted from or on behalf of) stockholders in any jurisdiction where it would be illegal to do so.

This Letter of Transmittal is to be used by stockholders of Noven Pharmaceuticals, Inc. (the “Company”), if Share Certificates (as defined below) are to be forwarded herewith or, unless an Agent’s Message (as defined in Section 2 (“Acceptance for Payment and Payment for Shares”) of the Offer to Purchase) is utilized, if delivery of Shares is to be made by book-entry transfer to an account maintained by the Depositary at the Book-Entry Transfer Facility (as defined in Section 2 (“Acceptance for Payment and Payment for Shares”) of the Offer to Purchase) pursuant to the procedures set forth in Section 3 (“Procedures for Accepting the Offer and Tendering Shares”) of the Offer to Purchase).

Stockholders whose certificates for Shares (“Share Certificates”) are not immediately available, or who cannot complete the procedure for book-entry transfer on a timely basis, or who cannot deliver all other required documents to the Depositary prior to the expiration of the Offer, must tender their Shares according to the guaranteed delivery procedure set forth in Section 3 (“Procedures for Accepting the Offer and Tendering Shares”) of the Offer to Purchase in order to participate in the Offer. See Instruction 2. Delivery of documents to the Book-Entry Transfer Facility does not constitute delivery to the Depositary.

Additional Information if Share Certificates Have Been Lost, Are Being Delivered By
Book-Entry Transfer or Are Being Delivered Pursuant to a Previous Notice of Guaranteed Delivery

If any Share Certificate you are tendering with this Letter of Transmittal has been lost, stolen, destroyed or mutilated, you should contact the Depositary at 718-921-8317 or toll-free at 877-248-6417, regarding the requirements for replacement. You may be required to post a bond to secure against the risk that the Share Certificates may be subsequently recirculated. You are urged to contact the Depositary immediately in order to receive further instructions, for a determination of whether you will need to post a bond and to permit timely processing of this documentation. See Instruction 11.

o   Check here if tendered Shares are being delivered by book-entry transfer made to an account maintained by the Depositary with the Book-Entry Transfer Facility and complete the following (only financial institutions that are participants in the system of the Book-Entry Transfer Facility may deliver Shares by book-entry transfer):

Name of Tendering Institution: 

DTC Account Number: 

Transaction Code Number: 

o   Check here if tendered Shares are being delivered pursuant to a Notice of Guaranteed Delivery previously sent to the Depositary and complete the following:

Name(s) of Tendering Stockholder(s): 

Date of Execution of Notice of Guaranteed Delivery: 

Name of Eligible Institution that Guaranteed Delivery: 

If Delivery is by Book-Entry Transfer, Provide the Following: 

     Account Number: 

     Transaction Code Number: 

2

NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ ACCOMPANYING INSTRUCTIONS CAREFULLY.

Ladies and Gentlemen:

The undersigned hereby tenders to Northstar Merger Sub, Inc., a Delaware corporation (the “Purchaser”) and wholly-owned subsidiary of Hisamitsu U.S., Inc., a Delaware corporation (“Holdings”) and a wholly-owned subsidiary of Hisamitsu Pharmaceutical Co., Inc., a corporation organized under the laws of Japan (“Parent”), the above described shares of common stock, par value $0.0001 per share, together with the associated Series A junior participating preferred stock purchase rights pursuant to the Rights Agreement, dated as of November 6, 2001, between the Company and American Stock Transfer & Trust, as amended (the “Shares”), of Noven Pharmaceuticals, Inc., a Delaware corporation (the “Company”), pursuant to the Purchaser’s offer to purchase (the “Offer”) all outstanding Shares, at a price of $16.50 per Share net to the seller in cash, without interest and less any required withholding taxes (the “Offer Price”), upon the terms and subject to the conditions set forth in the Offer to Purchase dated July 23, 2009 (the “Offer to Purchase”), receipt of which is hereby acknowledged, and in this Letter of Transmittal.

Upon the terms and subject to the conditions of the Offer (and if the Offer is extended or amended, the terms of any such extension or amendment), and effective upon acceptance for payment of the Shares tendered herewith in accordance with the terms of the Offer, the undersigned hereby sells, assigns and transfers to, or upon the order of, the Purchaser all right, title and interest in and to all of the Shares that are being tendered hereby (and any and all dividends, distributions, rights, other Shares or other securities issued, paid or distributed or issuable, payable or distributable in respect thereof on or after the date hereof (collectively, “Distributions”)) and irrevocably constitutes and appoints American Stock Transfer and Trust Company (the “Depositary”) the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares (and any and all Distributions), with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to (i) deliver certificates for such Shares (and any and all Distributions) or transfer ownership of such Shares (and any and all Distributions) on the account books maintained by the Book-Entry Transfer Facility (as defined in Section 2 (“Acceptance for Payment and Payment for Shares”) of the Offer to Purchase), together, in any such case, with all accompanying evidences of transfer and authenticity, to or upon the order of the Purchaser, (ii) present such Shares (and any and all Distributions) for transfer on the books of the Company and (iii) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares (and any and all Distributions), all in accordance with the terms and subject to the conditions of the Offer.

By executing this Letter of Transmittal, the undersigned hereby irrevocably appoints the Purchaser, and any other designees of the Purchaser, the attorneys-in-fact and proxies of the undersigned, each with full power of substitution, (i) to vote at any annual or special meeting of the Company’s stockholders or any adjournment or postponement thereof or otherwise in such manner as each such attorney-in-fact and proxy or its, his or her substitute shall in its, his or her sole discretion deem proper with respect to, (ii) to execute any written consent concerning any matter as each such attorney-in-fact and proxy or its, his or her substitute shall in its, his or her sole discretion deem proper with respect to and (iii) to otherwise act as each such attorney-in-fact and proxy or its, his or her substitute shall in its, his or her sole discretion deem proper with respect to, all of the Shares (and any and all Distributions) tendered hereby and accepted for payment by the Purchaser. This appointment will be effective if and when, and only to the extent that, the Purchaser accepts such Shares for payment pursuant to the Offer. This power of attorney and proxy are irrevocable and coupled with an interest, and are granted in consideration of the acceptance for payment of such Shares in accordance with the terms of the Offer. Such acceptance for payment shall, without further action, revoke any prior powers of attorney and proxies granted by the undersigned at any time with respect to such Shares (and any and all Distributions), and no subsequent powers of attorney, proxies, consents or revocations may be given by the undersigned with respect thereto (and, if given, will not be deemed effective). The Purchaser reserves the right to require that, in order for the Shares to be deemed validly tendered, immediately upon the Purchaser’s acceptance for payment of such Shares, the Purchaser must be able to exercise full voting, consent and other rights with respect to such Shares (and any and all Distributions), including voting at any meeting of the Company’s stockholders.

The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Shares tendered hereby (and any and all Distributions) and that, when the same are accepted for payment by the Purchaser, the Purchaser will acquire good, marketable and unencumbered title to such Shares (and any and all Distributions), free and clear of all liens, restrictions, charges and encumbrances and the same will not be subject

3

to any adverse claim and will not have been transferred to the Purchaser in violation of any contractual or other restriction on the transfer thereof. The undersigned will, upon request, execute and deliver any additional documents deemed by the Depositary or the Purchaser to be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered hereby (and any and all Distributions). In addition, the undersigned shall remit and transfer promptly to the Depositary for the account of the Purchaser all Distributions in respect of the Shares tendered hereby, accompanied by appropriate documentation of transfer, and, pending such remittance and transfer or appropriate assurance thereof, the Purchaser shall be entitled to all rights and privileges as owner of each such Distribution and, unless such Distribution is transferred to the Purchaser, may deduct from the purchase price of the Shares tendered hereby the amount or value of such Distribution as determined by the Purchaser in its sole discretion.

All authority herein conferred or agreed to be conferred shall not be affected by and shall survive the death or incapacity of the undersigned, and any obligation of the undersigned hereunder shall be binding upon the heirs, executors, administrators, personal representatives, trustees in bankruptcy, successors and assigns of the undersigned. Except as stated in the Offer to Purchase, the tender of Shares herewith is irrevocable.

The undersigned understands that the valid tender of Shares pursuant to any of the procedures described in the Offer to Purchase and in the instructions hereto will constitute a binding agreement between the undersigned and the Purchaser upon the terms and subject to the conditions of the Offer (and if the Offer is extended or amended, upon the terms and subject to the conditions of any such extension or amendment).

Unless otherwise indicated under “Special Payment Instructions,” please issue the check for the purchase price of all of the Shares purchased and, if appropriate, return any certificates for the Shares not tendered or not accepted for payment in the name(s) of the registered holder(s) appearing above under “Description of Shares Tendered.” Similarly, unless otherwise indicated under “Special Delivery Instructions,” please mail the check for the purchase price of all of the Shares purchased and, if appropriate, return any certificates for the Shares not tendered or not accepted for payment (and any accompanying documents, as appropriate) to the address of the registered holder(s) appearing above under “Description of Shares Tendered.” In the event that the boxes entitled “Special Payment Instructions” and “Special Delivery Instructions” are both completed, please issue the check for the purchase price of all Shares purchased and, if appropriate, return any certificates evidencing Shares not tendered or not accepted for payment (and any accompanying documents, as appropriate) in the name(s) of, and deliver such check and, if appropriate, return any such certificates (and any accompanying documents, as appropriate) to, the person(s) so indicated. Unless otherwise indicated herein in the box entitled “Special Payment Instructions,” please credit any Shares tendered herewith by book-entry transfer that are not accepted for payment by crediting the account at the Book-Entry Transfer Facility designated above. The undersigned recognizes that the Purchaser has no obligation, pursuant to the “Special Payment Instructions,” to transfer any Shares from the name of the registered holder thereof if the Purchaser does not accept for payment any of the Shares so tendered.

4

SPECIAL PAYMENT INSTRUCTIONS
(See Instructions 1, 5, 6 and 7)

To be completed ONLY if the check for the purchase price of Shares accepted for payment and/or certificates for Shares not tendered or not accepted are to be issued in the name of someone other than the undersigned.

Issue check and/or certificates to:

Name: 

(Please Print)

Address: 

(Include Zip Code)

(Taxpayer Identification or Social Security No.)

(Also Complete Substitute Form W-9 Below)

SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 5, 6 and 7)

To be completed ONLY if the check for the purchase price of Shares accepted for payment and/or certificates for Shares not tendered or not accepted are to be mailed to someone other than the undersigned or to the undersigned at an address other than that shown above.

Mail check and/or certificates to:

Name: 

(Please Print)

Address: 

(Include Zip Code)

(Taxpayer Identification or Social Security No.)

(Also Complete Substitute Form W-9 Below)

5

IMPORTANT

STOCKHOLDER: SIGN HERE
(Please complete and return the attached Substitute Form W-9 below)

Signature(s) of Holder(s) of Shares

Dated: 

Name: 

(Please Print)

Capacity (full title) (See Instruction 5): 

Address: 

(Include Zip Code)

Area Code and Telephone No.: 

Tax Identification or Social Security No. (See Substitute Form W-9 enclosed herewith): 

(Must be signed by registered holder(s) exactly as name(s) appear(s) on stock certificate(s) or on a security position listing or by person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, agent, officer of a corporation or other person acting in a fiduciary or representative capacity, please set forth full title and see Instruction 5.)

Guarantee of Signature(s)
(If Required — See Instructions 1 and 5)

Authorized Signature: 

Name: 

Name of Firm: 

Address: 

(Include Zip Code)

Area Code and Telephone No.: 

Dated: ­ ­

6

INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER

1. Guarantee of Signatures.  No signature guarantee is required on this Letter of Transmittal (a) if this Letter of Transmittal is signed by the registered holder(s) (which term, for purposes of this Letter of Transmittal, includes any participant in the Book-Entry Transfer Facility’s systems whose name appears on a security position listing as the owner of the Shares) of Shares tendered herewith, unless such registered holder has completed either the box entitled “Special Payment Instructions” or the box entitled “Special Delivery Instructions” on this Letter of Transmittal or (b) if such Shares are tendered for the account of a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a participant in the Security Transfer Agents Medallion Program or by any other “eligible guarantor institution” (as defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended) (each, an “Eligible Institution”). In all other cases, all signatures on this Letter of Transmittal must be guaranteed by an Eligible Institution. See Instruction 5.

2. Requirements of Tender.  This Letter of Transmittal is to be completed if certificates for Shares (“Share Certificates”) are to be forwarded herewith or, unless an Agent’s Message is utilized, if tenders are to be made pursuant to the procedure for tender by book-entry transfer set forth in Section 3 (“Procedures for Accepting the Offer and Tendering Shares”) of the Offer to Purchase. Share Certificates evidencing tendered Shares, or timely confirmation of a book-entry transfer of Shares (a “Book-Entry Confirmation”) into the Depositary’s account at the Book-Entry Transfer Facility, as well as this Letter of Transmittal (or a manually signed facsimile hereof), properly completed and duly executed, with any required signature guarantees, or an Agent’s Message in connection with a book-entry transfer, and any other documents required by this Letter of Transmittal, must be received by the Depositary at one of its addresses set forth herein prior to the expiration of the Offer. Stockholders whose Share Certificates are not immediately available, or who cannot complete the procedure for delivery by book-entry transfer on a timely basis or who cannot deliver all other required documents to the Depositary prior to the expiration of the Offer, may tender their Shares by properly completing and duly executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedure set forth in Section 3 (“Procedures for Accepting the Offer and Tendering Shares”) of the Offer to Purchase. Pursuant to such procedure: (i) such tender must be made by or through an Eligible Institution; (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form made available by the Purchaser, must be received by the Depositary prior to the expiration of the Offer and (iii) the Share Certificates (or a Book-Entry Confirmation) evidencing all tendered Shares, in proper form for transfer, in each case together with this Letter of Transmittal (or a manually signed facsimile hereof), properly completed and duly executed, with any required signature guarantees (or, in the case of a book-entry delivery, an Agent’s Message) and any other documents required by this Letter of Transmittal, must be received by the Depositary within three trading days after the date of execution of such Notice of Guaranteed Delivery. If Share Certificates are forwarded separately to the Depositary, a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile hereof) must accompany each such delivery.

The method of delivery of this Letter of Transmittal, Share Certificates and all other required documents, including delivery through the Book-Entry Transfer Facility, is at the option and the risk of the tendering stockholder and the delivery will be deemed made only when actually received by the Depositary (including, in the case of Book-Entry Transfer, by Book-Entry Confirmation). If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery.

The Purchaser will not accept any alternative, conditional or contingent tenders, and no fractional Shares will be purchased. By executing this Letter of Transmittal (or facsimile thereof), the tendering stockholder waives any right to receive any notice of the acceptance for payment of the Shares.

3. Inadequate Space.  If the space provided herein is inadequate, the Share Certificate numbers and/or the number of Shares should be listed on a signed separate schedule attached hereto and separately signed on each page in the same manner as this Letter of Transmittal.

4. Partial Tenders.  If fewer than all the Shares represented by any Share Certificate delivered to the Depositary are to be tendered, fill in the number of Shares which are to be tendered in the box entitled “Total Number of Shares Tendered”. In such case, a new certificate for the remainder of the Shares represented by the old certificate will be sent to the person(s) signing this Letter of Transmittal, unless otherwise provided in the appropriate box on this Letter of

7

Transmittal, as promptly as practicable following the expiration or termination of the Offer. All Shares represented by certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated.

5. Signatures on Letter of Transmittal; Stock Powers and Endorsements.

(a) Exact Signatures.  If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the Share Certificates without alteration, enlargement or any change whatsoever.

(b) Joint Holders.  If any of the Shares tendered hereby are held of record by two or more persons, all such persons must sign this Letter of Transmittal.

(c) Different Names on Certificates.  If any of the Shares tendered hereby are registered in different names on different certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of certificates.

(d) Endorsements.  If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, no endorsements of certificates or separate stock powers are required unless payment of the purchase price is to be made, or Shares not tendered or not purchased are to be returned, in the name of any person other than the registered holder(s). Signatures on any such certificates or stock powers must be guaranteed by an Eligible Institution.

If this Letter of Transmittal is signed by a person other than the registered holder(s) of the Shares tendered hereby, certificates must be endorsed or accompanied by appropriate stock powers, in either case, signed exactly as the name(s) of the registered holder(s) appear(s) on the certificates for such Shares. Signature(s) on any such certificates or stock powers must be guaranteed by an Eligible Institution. See Instruction 1.

If this Letter of Transmittal or any certificate or stock power is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to the Depositary of the authority of such person so to act must be submitted.

6. Stock Transfer Taxes.  Except as otherwise provided in this Instruction 6, the Purchaser or any successor entity thereto will pay or cause to be paid all U.S. and Japanese stock transfer taxes with respect to the transfer and sale of any Shares to it or its order pursuant to the Offer. If, however, a transfer tax is imposed based on income or for any reason other than the tender of Shares in the Offer, then those transfer taxes, whether imposed on the registered holder(s) or any other person(s), will not be payable to the tendering holder(s). If payment of the purchase price is to be made to, or (in circumstances permitted hereby) if Share Certificate(s) for Shares not tendered or not accepted for payment are to be issued in the name of, any person(s) other than the registered holder(s), or if tendered Share Certificate(s) are registered in the name of any person(s) other than the person(s) signing this Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered holder(s) or such other person(s)) payable on account of the transfer to such other person(s) will be deducted from the purchase price of such Shares purchased unless evidence satisfactory to the Purchaser of the payment of such taxes, or exemption therefrom, is submitted.

Except as provided in this Instruction 6, it will not be necessary for transfer tax stamps to be affixed to the Share Certificate(s) evidencing the Shares tendered hereby.

7. Special Payment and Delivery Instructions.  If a check is to be issued in the name of, and, if appropriate, Share Certificates for Shares not tendered or not accepted for payment are to be issued or returned to, any person(s) other than the signer of this Letter of Transmittal or if a check and, if appropriate, such Share Certificates are to be returned to any person(s) other than the person(s) signing this Letter of Transmittal or to an address other than that shown in this Letter of Transmittal, the appropriate boxes on this Letter of Transmittal must be completed.

8. Substitute Form W-9; Backup Withholding; Taxpayer Identification Number.  Under U.S. federal income tax law, if you tender your Shares, you generally are required to furnish the Depositary either (i) a properly completed IRS Form W-9 or Substitute Form W-9 (which is included below) with your correct Taxpayer Identification Number (“TIN”), if you are a “holder” (as defined in the Offer to Purchase under Section 5 (“Certain United States Federal Income Tax Consequences”)), or (ii) a properly completed appropriate Internal Revenue Service (“IRS”) Form W-8, if you are a foreign holder.

8

Use Substitute Form W-9 only if you are a U.S. person, including a resident alien individual. If you have been notified by the IRS that you are subject to backup withholding, you must cross out item (2) of the Certification box in Part 2 of the Substitute Form W-9, unless you have since been notified by the IRS that you are no longer subject to backup withholding. You will be subject to backup withholding at a rate of 28% on all reportable payments made to you pursuant to the Offer if (i) you do not furnish your TIN to the requester, (ii) you do not certify your TIN, (iii) the IRS tells the requester that you furnished an incorrect TIN, (iv) the IRS tells you that you are subject to backup withholding because you did not report all your interest and dividends on your tax return, or (v) you do not certify to the requester that you are not subject to backup withholding. Certain payees are exempt from backup withholding. See the enclosed “Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9” for further guidance on whether you are an exempt payee.

Backup withholding is not an additional tax. You may credit any amounts withheld against your regular U.S. federal income tax liability or, if backup withholding results in an overpayment of taxes, claim a refund from the IRS.

If you have not been issued a TIN and have applied for one or intend to apply for one in the near future, you should check the box in Part 3 of the Substitute Form W-9, and sign and date the Substitute Form W-9. If the box in Part 3 is checked and the Depositary is not provided with a TIN by the time of payment, the Depositary will withhold 28% of all reportable payments until you provide a TIN to the Depositary, or have otherwise established an exemption from backup withholding.

You are generally exempt from backup withholding if you are a nonresident alien or a foreign entity (including a disregarded domestic entity with a foreign owner) and submit an appropriate and properly completed IRS Form W-8, a copy of which may be obtained from the Depositary or from the IRS at its website (www.irs.gov). You should consult a tax advisor to determine which IRS Form W-8 is appropriate for you. See the enclosed “Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9” for further instructions.

If you fail to furnish your correct TIN to the Depositary, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. If you make a false statement with no reasonable basis that results in no backup withholding, you are subject to a $500 penalty. Willfully falsifying certifications or affirmations may subject you to criminal penalties, including fines and/or imprisonment.

9. Irregularities.  All questions as to purchase price, the form of documents and the validity, eligibility (including time of receipt) and acceptance for payment of any tender of Shares will be determined by the Purchaser in its sole discretion, which determinations shall be final and binding on you. The Purchaser reserves the absolute right to reject any or all tenders of Shares it determines not to be in proper form or the acceptance of which or payment for which may, in the opinion of the Purchaser, be unlawful. The Purchaser also reserves the absolute right to waive any of the conditions of the Offer (other than the Minimum Condition (as defined in the Offer to Purchase) which may only be waived with the consent of the Company) and any defect or irregularity in the tender of any particular Shares, and the Purchaser’s interpretation of the terms of the Offer (including these instructions) will be final and binding on you. No tender of Shares will be deemed to be properly made until all defects and irregularities have been cured or waived. Unless waived, any defects or irregularities in connection with tenders must be cured within such time as the Purchaser shall determine. None of the Purchaser, the Depositary, Georgeson, Inc., the Information Agent for the Offer, or any other person is or will be obligated to give notice of any defects or irregularities in tenders and none of them will incur any liability for failure to give any such notice.

10. Requests for Assistance or Additional Copies.  Questions and requests for assistance or additional copies of the Offer to Purchase and this Letter of Transmittal should be directed to the Information Agent at the addresses and telephone number set forth below.

11. Lost, Destroyed or Stolen Certificates.  If any certificate representing Shares has been lost, destroyed or stolen, the stockholder should promptly notify the Depositary at 718-921-8317 or toll-free at 877-248-6417. The stockholder will then be instructed as to the steps that must be taken in order to replace the certificate(s). This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost or destroyed certificates have been followed.

This Letter of Transmittal, properly completed and duly executed, together with certificates representing Shares being tendered (or confirmation of book-entry transfer) and all other required documents, must be received before 12:00 midnight, New York City time, on Wednesday, August 19, 2009 (which is the end of the day on August 19, 2009), or the tendering stockholder must comply with the procedures for guaranteed delivery.

9

IMPORTANT TAX INFORMATION

United States Federal Income Tax

Under U.S. federal income tax law, a stockholder surrendering Shares must, unless an exemption applies, provide the Depositary (as payer) with the stockholder’s correct TIN on IRS Form W-9 or on the Substitute Form W-9 included in this Letter of Transmittal. If the stockholder is an individual, the stockholder’s TIN is such stockholder’s social security number. If the correct TIN is not provided, the stockholder may be subject to a $50 penalty imposed by the IRS and payments of cash to the stockholder (or other payee) pursuant to the Offer may be subject to backup withholding at a rate of 28%.

Certain stockholders (including, among others, all corporations and certain foreign individuals and entities) are generally not subject to these backup withholding and reporting requirements. In order for an exempt foreign stockholder to avoid backup withholding, such person should submit an appropriate IRS Form W-8, signed under penalties of perjury, attesting to his or her exempt status. An appropriate IRS Form W-8 can be obtained from the Depositary or from the IRS at its website (www.irs.gov). Exempt stockholders, other than foreign stockholders, should furnish their TIN, check the box in Part 4 of the Substitute Form W-9 and sign, date and return the Substitute Form W-9 to the Depositary in order to avoid erroneous backup withholding. See the enclosed “Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9” for additional instructions. A stockholder should consult his or her tax advisor as to such stockholder’s qualification for an exemption from backup withholding and the procedure for such exemption.

If backup withholding applies, the Depositary is required to withhold and pay over to the IRS 28% of any reportable payments made to a stockholder. Backup withholding is not an additional tax. Rather, the U.S. federal income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If backup withholding results in an overpayment of taxes, a refund may be obtained from the IRS.

Purpose of Substitute Form W-9

To prevent backup withholding on payments that are made to a stockholder with respect to Shares purchased pursuant to the Offer, the stockholder is required to notify the Depositary of the stockholder’s correct TIN by completing the Substitute Form W-9 included in this Letter of Transmittal certifying that (1) the TIN provided on the Substitute Form W-9 is correct (or that such stockholder is awaiting a TIN), (2) the stockholder is not subject to backup withholding because (i) the stockholder is exempt from backup withholding, (ii) the stockholder has not been notified by the IRS that the stockholder is subject to backup withholding as a result of a failure to report all interest and dividends or (iii) the IRS has notified the stockholder that the stockholder is no longer subject to backup withholding and (3) the stockholder is a U.S. person (including a U.S. resident alien).

What Number to Give the Depositary

The tendering stockholder is required to give the Depositary the TIN, generally the social security number or employer identification number, of the record holder of the Shares tendered hereby. If the Shares are in more than one name or are not in the name of the actual owner, consult the enclosed “Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9” for additional guidance on which number to report. If the tendering stockholder has not been issued a TIN and has applied for a number or intends to apply for a number in the near future, such stockholder should check the box in Part 3 of the Substitute Form W-9, sign and date the Substitute Form W-9 and sign and date the Certificate of Awaiting Taxpayer Identification Number, which appears in a separate box below the Substitute Form W-9. If the box in Part 3 of the Substitute Form W-9 is checked and the Depositary is not provided with a TIN by the time of payment, the Depositary will withhold 28% of all reportable payments of the purchase price, which will be refunded if a TIN is provided to the Depositary within sixty (60) days of the Depositary’s receipt of the Certificate of Awaiting Taxpayer Identification Number.

10

PAYER’S NAME: American Stock Transfer and Trust Company
SUBSTITUTE FORM W-9	Part 1 — PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND CERTIFY BY SIGNING AND DATING BELOW.	Social Security Number or Employer Identification Number
	CHECK APPROPRIATE BOX:
Department of the Treasury Internal Revenue Service	o Individual/Sole Proprietor o Corporation o Partnership o Other	Part 3 Awaiting TIN o
Payer’s Request for Taxpayer Identification Number (“TIN”)		Part 4 Exempt o
Please fill in your name and address below	Part 2 — Certification — Under penalties of perjury, I certify that: (1) The number shown on this form is my correct TIN (or I am waiting for a number to be issued to me);
	(2) I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (the “IRS”) that I am subject to backup withholding as a result of a failure to report all interest or dividends or (c) the IRS has notified me that I am no longer subject to backup withholding; and
	(3) I am a U.S. person (including a U.S. resident alien).
Name Address (Number and Street) City, State and Zip Code	Certification Instructions — You must cross out Item (2) above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out such Item (2). If you are exempt from backup withholding, check the box in Part 4 above.
	SIGNATURE ­ ­ DATE                    , 200

NOTE:  FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF A PORTION OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9.

CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER

I certify under penalties of perjury that a TIN has not been issued to me, and either (1) I have mailed or delivered an application to receive a TIN to the appropriate Internal Revenue Service Center or Social Security Administration Office, or (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a TIN by the time of payment, a portion of all reportable payments made to me will be withheld, but that such amounts will be refunded to me if I then provide a TIN within sixty (60) days.

Signature ­ ­          Date ­ ­

11

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9

GUIDELINES FOR DETERMINING THE PROPER TAXPAYER IDENTIFICATION NUMBER (“TIN”) TO GIVE THE PAYER. Social Security numbers have nine digits separated by two hyphens: i.e., 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen: i.e., 00-0000000. The table below will help determine the number to give the payer.

WHAT NAME AND NUMBER TO GIVE THE PAYER

For this type of account:		Give name and SSN of:
1.	Individual	The individual
2.	Two or more individuals (joint account)	The actual owner of the account or, if combined funds, the first individual on the account(1)
3.	Custodian account of a minor (Uniform Gift to Minors Act)	The minor(2)
4.	a. The usual revocable savings trust (grantor is also trustee)	The grantor-trustee(1)
	b. So-called trust account that is not a legal or valid trust under state law	The actual owner(1)
5.	Sole proprietorship or single-owner LLC	The owner(3)
For this type of account:		Give name and EIN of:
6.	Sole proprietorship or single-owner LLC	The owner(3)
7.	A valid trust, estate, or pension trust	Legal entity(4)
8.	Corporate or LLC electing corporate status on IRS Form 8832	The corporation
9.	Association, club, religious, charitable, educational, or other tax-exempt organization	The organization
10.	Partnership or multi-member LLC	The partnership
11.	A broker or registered nominee	The broker or nominee
12.	Account with the Department of Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments	The public entity

(1)	List first and circle the name of the person whose number you furnish. If only one person on a joint account has an SSN, that person’s number must be furnished.
(2)	Circle the minor’s name and furnish the minor’s SSN.
(3)	You must show your individual name and you may also enter your business or “DBA” name on the second name line. You may use either your SSN or EIN (if you have one), but the IRS encourages you to use your SSN.
(4)	List first and circle the name of the legal trust, estate, or pension trust. (Do not furnish the TIN of the personal representative or trustee unless the legal entity itself is not designated in the account title.)

Note.  If no name is circled when more than one name is listed, the number will be considered to be that of the first name listed.

12

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2

OBTAINING A NUMBER

If you do not have a TIN or you do not know your number, obtain Form SS-5, Application for a Social Security Number Card, or Form SS-4, Application for Employer Identification Number, at the local office of the Social Security Administration or the Internal Revenue Service and apply for a number.

PAYEES EXEMPT FROM BACKUP WITHHOLDING

Payees specifically exempted from backup withholding on ALL payments include the following:

•  An organization exempt from tax under section 501(a), any IRA where the payor is also the trustee or custodian, or a custodial account under Section 403(b)(7) if the account satisfies the requirements of section 401(f)(2).

•  The United States or any agency or instrumentality thereof.

•  A State, the District of Columbia, a possession of the United States, or any subdivision or instrumentality thereof.

•  A foreign government, a political subdivision of a foreign government, or any agency or instrumentality thereof.

•  An international organization or any agency, or instrumentality thereof.

Payees that may be exempt from backup withholding include the following:

•  A corporation.

•  A financial institution.

•  A registered dealer in securities or commodities registered in the U.S. or a possession of the U.S.

•  A real estate investment trust.

•  A common trust fund operated by a bank under section 584(a).

•  An exempt charitable remainder trust, or a non-exempt trust described in section 4947(a)(1).

•  An entity registered at all times under the Investment Company Act of 1940.

•  A foreign central bank of issue.

•  A futures commission merchant registered with the Commodity Futures Trading Commission.

•  A middleman known in the investment community as a nominee or listed in the most recent publication of the American Society of Corporate Secretaries, Inc. Nominee List.

Payments of dividends and patronage dividends not generally subject to backup withholding include the following:

•  Payments to nonresident aliens subject to withholding under section 1441.

•  Payments to partnerships not engaged in a trade or business in the U.S. and which have at least one nonresident alien partner.

•  Payments of patronage dividends where the amount received is not paid in money.

•  Payments made by certain foreign organizations.

•  Section 404(k) distributions made by an ESOP.

Payments of interest not generally subject to backup withholding include the following:

•  Payments of interest on obligations issued by individuals. Note: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payer’s trade or business and you have not provided your correct TIN to the payer.

13

•  Payments described in section 6049(b)(5) to non-resident aliens.

•  Payments on tax-free covenant bonds under section 1451.

•  Payments made by certain foreign organizations.

•  Mortgage or student loan interest paid to an individual.

Exempt payees described above should file the Substitute Form W-9 to avoid possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TIN, WRITE “EXEMPT” ON THE FACE OF THE FORM, AND RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE FORM.

Certain payments, other than interest, dividends, and patronage dividends, that are not subject to information reporting, are also not subject to backup withholding. For details, see the regulations under sections 6041, 6041A(a), 6045, and 6050A of the Internal Revenue Code of 1986, as amended (the “Code”). All section references above are to the Code.

PRIVACY ACT NOTICE — Section 6109 of the Code requires most recipients of dividend, interest, or other payments to give TINs to payers who must report the payments to IRS. IRS uses the numbers for identification purposes. Payers must be given the numbers whether or not recipients are required to file tax returns. Payers must generally withhold a portion of taxable interest, dividend, and certain other payments to a payee who does not furnish a TIN to a payer. Certain penalties may also apply.

PENALTIES

(1) PENALTY FOR FAILURE TO FURNISH TIN — If you fail to furnish your TIN to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect.

(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING — If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500.

(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION — Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment.

FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE.

14

The Depositary for the Offer is:

American Stock Transfer and Trust Company

If delivering by mail:
American Stock Transfer & Trust Company, LLC
Operations Center
Attn: Reorganization Department
P.O. Box 2042
New York, New York 10272-2042 If delivering by overnight courier:
American Stock Transfer & Trust Company, LLC
Operations Center
Attn: Reorganization Department
6201 15^th Avenue
Brooklyn, New York 11219

Questions or requests for assistance may be directed to the Information Agent at the telephone number and address set forth below. Questions or requests for assistance or additional copies of the Offer to Purchase, this Letter of Transmittal and the Notice of Guaranteed Delivery may be addressed to the Information Agent. Stockholders may also contact their broker, dealer, commercial bank or trust company for assistance concerning the Offer.

The Information Agent for the Offer is:

199 Water Street, 26th Floor
New York, NY 10038-3560

Banks and Brokerage Firms, Please Call:

212-440-9800

All Others Call Toll-Free:

888-897-6012

EX-99.A.1.C

Exhibit (a)(1)(C)

NOTICE OF GUARANTEED DELIVERY
For Tender of Shares of Common Stock
(including the associated preferred stock purchase rights)
of
NOVEN PHARMACEUTICALS, INC.
at
$16.50 NET PER SHARE
Pursuant to the Offer to Purchase dated July 23, 2009
by
NORTHSTAR MERGER SUB, INC.
a wholly-owned subsidiary of
HISAMITSU U.S., INC.
a wholly-owned subsidiary of
HISAMITSU PHARMACEUTICAL CO., INC.

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, AUGUST 19, 2009, UNLESS THE OFFER IS EXTENDED.

This Notice of Guaranteed Delivery, or one substantially in the form hereof, must be used to accept the Offer (as defined below) if (i) certificates representing shares of common stock, par value $0.0001 per share of Noven Pharmaceuticals, Inc., a Delaware corporation, are not immediately available, (ii) the procedure for book-entry transfer cannot be completed on a timely basis or (iii) time will not permit all required documents to reach American Stock Transfer and Trust Company (the “Depositary”) prior to the expiration of the Offer. This Notice of Guaranteed Delivery may be delivered by hand, facsimile transmission or mail to the Depositary. See Section 3 (“Procedures for Accepting the Offer and Tendering Shares”) of the Offer to Purchase.

The Depositary for the Offer is:

American Stock Transfer and Trust Company

By Mail:	By Facsimile Transmission:	By Overnight Courier:
American Stock Transfer & Trust Company, LLC Operations Center Attn: Reorganization Department P.O. Box 2042 New York, New York 10272-2042	For Eligible Institutions Only: 718-234-5001 For Confirmation Only Telephone: 877-248-6417	American Stock Transfer & Trust Company, LLC Operations Center Attn: Reorganization Department 6201 15th Avenue Brooklyn, New York 11219

DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION, OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY.

THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN “ELIGIBLE INSTITUTION” UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.

Ladies and Gentlemen:

The undersigned hereby tenders to Northstar Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Hisamitsu U.S., Inc., a Delaware corporation (“Holdings”) and wholly-owned subsidiary of Hisamitsu Pharmaceutical Co., Inc., a corporation organized under the laws of Japan, upon the terms and subject to the conditions set forth in the offer to purchase, dated July 23, 2009 (the “Offer to Purchase”), and the related Letter of Transmittal (such offer, the “Offer”), receipt of which is hereby acknowledged, the number of shares of common stock, par value $0.0001 per share, together with the associated Series A junior participating preferred stock purchase rights pursuant to the Rights Agreement, dated as of November 6, 2001, between the Company and American Stock Transfer & Trust, as amended (the “Shares”), of Noven Pharmaceuticals, Inc., a Delaware corporation, specified below, pursuant to the guaranteed delivery procedure set forth in Section 3 (“Procedures for Accepting the Offer and Tendering Shares”) of the Offer to Purchase.

Number of Tendered Shares: 

Certificate No.(s) (if available): 

Check box if Shares will be tendered by book entry transfer: o

DTC Account Number: 

Dated: ­ ­

Name(s) of Record Holder(s): 

(Please type or print)

Address(es):

(Zip Code)

Area Code and Tel. No.: 

(Daytime telephone number)

Signature(s): 

2

GUARANTEE
(Not to be used for signature guarantee)

The undersigned, an Eligible Institution (as defined in Section 3 (“Procedures for Accepting the Offer and Tendering Shares”) of the Offer to Purchase), hereby (i) represents that the tender of Shares effected hereby complies with Rule 14e-4 under the Securities Exchange Act of 1934, as amended, and (ii) guarantees delivery to the Depositary, at one of its addresses set forth above, of certificates representing the Shares tendered hereby, in proper form for transfer, or a confirmation of a book-entry transfer of such Shares into the Depositary’s account at the Book-Entry Transfer Facility (as defined in Section 2 (“Acceptance for Payment and Payment for Shares”) of the Offer to Purchase), in either case together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof) or, in the case of a book-entry transfer, an Agent’s Message (as defined in Section 2 (“Acceptance for Payment and Payment for Shares”) of the Offer to Purchase), together with any other documents required by the Letter of Transmittal, all within three Nasdaq Global Select Market trading days after the date hereof.

Name of Firm: ­ ­
	(Authorized Signature)
Address: ­ ­	Name: ­ ­
	(Please type or print)
	Title: ­ ­
(Zip Code)
Area Code and Tel. No.: ­ ­	Date: ­ ­

The Eligible Institution that completes this form must communicate the guarantee to the Depositary and must deliver the Letter of Transmittal or an Agent’s Message (as defined in Section 2 (“Acceptance for Payment and Payment for Shares”) of the Offer to Purchase) and certificates for Shares to the Depositary within the time period indicated above. Failure to do so could result in a financial loss to such Eligible Institution.

NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.

3

EX-99.A.1.D

Exhibit (a)(1)(D)

Offer To Purchase For Cash
All Outstanding Shares of Common Stock
(including the associated preferred stock purchase rights)
of
NOVEN PHARMACEUTICALS, INC.
at
$16.50 NET PER SHARE
Pursuant to the Offer to Purchase dated July 23, 2009
by
NORTHSTAR MERGER SUB, INC.
a wholly-owned subsidiary of
HISAMITSU U.S., INC.
a wholly-owned subsidiary of
HISAMITSU PHARMACEUTICAL CO., INC.

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, AUGUST 19, 2009, UNLESS THE OFFER IS EXTENDED.

July 23, 2009

To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:

We have been engaged by Northstar Merger Sub, Inc., a Delaware corporation (the “Purchaser”) and a wholly-owned subsidiary of Hisamitsu U.S., Inc., a Delaware corporation (“Holdings”) and wholly-owned subsidiary of Hisamitsu Pharmaceutical Co., Inc., a corporation organized under the laws of Japan (“Parent”), to act as Information Agent in connection with the Purchaser’s offer to purchase (the “Offer”) all outstanding shares of common stock, par value $0.0001 per share, together with the associated Series A junior participating preferred stock purchase rights pursuant to the Rights Agreement, dated as of November 6, 2001, between the Company and American Stock Transfer & Trust, as amended (the “Shares”), of Noven Pharmaceuticals, Inc., a Delaware corporation (the “Company”), at a purchase price of $16.50 per Share net to the seller in cash, without interest and less any required withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase dated July 23, 2009 (together with any amendments and supplements thereto, the “Offer to Purchase”), and the related Letter of Transmittal enclosed herewith.

For your information and for forwarding to your clients for whom you hold Shares registered in your name or in the name of your nominee, we are enclosing the following documents:

1. The Offer to Purchase;

2. The Letter of Transmittal for your use in accepting the Offer and tendering Shares and for the information of your clients, together with “Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9” providing information relating to backup withholding of U.S. federal income tax;

3. A Notice of Guaranteed Delivery to be used to accept the Offer if the Shares and all other required documents cannot be delivered to American Stock Transfer & Trust (the “Depositary”) by the expiration of the Offer or if the procedure for book-entry transfer cannot be completed by the expiration of the Offer;

4. A form of letter which may be sent to your clients for whose accounts you hold Shares registered in your name or in the name of your nominee, with space provided for obtaining such clients’ instructions with regard to the Offer; and

5. A return envelope addressed to the Depositary for your use only.

Certain conditions to the Offer are described in Section 15 (“Certain Conditions of the Offer”) of the Offer to Purchase.

We urge you to contact your clients as promptly as possible. Please note that the Offer will expire at 12:00 midnight, New York City time, on Wednesday, August 19, 2009 (which is the end of the day on August 19, 2009), unless the Offer is extended. Except as otherwise described in Section 4 (“Withdrawal Rights”) of the Offer to Purchase, previously tendered Shares may be withdrawn at any time until the Offer has expired and, if the Purchaser has not accepted such Shares for payment by August 19, 2009, such Shares may be withdrawn at any time after that date until the Purchaser accepts Shares for payment.

For Shares to be properly tendered pursuant to the Offer, (a) the share certificates or confirmation of receipt of such Shares under the procedure for book-entry transfer, together with a properly completed and duly executed Letter of Transmittal, including any required signature guarantees, or an “Agent’s Message” (as defined in Section 2 (“Acceptance for Payment and Payment for Shares”) of the Offer to Purchase) in the case of book-entry transfer, and any other documents required in the Letter of Transmittal, must be timely received by the Depositary or (b) the tendering stockholder must comply with the guaranteed delivery procedures, all in accordance with the Offer to Purchase and Letter of Transmittal.

The Purchaser will not pay any fees or commissions to any broker or dealer or other person (other than the Depositary and the Information Agent as described in the Offer to Purchase) for soliciting tenders of Shares pursuant to the Offer. The Purchaser will, however, upon request, reimburse brokers, dealers, commercial banks and trust companies for reasonable and necessary costs and expenses incurred by them in forwarding materials to their customers. The Purchaser will pay or cause to be paid all U.S. and Japanese stock transfer taxes applicable to its purchase of Shares pursuant to the Offer, subject to Instruction 6 of the Letter of Transmittal.

Any inquiries you may have with respect to the Offer should be addressed to, and additional copies of the enclosed materials may be obtained from, the Information Agent or the undersigned at the addresses and telephone numbers set forth on the back cover of the Offer to Purchase.

Very truly yours,

Georgeson Inc.

Nothing contained herein or in the enclosed documents shall render you the agent of the Purchaser, the Information Agent or the Depositary or any affiliate of any of them or authorize you or any other person to use any document or make any statement on behalf of any of them in connection with the Offer other than the enclosed documents and the statements contained therein.

2

EX-99.A.1.E

Exhibit (a)(1)(E)

Offer To Purchase For Cash
All Outstanding Shares of Common Stock
(including the associated preferred stock purchase rights)
of
NOVEN PHARMACEUTICALS, INC.
at
$16.50 NET PER SHARE
Pursuant to the Offer to Purchase dated July 23, 2009
by
NORTHSTAR MERGER SUB, INC.
a wholly-owned subsidiary of
HISAMITSU U.S., INC.
a wholly-owned subsidiary of
HISAMITSU PHARMACEUTICAL CO., INC.

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, AUGUST 19, 2009, UNLESS THE OFFER IS EXTENDED.

July 23, 2009

To Our Clients:

Enclosed for your consideration are the Offer to Purchase, dated July 23, 2009 (the “Offer to Purchase”), and the related Letter of Transmittal in connection with the offer (the “Offer”) by Northstar Merger Sub, Inc., a Delaware corporation (the “Purchaser”) and a wholly-owned subsidiary of Hisamitsu U.S., Inc., a Delaware corporation (“Holdings”) and a wholly-owned subsidiary of Hisamitsu Pharmaceutical Co., Inc., a corporation organized under the laws of Japan, to purchase all outstanding shares of common stock, par value $0.0001 per share, together with the associated Series A junior participating preferred stock purchase rights pursuant to the Rights Agreement, dated as of November 6, 2001, between the Company and American Stock Transfer & Trust, as amended (the “Shares”), of Noven Pharmaceuticals, Inc., a Delaware corporation, at a purchase price of $16.50 per Share net to the seller in cash, without interest and less any required withholding taxes, upon the terms and subject to the conditions of the Offer.

We or our nominees are the holder of record of Shares held for your account. A tender of such Shares can be made only by us as the holder of record and pursuant to your instructions. The Letter of Transmittal is furnished to you for your information only and cannot be used by you to tender Shares held by us for your account.

We request instructions as to whether you wish us to tender any or all of the Shares held by us for your account, upon the terms and subject to the conditions set forth in the enclosed Offer to Purchase and the Letter of Transmittal.

Please note carefully the following:

1. The offer price for the Offer is $16.50 per Share net to you in cash, without interest and less any required withholding taxes, upon the terms of and subject to the conditions to the Offer.

2. The Offer is being made for all outstanding Shares.

3. The Offer will expire at 12:00 midnight, New York City time, on Wednesday, August 19, 2009 (which is the end of the day on August 19, 2009), unless the Offer is extended by the Purchaser. Except as otherwise described in Section 4 (“Withdrawal Rights”) of the Offer to Purchase, previously tendered Shares may be withdrawn at any time until the Offer has expired and, if the Purchaser has not accepted such Shares for payment by September 21, 2009, such Shares may be withdrawn at any time after that date until the Purchaser accepts Shares for payment.

4. The Offer is subject to certain conditions described in Section 15 (“Certain Conditions of the Offer”) of the Offer to Purchase.

5. Tendering stockholders who are registered stockholders or who tender their Shares directly to American Stock Transfer and Trust Company (the “Depositary”) will not be obligated to pay any brokerage commissions or fees, solicitation fees, or, except as set forth in the Offer to Purchase and the Letter of Transmittal, U.S. and Japanese stock transfer taxes on the Purchaser’s purchase of Shares pursuant to the Offer. However, federal income tax backup withholding at a rate of 28% may be required, unless the required taxpayer identification information is provided or an exemption is available. See the Letter of Transmittal for more information.

If you wish to have us tender any or all of your Shares, please so instruct us by completing, executing, detaching and returning to us the Instruction Form on the detachable part hereof. An envelope to return your instructions to us is enclosed. If you authorize tender of your Shares, all such Shares will be tendered unless otherwise specified on the Instruction Form.

Your prompt action is requested. Your Instruction Form should be forwarded to us in ample time to permit us to submit the tender on your behalf before the expiration of the Offer.

The Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of Shares in any jurisdiction in which the making of the Offer or acceptance thereof would not be in compliance with the laws of such jurisdiction.

2

INSTRUCTION FORM
With Respect to the Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(including the associated preferred stock purchase rights)
of
NOVEN PHARMACEUTICALS, INC.
at
$16.50 NET PER SHARE
Pursuant to the Offer to Purchase
dated July 23, 2009
by
NORTHSTAR MERGER SUB, INC.
a wholly-owned subsidiary
of
HISAMITSU U.S., INC.
a wholly-owned subsidiary
of
HISAMITSU PHARMACEUTICAL CO., INC.

The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase, dated July 23, 2009 and the related Letter of Transmittal, in connection with the offer (the “Offer”) by Northstar Merger Sub, Inc., a Delaware corporation (the “Purchaser”) and a wholly-owned subsidiary of Hisamitsu U.S., Inc., a Delaware corporation (“Holdings”) and a wholly-owned subsidiary of Hisamitsu Pharmaceutical Co., Inc., a corporation organized under the laws of Japan, to purchase all outstanding shares of common stock, par value $0.0001 per share, together with the associated Series A junior participating preferred stock purchase rights pursuant to the Rights Agreement, dated as of November 6, 2001, between the Company and American Stock Transfer & Trust, as amended (the “Shares”), of Noven Pharmaceuticals, Inc., a Delaware corporation, at a purchase price of $16.50 per Share net to the seller in cash, without interest and less any required withholding taxes, upon the terms and subject to the conditions of the Offer.

The undersigned hereby instruct(s) you to tender to the Purchaser the number of Shares indicated below or, if no number is indicated, all Shares held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer.

ACCOUNT NUMBER:

NUMBER OF SHARES BEING TENDERED HEREBY:                     SHARES*

The method of delivery of this document is at the election and risk of the tendering stockholder. If delivery is by mail, then registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery.

* Unless otherwise indicated, it will be assumed that all Shares held by us for your account are to be tendered.

Dated: ­ ­

(Signature(s))

Please Print Name(s)

Address 

Include Zip Code

Area Code and Telephone No. 

Taxpayer Identification or Social Security No. 

EX-99.A.5.B

Exhibit (a)(5)(B)

This announcement is neither an offer to purchase nor a solicitation of an offer to sell Shares (as defined below). The Offer (as defined below) is made only by the Offer to Purchase, dated July 23, 2009, and the related Letter of Transmittal and any amendments or supplements thereto, and is being made to all holders of Shares. The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. However, the Purchaser (as defined below) may, in its discretion, take such action as it may deem necessary to make the Offer in any jurisdiction and extend the Offer to holders of Shares in such jurisdiction.

Notice of Offer to Purchase for Cash
All of the Outstanding Shares of Common Stock
(including the associated preferred stock purchase rights)
of
NOVEN PHARMACEUTICALS, INC.
at
$16.50 Net Per Share
by
NORTHSTAR MERGER SUB, INC.
a wholly-owned subsidiary
of
HISAMITSU U.S., INC.
a wholly-owned subsidiary
of
HISAMITSU PHARMACEUTICAL CO., INC.

Northstar Merger Sub, Inc., a Delaware corporation (the “Purchaser”) and wholly-owned subsidiary of Hisamitsu U.S., Inc., a Delaware corporation (“Holdings”) and a wholly-owned subsidiary of Hisamitsu Pharmaceutical Co., Inc., a corporation organized under the laws of Japan (“Parent”), is making an offer to purchase all outstanding shares of common stock, par value $0.0001 per share, together with the associated Series A junior participating preferred stock purchase rights (“the Rights”) pursuant to the Rights Agreement, dated as of November 6, 2001, between the Company and American Stock Transfer & Trust, as amended (the “Shares”), of Noven Pharmaceuticals, Inc., a Delaware corporation (the “Company”), at a price of $16.50 per Share, net to the seller in cash, without interest and less any required withholding taxes (the “Offer Price”), upon the terms and subject to the conditions set forth in the Offer to Purchase, dated July 23, 2009 (the “Offer to Purchase”), and in the related Letter of Transmittal (such offer, together with any amendments or supplements thereto, collectively constitute the “Offer”).

THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, AUGUST 19, 2009, UNLESS THE OFFER IS EXTENDED. PREVIOUSLY TENDERED SHARES MAY BE WITHDRAWN AT ANY TIME UNTIL THE OFFER HAS EXPIRED AND, IF THE PURCHASER HAS NOT ACCEPTED SUCH SHARES FOR PAYMENT BY SEPTEMBER 21, 2009, SUCH SHARES MAY BE WITHDRAWN AT ANY TIME AFTER THAT DATE UNTIL THE PURCHASER ACCEPTS SHARES FOR PAYMENT.

The Offer is being made pursuant to the Agreement and Plan of Merger, dated as of July 14, 2009 (the “Merger Agreement”), by and among Parent, the Purchaser and the Company. The Offer is conditioned upon, among other things, (i) the satisfaction of the Minimum Condition (as defined below) and (ii) the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

The term “Minimum Condition” is defined in Section 15 (“Certain Conditions of the Offer”) of the Offer to Purchase and generally requires that the number of outstanding Shares which have been validly tendered and not validly withdrawn prior to the expiration of the Offer (as it may be extended as described below) represents at least a majority of the Shares then outstanding (determined on a fully diluted basis after giving effect to the exercise or conversion of all options, rights

and securities exercisable or convertible into such voting securities, other than the Rights, regardless of the conversion or exercise price, the vesting schedule or other terms and conditions thereof).

The Merger Agreement provides, among other things, subject to the conditions described in Sections 11 (“The Transaction Agreements; Employment Agreement”) and 15 (“Certain Conditions of the Offer”), that the Purchaser will be merged with and into the Company with the Company continuing as the surviving corporation as a wholly-owned subsidiary of Parent (the “Merger”). Pursuant to the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each Share outstanding immediately prior to the Effective Time (other than (i) Shares held by the Company as treasury stock or owned by Parent, Holdings or the Purchaser or their respective subsidiaries, which will be cancelled and will cease to exist, and (ii) Shares owned by the Company’s stockholders who perfect their appraisal rights under Section 262 of the General Corporation Law of the State of Delaware (the “DGCL”)), will be converted into the right to receive $16.50 (or any other per Share price paid in the Offer) net in cash, without interest and less any required withholding taxes.

The Board of Directors of the Company unanimously (i) approved and declared advisable the Merger Agreement, the Offer, the Merger and the other transactions contemplated by the Merger Agreement (the “Transactions”), (ii) determine that the terms of the Offer of the Merger and the other Transactions are fair to, and in the best interests of the stockholders of the Company, (iii) duly approved the Offer, the Merger and the other Transactions in accordance with the DGCL and (iv) recommended that the Company’s stockholders accept the Offer, tender their Shares to the Purchaser pursuant to the Offer, and, if required by applicable law, adopt the Merger Agreement and approve the Merger.

For purposes of the Offer, the Purchaser will be deemed to have accepted for payment, and thereby purchased, Shares validly tendered and not validly withdrawn as, if and when the Purchaser gives oral or written notice to American Stock Transfer and Trust Company (the “Depositary”) of the Purchaser’s acceptance for payment of such Shares pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, payment for Shares accepted for payment pursuant to the Offer will be made by deposit of the Offer Price for such Shares with the Depositary, which will act as agent for tendering stockholders for the purpose of receiving payments from the Purchaser and transmitting such payments to tendering stockholders whose Shares have been accepted for payment. In all cases, payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (i) the certificates evidencing such Shares or confirmation of a book-entry transfer of such Shares into the Depositary’s account at the Book-Entry Transfer Facility (as defined in Section 2 (“Acceptance for Payment and Payment for Shares”) of the Offer to Purchase) pursuant to the procedures set forth in the Offer to Purchase, (ii) the Letter of Transmittal (or a manually signed facsimile thereof), properly completed and duly executed, with any required signature guarantees or, in the case of book-entry transfer, an Agent’s Message (as defined in Section 2 (“Acceptance for Payment and Payment for Shares”) of the Offer to Purchase) and (iii) any other documents required by the Letter of Transmittal.

The term “Expiration Time” means 12:00 midnight, New York City time, on Wednesday, August 19, 2009 (which is the end of the day on August 19, 2009), unless the Purchaser, in accordance with the Merger Agreement, extends the period during which the Offer is open, in which event the term “Expiration Time” means the latest time and date at which the Offer, as so extended, expires.

The Merger Agreement provides that the Purchaser may, without the Company’s consent, extend the Offer (i) on one or more occasions for any period not exceeding seven business days for any extension, if at any then scheduled expiration of the Offer any of the conditions to the Purchaser’s obligation to accept for payment and pay for the Shares validly tendered in the offer shall not be satisfied or, if permitted under the Merger Agreement, waived and (ii) for any period or periods required by any applicable rule, regulation, interpretation or position of the Securities and Exchange Commission (or its staff) applicable to the Offer. Subject to the Purchaser’s, Holdings’ and Parent’s termination rights, if requested by the Company, the Purchaser must extend the Offer on one or more occasions for any period not exceeding seven business days for any extension, if at any then scheduled expiration of the Offer any of the conditions to the Purchaser’s obligation to accept for payment and pay for the Shares validly tendered in the offer shall not be satisfied or, if permitted under the Merger Agreement, waived. The Purchaser will not, however, be required to extend the Offer beyond November 17, 2009 if the Minimum Condition is not satisfied at such time, and will not in any event be required to extend the Offer beyond April 14, 2010. The termination rights of the parties to the Merger Agreement are as set forth in the Merger Agreement and remain unaffected by the foregoing provisions of the Merger Agreement.

2

The Merger Agreement further provides that, if necessary to acquire sufficient Shares (without regard to the exercise of the Top-Up Option (as defined in Section 11 (“The Transaction Agreements; Employment Agreement”) of the Offer to Purchase), such that Parent, Holdings, the Purchaser and their respective subsidiaries hold, in the aggregate, at least 90% of the outstanding Shares, the Purchaser may, in its sole discretion, provide for one or more “subsequent offering periods” (each a “Subsequent Offering Period”) in accordance with Rule 14d-11 under the Securities Exchange Act of 1934, as amended (together with the rules and regulations promulgated thereunder, the “Exchange Act”).

Any extension of the Offer will be followed as promptly as practicable by a public announcement if required. Such announcement will be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Time, in accordance with the public announcement requirements of Rule 14e-1(d) under the Exchange Act. During any such extension, all Shares previously tendered and not validly withdrawn will remain subject to the Offer, subject to the rights of a tendering stockholder to withdraw such stockholder’s Shares except during a Subsequent Offering Period. Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Time and, unless previously accepted for payment by the Purchaser pursuant to the Offer, may also be withdrawn at any time after September 21, 2009. If the initial offering period has expired and the Purchaser elects to provide for a Subsequent Offering Period, Shares tendered during a Subsequent Offering Period may not be withdrawn. For a withdrawal to be effective, a written, telegraphic or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover of the Offer to Purchase. Any such notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder of such Shares, if different from that of the person who tendered such Shares. If share certificates evidencing Shares to be withdrawn have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such share certificates, the serial numbers shown on such share certificates must be submitted to the Depositary and the signature(s) on the notice of withdrawal must be guaranteed by an Eligible Institution (as defined in Section 3 (“Procedures for Accepting the Offer and Tendering Shares”) of the Offer to Purchase), unless such Shares have been tendered for the account of a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a participant in the Securities Transfer Agents Medallion Program or any other “eligible guarantor institution,” as such term is defined in Rule 17Ad-15 of the Exchange Act. If Shares have been tendered pursuant to the procedure for book-entry transfer as set forth in Section 3 (“Procedures for Accepting the Offer and Tendering Shares”) of the Offer to Purchase, any notice of withdrawal must also specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares. All questions as to validity, form, eligibility (including time of receipt) and acceptance for payment of any tendered Shares will be determined by the Purchaser, in its sole discretion, which determination shall be final and binding on all parties.

The receipt of cash for Shares in the Offer and the Merger will be a taxable transaction for United States federal income tax purposes and may also be a taxable transaction under applicable state, local or foreign tax laws. Stockholders should consult with their tax advisors as to the particular tax consequences of the Offer and the Merger to them, including the applicability and effect of the alternative minimum tax and any state, local or foreign income and other tax laws and of changes in such tax laws. For a more complete description of certain material United States federal income tax consequences of the Offer and the Merger, see Section 5 (“Certain United States Federal Income Tax Consequences”) of the Offer to Purchase.

The information required to be disclosed by Paragraph (d)(1) of Rule 14d-6 of the General Rules and Regulations under the Exchange Act is contained in the Offer to Purchase and is incorporated herein by reference. The Company has provided the Purchaser with the Company’s stockholder list and security position listings for the purpose of disseminating the Offer to holders of Shares. The Offer to Purchase and the related Letter of Transmittal will be mailed to record holders of Shares whose names appear on the Company’s stockholder list and will be furnished, for subsequent transmittal to beneficial owners of Shares, to banks, brokers, dealers and other nominees whose names, or the names of whose nominees, appear on the stockholder list or, if applicable, who are listed as participants in a clearing agency’s security position listing.

3

THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION THAT SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER.

Questions or requests for assistance may be directed to the Information Agent at the address and telephone number set forth below. Questions or requests for additional copies of the Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery may also be directed to the Information Agent. Stockholders may also contact their broker, dealer, commercial bank or trust company for assistance concerning the Offer.

The Information Agent for the Offer is:

199 Water Street, 26th Floor
New York, NY 10038-3560

Banks and Brokerage Firms, Please Call:

212-440-9800

Stockholders and All Others Call Toll-Free:

888-897-6012

July 23, 2009

4

EX-99.A.5.C

Exhibit (a)(5)(C)

Hisamitsu Pharmaceutical Co., Inc.

Media Contacts:	Shinichiro Takao Executive Officer, Corporate Strategic Planning Division Hisamitsu Pharmaceutical Co., Inc.	Christopher M. Hayden Senior Managing Director Georgeson Inc.
	Phone: +81-3-5293-1713	Phone: 212-440-9850
	E-mail: Shinichiro_Takao@hisamitsu.co.jp	Email: chayden@georgeson.com

FOR IMMEDIATE RELEASE

Hisamitsu Pharmaceutical Co., Inc. Begins Tender Offer for All Outstanding Shares of Noven Pharmaceuticals, Inc.

Tosu, Saga Japan (July 23, 2009) — Hisamitsu Pharmaceutical Co., Inc. (TSE: 4530), Hisamitsu U.S., Inc. and Northstar Merger Sub, Inc., today commenced the cash tender offer to purchase all outstanding shares of common stock of Noven Pharmaceuticals, Inc. (NASDAQ: NOVN) contemplated by the Agreement and Plan of Merger executed and publicly announced on July 14, 2009.

Upon the successful closing of the tender offer, shareholders of Noven will receive $16.50 in cash for each share of Noven common stock tendered in the offer, without interest and less any required withholding taxes. The companies expect that Noven will continue as a standalone business unit, operating at its current locations in Miami and New York with its existing work force.

Today, Hisamitsu is filing with the Securities and Exchange Commission (SEC) a tender offer statement on Schedule TO that provides the terms of the tender offer. Noven is also filing with the SEC a solicitation/recommendation statement on Schedule 14D-9 that includes the recommendation of Noven’s board of directors that Noven shareholders accept the tender offer and tender their shares to Hisamitsu. As previously disclosed, the board of directors of both Noven and Hisamitsu have unanimously approved the transaction.

The tender offer will expire at 12:00 midnight New York Time, on August 19, 2009, unless extended in accordance with the merger agreement and the applicable rules and regulations of the SEC. The closing of the tender offer is conditioned on the tender of a majority of the outstanding shares of Noven’s common stock on a fully diluted basis. The closing is also conditioned on clearance under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions.

The Depository for the tender offer is American Stock Transfer and Trust Company, LLC, 59 Maiden Lane, Plaza Level, New York, NY 10038. The Information Agent for the tender offer is Georgeson, Inc., 199 Water Street, 26th floor, New York, NY 10038.

About Hisamitsu

Hisamitsu Pharmaceutical Co., Inc. is a leading pharmaceutical company that develops and markets prescription and over-the-counter (“OTC”) pharmaceutical products using transdermal delivery systems technology. Its leading product in prescription pharmaceuticals is Mohrus^® series, ketoprofen patch for pain, and its leading brand in the OTC business is “Salonpas^®”. The company was founded in 1847 and is located in Saga, Japan. Additional information is available through its corporate website, http://www.hisamitsu.co.jp.

Additional Information

This press release is neither an offer to purchase nor a solicitation of an offer to sell shares of Noven. Hisamitsu has filed a tender offer statement with the SEC, and will mail an offer to purchase, forms of letter of transmittal and related documents to Noven shareholders. Noven has filed with the SEC, and will mail to Noven shareholders, a solicitation/recommendation statement on Schedule 14D-9. These documents contain important information about the tender offer and shareholders of Noven are urged to read them carefully when they become available.

These documents will be available at no charge at the SEC’s website at www.sec.gov. The tender offer statement and the related materials may be obtained for free by directing a request by mail to Georgeson Inc., 199 Water Street, 26th Floor, New York, New York 10038 or by calling toll-free (888) 897-6012.

###

EX-99.A.5.D

Exhibit (a)(5)(D)

EFiled: Jul 15 2009 2:59PM EDT
Transaction ID 26111033
Case No. 4732-

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

IBEW LOCAL UNION 98,	:
individually and on behalf of all	:	C.A. No.
others similarly situated,	:
	:
Plaintiff,	:
	:
v.	:
	:
NOVEN PHARMACEUTICALS INC.,	:
WAYNE P. YETTER, PETER BRANDT,	:
JOHN G. CLARKSON, DONALD A.	:
DENKHAUS, PHILLIP M. SATOW,	:
ROBERT G. SAVAGE, PEDRO GRANADILLO,	:
FRANCOIS NADER, and HISAMITSU	:
PHARMACEUTICAL CO., INC.,	:
Defendants.	:
	:

VERIFIED CLASS ACTION COMPLAINT

     Plaintiff, through its counsel, alleges upon information and belief, except for allegations pertaining to plaintiff, which are based upon personal knowledge, as follows:

NATURE AND SUMMARY OF THE ACTION

     1. This is a shareholder class action brought by plaintiff on behalf of shareholders of Noven Pharmaceuticals Inc. (“Noven” or the “Company”) common stock for injunctive and other relief appropriate relief in connection with the proposal by Hisamitsu Pharmaceutical Co., Inc., (“Hisamitsu”), to acquire Noven for inadequate consideration — $428 million or $16.50 per share — in an all-cash tender (the “Proposed Transaction”). The Proposed Transaction reflects a clear effort by Hisamitsu to takeover Noven at an unfair price. Indeed, Hisamitsu’s offer consideration is only a 22 percent premium over the $13.48 closing price of Noven on the last trading day before the announcement of the Proposed Transaction.

     2. The consideration that Hisamitsu has stated it will offer to holders of Noven common stock, and that Noven’s Board has accepted in unanimously agreeing to the Proposed Transaction, is unfair and inadequate because, among other things, the intrinsic value of Noven common stock is materially higher than the amount offered, giving due consideration to the Company’s growth and operating results and a promising new drug product in its pipeline. Plaintiff seeks to enjoin, preliminarily and permanently, Hisamitsu’s offer for acquisition of Noven.

PARTIES

     3. Plaintiff, IBEW Local Union 98, is and was at all times relevant hereto a public holder of Noven.

     4. Defendant Noven is incorporated under the laws of the State of Delaware, with its headquarters located at 11960 S.W. 144th Street, Miami, Florida 33186. The Company was founded in 1987 and is a specialty pharmaceutical company engaged in the research, development, manufacture, marketing and sale of prescription pharmaceutical products. The Company operates through three segments: Noven Transdermals, Novogyne, and Noven Therapeutics. Noven markets its products primarily in the United States, and has out-licensed products to third parties in Canada and Japan, as well as in Europe.

     5. Defendant Wayne P. Yetter serves as the non-executive Chairman of Noven’s board of directors. He has been a member of the board of since 2001.

     6. Defendant Peter Brandt has served as a member of the board of directors of Noven since 2008. Since 2008, he has also served as President and Chief Executive Officer of Noven.

2

     7. Defendant John G. Clarkson, M.D. has served as a member of the board of directors of Noven since 2000. He also serves as the Chairman of the Compensation Committee and is a member of the Nominating and Corporate Governance Committee.

     8. Defendant Donald A. Denkhaus has served as a member of the board of directors of Noven since 2004. He is the Chairman of the Audit Committee.

     9. Defendant Pedro P. Garandillo has served as a member of the board of directors of Noven since 2004. He also serves a member of the Audit Committee and the Compensation Committee.

     10. Defendant Francois Nader, M.D. has served as a member of the board of directors of Noven since May 2009. He also has served as a member of the Noven Audit Committee since May 2009.

     11. Defendant Phillip M. Satow has served as a member of the board of directors of Noven since 2007. Previously, he served as Chief Executive Officer of JDS Pharmaceuticals, LLC, a company he co-founded, which Noven acquired in August 2007 and which is now known as Noven Therapeutics.

     12. Defendant Robert G. Savage has been a member of the Noven board of directors since 2004. He is the Chairman of the Nominating and Corporate Governance Committee and also serves as a member of the Compensation Committee.

     13. The defendants identified in ¶¶ 5 – 12 are referred to herein collectively as the “Individual Defendants.” Each of the Noven Directors was a member of the board of directors at all pertinent times and participated in the decisions and conduct challenged herein. By reason of their positions, the Noven Directors owe fiduciary duties of good faith, fair dealing, and loyalty to the Noven shareholders.

3

     14. Defendant Hisamitsu is a Japanese company, with its head offices in Saga, Tosu, Tashiro Daikan-machi 408, Japan 841-0017 and Tokyo, Chiyoda-ku, Marunouchi 1-11-1, Japan 100-6221. Hisamitsu already owns approximately 1.24 million Noven shares, or about a 4.9% stake and has owned at least one million shares of Noven since 2000.

CLASS ACTION ALLEGATIONS

     15. Plaintiff brings this action on their own behalf and as a class action, pursuant to Rule 23 of the Rules of the Court of Chancery, on behalf of all Noven shareholders who are being and will be harmed by defendants’ actions described herein (the “Class”). Excluded from the Class are defendants herein and any person, firm, trust, corporation or other entity related to or affiliated with any defendants.

     16. This action is properly maintainable as a class action.

     17. The Class is so numerous that joinder of all members is impracticable. The number of shares of common stock of Noven outstanding as of April 30, 2009 was 24,914,418.

     18. There are questions of law and fact that are common to the Class and that predominate over questions affecting any individual Class member. The common questions include the following:

a.	Whether the Proposed Transaction is unfair to the Class;
b.	Whether the Proposed Transaction inadequately values Noven;
c.	Whether defendants have breached their fiduciary duties with respect to Plaintiff and the other members of the Class in connection with the Proposed Transaction;
d.	Whether the defendants have breached their fiduciary duty to consider alternatives to maximize value and secure the best price reasonable under

4

	the circumstances for the benefit of Plaintiff and the other members of the Class in connection with the Proposed Transaction;
e.	Whether defendant Hisamitsu participated in, or has aided and abetted or otherwise conspired in the Individual Defendants’ breaches of fiduciary duties;
f.	Whether the Proposed Transaction will result in payment to Plaintiff and the Class that is unfair and inadequate;
g.	Whether Plaintiff and the other members of the Class will be irreparably harmed if the transactions complained of herein are allowed to proceed.

     19. Plaintiff is committed to prosecuting this action and have retained competent counsel experienced in litigation of this nature. Plaintiff’s claims are typical of the claims of the other members of the Class, and Plaintiff has the same interests as the other members of the Class. Accordingly, Plaintiff will fairly and adequately represent the Class.

     20. The prosecution of separate actions by individual members of the Class would create a risk of inconsistent or varying adjudications with respect to individual members of the Class and establish incompatible standards of conduct for the party opposing the Class.

     21. Defendants have acted and are about to act on grounds generally applicable to the Class, thereby making appropriate final injunctive relief with respect to the Class as a whole.

FACTUAL BACKGROUND

A. Background

     22. Noven was founded in 1987 and went public in 1988. The Company, which is headquartered in Miami, Florida and has offices in New York, is a

5

pharmaceutical company that engages in the research, development, manufacture, licensing, marketing, and sale of prescription pharmaceutical products. The Company operates through three segments; Noven Transdermals, Novogyne, and Noven Therapeutics. The Noven Transdermals segment offers transdermal patches, which are used in the treatment of attention deficit hyperactivity disorder and in menopausal hormone therapy. The Novogyne segment, a joint venture with Novartis Pharmaceuticals Corporation, markets and sells transdermal hormone therapy product delivery systems for women. The Noven Therapeutics segment offers branded oral prescription psychiatry products treating bipolar, depressive, panic, obsessive compulsive, and generalized anxiety disorders. The Company’s products are marketed primarily in the United States, but the Company has out-licensed products to third parties in Canada and Japan, as well as in Europe. Noven has collaborated with Procter & Gamble Pharmaceuticals, Inc. for the development of a low-dose testosterone patch for hypoactive sexual desire disorder. Today, Noven is traded on the NASDAQ under the symbol NOVN.

     23. Noven is an extremely successful company. According to defendant Brandt, “[a]s our financial results and business highlights suggest, Noven is off to a strong start in 2009, with progress in each of our main business areas.” For example, net revenue increased 29% for the first quarter of 2009 compared to the 2008 Quarter and net income increased 73% compared to the 2008 Quarter. Defendant Brandt also announced that “[i]n light of our first quarter performance and our expectations for gross margin and other aspects of our business, we are raising our guidance for 2009 earnings per share to $0.95 to $1.05 from our previous range of $0.85 to $0.95.”

6

     24. On July 14, the same day the Proposed Transaction was announced to the public, Noven also revealed in a separate press release that it had positive results from its Phase 2 trial of its drug Mesafem for the treatment of hot flashes associated with menopause and will put the drug into Phase 3 development. Defendant Brandt, Noven’s President & CEO, said: “Today’s Phase 2 results exceeded all our internal expectations from the standpoints of both efficacy and tolerability. With the data from this study, we plan to expedite Mesafem into Phase 3 development, and to advance our commercialization and partnering strategies, with the goal of making this new non-hormonal treatment option broadly available to women . . .”

     25. According to Noven’s 2008 Form 10-K, the Company has a stockholders’ rights plan, or “poison pill,” and joint venture operating agreements with Novartis Pharmaceutical Corporation (“Novartis”), both of which include provisions that discourage potential third parties from acquiring Noven by making it difficult for third parties to acquire a majority of the Company without the consent of its board. Such provisions “may have the effect of depriving [Noven’s] stockholders of the opportunity to sell their stock at a price in excess of prevailing market prices in an acquisition of” the Company.

     26. In 1998, Noven’s Novogyne division entered into a joint venture agreement with Novartis. The joint venture operating agreement has a buy/sell provision either party may trigger by notifying the other party of the price at which the triggering party would be willing to acquire the other party’s interest in the joint venture. As a result of the buy/sell provision, a company that seeks to acquire Noven without approval of Noven’s board faces the possibility that Noven could trigger this provision, which

7

would cause Noven to lose one of its most valuable assets and thereby make it much less valuable to any non-approved acquirer. Therefore, the joint venture agreement serves as a deterrent for any bidder other than the anointed one.

     27. Additionally, the joint venture operating agreement gives Novartis the right to dissolve the joint venture in the event of a change in control of Noven if the acquirer is one of the ten largest pharmaceutical companies (as measured by annual dollar sales). Upon dissolution, Novartis would reacquire the rights to market Vivelle-Dot, the drug product jointly produced by Novogyne and Novartis, and Novogyne’s other assets would be liquidated and distributed between Noven and Novartis in accordance with Noven and Novartis’ respective capital account balances as determined pursuant to the joint venture operating agreement.

     28. These agreements effectively preclude other potential bidders from making a bid for the Company.

     29. There are also provisions in Noven’s certificate of incorporation and bylaws, including provisions limiting the ability of stockholders to bring matters before an annual meeting of stockholders, to call special meetings or to nominate candidates for the board. Such provisions also make it difficult for a third party to acquire a majority of Noven’s outstanding voting common stock.

     30. Hisamitsu, a Japanese company with 26 global offices, is the world’s largest transdermal patch manufacturer, producing over four billion units per year. Hisamitsu is not one of the ten largest pharmaceutical companies. Hisamitsu has been a long-time partner of Noven. Since 2002, Hisamitsu has owned at least one million shares of Noven. Hisamitsu is currently the beneficial owner of 1,240,000 shares of Noven

8

common stock, representing approximately 4.9% of outstanding shares. Moreover, the parties have worked together on several product opportunities.

B. Hisamitsu Seeks to Acquire Noven in an All-Cash Tender Offer

     31. On July 14, 2009, Hisamitsu and Noven jointly announced that they have entered into a definitive merger agreement pursuant to which Hisamitsu has proposed to acquire Noven for total cash consideration of approximately $428 million, or $16.50 per share, in an all-cash tender offer for 100% of the outstanding shares of Noven. The offer price represents a 22% premium to the closing price of Noven’s common stock on July 13, 2009. Under the terms of the Proposed Transaction, Noven will become a wholly-owned subsidiary of Hisamitsu.

     32. Noven’s existing operations are expected to serve as a growth platform for Hisamitsu to expand its business in the U.S across all functions, including product development, operations, clinical/regulatory and commercial capabilities. As described in a special town meeting presentation made to Noven employees on July 14, 2009, “[t]he transaction is a major step toward Hisamitsu’s long-term corporate objective to be the world’s leading transdermal company.”

     33. The Proposed Transaction was unanimously approved by the boards of directors of both Noven and Hisamitsu. The tender offer is expected to commence by July 28, 2009, and to last for 20 business days. Hisamitsu’s shareholders are not required to vote on or approve the tender offer or merger. The tender required to consummate the Proposed Transaction is greater than 50% of the outstanding shares.

     34. The companies announced that they expect that Noven will continue as a standalone business unit, operating at its current locations in Miami and New York with

9

its existing work force. Additionally, following consummation of the Proposed Transaction, Jeffrey F. Eisenberg, Noven’s Executive Vice President and President of the Novogyne joint venture, will become Noven’s President and Chief Executive Officer, replacing defendant Brandt, who will leave Noven after an unspecified transition period.

     35. The merger agreement, filed on July 15, 2009, includes a combination of onerous and unreasonable deal protection devices that effectively preclude topping bids. For example, the merger agreement contains a “no-shop” provision, which prohibits Noven and its Board from soliciting, discussing or negotiating with third parties and a 4% termination fee if the Proposed Transaction is not consummated.

     36. Noven’s value is substantially greater than the $16.50 per share offered by Hisamitsu. The consideration offered as part of the Proposed Transaction is inadequate and undervalues the Company, especially in light of the positive results Noven announced during its first quarter 2009 earnings call and the positive phase 2 results for Mesafem. Noven’s shares also have traded above the offer price, providing further indication that the consideration is inadequate.

     37. The Individual Defendants have violated fiduciary duties owed to Noven shareholders, causing damages for which Plaintiff seeks compensation. Defendants have failed to take adequate measures to ensure that the interests of Noven’s shareholders are properly protected and have embarked on a process that avoids competitive bidding.

     38. By the acts, transactions and courses of conduct alleged herein, defendants, individually and acting as a part of a common plan, will unfairly deprive Plaintiff and other members of the Class of the true value of their Noven investment.

10

Plaintiff and other members of the Class will suffer irreparable harm unless actions of defendants and Hisamitsu are enjoined and a fair process is substituted.

     39. Plaintiff and members of the Class have no adequate remedy at law. Only through the exercise of this Court’s equitable powers can Plaintiff and the Class be fully protected from immediate and irreparable injury which defendants’ actions threaten to inflict.

PRAYER FOR RELIEF

     WHEREFORE, Plaintiff, on behalf of itself and other public holders of Noven, demand judgment as follows:

A.	declaring this action properly maintainable as a class action;
B.	enjoining, preliminarily and permanently, defendants from taking any steps to consummate the Proposed Transaction;
C.	to the extent, if any, that the transaction complained of is consummated prior to the entry of this Court’s final judgment, rescinding such transaction, and granting, inter alia, rescissory damages against the Individual Defendants and Noven;
E.	requiring Defendants to fully disclose all material information regarding the Proposed Transaction;
F.	directing defendants, jointly and severally, to account to Plaintiff and the Class for all damages suffered and to be suffered by them as a result of the wrongs complained of herein;
G.	requiring the Individual Defendants to conduct a fair process to evaluate the Company’s value and any available maximizing strategic alternatives;

11

H.	awarding Plaintiff and the Class pre- and post-judgment interest at the statutory rate;
I.	awarding Plaintiff the costs and disbursements of this action, including a reasonable allowance for the fees and expenses of Plaintiff’s attorneys and experts; and
J.	granting Plaintiff and the other members of the class such other and further relief as is just and equitable, including all injunctive relief as alleged heretofore.

Dated: July 15, 2009	CHIMICLES & TIKELLIS LLP
	By:	/s/ Meghan A. Adams
	Pamela S. Tikellis (DE Bar No. 2172) Robert J. Kriner. (DE Bar No. 2546)
	Meghan A. Adams (DE Bar No. 4981)
	222 Delaware Avenue, Suite 1100
	P. O. Box 1035
	Wilmington, Delaware 19899
	Phone: (302) 656-2500
	Fax: (302) 656-9053

OF COUNSEL:
M. Richard Komins
Julie B. Palley
BARRACK, RODOS & BACINE
3300 Two Commerce Square
2001 Market Street
Philadelphia, PA 19130
(215) 963-0600

               -and-

Stephen R. Basser
One American Plaza
600 West Broadway, Suite 900

12

San Diego, CA 92101
Telephone: (619) 230-0800
Facsimile: (619) 230-1874

Attorneys for Plaintiff

13

EX-99.A.5.E

Exhibit (a)(5)(E)

IN THE CIRCUIT COURT OF THE ELEVENTH JUDICIAL CIRCUIT
IN AND FOR MIAMI-DADE COUNTY, FLORIDA

ARTHUR I. MURPHY, JR., Individually and		Case No. 09 - 53113CA0 6
on Behalf of All Others Similarly Situated,	)
	)	SHAREHOLDER CLASS ACTION
Plaintiff,	)	COMPLAINT BASED UPON SELF
	)	DEALING AND BREACH OF FIDUCIARY
vs.	)	DUTY
	)
NOVEN PHARMACEUTICALS, INC.,	)	CLASS REPRESENTATION
PETER BRANDT, JOHN G. CLARKSON,	)
DONALD A. DENKHAUS, PEDRO P.	)	ORIGINAL
GRANADILLO, FRANCOIS NADER,	)	FILED
PHILLIP M. SATOW, ROBERT G.	)	JUL 15 2009
SAVAGE, and WAYNE P. YETTER,	)	HARVEY RUVIN
	)	CLERK
Defendants.	)
	)
	)	JURY TRIAL DEMANDED

     Plaintiff Arthur I. Murphy, Jr. (“Plaintiff”), by and through his attorneys, individually and on behalf of all others similarly situated, files this Shareholder Class Action Complaint Based upon Self Dealing and Breach of Fiduciary Duty (the “Complaint”) against the Defendants herein named, and alleges as follows:

SUMMARY OF THE ACTION

     1. This is a stockholder class action brought by Plaintiff on behalf of the public holders of Noven Pharmaceuticals, Inc. (“Noven” or the “Company”) common stock against Noven and its senior officers and directors arising out of their attempts to provide certain Noven insiders and directors with preferential treatment in connection with a definitive merger agreement (“Merger”) with Hisamitsu Pharmaceutical Co., Inc. (“Hisamitsu”). This action seeks equitable relief only.

     2. In pursuing the unlawful plan to squeeze out Noven’s public stockholders for grossly inadequate consideration, the Defendants have breached their fiduciary duties of loyalty, due care, independence, candor, good faith and fair dealing, and have aided and abetted such breaches by Noven’s officers and directors. Instead of attempting to obtain the highest value reasonably available for the Company’s stockholders, Defendants spent a substantial effort tailoring the Merger to meet the specific needs of Hisamitsu and certain Noven insiders.

     3. Because Defendants dominate and control the business and corporate affairs of Noven and are in possession of private corporate information concerning Noven’s assets, business and future prospects, there exists an imbalance and disparity of knowledge and economic power between them and the public shareholders of Noven, which makes it inherently unfair for them to pursue any proposed transaction wherein they will reap disproportionate benefits to the exclusion of maximizing stockholder value.

- 1 -

     4. In short, the Merger is designed to unlawfully divest Noven’s public stockholders of their holdings without providing them the maximized value they are entitled to. Defendants know that these assets will continue to produce substantial revenue and earnings.

JURISDICTION AND VENUE

     5. This Court has jurisdiction over each Defendant named herein because each Defendant is either a corporation that conducts business in and maintains operations in this County, or is an individual who has sufficient minimum contacts with Florida so as to render the exercise of jurisdiction by the Florida courts permissible under traditional notions of fair play and substantial justice.

     6. Venue is proper in this Court because one or more of the Defendants either resides in or maintains executive offices in this County, a substantial portion of the transactions and wrongs complained of herein, including the Defendants’ primary participation in the wrongful acts detailed herein and aiding and abetting and conspiracy in violation of fiduciary duties owed to Noven’s shareholders occurred in this County, and Defendants have received substantial compensation in this County by doing business here and engaging in numerous activities that had an effect in this County.

PARTIES

     7. Plaintiff is, and at all times relevant hereto has been, a shareholder of Noven.

     8. Defendant Noven is a Delaware corporation headquartered with its principal place of business located at 11960 S.W. 144th Street, Miami, Florida 33186. The Company is publicly traded under the NASDAQ stock ticker “NOVN” and is a specialty pharmaceutical company engaged in the research, development, manufacturing, licensing, marketing and sale of prescription pharmaceutical products.

- 2 -

     9. Defendant Peter Brandt (“Brandt”) is and at all relevant times has been a director of Noven. Defendant Brandt received a 2009 base salary increase of 3% for a total amount of $674,375, in addition to a substantial amount in equity grants in 2008.

     10. Defendant John G. Clarkson (“Clarkson”) is and at all relevant times has been a director of Noven. In 2008, Clarkson received a total of $158,500 in compensation.

     11. Defendant Donald A. Denkhaus (“Denkhaus”) is and at all relevant times has been a director of Noven. In 2008, Denkhaus received a total of $162,250 in compensation.

     12. Defendant Pedro P. Granadillo (“Granadillo”) is and at all relevant times has been a director of Noven.

     13. Defendant Francois Nader (“Nader”) is and at all relevant times has been a director of Noven.

     14. Defendant Phillip M. Satow (“Satow”) is and at all relevant times has been a director of Noven. In 2008, Satow received a total of $118,500 in compensation.

     15. Defendant Robert G. Savage (“Savage”) is and at all relevant times has been a director of Noven. In 2008, Savage received a total of $160,000 in compensation.

     16. Defendant Wayne P. Yetter(“Yetter”) is and at all relevant times has been a director of Noven, and is Chairman of Noven’s Board of Directors. In 2008, Yetter received a total of $208,983 in compensation.

     17. The Defendants named above in ¶¶9-16 are sometimes collectively referred to herein as the “Individual Defendants.”

DEFENDANTS’ FIDUCIARY DUTIES

     18. Under applicable law, in any situation where the directors of a publicly traded corporation undertake a transaction that will result in either: (i) a change in corporate control; or (ii) a break up of the corporation’s assets, the directors have an affirmative fiduciary obligation to

 - 3 -

obtain the highest value reasonably available for the corporation’s shareholders, and if such transaction will result in a change of corporate control, the shareholders are entitled to receive a significant premium. To diligently comply with these duties, the directors and/or officers may not take any action that:

          (a) adversely affects the value provided to the corporation’s shareholders;

          (b) will discourage or inhibit alternative offers to purchase control of the corporation or its assets;

          (c) contractually prohibits themselves from complying with their fiduciary duties;

          (d) will otherwise adversely affect their duty to search and secure the best value reasonably available under the circumstances for the corporation’s shareholders; and/or

          (e) will provide the directors and/or officers with preferential treatment at the expense of, or separate from, the public shareholders.

     19. In accordance with their duties of loyalty and good faith, the Defendants, as directors and/or officers of Noven, are obligated under applicable law to refrain from:

          (a) participating in any transaction where the directors’ or officers’ loyalties are divided;

          (b) participating in any transaction where the directors or officers receive, or are entitled to receive, a personal financial benefit not equally shared by the public shareholders of the corporation; and/or

          (c) unjustly enriching themselves at the expense or to the detriment of the public shareholders.

     20. Plaintiff alleges herein that Defendants, separately and together, in connection with the Merger, are knowingly or recklessly violating their fiduciary duties, including their duties of loyalty, good faith and independence owed to Plaintiff and other public shareholders of Noven.

- 4 -

Defendants stand on both sides of the transaction, are engaging in self dealing, are obtaining for themselves personal benefits, including personal financial benefits not shared equally by Plaintiff or the Class, and choosing not to provide shareholders with all information necessary to make an informed decision in connection with the Merger. As a result of Defendants self dealing and divided loyalties, neither Plaintiff nor the Class will receive adequate or fair value for their Noven common stock in the proposed Merger.

     21. Because Defendants are knowingly or recklessly breaching their duties of loyalty, good faith and independence in connection with the Merger, the burden of proving the inherent or entire fairness of the Merger, including all aspects of its negotiation, structure, price and terms, is placed upon Defendants as a matter of law.

BACKGROUND TO THE PROPOSED MERGER

     22. Noven is a specialty pharmaceutical company engaged in the research, development, manufacturing, licensing, marketing and sale of prescription pharmaceutical products.

     23. Hisamitsu is a Japan-based pharmaceutical company that operates around the world, including in the United States, and maintains business segments dedicated to developing media outlets and the rearing of animals for pharmaceutical research.

     24. On July 14, 2009, Noven announced that it has entered into a definitive merger agreement with Hisamitsu “for total cash consideration of approximately $428 million, or $16.50 per share, in an all-cash tender offer for 100% of the outstanding shares of Noven.”

     25. Although the Defendants tout that the “offer price represents a 22% premium to the closing price of Noven’s common stock on July 13, 2009, and a 43% premium to Noven’s average closing price for the preceding 90 days,” the Merger substantially undervalues Noven.

     26. On May 7, 2009, Noven announced its 2009 first fiscal quarter financial results which demonstrate Noven’s meteoric potential. Compared to the corresponding 2008 quarter, Noven

- 5 -

enjoyed a 29% increase in revenues and a 75% increase in net income. Likewise, Noven realized total product revenues of 47% in the 2009 quarter compared to 30% in the same quarter in 2008; and, increased research and development expenses by 40% compared to the corresponding quarter in 2008.

     27. Indeed, Defendant Brandt stated, “As our financial result and business highlights suggest, Noven is off to a strong start in 2009, with progress in each of our main business areas.” Brandt went onto to exalt that “for full-year 2009 we continue to expect [one of Noven’s major business segments] to report double-digit earnings growth.”

     28. For another of Noven’s business segments, Brandt stated,

[W]e continue to expect to achieve our gross margin targets for 2009, in part due to the manufacturing improvements implemented in the fourth quarter of 2008. These improvements contributed to a 47% consolidated gross margin for the 2009 Quarter, which is the highest consolidated gross margin reported by the company in over three years.

     29. Brant also added:

At Noven Therapeutics, targeted marketing and selling efforts, as well as closely-managed spending, permitted this unit to contribute on a segment basis $0.5 million (excluding amortization of $0.9 million) to our pre-tax profit in the 2009 Quarter, and advanced our commitment to deliver a $5.0 million improvement in this unit’s pre-tax contribution for full-year 2009 compared to 2008.

*       *       *

More broadly, an improved gross margin, expense controls and other company initiatives permitted us to deliver an 83% increase in pre-tax income in the 2009 Quarter, while increasing our investment in research and development by 40%... In light of our first quarter performance and our expectations for gross margin and other aspects of our business, we are raising our guidance for 2009 earning per share to $0.95 to $1.05 from our previous range of $0.85 to $0.95.

     30. Noven had $72.2 million in cash and equivalents and $11.8 million in investments at the end of the first fiscal quarter of 2009 compared with the relative respective numbers of $62.9 million and $15.5 million as of December 31, 2008. Additionally, Noven liquidated

- 6 -

$39.0 million of its investments at par value during 2008 and an additional $3.7 million at par value during the first fiscal quarter of 2009.

SELF-DEALING

     31. By reason of their positions with Noven, the Individual Defendants are in possession of non-public information concerning the financial condition and prospects of Noven, and especially the true value and expected increased future value of Noven and its assets, which they have not disclosed to Noven’s public stockholders. Moreover, despite their duty to maximize shareholder value, the Defendants have clear and material conflicts of interest and are acting to better their own interests at the expense of Noven’s public shareholders.

     32. As part of their employment agreements with Noven, the Individual Defendants will enjoy generous change of control and termination payments. For instance, Defendant Brandt could receive nearly $2.5 million as a result of the Merger. Indeed, on May 22, 2009 Noven stockholders approved of an Equity Incentive Plan for the benefit of the Individual Defendants.

     33. The proposed sale is wrongful, unfair and harmful to Noven’s public stockholders, and represents an effort by Defendants to aggrandize their own financial position and interests at the expense of and to the detriment of Class members. Specifically, Defendants are attempting to deny Plaintiff and the Class their shareholder rights via the sale of Noven on terms that do not adequately value the Company. Accordingly, the Merger will only benefit Defendants and Hisamitsu.

     34. In light of the foregoing, the Individual Defendants must, as their fiduciary obligations require:

• Withdraw their consent to the sale of Noven and allow the shares to trade freely;

• Act independently so that the interests of Noven’s public stockholders will be protected;

- 7 -

• Adequately ensure that no conflicts of interest exist between Defendants’ own interests and their fiduciary obligation to maximize stockholder value or, if such conflicts exist, to ensure that all conflicts be resolved in the best interests of Noven’s public stockholders; and

• Consider alternatives to the Merger including the solicitation of bids from interested third-parties to assure that the Company’s shareholders are receiving the maximum value for their shares.

DEFENDANTS FAILED TO MAXIMIZE SHAREHOLDER VALUE

     35. As a result of Defendants’ conduct, Noven’s public stockholders have been and will continue to be denied the fair process and arm’s-length negotiated terms to which they are entitled in a sale of their Company. In order to meet their fiduciary duties, Defendants are obligated to maximize shareholder value, not structure a preferential deal for themselves.

CLASS ACTION ALLEGATIONS

     36. Plaintiff brings this action on his own behalf and as a class action on behalf of all holders of Noven stock who are being and will be harmed by Defendants’ actions described below (the “Class”). Excluded from the Class are Defendants herein and any person, firm, trust, corporation, or other entity related to or affiliated with any Defendants.

     37. This action is properly maintainable as a class action.

     38. The Class is so numerous that joinder of all members is impracticable. According to Noven’s Securities and Exchange Commission filings, as of March 2, 2009, there were 24,913,418 shares of Common Stock outstanding, shares which are held by hundreds, if not thousands, of beneficial holders.

     39. There are questions of law and fact which are common to the Class and which predominate over questions affecting any individual Class member. The common questions include, inter alia, the following:

- 8 -

          (a) whether the Individual Defendants have breached their fiduciary duties of undivided loyalty, independence or due care with respect to Plaintiff and the other members of the Class in connection with the Merger;

          (b) whether the Individual Defendants are engaging in self dealing in connection with the Merger;

          (c) whether the Individual Defendants have breached their fiduciary duty to secure and obtain the best price reasonable under the circumstances for the benefit of Plaintiff and the other members of the Class in connection with the Merger;

          (d) whether the Individual Defendants are unjustly enriching themselves and other insiders or affiliates of Noven;

          (e) whether the Individual Defendants have breached any of their other fiduciary duties to Plaintiff and the other members of the Class in connection with the Merger, including the duties of good faith, diligence, honesty and fair dealing;

          (f) whether the Individual Defendants have breached their fiduciary duties of candor to Plaintiff and the other members of the Class in connection with the Merger by failing to disclose all material information concerning the Merger;

          (g) whether the Individual Defendants, in bad faith and for improper motives, have impeded or erected barriers to discourage other strategic alternatives including offers from interested parties for the Company or its assets;

          (h) whether Plaintiff and the other members of the Class would be irreparably harmed were the transactions complained of herein consummated; and

          (i) whether Noven is aiding and abetting the wrongful acts of the Individual Defendants.

- 9 -

     40. Plaintiff’s claims are typical of the claims of the other members of the Class and Plaintiff does not have any interests adverse to the Class.

     41. Plaintiff is an adequate representative of the Class, has retained competent counsel experienced in litigation of this nature and will fairly and adequately protect the interests of the Class.

     42. The prosecution of separate actions by individual members of the Class would create a risk of inconsistent or varying adjudications with respect to individual members of the Class which would establish incompatible standards of conduct for the party opposing the Class.

     43. Plaintiff anticipates that there will be no difficulty in the management of this litigation. A class action is superior to other available methods for the fair and efficient adjudication of this controversy.

     44. Defendants have acted on grounds generally applicable to the Class with respect to the matters complained of herein, thereby making appropriate the relief sought herein with respect to the Class as a whole.

CAUSES OF ACTION

COUNT I

Claim for Breach of Fiduciary Duties Against the Individual Defendants

     45. Plaintiff repeats and realleges each allegation set forth herein.

     46. Defendants have knowingly and recklessly and in bad faith violated fiduciary duties of care, loyalty, good faith, candor and independence owed to the public shareholders of Noven and have acted to put their personal interests and the interests of Hisamitsu ahead of the interests of Noven’s shareholders.

     47. By the acts, transactions and courses of conduct alleged herein, Defendants, individually and acting as a part of a common plan, knowingly or recklessly and in bad faith are

- 10 -

attempting to unfairly deprive Plaintiff and other members of the Class of the true value of their investment in Noven.

     48. Defendants have knowingly or recklessly and in bad faith violated their fiduciary duties by entering into a transaction with Hisamitsu without regard to the fairness of the transaction to Noven’s shareholders and by failing to disclose all material information concerning the Merger to such shareholders.

     49. As demonstrated by the allegations above, Defendants knowingly or recklessly failed to exercise the care required, and breached their duties of loyalty, good faith, candor and independence owed to the shareholders of Noven because, among other reasons:

          (a) they failed to take steps to maximize the value of Noven to its public shareholders to cap the price of Noven’s stock and to give Defendants an unfair advantage, by, among other things, failing to solicit other potential acquirors or alternative transactions;

          (b) they failed to properly value Noven;

          (c) they ignored or did not protect against the numerous conflicts of interest resulting from the directors’ own interrelationships or connection with the Merger; and

          (d) they failed to disclose all material information that would permit Noven’s stockholders to cast a fully informed vote on the Merger.

     50. Because Defendants dominate and control the business and corporate affairs of Noven, and are in possession of private corporate information concerning Noven’s assets, business and future prospects, there exists an imbalance and disparity of knowledge and economic power between them and the public shareholders of Noven which makes it inherently unfair for them to pursue any proposed transaction wherein they will reap disproportionate benefits to the exclusion of maximizing stockholder value.

- 11 -

     51. By reason of the foregoing acts, practices and course of conduct, Defendants have knowingly or recklessly and in bad faith failed to exercise ordinary care and diligence in the exercise of their fiduciary obligations toward Plaintiff and the other members of the Class.

     52. Unless enjoined by this Court, Defendants will continue to knowingly or recklessly and in bad faith breach their fiduciary duties owed to Plaintiff and the Class, and may consummate the proposed Merger which will exclude the Class from the maximized value they are entitled to all to the irreparable harm of the Class.

     53. Defendants are engaging in self dealing, are not acting in good faith toward Plaintiff and the other members of the Class, and knowingly or recklessly have breached and are continuing to breach their fiduciary duties to the members of the Class.

     54. As a result of Defendants’ unlawful actions, Plaintiff and the other members of the Class will be irreparably harmed in that they will not receive the real value of their equity ownership of the Company. Unless the proposed Merger is enjoined by the Court, Defendants will continue to knowingly or recklessly and in bad faith breach their fiduciary duties owed to Plaintiff and the members of the Class, will not engage in arm’s-length negotiations on the Merger terms, and will not supply to Noven’s stockholders sufficient information to enable them to cast informed votes on the proposed Merger and may consummate the proposed Merger, all to the irreparable harm of the members of the Class.

     55. Plaintiff and the members of the Class have an inadequate remedy at law. Only through the exercise of this Court’s equitable powers can Plaintiff and the Class be fully protected from the immediate and irreparable injury which Defendants’ actions threaten to inflict.

     56. Plaintiff seeks to obtain a non-pecuniary benefit for the Class in the form of injunctive relief against the Individual Defendants. Plaintiffs counsel are entitled to recover their

- 12 -

reasonable attorneys’ fees and expenses as a result of the conference of a non-pecuniary benefit on behalf of the Class, and will seek an award of such fees and expenses at the appropriate time.

COUNT II

Aiding & Abetting the Individual Defendants’ Breach of Fiduciary Duty
(Against Defendant Noven)

     57. Plaintiff repeats and realleges each allegation set forth herein.

     58. Defendant Noven is sued herein as aider and abettor of the breaches of fiduciary duties outlined above by the Individual Defendants, as members of the Board of Noven.

     59. The Individual Defendants breached their fiduciary duties of good faith, loyalty, due care and candor to the Noven shareholders by failing to:

          (a) fully inform themselves of the market value of Noven before entering into the Merger Agreement;

          (b) act in the best interests of the public shareholders of Noven common stock;

          (c) maximize shareholder value;

          (d) obtain the best financial and other terms when the Company’s independent existence will be materially altered by the Merger;

          (e) act in accordance with their fundamental duties of good faith, due care and loyalty;

          (f) put the shareholders’ best interests above those of the Individual Defendants; and

          (g) disclose all material information concerning the transaction to enable Noven’s shareholders to cast informed votes on the Merger.

     60. Such breaches of fiduciary duties could not and would not have occurred but for the conduct of Defendant Noven, which, therefore, aided and abetted such breaches via entering into the Merger with Hisamitsu.

- 13 -

     61. Defendant Noven had knowledge that it was aiding and abetting the Individual Defendants’ breach of their fiduciary duties to the Noven shareholders.

     62. Defendant Noven rendered substantial assistance to the Individual Defendants in their breach of their fiduciary duties to the Noven shareholders.

     63. As a result of Noven’s conduct of aiding and abetting the Individual Defendants’ breaches of fiduciary duties, Plaintiff and the other members of the Class have been and will be damaged in that they have been and will be prevented from obtaining a fair price for their shares and will not be able to cast informed votes with all material information concerning the Merger.

     64. As a result of the unlawful actions of Defendant Noven, Plaintiff and the other members of the Class will be irreparably harmed in that they will not receive fair value for Noven’s assets and business, will be prevented from obtaining the real value of their equity ownership in the Company, and will be voting on the basis of inadequate and incomplete information concerning the Merger. Unless the actions of Defendant Noven is enjoined by the Court, it will continue to aid and abet the Individual Defendants’ breach of their fiduciary duties owed to Plaintiff and the members of the Class, and will aid and abet a process that inhibits the Maximization of shareholder value and the disclosure of material information.

     65. Plaintiff and the other members of the Class have no adequate remedy at law.

     66. Plaintiff seeks to obtain a non-pecuniary benefit for the Class in the form of injunctive relief against Defendant Noven. Plaintiff’s counsel are entitled to recover their reasonable attorneys’ fees and expenses as a result of the conference of a non-pecuniary benefit on behalf of the Class, and will seek an award of such fees and expenses at the appropriate time.

- 14 -

PRAYER FOR RELIEF

     WHEREFORE, Plaintiff demands injunctive relief, in his favor and in favor of the Class and against Defendants as follows:

     A. Declaring that this action is properly maintainable as a class action;

     B. Declaring and decreeing that the Merger was entered into in breach of the fiduciary duties of Defendants and is therefore unlawful and unenforceable;

     C. Enjoining Defendants, their agents, counsel, employees and all persons acting in concert with them from consummating the Merger, unless and until the Company adopts and implements a procedure or process to obtain the highest possible value for shareholders;

     D. Directing the Individual Defendants to exercise their fiduciary duties to obtain a transaction which is in the best interests of Noven’s shareholders until the process for the sale or auction of the Company is completed and the highest possible value is obtained;

     E. Rescinding, to the extent already implemented, the Merger or any of the terms thereof;

     F. Implementation of a constructive trust, in favor of Plaintiff, upon any benefits improperly received by Defendants as a result of their wrongful conduct;

     G. Awarding Plaintiff the costs and disbursements of this action, including reasonable attorneys’ and experts’ fees; and

     H. Granting such other and further equitable relief as this Court may deem just and proper.

- 15 -

JURY DEMAND

     Plaintiff demands a trial by jury on all issues so triable.

DATED: July 15, 2009	COUGHLIN STOIA GELLER RUDMAN &      ROBBINS LLP
	JONATHAN M. STEIN
	STUART A. DAVIDSON
	CULLIN A. O’BRIEN
	/s/ Cullin A. O’Brien CULLIN A. O’BRIEN
	120 E. Palmetto Park Road, Suite 500
	Boca Raton, FL 33432
	Telephone: 561/750-3000
	561/750-3364 (fax)
	ALFRED G. YATES JR
	GERALD L. RUTLEDGE
	LAW OFFICE OF ALFRED G. YATES JR., PC
	519 Allegheny Building
	429 Forbes Avenue
	Pittsburgh, PA 15219
	Telephone: 412/391-5164
	412/471-1033 (fax)
	Attorneys for Plaintiff

- 16 -

EX-99.A.5.F

Exhibit (a)(5)(F)

EFiled: Jul 16 2009 3:48PM EDT
Transaction ID 26111453
Case No. 4738-

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

LOUISIANA MUNICIPAL POLICE	:
EMPLOYEES RETIREMENT SYSTEM,	:
individually and on behalf of all	:	C.A. No.
others similarly situated,	:
	:
Plaintiff,	:
	:
v.	:
	:
NOVEN PHARMACEUTICALS, INC.,	:
WAYNE P. YETTER, PETER BRANDT,	:
JOHN G. CLARKSON, DONALD A.	:
DENKHAUS, PHILLIP M. SATOW,	:
ROBERT G. SAVAGE, PEDRO GRANADILLO,	:
FRANCOIS NADER, and HISAMITSU	:
PHARMACEUTICAL CO., INC.,	:
Defendants.	:
	:

VERIFIED CLASS ACTION COMPLAINT

     Plaintiff, through its counsel, alleges upon information and belief, except for allegations pertaining to plaintiff, which are based upon personal knowledge, as follows:

NATURE AND SUMMARY OF THE ACTION

     1. This is a shareholder class action brought by plaintiff on behalf of shareholders of Noven Pharmaceuticals, Inc. (“Noven” or the “Company”) common stock for injunctive and other relief appropriate relief in connection with the proposal by Hisamitsu Pharmaceutical Co., Inc., (“Hisamitsu”), to acquire Noven for inadequate consideration — $428 million or $16.50 per share — in an all-cash tender (the “Proposed Transaction”). The Proposed Transaction reflects a clear effort by Hisamitsu to take over Noven at an unfair price. Indeed, Hisamitsu’s offer consideration is only a 22 percent

premium over the $13.48 closing price of Noven on the last trading day before the announcement of the Proposed Transaction.

     2. The consideration that Hisamitsu has stated it will offer to holders of Noven common stock, and that Noven’s Board has accepted in unanimously agreeing to the Proposed Transaction, is unfair and inadequate because, among other things, the intrinsic value of Noven common stock is materially higher than the amount offered, giving due consideration to the Company’s growth and operating results and a promising new drug product in its pipeline. Plaintiff seeks to enjoin, preliminarily and permanently, Hisamitsu’s offer for acquisition of Noven.

PARTIES

     3. Plaintiff, Louisiana Municipal Police Employees Retirement System, is and was at all times relevant hereto a public holder of Noven.

     4. Defendant Noven is incorporated under the laws of the State of Delaware, with its headquarters located at 11960 S.W. 144th Street, Miami, Florida 33186. The Company was founded in 1987 and is a specialty pharmaceutical company engaged in the research, development, manufacture, marketing and sale of prescription pharmaceutical products. The Company operates through three segments: Noven Transdermals, Novogyne, and Noven Therapeutics. Noven markets its products primarily in the United States, and has out-licensed products to third parties in Canada and Japan, as well as in Europe.

     5. Defendant Wayne P. Yetter serves as the non-executive Chairman of Noven’s board of directors. He has been a member of the board of since 2001.

2

     6. Defendant Peter Brandt has served as a member of the board of directors of Noven since 2008. Since 2008, he has also served as President and Chief Executive Officer of Noven.

     7. Defendant John G. Clarkson, M.D. has served as a member of the board of directors of Noven since 2000. He also serves as the Chairman of the Compensation Committee and is a member of the Nominating and Corporate Governance Committee.

     8. Defendant Donald A. Denkhaus has served as a member of the board of directors of Noven since 2004. He is the Chairman of the Audit Committee.

     9. Defendant Pedro P. Granadillo has served as a member of the board of directors of Noven since 2004. He also serves a member of the Audit Committee and the Compensation Committee.

     10. Defendant Francois Nader, M.D. has served as a member of the board of directors of Noven since May 2009. He also has served as a member of the Noven Audit Committee since May 2009.

     11. Defendant Phillip M. Satow has served as a member of the board of directors of Noven since 2007. Previously, he served as Chief Executive Officer of JDS Pharmaceuticals, LLC, a company he co-founded, which Noven acquired in August 2007 and which is now known as Noven Therapeutics.

     12. Defendant Robert G. Savage has been a member of the Noven board of directors since 2004. He is the Chairman of the Nominating and Corporate Governance Committee and also serves as a member of the Compensation Committee.

     13. The defendants identified in ¶¶ 5 – 12 are referred to herein collectively as the “Individual Defendants.” Each of the Noven Directors was a member of the board of

3

directors at all pertinent times and participated in the decisions and conduct challenged herein. By reason of their positions, the Noven Directors owe fiduciary duties of good faith, fair dealing, and loyalty to the Noven shareholders.

     14. Defendant Hisamitsu is a Japanese company, with its head offices in Saga, Tosu, Tashiro Daikan-machi 408, Japan 841-0017 and Tokyo, Chiyoda-ku, Marunouchi 1-11-1, Japan 100-6221. Hisamitsu already owns approximately 1.24 million Noven shares, or about a 4.9% stake, and has owned at least one million shares of Noven since 2000.

CLASS ACTION ALLEGATIONS

     15. Plaintiff brings this action on their own behalf and as a class action, pursuant to Rule 23 of the Rules of the Court of Chancery, on behalf of all Noven shareholders who are being and will be harmed by defendants’ actions described herein (the “Class”). Excluded from the Class are defendants herein and any person, firm, trust, corporation or other entity related to or affiliated with any defendants.

     16. This action is properly maintainable as a class action.

     17. The Class is so numerous that joinder of all members is impracticable. The number of shares of common stock of Noven outstanding as of April 30, 2009 was 24,914,418.

     18. There are questions of law and fact that are common to the Class and that predominate over questions affecting any individual Class member. The common questions include the following:

a.	Whether the Proposed Transaction is unfair to the Class;
b.	Whether the Proposed Transaction inadequately values Noven;

4

c.	Whether defendants have breached their fiduciary duties with respect to Plaintiff and the other members of the Class in connection with the Proposed Transaction;
d.	Whether the defendants have breached their fiduciary duty to consider alternatives to maximize value and secure the best price reasonable under the circumstances for the benefit of Plaintiff and the other members of the Class in connection with the Proposed Transaction;
e.	Whether defendant Hisamitsu participated in, or has aided and abetted or otherwise conspired in the Individual Defendants’ breaches of fiduciary duties;
f.	Whether the Proposed Transaction will result in payment to Plaintiff and the Class that is unfair and inadequate;
g.	Whether Plaintiff and the other members of the Class will be irreparably harmed if the transactions complained of herein are allowed to proceed.

     19. Plaintiff is committed to prosecuting this action and has retained competent counsel experienced in litigation of this nature. Plaintiff’s claims are typical of the claims of the other members of the Class, and Plaintiff has the same interests as the other members of the Class. Accordingly, Plaintiff will fairly and adequately represent the Class.

     20. The prosecution of separate actions by individual members of the Class would create a risk of inconsistent or varying adjudications with respect to individual members of the Class and establish incompatible standards of conduct for the party opposing the Class.

     21. Defendants have acted and are about to act on grounds generally applicable to the Class, thereby making appropriate final injunctive relief with respect to the Class as a whole.

5

FACTUAL BACKGROUND

A. Background

     22. Noven was founded in 1987 and went public in 1988. The Company, which is headquartered in Miami, Florida and has offices in New York, is a pharmaceutical company that engages in the research, development, manufacture, licensing, marketing, and sale of prescription pharmaceutical products. The Company operates through three segments Noven Transdermals, Novogyne, and Noven Therapeutics. The Noven Transdermals segment offers transdermal patches, which are used in the treatment of attention deficit hyperactivity disorder and in menopausal hormone therapy. The Novogyne segment, a joint venture with Novartis Pharmaceuticals Corporation, markets and sells transdermal hormone therapy product delivery systems for women. The Noven Therapeutics segment offers branded oral prescription psychiatry products treating bipolar, depressive, panic, obsessive compulsive, and generalized anxiety disorders. The Company’s products are marketed primarily in the United States, but the Company has out-licensed products to third parties in Canada and Japan, as well as in Europe. Noven has collaborated with Procter & Gamble Pharmaceuticals, Inc. for the development of a low-dose testosterone patch for hypoactive sexual desire disorder. Today, Noven is traded on the NASDAQ under the symbol NOVN.

     23. Noven is an extremely successful company. According to defendant Brandt, “[a]s our financial results and business highlights suggest, Noven is off to a strong start in 2009, with progress in each of our main business areas.” For example, net revenue increased 29% for the first quarter of 2009 compared to the 2008 Quarter and net income increased 73% compared to the 2008 Quarter. Defendant Brandt also announced

6

that “[i]n light of our first quarter performance and our expectations for gross margin and other aspects of our business, we are raising our guidance for 2009 earnings per share to $0.95 to $1.05 from our previous range of $0.85 to $0.95.”

     24. On July 14, the same day the Proposed Transaction was announced to the public, Noven also revealed in a separate press release that it had positive results from its Phase 2 trial of its drug Mesafem for the treatment of hot flashes associated with menopause and will put the drug into Phase 3 development. Defendant Brandt, Noven’s President & CEO, said: “Today’s Phase 2 results exceeded all our internal expectations from the standpoints of both efficacy and tolerability. With the data from this study, we plan to expedite Mesafem into Phase 3 development, and to advance our commercialization and partnering strategies, with the goal of making this new non-hormonal treatment option broadly available to women . . .”

     25. According to Noven’s 2008 Form 10-K, the Company has a stockholders’ rights plan, or “poison pill,” and joint venture operating agreements with Novartis Pharmaceutical Corporation (“Novartis”), both of which include provisions that discourage potential third parties from acquiring Noven by making it difficult for third parties to acquire a majority of the Company without the consent of its board. Such provisions “may have the effect of depriving [Noven’s] stockholders of the opportunity to sell their stock at a price in excess of prevailing market prices in an acquisition of” the Company.

     26. In 1998, Noven’s Novogyne division entered into a joint venture agreement with Novartis. The joint venture operating agreement has a buy/sell provision either party may trigger by notifying the other party of the price at which the triggering

7

party would be willing to acquire the other party’s interest in the joint venture. As a result of the buy/sell provision, a company that seeks to acquire Noven without approval of Noven’s board faces the possibility that Noven could trigger this provision, which would cause Noven to lose one of its most valuable assets and thereby make it much less valuable to any non-approved acquirer. Therefore, the joint venture agreement serves as a deterrent for any bidder other than the anointed one.

     27. Additionally, the joint venture operating agreement gives Novartis the right to dissolve the joint venture in the event of a change in control of Noven if the acquirer is one of the ten largest pharmaceutical companies (as measured by annual dollar sales). Upon dissolution, Novartis would reacquire the rights to market Vivelle-Dot, the drug product jointly produced by Novogyne and Novartis, and Novogyne’s other assets would be liquidated and distributed between Noven and Novartis in accordance with Noven and Novartis’ respective capital account balances as determined pursuant to the joint venture operating agreement.

     28. These agreements effectively preclude other potential bidders from making a bid for the Company.

     29. There are also provisions in Noven’s certificate of incorporation and bylaws, including provisions limiting the ability of stockholders to bring matters before an annual meeting of stockholders, to call special meetings or to nominate candidates for the board. Such provisions also make it difficult for a third party to acquire a majority of Noven’s outstanding voting common stock.

     30. Hisamitsu, a Japanese company with 26 global offices, is the world’s largest transdermal patch manufacturer, producing over four billion units per year.

8

Hisamitsu is not one of the ten largest pharmaceutical companies. Hisamitsu has been a long-time partner of Noven. Since 2002, Hisamitsu has owned at least one million shares of Noven. Hisamitsu is currently the beneficial owner of 1,240,000 shares of Noven common stock, representing approximately 4.9% of outstanding shares. Moreover, the parties have worked together on several product opportunities.

B. Hisamitsu Seeks to Acquire Noven in an All-Cash Tender Offer

     31. On July 14, 2009, Hisamitsu and Noven jointly announced that they have entered into a definitive merger agreement pursuant to which Hisamitsu has proposed to acquire Noven for total cash consideration of approximately $428 million, or $16.50 per share, in an all-cash tender offer for 100% of the outstanding shares of Noven. The offer price represents a 22% premium to the closing price of Noven’s common stock on July 13, 2009. Under the terms of the Proposed Transaction, Noven will become a wholly-owned subsidiary of Hisamitsu.

     32. Noven’s existing operations are expected to serve as a growth platform for Hisamitsu to expand its business in the U.S across all functions, including product development, operations, clinical/regulatory and commercial capabilities. As described in a special town meeting presentation made to Noven employees on July 14, 2009, “[t]he transaction is a major step toward Hisamitsu’s long-term corporate objective to be the world’s leading transdermal company.”

     33. The Proposed Transaction was unanimously approved by the boards of directors of both Noven and Hisamitsu. The tender offer is expected to commence by July 28, 2009, and to last for 20 business days. Hisamitsu’s shareholders are not required

9

to vote on or approve the tender offer or merger. The tender required to consummate the Proposed Transaction is greater than 50% of the outstanding shares.

     34. The companies announced that they expect that Noven will continue as a standalone business unit, operating at its current locations in Miami and New York with its existing work force. Additionally, following consummation of the Proposed Transaction, Jeffrey F. Eisenberg, Noven’s Executive Vice President and President of the Novogyne joint venture, will become Noven’s President and Chief Executive Officer, replacing defendant Brandt, who will leave Noven after an unspecified transition period.

     35. The merger agreement, filed on July 15, 2009, includes a combination of onerous and unreasonable deal protection devices that effectively preclude topping bids. For example, the merger agreement contains a “no-shop” provision, which prohibits Noven and its Board from soliciting, discussing or negotiating with third parties and a 4% termination fee if the Proposed Transaction is not consummated.

     36. Noven’s value is substantially greater than the $16.50 per share offered by Hisamitsu. The consideration offered as part of the Proposed Transaction is inadequate and undervalues the Company, especially in light of the positive results Noven announced during its first quarter 2009 earnings call and the positive phase 2 results for Mesafem. Noven’s shares also have traded above the offer price, providing further indication that the consideration is inadequate.

     37. The Individual Defendants have violated fiduciary duties owed to Noven shareholders, causing damages for which Plaintiff seeks compensation. Defendants have failed to take adequate measures to ensure that the interests of Noven’s shareholders are properly protected and have embarked on a process that avoids competitive bidding.

10

     38. By the acts, transactions and courses of conduct alleged herein, defendants, individually and acting as a part of a common plan, will unfairly deprive Plaintiff and other members of the Class of the true value of their Noven investment. Plaintiff and other members of the Class will suffer irreparable harm unless actions of defendants and Hisamitsu are enjoined and a fair process is substituted.

     39. Plaintiff and members of the Class have no adequate remedy at law. Only through the exercise of this Court’s equitable powers can Plaintiff and the Class be fully protected from immediate and irreparable injury which defendants’ actions threaten to inflict.

PRAYER FOR RELIEF

     WHEREFORE, Plaintiff, on behalf of itself and other public holders of Noven, demand judgment as follows:

A.	declaring this action properly maintainable as a class action;
B.	enjoining, preliminarily and permanently, defendants from taking any steps to consummate the Proposed Transaction;
C.	to the extent, if any, that the transaction complained of is consummated prior to the entry of this Court’s final judgment, rescinding such transaction, and granting, inter alia, rescissory damages against the Individual Defendants and Noven;
E.	requiring Defendants to fully disclose all material information regarding the Proposed Transaction.
F.	directing defendants, jointly and severally, to account to Plaintiff and the Class for all damages suffered and to be suffered by them as a result of the wrongs complained of herein;

11

G.	requiring the Individual Defendants to conduct a fair process to evaluate the Company’s value and any available maximizing strategic alternatives;
H.	awarding Plaintiff and the Class pre- and post-judgment interest at the statutory rate;
I.	awarding Plaintiff the costs and disbursements of this action, including a reasonable allowance for the fees and expenses of Plaintiff’s attorneys and experts; and
J.	granting Plaintiff and the other members of the class such other and further relief as is just and equitable, including all injunctive relief as alleged heretofore.

Dated: July 16, 2009	CHIMICLES & TIKELLIS LLP
	By:	/s/ Meghan A. Adams
	Pamela S. Tikellis (DE Bar No. 2172)
	Robert J. Kriner. (DE Bar No. 2546)
	Meghan A. Adams (DE Bar No. 4981)
	222 Delaware Avenue, Suite 1100
	P.O. Box 1035
	Wilmington, Delaware 19899
	Phone: (302) 656-2500
	Fax: (302) 656-9053

OF COUNSEL:
M. Richard Komins
Julie B. Palley
BARRACK, RODOS & BACINE
3300 Two Commerce Square
2001 Market Street
Philadelphia, PA 19130
(215) 963-0600

-and-

Stephen R. Basser
One American Plaza

12

600 West Broadway, Suite 900
San Diego, CA 92101
Telephone: (619) 230-0800
Facsimile: (619) 230-1874

-and-

FINE, KAPLAN & BLACK
Roberta D. Liebenberg
1835 Market Street, 28th Floor
Philadelphia, PA 19103
(215) 567-6565

Attorneys for Plaintiff

13

EX-99.D.1

Exhibit (d)(1)

AGREEMENT AND PLAN OF MERGER

dated as of July 14, 2009,

among

HISAMITSU PHARMACEUTICAL CO., INC.,

HISAMITSU U.S., INC.,

NORTHSTAR MERGER SUB, INC.

and

NOVEN PHARMACEUTICALS, INC.

TABLE OF CONTENTS

		Page
ARTICLE I
The Offer
SECTION 1.01.	The Offer		1
SECTION 1.02.	Company Actions		3
SECTION 1.03.	Top-Up Option		4
ARTICLE II
The Merger
SECTION 2.01.	The Merger		5
SECTION 2.02.	Merger Closing		5
SECTION 2.03.	Effective Time		5
SECTION 2.04.	Effects of Merger		6
SECTION 2.05.	Certificate of Incorporation and By-laws		6
SECTION 2.06.	Directors and Officers		6
SECTION 2.07.	Effect on Capital Stock		6
SECTION 2.08.	Payment of Merger Consideration		7
ARTICLE III
Representations and Warranties
SECTION 3.01.	Organization, Standing and Power		9
SECTION 3.02.	Company Subsidiaries; Equity Interests		10
SECTION 3.03.	Capital Structure		10
SECTION 3.04.	Authority; Execution and Delivery; Enforceability		12
SECTION 3.05.	No Conflicts; Consents		13
SECTION 3.06.	SEC Documents; Undisclosed Liabilities		14
SECTION 3.07.	Information Supplied		15
SECTION 3.08.	Absence of Certain Changes or Events		16
SECTION 3.09.	Taxes		17
SECTION 3.10.	Labor Relations		18
SECTION 3.11.	Employee Benefits		19
SECTION 3.12.	Title to Properties		20
SECTION 3.13.	Contracts		21
SECTION 3.14.	Litigation		23
SECTION 3.15.	Compliance with Laws		23
SECTION 3.16.	Environmental Matters		25

i

		Page
SECTION 3.17.	Intellectual Property		26
SECTION 3.18.	Suppliers		28
SECTION 3.19.	Insurance		28
SECTION 3.20.	Brokers and Other Advisors		28
SECTION 3.21.	Opinion of Financial Advisor		28
ARTICLE IV
Representations and Warranties of Parent, Holdings and Merger Sub
SECTION 4.01.	Organization, Standing and Power		29
SECTION 4.02.	Holdings and Merger Sub		29
SECTION 4.03.	Authority; Execution and Delivery; Enforceability		29
SECTION 4.04.	No Conflicts; Consents		30
SECTION 4.05.	Information Supplied		30
SECTION 4.06.	Brokers		30
SECTION 4.07.	Absence of Litigation		31
SECTION 4.08.	Ownership of Company Common Stock		31
SECTION 4.09.	Available Funds		31
ARTICLE V
Covenants Relating to Conduct of Business
SECTION 5.01.	Conduct of Business of the Company		31
SECTION 5.02.	No Frustration of Conditions		35
SECTION 5.03.	Advice of Changes		35
SECTION 5.04.	No Solicitation		35
ARTICLE VI
Additional Agreements
SECTION 6.01.	Preparation of Proxy Statement; Stockholders Meeting		38
SECTION 6.02.	Access to Information; Confidentiality		39
SECTION 6.03.	Reasonable Efforts; Notification		39
SECTION 6.04.	Equity Awards		40
SECTION 6.05.	Employee Matters		41
SECTION 6.06.	Indemnification		42
SECTION 6.07.	Fees and Expenses		43
SECTION 6.08.	Public Announcements		45
SECTION 6.09.	Transfer Taxes		45
SECTION 6.10.	Directors		45
SECTION 6.11.	Company Rights Agreement		46
SECTION 6.12.	Stockholder Litigation		46

ii

		Page
SECTION 6.13.	Rule 14d-10 Matters		46
SECTION 6.14.	Vivelle Ventures LLC		46
SECTION 6.15.	Holdings and Merger Sub Compliance		48
SECTION 6.16.	Delisting		48
SECTION 6.17.	Patent Litigation		48
ARTICLE VII
Conditions Precedent to the Merger
SECTION 7.01.	Conditions to Each Party’s Obligation		49
SECTION 7.02.	Condition to Obligations of Parent, Holdings and Merger Sub		49
SECTION 7.03.	Condition to Obligation of the Company		49
ARTICLE VIII
Termination, Amendment and Waiver
SECTION 8.01.	Termination		49
SECTION 8.02.	Effect of Termination		51
SECTION 8.03.	Amendment		51
SECTION 8.04.	Extension; Waiver		51
SECTION 8.05.	Procedure for Termination, Amendment, Extension or Waiver		51
ARTICLE IX
General Provisions
SECTION 9.01.	Nonsurvival of Representations and Warranties		52
SECTION 9.02.	Notices		52
SECTION 9.03.	Definitions		53
SECTION 9.04.	Interpretation		55
SECTION 9.05.	Severability		56
SECTION 9.06.	Counterparts		56
SECTION 9.07.	Entire Agreement; No Third-Party Beneficiaries; No Other Representations or Warranties		56
SECTION 9.08.	Governing Law		57
SECTION 9.09.	Assignment		57
SECTION 9.10.	Specific Enforcement		57
SECTION 9.11.	Waiver of Jury Trial		58

Exhibits:
Exhibit A           Conditions to the Offer

iii

INDEX OF DEFINED TERMS

	Location of
Defined Term	Definition
Acceptable Confidentiality Agreement	5.04(e)
Adverse Recommendation Change	5.04(b)
affiliate	9.03
Agreement	Preamble
Appraisal Shares	2.07(e)
Authorizations	3.15(a)
Book-Entry Shares	9.03
business day	9.03
Certificate of Merger	2.03
Certificates	2.08(b)
Code	1.01(d)
Commonly Controlled Entity	3.11(a)
Company	Preamble
Company Balance Sheet	3.06(d)
Company Benefit Agreement	3.11(b)
Company Benefit Plan	3.11(a)
Company Board	3.04(b)
Company By-laws	3.01
Company Charter	3.01
Company Common Stock	Recitals
Company Disclosure Letter	Article III
Company Material Adverse Effect	9.03
Company Officer	9.03
Company Personnel	3.08(d)(i)
Company Preferred Stock	3.03(a)
Company Registered Intellectual Property	3.17(g)(i)
Company Restricted Share	6.04(d)
Company Rights	3.03(a)
Company Rights Agreement	3.03(a)
Company RSU	6.04(d)
Company SAR	6.04(d)
Company SEC Documents	3.06(a)
Company Stock Option	6.04(d)
Company Stock Plans	6.04(d)
Company Stockholder Approval	3.04(c)
Company Stockholders Meeting	6.01(b)
Company Subsidiaries	3.01
Company Takeover Proposal	5.04(e)
Company Termination Fee	6.07(b)
Compensation Committee	3.11(h)
Confidentiality Agreement	6.02

iv

	Location of
Defined Term	Definition
Consent	3.05(b)
Continuing Employees	6.05(a)
Contract	3.05(a)
control	9.03
D&O Insurance	6.06(b)
DGCL	2.01
Direct Registration System	9.03
Drug Law	3.15(a)
Effective Time	2.03
Environmental Authorization	3.16(b)
Environmental Law	3.16(b)
ERISA	3.11(a)
Exchange Act	1.01(a)
Exchange Fund	2.08(a)
Expense Reimbursement	6.07(c)
FDA	3.15(a)
FDCA	3.15(a)
Filed Company SEC Documents	Article III
Fully Diluted Shares	Exhibit A
GAAP	3.06(c)
Governmental Entity	3.05(b)
Grant Date	3.03(f)
Hazardous Substance	3.16(b)
Holdings	Preamble
HSR Act	3.05(b)
Independent Directors	6.10
Information Statement	3.05(b)
Insured Parties	6.06(b)
Intellectual Property	3.17(g)(ii)
Intervening Event	5.04(e)
Judgment	3.05(a)
knowledge	9.03
Law	3.05(a)
Legal Restraints	7.01(c)
Liens	3.02(a)
LLC Operating Agreement	6.14(a)
Maximum Premium	6.06(b)
Measurement Date	3.03(a)
Merger	Recitals
Merger Closing	2.02
Merger Closing Date	2.02
Merger Consideration	2.07(d)
Merger Sub	Preamble
Minimum Tender Condition	Exhibit A
Nasdaq	1.03(a)
Notice of Recommendation Change	5.04(b)

v

	Location of
Defined Term	Definition
Novartis	6.14(a)
Offer	Recitals
Offer Closing Date	1.01(a)
Offer Conditions	1.01(a)
Offer Documents	1.01(b)
Offer Price	Recitals
Outside Date	8.01(b)(i)
Parent	Preamble
Parent Determination	6.14(a)
Parent Material Adverse Effect	9.03
Paying Agent	2.08(a)
Permitted Liens	3.12(a)
Person	9.03
Pre-Closing Service	6.05(b)
Proxy Statement	3.05(b)
Qualifying Company Takeover Proposal	5.04(a)
Release	3.16(b)
Remedial Action	3.16(b)
Representatives	5.04(a)
Response Period	6.14(a)
Schedule 14D-9	1.02(b)
SEC	1.01(a)
Section 262	2.07(e)
Securities Act	1.03(b)
Specified Contract	3.13(a)
subsidiary	9.03
Superior Company Proposal	5.04(e)
Surviving Corporation	2.01
Tax Return	3.09(l)
Taxes	3.09(l)
Top-Up Option	1.03(a)
Top-Up Shares	1.03(a)
Transactions	1.02(a)
Transfer Taxes	6.09
Trust Agreement	6.05(d)
Vivelle	3.01
Voting Company Debt	3.03(c)

vi

     AGREEMENT AND PLAN OF MERGER dated as of July 14, 2009 (this “Agreement”), among Hisamitsu Pharmaceutical Co., Inc., a Japanese corporation (“Parent”), Hisamitsu U.S., Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Holdings”), Northstar Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Holdings (“Merger Sub”), and Noven Pharmaceuticals, Inc., a Delaware corporation (the “Company”).

     WHEREAS the respective Boards of Directors of Parent, Holdings, Merger Sub and the Company have approved the acquisition of the Company by Parent on the terms and subject to the conditions set forth in this Agreement;

     WHEREAS, in furtherance of such acquisition, Parent proposes to cause Merger Sub to make a tender offer (as it may be amended from time to time as permitted under this Agreement, the “Offer”) to purchase all the outstanding shares of common stock, par value $0.0001 per share, of the Company (the “Company Common Stock”), including the associated Company Rights, at a price per share of Company Common Stock (including the associated Company Rights) of $16.50 (such amount or, if the Offer is amended in accordance with the terms of this Agreement and a different amount per share is paid pursuant to the Offer, such different amount, the “Offer Price”), net to the seller in cash, on the terms and subject to the conditions set forth in this Agreement;

     WHEREAS the respective Boards of Directors of Parent, Holdings, Merger Sub and the Company have approved the merger (the “Merger”) of Merger Sub into the Company on the terms and subject to the conditions set forth in this Agreement; and

     WHEREAS Parent, Holdings, Merger Sub and the Company desire to make certain representations, warranties, covenants and agreements in connection with the Offer and the Merger and also to prescribe various conditions to the Offer and the Merger.

     NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE I

The Offer

     SECTION 1.01. The Offer. (a) Subject to the terms and conditions of this Agreement, as promptly as practicable (but in no event later than 10 business days after the date of this Agreement), Merger Sub shall, and Parent and Holdings shall cause Merger Sub to, commence the Offer within the meaning of the applicable rules and regulations of the Securities and Exchange Commission (the “SEC”); provided, however, that Parent, Holdings and Merger Sub shall not be required to commence, or cause to be commenced, the Offer prior to the date on which the Company is prepared to file the Schedule 14D-9. The obligations of Merger Sub to, and of Parent and Holdings to cause Merger Sub to, accept for payment, and pay for, any shares of Company Common Stock tendered pursuant to the Offer are subject to the satisfaction or waiver of the conditions set forth in Exhibit A (the “Offer Conditions”). The initial expiration date of the Offer shall be 12:00 midnight, New York City time, on the 20th business day following the commencement of the Offer (determined using Rule 14d-1(g)(3) of the Securities Exchange Act of 1934, as amended (together with the rules and regulations promulgated thereunder, the “Exchange Act”)). Merger Sub expressly reserves the right to waive any Offer Condition or modify the terms of the Offer, except that, without the consent of the Company, Merger Sub shall not (i) reduce the number of shares of Company Common Stock subject to the Offer, (ii) reduce the Offer Price, (iii) waive or amend the Minimum Tender Condition, (iv) add to the conditions set forth in Exhibit A or modify any condition set forth in Exhibit A in any manner adverse to the holders of Company Common Stock, (v) except as otherwise provided in this Section 1.01(a), extend the Offer, (vi) change the form of consideration payable in the Offer or (vii) otherwise amend the Offer in any manner adverse to the holders of Company Common Stock. Notwithstanding the foregoing, Merger Sub may, without the consent of the Company, (A) extend the Offer for one or more consecutive increments of not more than seven business days each, if at the scheduled expiration date of the Offer any of the Offer Conditions is not satisfied, until such time as such conditions are satisfied or waived or (B) extend the Offer for the minimum period required by any rule, regulation, interpretation or position of the SEC or the staff thereof applicable to the Offer. In addition, if at the otherwise scheduled expiration date of the Offer any Offer Condition is not satisfied, Merger Sub shall, and Parent and Holdings shall cause Merger Sub to, extend the Offer at the request of the Company for one or more consecutive increments of not more than seven business days each (or for such longer period as may be agreed by Parent and the Company); provided that Merger Sub shall not be required to, and Parent and Holdings shall not be required to cause Merger Sub to, extend the Offer beyond the date that is 90 days after the initial expiration date of the Offer only if the Minimum Tender Condition is not satisfied at such time. In addition, Merger Sub may make available one or more “subsequent offering periods”, in accordance with Rule 14d-11 of the Exchange Act, of at least three and not more than 20 business days each, unless Parent has become the owner, directly or indirectly, of 90% or more of the outstanding shares of Company Common Stock. On the terms and subject to the conditions of the Offer and this Agreement, Merger Sub shall, and Parent and Holdings shall cause Merger Sub to, pay for all shares of Company Common Stock validly tendered in accordance with the terms of the Offer and not withdrawn that Merger Sub becomes obligated to purchase pursuant to the Offer as soon as practicable after the expiration of the Offer and, in any event, no more than two business days after the Offer Closing Date. The date on which Merger Sub first accepts for payment the shares of Company Common Stock tendered in the Offer is referred to as the “Offer Closing Date”.

     (b) On the date of commencement of the Offer, Parent, Holdings and Merger Sub shall file with the SEC a Tender Offer Statement on Schedule TO with respect to the Offer, which shall contain an offer to purchase and a related letter of transmittal and summary advertisement (such Schedule TO and the documents included therein pursuant to which the Offer will be made, together with any supplements or amendments thereto, the “Offer Documents”). The Company shall furnish to Parent, Holdings and Merger Sub all information concerning the Company required by the Exchange Act to be set forth in the Offer Documents. Each of Parent, Holdings, Merger Sub and the Company shall promptly correct any information provided by it for use in the Offer Documents if and to the extent that such information shall have become false or misleading in any material respect, and each of Parent, Holdings and Merger Sub shall take all steps necessary to amend or supplement the Offer Documents and to cause the Offer Documents, as so amended or supplemented, to be filed with the SEC and the Offer Documents, as so amended or supplemented, to be disseminated to the Company’s stockholders, in each case as and to the extent required by applicable Federal securities Laws. Parent, Holdings and Merger Sub shall provide the Company and its counsel in writing with any comments Parent, Holdings, Merger Sub or their counsel may receive from the SEC or its staff with respect to the Offer Documents promptly after the receipt of such comments. Prior to the filing of the Offer Documents (including any amendment or supplement thereto) with the SEC or the dissemination thereof to the stockholders of the Company, or responding to any comments of the SEC with respect to the Offer Documents, Parent, Holdings and Merger Sub shall provide the Company and its counsel a reasonable opportunity to review and comment on such Offer Documents or response (including the proposed final version thereof), and Parent, Holdings and Merger Sub shall give reasonable and good faith consideration to any comments made by the Company or its counsel.

2

     (c) Parent shall provide or cause to be provided to Merger Sub on a timely basis the funds necessary to purchase any shares of Company Common Stock that Merger Sub becomes obligated to purchase pursuant to the Offer.

     (d) Parent, Holdings and Merger Sub shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to the Offer to any holder of shares of Company Common Stock such amounts as Parent, Holdings or Merger Sub is required to deduct and withhold with respect to the making of such payment under the Internal Revenue Code of 1986, as amended (the “Code”), or any provision of state, local or foreign tax Law. To the extent amounts are so withheld and paid over to the appropriate taxing authority, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding was made.

     SECTION 1.02. Company Actions. (a) Subject to Sections 5.04 and 8.05, the Company hereby approves of and consents to the Offer, the Merger and the other transactions contemplated by this Agreement (collectively, the “Transactions”).

     (b) Subject to Section 5.04(b), on the date the Offer Documents are filed with the SEC, the Company shall file with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9 with respect to the Offer (such Schedule 14D-9, as amended from time to time, the “Schedule 14D-9”), which shall describe and make the recommendations referred to in Section 3.04(b) and shall mail the Schedule 14D-9 to the holders of Company Common Stock. Parent, Holdings and Merger Sub shall furnish to the Company all information concerning Parent, Holdings and Merger Sub required by the Exchange Act to be set forth in the Schedule 14D-9. Each of the Company, Parent, Holdings and Merger Sub shall promptly correct any information provided by it for use in the Schedule 14D-9 if and to the extent that such information shall have become false or misleading in any material respect, and the Company shall take all steps necessary to amend or supplement the Schedule 14D-9 and to cause the Schedule 14D-9, as so amended or supplemented, to be filed with the SEC and disseminated to the Company’s stockholders, in each case as and to the extent required by applicable Federal securities Laws. The Company shall provide Parent and its counsel in writing with any comments the Company or its counsel may receive from the SEC or its staff with respect to the Schedule 14D-9 promptly after the receipt of such comments. Prior to the filing of the Schedule 14D-9 (including any amendment or supplement thereto) with the SEC or the mailing thereof to the stockholders of the Company, or responding to any comments of the SEC with respect to the Schedule 14D-9, the Company shall provide Parent and its counsel a reasonable opportunity to review and comment on such Schedule 14D-9 or response (including the proposed final version thereof), and the Company shall give reasonable and good faith consideration to any comments made by Parent or its counsel. The Company hereby consents to the inclusion in the Offer Documents of a description of the recommendation of the Board of Directors of the Company contained in the Schedule 14D-9.

3

     (c) In connection with the Offer, the Company shall cause its transfer agent to promptly furnish Merger Sub with mailing labels containing the names and addresses of the record holders of Company Common Stock as of a recent date and of those Persons becoming record holders subsequent to such date, together with copies of all lists of stockholders, security position listings, computer files and all other information in the Company’s possession or control regarding the beneficial owners of Company Common Stock, and shall furnish to Merger Sub such information and assistance (including updated lists of stockholders, security position listings and computer files) as Parent may reasonably request in communicating the Offer to the Company’s stockholders. Subject to the requirements of applicable Law, and except for such steps as are necessary to disseminate the Offer Documents and any other documents necessary to consummate the Transactions, Parent, Holdings and Merger Sub shall hold in confidence the information contained in any such labels, listings and files, shall use such information only in connection with the Offer and the Merger and, if this Agreement shall be terminated, shall, upon request, deliver to the Company all copies of such information then in their possession or control.

     SECTION 1.03. Top-Up Option. (a) The Company hereby grants to Merger Sub an irrevocable option (the “Top-Up Option”), exercisable only on the terms and conditions set forth in this Section 1.03, to purchase at a price per share equal to the Offer Price that number of newly issued, fully paid and nonassessable shares of Company Common Stock (the “Top-Up Shares”) equal to the lowest number of shares of Company Common Stock that, when added to the number of shares of Company Common Stock directly or indirectly owned by Parent, Holdings and Merger Sub at the time of exercise of the Top-Up Option, shall constitute one share more than 90.0% of the Fully Diluted Shares outstanding immediately after the issuance of the Top-Up Shares; provided, however, that the Top-Up Option may not be exercised if the number of Top-Up Shares exceeds the lesser of (i) that number of shares of Company Common Stock authorized and unissued (treating shares held in treasury as unissued) and not reserved for issuance at the time of exercise of the Top-Up Option and (ii) that number of shares of Company Common Stock the issuance of which would require approval of the Company’s stockholders under applicable Law or the rules and regulations of The NASDAQ Global Select Market (“Nasdaq”). The Top-Up Option shall be exercisable only once, in whole but not in part, at such time as Parent, Holdings and Merger Sub, directly or indirectly, own at least 85.0% of the Fully Diluted Shares and following the expiration of the Offer and any subsequent offering period. The obligation of the Company to issue and deliver the Top-Up Shares upon the exercise of the Top-Up Option is subject to the condition that no Legal Restraint that has the effect of prohibiting the exercise of the Top-Up Option or preventing the issuance and delivery of the Top-Up Shares shall be in effect.

4

     (b) The parties shall cooperate to ensure that the issuance and delivery of the Top-Up Shares comply with all applicable Laws, including compliance with an applicable exemption from registration of the Top-Up Shares under the Securities Act of 1933, as amended (together with the rules and regulations promulgated thereunder, the “Securities Act”). In the event Merger Sub wishes to exercise the Top-Up Option, Merger Sub shall give the Company two business days prior written notice, specifying (i) the number of shares of Company Common Stock directly or indirectly owned by Parent at the time of such notice and (ii) a place and a time for the closing of such purchase. The Company shall, as soon as practicable following receipt of such notice, deliver written notice to Merger Sub specifying, based on the information provided by Merger Sub in its notice, the number of Top-Up Shares. At the closing of the purchase of Top-Up Shares, the purchase price owed by Merger Sub to the Company shall be paid to the Company, at Merger Sub’s option, (i) in cash, by wire transfer in immediately available funds, or (ii) by issuance by Merger Sub to the Company of a promissory note on terms reasonably satisfactory to the Company.

ARTICLE II

The Merger

     SECTION 2.01. The Merger. On the terms and subject to the conditions set forth in this Agreement, and in accordance with the Delaware General Corporation Law (the “DGCL”), Merger Sub shall be merged with and into the Company at the Effective Time. At the Effective Time, the separate corporate existence of Merger Sub shall cease and the Company shall continue as the surviving corporation (the “Surviving Corporation”).

     SECTION 2.02. Merger Closing. The closing of the Merger (the “Merger Closing”) shall take place at the offices of Debevoise & Plimpton LLP, 919 Third Avenue, New York, New York 10022 at 10:00 a.m., New York City time, on the second business day following the satisfaction or (to the extent permitted by Law) waiver by the party or parties entitled to the benefits thereof of the conditions set forth in Article VII (other than those conditions that by their nature are to be satisfied at the Merger Closing), or at such other place, time and date as shall be agreed in writing by the parties hereto; provided, however, that if all the conditions set forth in Article VII have not been satisfied or (to the extent permitted by Law) waived on such second business day, then the Merger Closing shall take place on the first business day on which all such conditions shall have been satisfied or (to the extent permitted by Law) waived, or at such other place, time and date as shall be agreed in writing by the parties hereto. The date on which the Merger Closing occurs is referred to in this Agreement as the “Merger Closing Date”.

     SECTION 2.03. Effective Time. Prior to the Merger Closing, Merger Sub shall prepare, and on the Merger Closing Date, Merger Sub shall file with the Secretary of State of the State of Delaware, a certificate of merger or other appropriate documents (in any such case, the “Certificate of Merger”) executed in accordance with the relevant provisions of the DGCL and shall make all other filings or recordings required under the DGCL to effectuate the Merger. The Merger shall become effective at such time as the Certificate of Merger is duly filed with such Secretary of State or at such other time as Parent and the Company shall agree and specify in the Certificate of Merger (the time the Merger becomes effective being the “Effective Time”).

5

     SECTION 2.04. Effects of Merger. The Merger shall have the effects set forth in Section 259 of the DGCL.

     SECTION 2.05. Certificate of Incorporation and By-laws. (a) The Company Charter shall be amended at the Effective Time to be the same as the Certificate of Incorporation of Merger Sub as in effect immediately prior to the Effective Time (except that the name of the Company set forth in such amended certificate of incorporation shall be “Noven Pharmaceuticals, Inc.”), and as so amended shall be the Certificate of Incorporation of the Surviving Corporation until thereafter changed or amended as provided therein or by applicable Law.

     (b) The By-laws of Merger Sub as in effect immediately prior to the Effective Time shall be the By-laws of the Surviving Corporation (except that the name of the Company set forth in such bylaws shall be “Noven Pharmaceuticals, Inc.”) until thereafter changed or amended as provided therein or by applicable Law.

     SECTION 2.06. Directors and Officers. (a) The directors of Merger Sub immediately prior to the Effective Time shall be the directors of the Surviving Corporation, until the earlier of their resignation or removal or until their respective successors are duly elected and qualified, as the case may be.

     (b) The officers of the Company immediately prior to the Effective Time shall be the officers of the Surviving Corporation, until the earlier of their resignation or removal or until their respective successors are duly elected or appointed and qualified, as the case may be.

     SECTION 2.07. Effect on Capital Stock. At the Effective Time, by virtue of the Merger and without any action on the part of the holder of any shares of Company Common Stock or any shares of capital stock of Merger Sub:

     (a) Capital Stock of Merger Sub. Each issued and outstanding share of capital stock of Merger Sub shall be converted into and become one fully paid and nonassessable share of common stock, par value $0.01 per share, of the Surviving Corporation.

     (b) Cancelation of Treasury Stock and Parent-Owned Stock. Each share of Company Common Stock that is owned by the Company, Parent, Holdings or Merger Sub shall no longer be outstanding and shall automatically be canceled and retired and shall cease to exist, and no consideration shall be delivered or deliverable in exchange therefor.

     (c) Stock Held by Subsidiaries. Each share of Company Common Stock that is owned by any subsidiary of the Company or Parent (other than Merger Sub) shall automatically be converted into one fully paid and nonassessable share of common stock, par value $0.01 per share, of the Surviving Corporation.

     (d) Conversion of Other Company Common Stock. Subject to Sections 2.07(b), 2.07(c) and 2.07(e), each issued share of Company Common Stock shall be converted into the right to receive the Offer Price in cash (the “Merger Consideration”). As of the Effective Time, all such shares of Company Common Stock shall no longer be outstanding and shall automatically be canceled and retired and shall cease to exist, and each holder of any such shares of Company Common Stock shall cease to have any rights with respect thereto, except the right to receive the Merger Consideration in accordance with Section 2.08, without interest.

6

     (e) Appraisal Rights. Notwithstanding anything in this Agreement to the contrary, shares (“Appraisal Shares”) of Company Common Stock that are outstanding immediately prior to the Effective Time and that are held by any Person who is entitled to demand and properly demands appraisal of such Appraisal Shares pursuant to, and who complies in all respects with, Section 262 of the DGCL (“Section 262”) shall not be converted into the Merger Consideration as provided in Section 2.07(d), but instead the holders of Appraisal Shares shall be entitled to payment of the fair market value of such Appraisal Shares in accordance with Section 262; provided, however, that if any such holder shall fail to perfect or otherwise shall waive, withdraw or lose the right to appraisal under Section 262, then the right of such holder to be paid the fair value of such holder’s Appraisal Shares shall cease and such Appraisal Shares shall be deemed to have been converted as of the Effective Time into, and to have become exchangeable solely for the right to receive, the Merger Consideration as provided in Section 2.07(d). The Company shall serve prompt notice to Parent of any demands received by the Company for appraisal of any shares of Company Common Stock, and Parent shall have the right to participate in and direct all negotiations and proceedings with respect to such demands. Prior to the Effective Time, the Company shall not, without the prior written consent of Parent, make any payment with respect to, or settle or offer to settle, any such demands, or agree to do any of the foregoing.

     SECTION 2.08. Payment of Merger Consideration. (a) Paying Agent. Prior to the Effective Time, Parent shall select a bank or trust company reasonably acceptable to the Company to act as paying agent (the “Paying Agent”) for the payment of the Merger Consideration to former holders of Company Common Stock. Parent shall take all steps necessary to enable and shall cause the Surviving Corporation to provide to the Paying Agent on a timely basis, as and when needed after the Effective Time, cash necessary to pay for the shares of Company Common Stock converted into the right to receive cash pursuant to Section 2.07(d) (such cash being hereinafter referred to as the “Exchange Fund”).

     (b) Exchange Procedure. As soon as reasonably practicable after the Effective Time (but in no event later than three business days after the Effective Time), the Surviving Corporation or Parent shall cause the Paying Agent to mail to each holder of record of a certificate or certificates that immediately prior to the Effective Time represented outstanding shares of Company Common Stock (the “Certificates”) which were converted into the right to receive the Merger Consideration pursuant to Section 2.07 (i) a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Paying Agent, and shall be in such form and have such other provisions as are customary and reasonably acceptable to the Company and Parent) and (ii) instructions for effecting the surrender of the Certificates in exchange for the Merger Consideration. Upon surrender of a Certificate to the Paying Agent for cancelation, together with such letter of transmittal, duly executed, and such other documents as may reasonably be required by the Paying Agent, the holder of such Certificate shall be entitled to receive in exchange therefor the amount of cash into which the shares of Company Common Stock theretofore represented by such Certificate shall have been converted pursuant to Section 2.07, and the Certificate so surrendered shall forthwith be canceled. In the event of a transfer of ownership of Company Common Stock that is not registered in the transfer records of the Company, payment may be made to a Person other than the Person in whose name the Certificate so surrendered is registered, if such Certificate shall be properly endorsed or otherwise be in proper form for transfer and the Person requesting such payment shall pay any transfer or other Taxes required by reason of the payment to a Person other than the registered holder of such Certificate or establish to the satisfaction of Parent that such Tax has been paid or is not applicable. Until surrendered as contemplated by this Section 2.08, each Certificate shall be deemed at any time after the Effective Time to represent only the right to receive upon such surrender the amount of cash, without interest, into which the shares of Company Common Stock theretofore represented by such Certificate have been converted pursuant to Section 2.07. No interest shall be paid or accrue on the cash payable upon surrender of any Certificate.

7

     (c) Treatment of Book-Entry Shares. As soon as reasonably practicable after the Effective Time (but in no event later than three business days after the Effective Time), the Surviving Corporation or Parent shall cause the Paying Agent to mail to each holder of record, as of the Effective Time of the Merger, of Book-Entry Shares a check in an amount of U.S. dollars equal to the aggregate amount of Merger Consideration to which such holder is entitled hereunder.

     (d) No Further Ownership Rights in Company Common Stock. The Merger Consideration paid in accordance with the terms of this Article II upon conversion of any shares of Company Common Stock shall be deemed to have been paid in full satisfaction of all rights pertaining to such shares of Company Common Stock, and after the Effective Time there shall be no further registration of transfers on the stock transfer books of the Surviving Corporation of shares of Company Common Stock that were outstanding immediately prior to the Effective Time. If, after the Effective Time, any certificates formerly representing shares of Company Common Stock are presented to the Surviving Corporation or the Paying Agent for any reason, they shall be canceled and exchanged as provided in this Article II.

     (e) Termination of Exchange Fund. Any portion of the Exchange Fund that remains undistributed to the holders of Company Common Stock for 12 months after the Effective Time shall be delivered to Parent, upon demand, and any holder of Company Common Stock who has not theretofore complied with this Article II shall thereafter look only to Parent for payment of its claim for Merger Consideration.

     (f) No Liability. None of Parent, Holdings, Merger Sub, the Company or the Paying Agent shall be liable to any Person in respect of any cash from the Exchange Fund delivered to a public official pursuant to any applicable abandoned property, escheat or similar Law. If any Certificate has not been surrendered prior to five years after the Effective Time (or immediately prior to such earlier date on which the Merger Consideration in respect of such Certificate would otherwise escheat to or become the property of any Governmental Entity), any such shares, cash, dividends or distributions in respect of such Certificate shall, to the extent permitted by applicable Law, become the property of the Surviving Corporation, free and clear of all claims or interest of any Person previously entitled thereto.

     (g) Investment of Exchange Fund. The Paying Agent shall invest any cash included in the Exchange Fund, as directed by Parent, on a daily basis. Any interest and other income resulting from such investments shall be paid to Parent. In no event, however, shall such investment or any such payment of interest or income delay the receipt by holders of Certificates or Book-Entry Shares of the Merger Consideration, or otherwise impair such holders’ rights hereunder.

8

     (h) Withholding Rights. Each of the Surviving Corporation, Parent, Holdings, Merger Sub and the Paying Agent shall be entitled to deduct and withhold from the consideration otherwise payable to any holder of Company Common Stock pursuant to this Agreement such amounts as may be required to be deducted and withheld with respect to the making of such payment under the Code, or under any provision of state, local or foreign Tax Law. To the extent amounts are so withheld and paid over to the appropriate taxing authority, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding was made.

ARTICLE III

Representations and Warranties of the Company

     Except as disclosed in the reports, schedules, forms, statements and other documents filed by the Company with the SEC since January 1, 2007 and publicly available prior to the date of this Agreement (the “Filed Company SEC Documents”) (excluding any disclosures in the Filed Company SEC Documents under the headings “Risk Factors”, “Forward-Looking Information”, “Cautionary Factors” and “Outlook” and any other disclosures that are generic, predictive or forward-looking in nature) or as set forth in the letter, dated as of the date of this Agreement, from the Company to Parent, Holdings and Merger Sub (which shall be arranged in numbered and lettered sections corresponding to the numbered and lettered sections contained in this Article III, and the disclosure in any section shall be deemed to qualify or apply to other sections in this Article III to the extent that it is readily apparent on the face of such disclosure that it also qualifies or applies to such other sections, the “Company Disclosure Letter”), the Company represents and warrants to Parent, Holdings and Merger Sub as follows:

     SECTION 3.01. Organization, Standing and Power. Each of the Company, each of its subsidiaries (the “Company Subsidiaries”) and Vivelle Ventures LLC (“Vivelle”) is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized (in the case of good standing, to the extent the concept is recognized by such jurisdiction) and has full corporate power and authority necessary to enable it to own, lease or otherwise hold its properties and assets and to conduct its businesses as presently conducted, except in the case of the Company Subsidiaries and Vivelle, where the failure of any such Company Subsidiary or Vivelle to be in good standing would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect. Each of the Company, each Company Subsidiary and, to the knowledge of the Company, Vivelle is duly qualified or licensed to do business in each jurisdiction where the nature of its business or its ownership or leasing of its properties makes such qualification or licensing necessary, other than in such jurisdictions where the failure to be so qualified or licensed would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect. The Company has made available to Parent true and complete copies of the certificate of incorporation of the Company, as amended to the date of this Agreement (as so amended, the “Company Charter”), and the By-laws of the Company, as amended to the date of this Agreement (as so amended, the “Company By-laws”).

9

     SECTION 3.02. Company Subsidiaries; Equity Interests. (a) Section 3.02(a) of the Company Disclosure Letter lists, as of the date of this Agreement, each Company Subsidiary and its jurisdiction of organization. All the outstanding shares of capital stock of each Company Subsidiary have been validly issued and are fully paid and nonassessable and are owned by the Company, by another Company Subsidiary or by the Company and another Company Subsidiary, free and clear of all pledges, liens, charges, mortgages, encumbrances and security interests of any kind or nature whatsoever (collectively, “Liens”), other than Permitted Liens. The Company has made available to Parent true and complete copies of the organizational documents, as amended to the date of this Agreement, of each Company Subsidiary and Vivelle.

     (b) Except for its interests in the Company Subsidiaries and the Company’s ownership of 49% of the equity interests in Vivelle, the Company does not own, directly or indirectly, any capital stock, membership interest, partnership interest, joint venture interest or other equity interest in any Person.

     SECTION 3.03. Capital Structure. (a) The authorized capital stock of the Company consists of 80,000,000 shares of Company Common Stock and 100,000 shares of preferred stock, par value $0.01 per share (the “Company Preferred Stock”), of which 30,000 shares of Company Preferred Stock were designated by the Company Board as Series A Junior Participating Preferred Stock and are issuable upon exercise of the rights (the “Company Rights”) under the Rights Agreement dated as of November 6, 2001, between the Company and American Stock Transfer & Trust Company, as amended on March 18, 2008 (the “Company Rights Agreement”). At the close of business on July 9, 2009 (the “Measurement Date”), (i) 25,028,987 shares of Company Common Stock were issued and outstanding, of which 253,020 shares of Company Common Stock were Company Restricted Shares, (ii) 322,345 shares of Company Common Stock were held by the Company in its treasury, (iii) 1,399,639 shares of Company Common Stock were subject to outstanding Company Stock Options, 2,560,496 shares of Company Common Stock were subject to outstanding Company SARs, 50,000 shares of Company Common Stock were subject to outstanding Company RSUs and 2,133,093 additional shares of Company Common Stock were reserved for issuance pursuant to the Company Stock Plans, (iv) no shares of Company Preferred Stock were issued or outstanding and (v) 30,000 shares of Company Preferred Stock were reserved for issuance in connection with the Company Rights. Except as set forth above, at the close of business on the Measurement Date, no shares of capital stock or other securities of the Company were issued, reserved for issuance or outstanding. All outstanding options to purchase Company Common Stock, outstanding stock appreciation rights linked to the price of Company Common Stock and outstanding restricted stock units were granted under a Company Stock Plan.

     (b) All outstanding shares of Company Common Stock are, and all such shares that may be issued prior to the Effective Time (including pursuant to the Top-Up Option) will be when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights.

10

     (c) There are no bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of Company Common Stock may vote (“Voting Company Debt”). Other than intercompany indebtedness owed to the Company or one of the Company Subsidiaries, none of the Company or any of the Company Subsidiaries has any indebtedness for borrowed money.

     (d) Except as set forth above, as of the date of this Agreement, there are no options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, restricted stock units, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which the Company, any Company Subsidiary or, to the knowledge of the Company, Vivelle is a party or by which any of them is bound (i) obligating the Company, any Company Subsidiary or, to the knowledge of the Company, Vivelle to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, the Company, any Company Subsidiary or Vivelle or any Voting Company Debt or (ii) obligating the Company, any Company Subsidiary or, to the knowledge of the Company, Vivelle to issue, grant or enter into any such option, warrant, right, security, commitment, Contract, arrangement or undertaking. As of the date of this Agreement, there are no outstanding contractual obligations of the Company, any Company Subsidiary or, to the knowledge of the Company, Vivelle to repurchase, redeem or otherwise acquire any shares of capital stock of the Company, any Company Subsidiary or Vivelle. The Company has made available to Parent a true and complete copy of the Company Rights Agreement, as amended to the date of this Agreement.

     (e) All outstanding Company Stock Options, Company SARs, Company RSUs and Company Restricted Shares have been granted under the Company Stock Plans. Section 3.03(e) of the Company Disclosure Letter sets forth a true and complete list, as of the Measurement Date, of (i) all outstanding Company Stock Options, the number of shares of Company Common Stock subject to each such Company Stock Option, the exercise price per share and the name of the holder thereof, (ii) all outstanding Company SARs, the number of shares of Company Common Stock subject to each such Company SAR, the exercise price per share and the name of the holder thereof, (iii) all Company Restricted Shares and the name of the holder thereof and (iv) all outstanding Company RSUs and the name of the holder thereof. All Company Stock Options, Company SARs, Company Restricted Shares and Company RSUs are evidenced by written award agreements, in each case substantially in the forms that have been provided to Parent, except that such agreements differ from such forms with respect to the number of Company Stock Options, Company SARs, Company Restricted Shares, Company RSUs or shares of Company Common Stock covered thereby, the exercise price (if applicable), vesting schedule and expiration date applicable thereto and other similar terms.

     (f) With respect to outstanding Company Stock Options and outstanding Company SARs, (i) each grant of a Company Stock Option or Company SAR was duly authorized no later than the time and date the grant of such Company Stock Option or Company SAR was made and effective (the “Grant Date”) by all necessary corporate action, including, as applicable, approval by the Company Board (or a duly constituted and authorized committee thereof) and any required stockholder approval by the necessary number of votes or written consents, (ii) each such grant was made in accordance with the terms of the applicable Company Stock Plan, the Exchange Act and all other applicable Laws, including the rules and regulations of Nasdaq and any other exchange on which securities of the Company are traded, (iii) the per share exercise price of each Company Stock Option or Company SAR was equal to or greater than the fair market value (within the meaning of Section 409A of the Code) of a share of Company Common Stock on the applicable Grant Date and (iv) each such grant was properly accounted for in accordance with GAAP in the financial statements (including the notes thereto) of the Company and disclosed in the Company SEC Documents in accordance with the Exchange Act and all other applicable Laws.

11

     SECTION 3.04. Authority; Execution and Delivery; Enforceability. (a) The Company has all requisite corporate power and authority to execute and deliver this Agreement and to consummate the Transactions. The execution and delivery by the Company of this Agreement and the consummation by the Company of the Transactions have been duly authorized by all necessary corporate action on the part of the Company, subject, in the case of the Merger, to receipt of the Company Stockholder Approval, if required by applicable Law. The Company has duly executed and delivered this Agreement, and this Agreement constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms (except insofar as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other Laws of general applicability relating to or affecting creditors’ rights, or by principles governing the availability of equitable remedies, whether considered in a proceeding at law or in equity).

     (b) The Board of Directors of the Company (the “Company Board”), at a meeting duly called and held, duly and unanimously adopted resolutions (i) approving and declaring advisable this Agreement, the Offer, the Merger and the other Transactions, (ii) determining that the terms of the Offer, the Merger and the other Transactions are fair to and in the best interests of the stockholders of the Company, (iii) recommending that the holders of Company Common Stock accept the Offer and tender their shares of Company Common Stock pursuant to the Offer and (iv) recommending that the Company’s stockholders adopt this Agreement if the Company Stockholder Approval is required by applicable Law, which resolutions, as of the date of this Agreement, have not been rescinded, modified or withdrawn in any way. Such resolutions are sufficient to render inapplicable to Parent, Holdings and Merger Sub and this Agreement, the Offer, the Merger or any other Transaction the provisions of Section 203 of the DGCL to the extent, if any, such Section would otherwise be applicable to this Agreement, the Offer, the Merger or any other Transaction. No other state takeover statute or similar statute or regulation applies to the Company with respect to this Agreement, the Offer, the Merger or any other Transaction.

     (c) The only vote of holders of any class or series of capital stock of the Company necessary to approve and adopt this Agreement and the Merger, if required by applicable Law, is the adoption of this Agreement by the holders of a majority of the outstanding Company Common Stock (the “Company Stockholder Approval”). The affirmative vote of the holders of any class or series of capital stock of the Company is not necessary to consummate the Offer or any Transaction other than the Merger.

12

     SECTION 3.05. No Conflicts; Consents. (a) The execution and delivery by the Company of this Agreement do not, and the consummation of the Offer, the Merger and the other Transactions and compliance with the terms hereof will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancelation or acceleration of any obligation or to loss of or reduction in a material benefit under, or result in the creation of any Lien upon any of the properties or assets of the Company, any Company Subsidiary or, to the knowledge of the Company, Vivelle under, any provision of (i) the Company Charter, the Company By-laws or the comparable organizational documents of any Company Subsidiary or Vivelle, (ii) any material contract (written or oral), lease, license, indenture, note, bond, agreement, concession, franchise or other instrument (a “Contract”) to which the Company, any Company Subsidiary or, to the knowledge of the Company, Vivelle is a party or by which any of their respective properties or assets is bound or (iii) subject to the filings and other matters referred to in Section 3.05(b), any judgment, order or decree (“Judgment”) or statute, law, ordinance, rule or regulation (“Law”) applicable to the Company or any Company Subsidiary or their respective properties or assets or, to the knowledge of the Company, Vivelle or its properties or assets.

     (b) No consent, approval, license, permit, order or authorization (“Consent”) of, or registration, declaration or filing with, or permit from, any Federal, state, local or foreign government or any court of competent jurisdiction, administrative agency or commission or other governmental authority or instrumentality, domestic or foreign (a “Governmental Entity”), is required to be obtained or made by or with respect to the Company, any Company Subsidiary or, to the knowledge of the Company, Vivelle in connection with the execution, delivery and performance of this Agreement or the consummation of the Transactions, other than (i) compliance with and filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), (ii) the filing with the SEC of (A) the Schedule 14D-9, (B) a proxy or information statement relating to the adoption of this Agreement by the Company’s stockholders (the “Proxy Statement”), if such adoption is required by Law, (C) any information statement (the “Information Statement”) required under Rule 14f-1 in connection with the Offer and (D) such reports under Section 13 of the Exchange Act as may be required in connection with this Agreement, the Offer, the Merger and the other Transactions, (iii) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware and appropriate documents with the relevant authorities of the other jurisdictions in which the Company is qualified to do business, (iv) such filings as may be required under the rules and regulations of Nasdaq and (v) such other items (A) required solely by reason of the participation of Parent (as opposed to any third Person) in the Transactions or (B) that would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect.

     (c) The Company has taken all actions necessary to (i) render the Company Rights Agreement inapplicable to this Agreement, the Offer, the Merger and the other Transactions and (ii) ensure that (A) neither Parent nor any of its affiliates or associates is or will become an “Acquiring Person” (as defined in the Company Rights Agreement) by reason of this Agreement, the Offer, the Merger or any other Transaction, (B) a “Distribution Date” (as defined in the Company Rights Agreement) shall not occur by reason of this Agreement, the Offer, the Merger or any other Transaction and (C) the Company Rights shall expire immediately prior to the Effective Time.

13

     SECTION 3.06. SEC Documents; Undisclosed Liabilities. (a) The Company has filed all reports, schedules, forms, statements and other documents required to be filed pursuant to Sections 13(a) and 15(d) of the Exchange Act by the Company with the SEC since January 1, 2007 (the “Company SEC Documents”).

     (b) As of their respective effective dates (in the case of Company SEC Documents that are registration statements filed pursuant to the Securities Act) and as of their respective SEC filing dates (in the case of all other Company SEC Documents), each Company SEC Document complied as to form in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder applicable to such Company SEC Document, and except to the extent corrected or superseded by a subsequent filing with the SEC prior to the date hereof, did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

     (c) The audited consolidated financial statements and the unaudited quarterly financial statements (including, in each case, the notes thereto) of the Company included in the Company SEC Documents when filed complied as to form in all material respects with the published rules and regulations of the SEC with respect thereto, have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) (except, in the case of unaudited quarterly statements, as permitted by Form 10-Q of the SEC or other rules and regulations of the SEC) applied in all material respects on a consistent basis during the periods involved (except as may be indicated in the notes thereto) and fairly present in all material respects the consolidated financial position of the Company and its consolidated subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited quarterly statements, to normal year-end adjustments).

     (d) Except as set forth in the audited consolidated balance sheet of the Company, as of December 31, 2008, included in the Company SEC Documents (together with the notes thereto, the “Company Balance Sheet”), the Company and the Company Subsidiaries do not have any liability or obligation of any nature (whether accrued, absolute, contingent or otherwise) other than (i) liabilities or obligations incurred in the ordinary course of business since the date of the Company Balance Sheet, (ii) liabilities or obligations incurred in connection with the Transactions and (iii) liabilities or obligations that would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect.

     (e) The Company maintains a system of “internal controls over financial reporting” (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) sufficient to provide reasonable assurances (i) that transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP, consistently applied, (ii) that transactions are executed only in accordance with the authorization of management and (iii) regarding prevention or timely detection of the unauthorized acquisition, use or disposition of the Company’s properties or assets.

14

     (f) The “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) utilized by the Company are reasonably designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to the Company’s management, as appropriate, to allow timely decisions regarding required disclosure and to make the certifications required pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002.

     (g) Since January 1, 2007, none of the Company, the Company’s independent accountants, the Company Board, any Company Officer or the audit committee of the Company Board has received (A) any oral or written notification of any (i) “significant deficiency” in the internal controls over financial reporting of the Company, (ii) “material weakness” in the internal controls over financial reporting of the Company or (iii) fraud, whether or not material, that involves management or other employees of the Company who have a significant role in the internal controls over financial reporting of the Company or (B) any material complaint, allegation, assertion or claim alleging, asserting or claiming that the accounting or auditing practices, procedures, methodologies or methods of the Company, any of the Company Subsidiaries or Vivelle or their respective internal accounting controls fail to comply with GAAP, generally accepted auditing standards or applicable Law. For purposes of this Agreement, the terms “significant deficiency” and “material weakness” shall have the meanings assigned to them by the Public Company Accounting Oversight Board in Auditing Standard No. 2, as in effect on the date of this Agreement.

     (h) Since January 1, 2007, no attorney representing the Company or any of the Company Subsidiaries, whether or not employed by the Company or any of the Company Subsidiaries, has reported evidence of a material violation of securities Laws, breach of fiduciary duty or similar violation by the Company or any of its officers, directors, employees or agents to the Company Board or any committee thereof or to the General Counsel of the Company.

     SECTION 3.07. Information Supplied. Subject to the accuracy of the representations and warranties of Parent, Holdings and Merger Sub set forth in Article IV, none of the information supplied or to be supplied by or on behalf of the Company for inclusion or incorporation by reference in (a) the Offer Documents, the Schedule 14D-9 or the Information Statement will, at the time such document is filed with the SEC, at any time it is amended or supplemented or at the time it is first published, sent or given to the Company’s stockholders, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, or (b) the Proxy Statement will, at the date it is first mailed to the Company’s stockholders or at the time of the Company Stockholders Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The Schedule 14D-9, the Information Statement and the Proxy Statement will comply as to form in all material respects with the requirements of the Exchange Act and the rules and regulations thereunder, except that no representation or warranty is made by the Company with respect to statements made or incorporated by reference therein based on information supplied by or on behalf of Parent, Holdings or Merger Sub for inclusion or incorporation by reference therein.

15

     SECTION 3.08. Absence of Certain Changes or Events. From the date of the Company Balance Sheet to the date of this Agreement, the Company has conducted its business in the ordinary course in all material respects, and during such period there has not been:

     (a) any change, event, effect or occurrence that, individually or in the aggregate, has had or is reasonably likely to have a Company Material Adverse Effect;

     (b) any declaration, setting aside or payment of any dividend on, or making of any other distribution (whether in cash, stock or property) with respect to, any capital stock of the Company;

     (c) any split, combination or reclassification of any capital stock of the Company or any issuance or the authorization of any issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company;

     (d) (i) any material increase by the Company or any Company Subsidiary to any current or former director, officer, employee or independent contractor of the Company or any Company Subsidiary (each, a “Company Personnel”) in compensation or granting or amending any awards under any Company Benefit Plan (not including granting any equity or equity-based compensation), except in the ordinary course of business consistent with past practice or as was required under employment agreements included in or described in the Filed Company SEC Documents, (ii) any granting by the Company or any Company Subsidiary to any Company Personnel of any material increase in severance or termination pay, except as was required under any employment, severance or termination agreements included in or described in the Filed Company SEC Documents, (iii) any entry by the Company or any Company Subsidiary into any employment, severance or termination agreement with any Company Personnel or (iv) any material amendment to a Company Benefit Plan or Company Benefit Agreement;

     (e) any change in accounting methods, principles or practices by the Company, any Company Subsidiary or, to the knowledge of the Company, Vivelle materially affecting the consolidated assets, liabilities or results of operations of the Company, except as may have been required (i) by GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization, or (ii) by Law, including Regulation S-X under the Securities Act;

     (f) any material elections with respect to Taxes by the Company, any Company Subsidiary or, to the knowledge of the Company, Vivelle or settlement or compromise by the Company, any Company Subsidiary or, to the knowledge of the Company, Vivelle of any material Tax liability or refund;

     (g) any material damage, destruction or loss, whether or not covered by insurance, to any material assets of the Company, any of the Company Subsidiaries or, to the knowledge of the Company, Vivelle; or

     (h) any discounting, rebate, promotional or other special incentive arrangements with respect to the sale of any finished products by the Company, any Company Subsidiary or, to the knowledge of the Company, Vivelle, other than in the ordinary course of business consistent with past practice.

16

     SECTION 3.09. Taxes. (a) The Company, each Company Subsidiary and, to the knowledge of the Company, Vivelle have (i) timely filed, taking into account any extensions, all material Tax Returns required to have been filed and such Tax Returns are accurate and complete in all material respects, and (ii) paid all material Taxes required to have been paid by it other than Taxes that are not yet due or that are being contested in good faith in appropriate proceedings. The most recent financial statements contained in the Filed Company SEC Documents reflect an adequate reserve (excluding any reserves for deferred Taxes), if such a reserve is required by GAAP, for all material Taxes payable by the Company and the Company Subsidiaries for all taxable periods and portions thereof ending on or before the date of such financial statements.

     (b) The Company, each Company Subsidiary and, to the knowledge of the Company, Vivelle have complied in all material respects with all applicable Tax Laws relating to the withholding of Taxes (including withholding of Taxes in connection with amounts paid or owing to any employee, former employee or independent contractor) and have duly and timely withheld and paid over to the appropriate Governmental Entity all material amounts required to be so withheld and paid over on or prior to the due date thereof under all applicable Tax Laws.

     (c) No material Taxes with respect to the Company, any Company Subsidiary or, to the knowledge of the Company, Vivelle are under audit by any Governmental Entity or the subject of any judicial or administrative proceeding. There are no entity classification elections for US federal income tax purposes in force with respect to the Company, any Company Subsidiary or, to the knowledge of the Company, Vivelle. All Tax Returns filed with respect to Tax years of the Company and all Company Subsidiaries through the Tax year ended 2004 have been examined and closed or are Tax Returns with respect to which the applicable period for assessment under applicable Law, after giving effect to extensions or waivers, has expired. To the knowledge of the Company, all Tax Returns filed with respect to Tax years of Vivelle through the Tax year ended 2004 have been examined and closed or are Tax Returns with respect to which the applicable period for assessment under applicable Law, after giving effect to extensions or waivers, has expired.

     (d) No deficiency for any material Tax has been asserted or assessed by a taxing authority in writing against the Company, any Company Subsidiary or, to the knowledge of the Company, Vivelle which deficiency has not been paid. Except as would not reasonably be expected to be material in any respect to the Company, the Company Subsidiaries and Vivelle, there are no currently effective waivers, extensions or comparable consents regarding the application of the statute of limitations with respect to Taxes or Tax Returns which have been given by or on behalf of the Company, any Company Subsidiary or, to the knowledge of the Company, Vivelle (other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course).

     (e) None of the Company, any Company Subsidiary or, to the knowledge of the Company, Vivelle (i) has received or applied for a Tax ruling or entered into a closing agreement pursuant to Section 7121 of the Code (or any predecessor provision or any similar provision of state, local or foreign Law), in either case that would be binding upon the Company, any Company Subsidiary or Vivelle after the Offer Closing Date or (ii) has any liability for the Taxes of any other Person other than the Company or any Company Subsidiary (whether under Treasury Regulation Section 1.1502-6 or any similar provision of state, local or foreign Law, as a transferee or successor, pursuant to any Tax sharing or indemnity agreement or other contractual agreements, or otherwise).

17

     (f) None of the Company, any Company Subsidiary or, to the knowledge of the Company, Vivelle will be required to include in income any adjustment pursuant to Section 481 of the Code (or any similar provision of state, local or foreign Law) by reason of a change in accounting method by the Company, any Company Subsidiary or Vivelle.

     (g) None of the Company, any Company Subsidiary or, to the knowledge of the Company, Vivelle is a party to a “gain recognition agreement” within the meaning of the Treasury Regulations under Section 367 of the Code.

     (h) None of the Company, any Company Subsidiary or, to the knowledge of the Company, Vivelle is a party to or is bound by any Tax sharing, allocation or indemnification agreement or arrangement (other than such an agreement or arrangement exclusively between or among the Company and wholly owned Company Subsidiaries).

     (i) Within the past two years, none of the Company, any Company Subsidiary or, to the knowledge of the Company, Vivelle has been a “distributing corporation” or a “controlled corporation” in a distribution intended to qualify for tax-free treatment under Section 355 of the Code.

     (j) None of the Company, any Company Subsidiary or, to the knowledge of the Company, Vivelle has been a party to a transaction that, as of the date of this Agreement, constitutes a “listed transaction” for purposes of Section 6011 of the Code and applicable Treasury Regulations thereunder (or a similar provision of state Law).

     (k) No Company Subsidiary organized outside of the United States is or has been classified as a passive foreign investment company, as defined in Section 1297 of the Code.

     (l) For purposes of this Agreement:

          “Taxes” means all taxes, customs, tariffs, withholding, imposts, levies, duties, fees or other like assessments or charges of any kind imposed by a Governmental Entity, together with all interest, penalties and additions imposed with respect to such amounts.

          “Tax Return” means all Tax returns, declarations, statements, reports, schedules, forms and information returns and any amended Tax return relating to Taxes.

     SECTION 3.10. Labor Relations. (a) There are no collective bargaining or other labor union agreements to which the Company, any Company Subsidiary or, to the knowledge of the Company, Vivelle is a party or by which the Company, any Company Subsidiary or, to the knowledge of the Company, Vivelle is bound. None of the employees of the Company, any Company Subsidiary or, to the knowledge of the Company, Vivelle is represented by any union with respect to his employment by the Company, any such Company Subsidiary or Vivelle. In the last two years up to and including the date of this Agreement, none of the Company, any of the Company Subsidiaries or, to the knowledge of the Company, Vivelle has experienced any material labor disputes, strikes, work stoppages, slowdowns, lockouts or union organization attempts concerning any employees of the Company, a Company Subsidiary or Vivelle.

18

     (b) There is no material unfair labor practice charge or complaint or other proceeding pending, or, to the knowledge of the Company, threatened against the Company or any Company Subsidiary before the National Labor Relations Board, Equal Employment Opportunity Commission or any similar Governmental Entity.

     (c) To the knowledge of the Company, there is no material unfair labor practice charge or complaint or other proceeding pending or threatened against Vivelle before the National Labor Relations Board, Equal Employment Opportunity Commission or any similar Governmental Entity.

     SECTION 3.11. Employee Benefits. (a) Section 3.11(a) of the Company Disclosure Letter sets forth a true and complete list, as of the date of this Agreement, of each material Company Benefit Plan. “Company Benefit Plan” means each (i) “pension plan” (as defined in Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)) or post-retirement or employment health or medical plan or program, (ii) bonus, incentive or deferred compensation or equity or equity-based compensation plan or program, (iii) severance, change in control, retention or termination plan or program, or (iv) other compensation or benefit plan or program, in each case, sponsored, maintained, contributed to or required to be maintained or contributed to by the Company, any of the Company Subsidiaries or any other Person or entity that, together with the Company, is treated as a single employer under Section 414 of the Code (each, a “Commonly Controlled Entity”) for the benefit of any Company Personnel, other than a Company Benefit Agreement.

     (b) Section 3.11(b) of the Company Disclosure Letter sets forth a true and complete list, as of the date of this Agreement, of each written employment, consulting, bonus, incentive or deferred compensation, equity or equity-based compensation, severance, change in control, retention or termination Contract between the Company or any Company Subsidiary, on the one hand, and an individual, on the other hand (each, a “Company Benefit Agreement”).

     (c) With respect to each Company Benefit Plan and Company Benefit Agreement, the Company has made available to Parent true and complete copies of (i) such Company Benefit Plan or Company Benefit Agreement, including any amendment thereto, (ii) each trust, insurance, annuity or other funding Contract related thereto, (iii) the most recent financial statements and actuarial or other valuation reports prepared with respect thereto, (iv) the most recent annual report on Form 5500 required to be filed with the Internal Revenue Service with respect thereto (if any) and (v) all material communications received from the IRS, the Pension Benefit Guaranty Corporation, the Department of Labor or any other Governmental Entity (including a description of any oral communication) during the last two years.

     (d) Each Company Benefit Plan and Company Benefit Agreement (and any related trust or other funding vehicle) has been administered in all material respects in accordance with its terms and is in compliance in all material respects with ERISA, the Code and all other applicable Laws. Each of the Company and each of the Company Subsidiaries is in compliance in all material respects with ERISA, the Code and all other applicable Laws in respect of the Company Benefit Plans and Company Benefit Agreements.

19

     (e) None of the Company, any of the Company Subsidiaries or any Commonly Controlled Entity has sponsored, maintained, contributed to or been required to maintain or contribute to, or has any actual or contingent liability under, any Company Benefit Plan that is subject to Section 302 or Title IV of ERISA or Section 412 of the Code or is otherwise a defined benefit plan. No Company Benefit Plan or Company Benefit Agreement provides health, medical or other welfare benefits after retirement or other termination of employment (other than continuation coverage required under Section 4980(B)(f) of the Code or analogous state Laws), and no circumstances exist that could result in the Company or any Company Subsidiary becoming obligated to provide any such benefits.

     (f) None of the execution and delivery of this Agreement, the obtaining of the Company Stockholder Approval (if required by applicable Law) or the consummation of the Offer, the Merger or any other Transaction (alone or in conjunction with any other event, including any termination of employment on or following the Effective Time) will (i) entitle any Company Personnel to any compensation or benefit, (ii) accelerate the time of payment or vesting, or trigger any payment or funding, of any compensation or benefit or trigger any other material obligation under any Company Benefit Plan or Company Benefit Agreement or (iii) result in any breach or violation of, or default under, or limit the Company’s right to amend, modify or terminate, any Company Benefit Plan or Company Benefit Agreement.

     (g) No amount or other entitlement that could be received as a result of the execution and delivery of this Agreement, the obtaining of the Company Stockholder Approval (if required by applicable Law) or the consummation of the Offer, the Merger or any other Transaction (alone or in conjunction with any other event, including any termination of employment on or following the Effective Time) by any “disqualified individual” (as defined in Section 280G(c) of the Code) with respect to the Company will constitute an “excess parachute payment” (as defined in Section 280G(b)(1) of the Code). No Company Personnel is entitled to receive any gross-up or additional payment by reason of the tax required by Section 409A or 4999 of the Code being imposed on such person.

     (h) The Compensation Committee of the Company Board (the “Compensation Committee”) (each member of which the Company Board has determined is an “independent director” as defined by Rule 4200(a)(15) of the Nasdaq Marketplace Rules and is an “independent director” in accordance with the requirements of Rule 14d-10(d)(2) under the Exchange Act) (i) at a meeting duly called and held, duly adopted resolutions approving each agreement, arrangement or understanding entered into on or before the date hereof by the Company or any of its affiliates with current or future directors, officers or employees of the Company and its affiliates and (ii) has taken all other actions necessary to ensure that any such arrangements fall within the safe harbor provisions of Rule 14d-10(d).

     SECTION 3.12. Title to Properties. (a) The Company, the Company Subsidiaries and, to the knowledge of the Company, Vivelle (a) have good, valid and marketable title to all real property owned by the Company, any Company Subsidiary or Vivelle and good, valid and marketable title to, or valid leasehold interests in, all of the other respective properties and assets reflected in the Company Balance Sheet or acquired after the date thereof, in each case that are material to the business of the Company and the Company Subsidiaries, taken as a whole, free and clear of all Liens, except (i) Liens for taxes, assessments and other governmental charges and levies that are not due and payable or that may thereafter be paid without interest or penalty, (ii) mechanics’, carriers’, workmen’s, warehousemen’s, repairmen’s or other like Liens arising or incurred in the ordinary course of business that are not overdue for a period of more than 30 days or which are being contested in good faith by appropriate proceedings, (iii) Liens incurred in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, performance and return of money bonds and similar obligations that do not, and would not reasonably be expected to, individually or in the aggregate, materially impair or interfere with the continued use and operation of, or materially detract from the value of, the assets to which they relate in the business of the Company, the Company Subsidiaries and Vivelle as presently conducted, (iv) applicable zoning, building and other similar codes and regulations, (v) any conditions that would be disclosed by a current, accurate survey or physical inspection and that do not, and would not reasonably be expected to, individually or in the aggregate, materially impair or interfere with the continued use and operation of, or materially detract from the value of, the assets to which they relate in the business of the Company, the Company Subsidiaries and Vivelle as presently conducted and (vi) Liens (other than Liens securing indebtedness for borrowed money), defects or irregularities in title, easements, rights-of-way, covenants, restrictions and other similar matters that do not, and would not reasonably be expected to, individually or in the aggregate, materially impair or interfere with the continued use and operation of, or materially detract from the value of, the assets to which they relate in the business of the Company, the Company Subsidiaries and Vivelle, as presently conducted (collectively, “Permitted Liens”) and (b) have complied with the terms of all leases to which they are parties and under which they are in occupancy that are reflected in the Company Balance Sheet or acquired after the date thereof that are material to the business of the Company and the Company Subsidiaries, taken as a whole, and all such leases are in full force and effect.

20

     (b) Section 3.12(b) of the Company Disclosure Letter sets forth a true and complete list, as of the date of this Agreement, of all real property owned or leased by the Company, any of the Company Subsidiaries or, to the knowledge of the Company, Vivelle, in each case indicating whether such real property is owned, leased or subleased by the Company or a Company Subsidiary and whether the Company or a Company Subsidiary is currently leasing or subleasing any such property, other than ordinary course leases or rentals of public storage facilities used by sales representatives.

     (c) As of the date of this Agreement, none of the Company, any Company Subsidiary or, to the knowledge of the Company, Vivelle has granted or is obligated under any option, right of first offer, right of first refusal or other contractual right to purchase, acquire, sell or dispose of the real property listed in Section 3.12(b) of the Company Disclosure Letter or any portion thereof or interest therein.

     SECTION 3.13. Contracts. (a) Except for this Agreement and for the Contracts disclosed in the Filed Company SEC Documents, Section 3.13(a) of the Company Disclosure Letter sets forth a true and complete list, as of the date of this Agreement, and the Company has made available to Parent true and complete copies, of each Contract to which the Company, any Company Subsidiary or, in the case of clauses (v), (viii), (xi) and (xiv), to the knowledge of the Company, Vivelle is a party or by which any of their respective properties or assets are bound:

     (i) that would be required to be filed by the Company as a “material contract” pursuant to Item 601(b)(10) of Regulation S-K under the Securities Act;

21

     (ii) that restricts the ability of the Company or any affiliate of the Company to conduct or have an interest in any business or compete with any Person in any geographical area;

     (iii) that is with a supplier and provides exclusivity for such supplier;

     (iv) that provides for annual payments or receipts (based on payments made and receipts received during the 12-month period ending June 30, 2009) in excess of $500,000, other than spot purchase agreements for raw materials or finished goods entered into in the ordinary course of business;

     (v) under which the Company, any Company Subsidiary or, to the knowledge of the Company, Vivelle has incurred any indebtedness for borrowed money (other than intercompany indebtedness owed to the Company or any of the Company Subsidiaries) that is currently owing or given any financial guaranty that is currently outstanding;

     (vi) that is with any Governmental Entity (other than Contracts entered into in the ordinary course of business with a Governmental Entity as a customer);

     (vii) that is a real property lease, sublease, license or occupancy agreement, other than Contracts relating to ordinary course leases or rentals of public storage facilities used by sales representatives;

     (viii) that was entered into after January 1, 2006 and pursuant to which the Company, any Company Subsidiary or, to the knowledge of the Company, Vivelle disposed of or acquired any assets or properties material to the Company and the Company Subsidiaries, taken as a whole, other than any Contracts relating to dispositions or acquisitions in the ordinary course of business;

     (ix) that is of the type that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;

     (x) that is an equipment lease providing for payments by the Company or any Company Subsidiary in excess of $50,000 over the term of such Contract;

     (xi) that governs the formation, creation, operation, management or control of any partnership or joint venture or other jointly-owned entity in which the Company, any Company Subsidiary or, to the knowledge of the Company, Vivelle is a partner, shareholder or member;

22

     (xii) that is a principal agreement governing on-going strategic collaboration, including any collaboration with respect to the research, development, distribution, supply, license, marketing or co-promotion of products (including any products under development);

     (xiii) that governs the manufacturing of finished products by any Person (other than the Company, any Company Subsidiary or Vivelle) for resale by the Company or any Company Subsidiary; or

     (xiv) that governs the recall or potential recall of any products developed, manufactured, sold, marketed or distributed by the Company, any Company Subsidiary or, to the knowledge of the Company, Vivelle, and was entered into since January 1, 2006.

Each such Contract described in this Section 3.13(a) as well as each Contract listed in Section 3.13(a) of the Company Disclosure Letter is referred to herein as a “Specified Contract”.

     (b) Each of the Specified Contracts is valid, binding and enforceable on the Company, a Company Subsidiary or, to the knowledge of the Company, Vivelle, as the case may be, and, to the knowledge of the Company, each other party thereto, and is in full force and effect. There is no default under any Specified Contract by the Company, any Company Subsidiary or, to the knowledge of the Company, Vivelle or any other party thereto and no event has occurred that with the lapse of time or the giving of notice or both would constitute a default thereunder by the Company, any Company Subsidiary or, to the knowledge of the Company, Vivelle or any other party thereto, in each case except as would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect.

     SECTION 3.14. Litigation. (a) There is no suit, action, claim, investigation or proceeding (including opposition proceedings and interferences) pending or, to the knowledge of the Company, threatened by or against the Company or any Company Subsidiary that would reasonably be expected to, individually or in the aggregate, be material to the Company and the Company Subsidiaries, taken as a whole, nor is there any Judgment outstanding against the Company or any Company Subsidiary that would reasonably be expected to, individually or in the aggregate, be material to the Company and the Company Subsidiaries, taken as a whole.

     (b) To the knowledge of the Company, there is no suit, action, claim, investigation or proceeding (including opposition proceedings and interferences) pending or threatened by or against Vivelle that would reasonably be expected to, individually or in the aggregate, be material to the Company, the Company Subsidiaries and Vivelle, taken as a whole, nor is there any Judgment outstanding against Vivelle that would reasonably be expected to, individually or in the aggregate, be material to the Company, the Company Subsidiaries and Vivelle, taken as a whole.

     SECTION 3.15. Compliance with Laws. (a) Each of the Company, each Company Subsidiary and, to the knowledge of the Company, Vivelle is in compliance in all material respects with all Laws applicable to it or its business or operations, including (i) the Food, Drug and Cosmetic Act of 1938, as amended (the “FDCA”), the Public Health Service Act, as amended, the Controlled Substances Act, as amended, and all other Laws enforced by the United States Food and Drug Administration (“FDA”), the United States Drug Enforcement Administration, and comparable state and foreign Governmental Entities and all regulations promulgated thereunder (collectively, “Drug Law”), (ii) all healthcare compliance Laws, including the Federal False Claims Act, the Federal Anti-Kickback Statute and similar state Laws and (iii) all Laws respecting labor, employment, fair employment practices, terms and conditions of employment and plant closings. Each of the Company, each Company Subsidiary and, to the knowledge of the Company, Vivelle has made all necessary and appropriate applications, filings, safety reports and other submissions to, and has obtained and maintains in effect all material approvals, authorizations, certificates, registrations, licenses, exemptions, permits, consents, clearances and listings of, Governmental Entities (collectively, “Authorizations”) necessary for it to conduct its business as presently conducted, and all such Authorizations are in full force and effect, except for such Authorizations the absence of which, or the failure of which to be in full force and effect, would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect. None of the Company, any of the Company Subsidiaries or, to the knowledge of the Company, Vivelle has received, since January 1, 2006, any written notice, notification, claim or information alleging or asserting the failure to hold any material Authorization necessary for it to conduct its business as presently conducted. Each of the Company, each Company Subsidiary and, to the knowledge of the Company, Vivelle is in compliance in all material respects with the terms and conditions of all material Authorizations necessary for it to conduct its business as presently conducted. Since January 1, 2008, none of the Company, any of the Company Subsidiaries or, to the knowledge of the Company, Vivelle has had any material Authorization withdrawn or terminated by any Governmental Entity. This Section 3.15(a) does not relate to environmental matters, which are the subject of Section 3.16, employee benefit matters, which are the subject of Section 3.11, or Taxes, which are the subject of Section 3.09.

23

     (b) Except as would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect, none of the Company, any Company Subsidiary or any of their respective employees or agents or, to the knowledge of the Company, Vivelle or any of its employees or agents is or has been debarred from participation in any program related to pharmaceutical products pursuant to 21 U.S.C. § 335a(a) or (b).

     (c) Since January 1, 2006, (i) all manufacturing operations of products of the Company or any Company Subsidiary by the Company and the Company Subsidiaries and, to the knowledge of the Company, by Persons (other than the Company and any Company Subsidiary) that manufacture finished products for resale by the Company or any Company Subsidiary have been and are being conducted in material compliance with regulations enforced by the FDA, including C.F.R. Parts 210 and 211 and related guidance documents, as amended from time to time, and all applicable similar regulations in countries where such compliance is required, and (ii) the Company, the Company Subsidiaries and, to the knowledge of the Company, Vivelle have not been notified in writing by any Governmental Entity of any material failure (or any material investigation with respect thereto) by them or any licensor, licensee, partner or distributor to comply with, or maintain systems and programs to ensure compliance with any Drug Law pertaining to programs or systems regarding product quality, notification of facilities and products, corporate integrity, pharmacovigilance and conflict of interest, including Current Good Manufacturing Practice Requirements, Good Laboratory Practice Requirements, Good Clinical Practice Requirements, FDA Division of Drug Marketing, Advertising and Communications Requirements, Health Insurance Portability and Accountability Act Requirements, State Privacy Requirements, Establishment Registration and Product Listing Requirements, requirements applicable to the debarment of individuals, requirements applicable to the conflict of interest of clinical investigators and Adverse Drug Reaction Reporting Requirements, in each case with respect to any products of the Company, any Company Subsidiary or Vivelle.

24

     (d) No product or product candidate manufactured, tested, distributed, held or marketed by the Company, any Company Subsidiary or, to the knowledge of the Company, Vivelle has been recalled, withdrawn or suspended since January 1, 2006. No proceedings (whether completed or pending) seeking the recall, withdrawal, suspension or seizure of any such product or product candidate or pre-market approvals or marketing authorizations are pending or, to the knowledge of the Company, threatened against the Company or any Company Subsidiary. To the knowledge of the Company, no proceedings (whether completed or pending) seeking the recall, withdrawal, suspension or seizure of any such product or product candidate or pre-market approvals or marketing authorizations are pending or threatened against Vivelle. For purposes of this Section 3.15(d), the terms “products” and “product candidates” mean products and product candidates in respect of which an Investigational New Drug submission has been made by the Company or a Company Subsidiary.

     (e) None of the Company, any of the Company Subsidiaries or, to the knowledge of the Company, Vivelle has received, since January 1, 2006, any written notification that remains unresolved from any Governmental Entity alleging that any products of the Company, any Company Subsidiary or Vivelle is misbranded or adulterated as defined in the FDCA and the rules and regulations promulgated thereunder or any similar Law.

     (f) To the knowledge of the Company, since January 1, 2006, no Company Officer (in his capacity as such) has made an untrue statement of a material fact or fraudulent statement to the FDA or any other Governmental Entity, failed to disclose a material fact required to be disclosed to the FDA or any other Governmental Entity, or committed an act, made a statement or failed to make a statement that, at the time such disclosure was made, would reasonably be expected to provide a basis for the FDA or any other Governmental Entity to invoke its policy respecting “Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities” set forth in 56 Fed. Reg. 46191 (September 10, 1991) or any similar policy.

     (g) The Company and the Company Subsidiaries maintain a compliance program that utilizes internal controls and promotional guidelines sufficient to provide reasonable assurance of adherence to applicable Drug Laws.

     SECTION 3.16. Environmental Matters. (a) Except for matters that would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect, (i) each of the Company, each Company Subsidiary and, to the knowledge of the Company, Vivelle is and, since January 1, 2006 has been, in compliance with all Environmental Laws, (ii) each of the Company, each Company Subsidiary and, to the knowledge of the Company, Vivelle possesses and is in compliance with all Environmental Authorizations for its operations as presently conducted, (iii) since January 1, 2006, the Company, the Company Subsidiaries and, to the knowledge of the Company, Vivelle have not received any written notice alleging that the Company, any Company Subsidiary or Vivelle is in violation of, or has any liability under, any Environmental Law, and (iv) no Release of Hazardous Substances has occurred at, on, above, under or from any properties currently or, during the time of ownership or operation by the Company or any Company Subsidiary, formerly owned, leased, operated or used by the Company or any of the Company Subsidiaries that would reasonably be expected to require any Remedial Action pursuant to Environmental Law, as to which the Company, any of Company Subsidiaries or, to the knowledge of the Company, Vivelle would reasonably be expected to be liable pursuant to Environmental Law. Notwithstanding anything to the contrary, this Section 3.16 (along with Sections 3.05, 3.06 and 3.08) constitutes the sole representations and warranties under this Agreement by the Company with respect to matters arising under Environmental Laws.

25

     (b) For purposes of this Agreement:

          “Environmental Authorization” means any Authorization required pursuant to applicable Environmental Laws.

          “Environmental Law” means any Law or Judgment promulgated by any Governmental Entity with respect to pollution or the protection of the environment, the protection of human health as it relates to exposure to Hazardous Substances, natural resources or endangered or threatened species.

          “Hazardous Substance” means any substance that (i) is or contains asbestos, polychlorinated biphenyls or petroleum or petroleum by-products, (ii) is defined, listed or identified as a “hazardous waste”, “hazardous substance”, “toxic substance” or words of similar meaning or effect under Environmental Law or (iii) is regulated under any Environmental Law.

          “Release” means any releasing, disposing, discharging, injecting, spilling, leaking, leaching, pumping, dumping, emitting, escaping, emptying, seeping, dispersal, migration, transporting through, into or upon, the environment, including any land, soil, surface water or groundwater.

          “Remedial Action” means any action required to investigate, clean up, treat, monitor, remove, remediate or otherwise conduct remedial or corrective actions with respect to Hazardous Substances.

     SECTION 3.17. Intellectual Property. (a) The Company, the Company Subsidiaries and, to the knowledge of the Company, Vivelle own (free and clear of any Liens, other than rights and licenses granted in the ordinary course of business), license, sublicense or otherwise possess legally enforceable rights to use all Intellectual Property necessary to conduct the business of the Company, the Company Subsidiaries and Vivelle as presently conducted (in each case excluding generally commercially available, off-the-shelf software programs). The Company does not have knowledge of any inequitable conduct or of any patents, publications, disclosures, offers for sale or uses that would render any of the Company Registered Intellectual Property or any of the Company’s licensed or unlicensed Intellectual Property invalid or unenforceable by a court of competent jurisdiction.

26

     (b) Section 3.17(b) of the Company Disclosure Letter sets forth a true and complete list, as of the date of this Agreement, of all Company Registered Intellectual Property and all material licensed or unlicensed Intellectual Property owned by or licensed to the Company or any Company Subsidiary.

     (c) To the knowledge of the Company, the conduct of the business of the Company, the Company Subsidiaries and Vivelle as presently conducted, including the current use of any Intellectual Property by the Company, any Company Subsidiary or Vivelle, does not infringe, violate or constitute a misappropriation of any valid Intellectual Property of any third party. None of the Company, any of the Company Subsidiaries or, to the knowledge of the Company, Vivelle has received any written claim or notice from any Person since January 1, 2006 alleging any such infringement, violation or misappropriation.

     (d) The Intellectual Property owned by the Company, any Company Subsidiary or, to the knowledge of the Company, Vivelle which is material to the business of the Company, the Company Subsidiaries and Vivelle as presently conducted, has not been held invalid or unenforceable by a court of competent jurisdiction and, to the knowledge of the Company, is subsisting. To the knowledge of the Company, the Intellectual Property licensed by the Company, any Company Subsidiary or Vivelle which is material to the business of the Company, the Company Subsidiaries and Vivelle, taken as a whole, as presently conducted, has not been held invalid or unenforceable by a court of competent jurisdiction and is subsisting. The Company, the Company Subsidiaries and, to the knowledge of the Company, Vivelle have taken commercially reasonable steps to protect, preserve and maintain the validity and effectiveness of all of their respective owned or licensed material Intellectual Property, including paying all registration, maintenance and renewal fees with respect to Company Registered Intellectual Property.

     (e) Each of the Company, each Company Subsidiary and, to the knowledge of the Company, Vivelle has taken commercially reasonable steps to protect and maintain the confidentiality of the Intellectual Property owned by or licensed to it that is of a nature that the Company intends to keep confidential, including entering into Contracts that require employees to safeguard and maintain the secrecy and confidentiality of Intellectual Property which is material to the business of the Company, the Company Subsidiaries and Vivelle, taken as a whole, as presently conducted.

     (f) To the knowledge of the Company, no third party is challenging, infringing, violating or misappropriating any of the Intellectual Property owned by or licensed to the Company, any Company Subsidiary or Vivelle which is material to the business of the Company, the Company Subsidiaries and Vivelle, taken as a whole, as presently conducted. None of the Company, any Company Subsidiary or, to the knowledge of the Company, Vivelle has initiated any claims or actions against a third party with respect to any Intellectual Property owned by or licensed to it since January 1, 2006. The Company and the Company Subsidiaries own (free and clear of any Liens, other than rights and licenses granted in the ordinary course of business) all right, title and interest in and to all material Intellectual Property created by any present or former employee in the course of his employment or any contractor in the course of his engagement.

27

     (g) For purposes of this Agreement:

     (i) “Company Registered Intellectual Property” means all applications for and registrations for any patents (including divisions, continuations, continuations-in-part and renewals), trademarks, service marks, trade names, domain names, copyrights and designs, in each case owned by or registered to the Company or any of the Company Subsidiaries.

     (ii) “Intellectual Property” means (A) patents, trademarks, service marks, trade names, domain names, copyrights, designs and trade secrets, (B) applications for and registrations of such patents, trademarks, service marks, trade names, domain names, copyrights and designs, (C) processes, formulae, methods, schematics, technology, know-how, databases, computer software programs and applications and (D) other tangible or intangible proprietary or confidential information and materials (in whatever form or medium).

     SECTION 3.18. Suppliers. Since January 1, 2008, to the knowledge of the Company, (i) no supplier of a raw material or active ingredient required for the manufacture of a product of the Company, any of the Company Subsidiaries or Vivelle and (ii) no manufacturer of a product of the Company, any of the Company Subsidiaries or Vivelle has provided notice to the Company, a Company Subsidiary or Vivelle of its intent to discontinue to supply such raw material or manufacture such product, as the case may be, consistent with past practice.

     SECTION 3.19. Insurance. The Company has made available to Parent copies of all material insurance policies maintained by the Company and the Company Subsidiaries, including fire and casualty, general liability, product liability, business interruption, directors and officers and other professional liability policies. All such policies are in full force and effect as of the date of this Agreement. There is no material claim that does not involve a third party claim pending under any policies or Contracts of insurance maintained by the Company or any of the Company Subsidiaries as to which coverage has been questioned, denied or disputed by the issuers of such policies or Contracts. All premiums due and payable to date under all such policies have been paid. None of the Company or any of the Company Subsidiaries is in breach of or default (with or without notice or lapse of time, or both) under any such policies. None of the Company or any of the Company Subsidiaries has received notice of cancelation or termination with respect to such policies.

     SECTION 3.20. Brokers and Other Advisors. No broker, investment banker, financial advisor or other Person, other than J.P. Morgan Securities Inc., the fees and expenses of which will be paid by the Company, is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with the Offer, the Merger and the other Transactions based upon arrangements made by or on behalf of the Company or any of its affiliates.

     SECTION 3.21. Opinion of Financial Advisor. The Company Board has received the opinion of J.P. Morgan Securities Inc., dated the date of this Agreement, to the effect that, as of such date, the consideration to be received in the Offer and the Merger by the holders of Company Common Stock is fair from a financial point of view to such holders (other than Parent and its affiliates), a signed copy of which opinion will be delivered to Parent solely for informational purposes promptly after the date hereof.

28

ARTICLE IV

Representations and Warranties of Parent, Holdings and Merger Sub

     Parent, Holdings and Merger Sub, jointly and severally, represent and warrant to the Company that:

     SECTION 4.01. Organization, Standing and Power. Each of Parent, Holdings and Merger Sub is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized and has full corporate power and authority to conduct its businesses as presently conducted.

     SECTION 4.02. Holdings and Merger Sub. (a) Each of Holdings and Merger Sub was formed solely for the purpose of entering into the Transactions, and since the date of its incorporation, has not carried on any business, conducted any operations or incurred any liabilities or obligations other than the execution of this Agreement, the performance of its obligations hereunder and matters ancillary thereto.

     (b) The authorized capital stock of Holdings consists of 1,000 shares of common stock, par value $0.01 per share, all of which have been validly issued, are fully paid and nonassessable and are owned by Parent free and clear of any Lien other than any Lien arising under or in connection with any existing credit facility of Parent.

     (c) The authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $0.01 per share, all of which have been validly issued, are fully paid and nonassessable and are owned by Holdings free and clear of any Lien arising under or in connection with any existing credit facility of Parent.

     SECTION 4.03. Authority; Execution and Delivery; Enforceability. Each of Parent, Holdings and Merger Sub has all requisite corporate power and authority to execute and deliver this Agreement and to consummate the Transactions. The execution and delivery by each of Parent, Holdings and Merger Sub of this Agreement and the consummation by it of the Transactions have been duly authorized by all necessary corporate action on the part of Parent, Holdings and Merger Sub. Holdings, as sole stockholder of Merger Sub, has adopted this Agreement. Neither the approval or adoption of this Agreement nor the consummation of the Offer, the Merger or the other Transactions requires any approval of the stockholders of Parent. Each of Parent, Holdings and Merger Sub has duly executed and delivered this Agreement, and this Agreement constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms (except insofar as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other Laws of general applicability relating to or affecting creditors’ rights, or by principles governing the availability of equitable remedies, whether considered in a proceeding at law or in equity).

29

     SECTION 4.04. No Conflicts; Consents. (a) The execution and delivery by each of Parent, Holdings and Merger Sub of this Agreement do not, and the consummation of the Offer, the Merger and the other Transactions and compliance with the terms hereof will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancelation or acceleration of any obligation or to loss of a material benefit under, or result in the creation of any Lien upon any of the properties or assets of Parent or any of its subsidiaries under, any provision of (i) the organizational documents of Parent, Holdings, Merger Sub or any of Parent’s subsidiaries, (ii) any material Contract to which Parent or any of its subsidiaries is a party or by which any of their respective properties or assets is bound or (iii) subject to the filings and other matters referred to in Section 4.04(b), any Judgment or Law applicable to Parent or any of its subsidiaries or their respective properties or assets.

     (b) No Consent of, or registration, declaration or filing with, any Governmental Entity is required to be obtained or made by or with respect to Parent or any of its subsidiaries in connection with the execution, delivery and performance of this Agreement or the consummation of the Transactions, other than (i) compliance with and filings under the HSR Act, (ii) the filing with the SEC of (A) the Offer Documents and (B) such reports under Sections 13 and 16 of the Exchange Act, as may be required in connection with this Agreement, the Offer, the Merger and the other Transactions, (iii) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware and (iv) such other items (A) required solely by reason of the participation of the Company (as opposed to any third Person) in the Transactions or (B) that would not reasonably be expected to, individually or in the aggregate, have a Parent Material Adverse Effect.

     SECTION 4.05. Information Supplied. Subject to the accuracy of the representations and warranties of the Company set forth in Article III, none of the information supplied or to be supplied by or on behalf of Parent, Holdings or Merger Sub for inclusion or incorporation by reference in (a) the Offer Documents, the Schedule 14D-9 or the Information Statement will, at the time such document is filed with the SEC, at any time it is amended or supplemented or at the time it is first published, sent or given to the Company’s stockholders, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, or (b) the Proxy Statement will, at the date it is first mailed to the Company’s stockholders or at the time of the Company Stockholders Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The Offer Documents will comply as to form in all material respects with the requirements of the Exchange Act and the rules and regulations thereunder, except that no representation or warranty is made by Parent, Holdings or Merger Sub with respect to statements made or incorporated by reference therein based on information supplied by or on behalf of the Company for inclusion or incorporation by reference therein.

     SECTION 4.06. Brokers. No broker, investment banker, financial advisor or other Person, other than Lazard Frères K.K., the fees and expenses of which will be paid by Parent, is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with the Offer, the Merger and the other Transactions based upon arrangements made by or on behalf of Parent or any of its affiliates.

30

     SECTION 4.07. Absence of Litigation. There is no suit, action, investigation or proceeding pending or, to the knowledge of Parent, threatened against Parent or any subsidiary of Parent that would reasonably be expected to, individually or in the aggregate, have a Parent Material Adverse Effect.

     SECTION 4.08. Ownership of Company Common Stock. Except as set forth in the letter, dated as of the date of this Agreement, from Parent to the Company, none of Parent, Holdings, Merger Sub or any of their affiliates owns (within the meaning of Section 13 of the Exchange Act and the rules and regulations promulgated thereunder) any Company Common Stock or holds any rights to acquire any Company Common Stock except pursuant to this Agreement.

     SECTION 4.09. Available Funds. Parent, Holdings and Merger Sub have funds available sufficient to consummate the Offer and the Merger on the terms contemplated by this Agreement and, at the expiration of the Offer and the Effective Time, Parent, Holdings and Merger Sub will have available all of the funds necessary for the acquisition of all shares of Company Common Stock pursuant to the Offer and the Merger, as the case may be, to pay all fees and expenses in connection therewith, to make payments pursuant to Section 6.04 and to perform their respective obligations under this Agreement.

ARTICLE V

Covenants Relating to Conduct of Business

     SECTION 5.01. Conduct of Business of the Company. Except for matters set forth in Section 5.01 of the Company Disclosure Letter or otherwise expressly permitted or required by this Agreement or required by applicable Law, from the date of this Agreement to the Effective Time, the Company shall, and shall cause each Company Subsidiary to, conduct its business in the ordinary course in substantially the same manner as previously conducted and, to the extent consistent therewith, use all reasonable efforts to preserve intact its current business organization, use all reasonable efforts to keep available the services of its current officers and employees and use all reasonable efforts to keep its present relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition, except for matters set forth in Section 5.01 of the Company Disclosure Letter or otherwise expressly permitted or required by this Agreement or required by applicable Law, from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any Company Subsidiary to, do any of the following without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):

     (a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock, other than dividends and distributions by a direct or indirect wholly owned subsidiary of the Company to its parent, (ii) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (iii) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any Company Subsidiary or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities, except for acquisitions of shares of capital stock of the Company in connection with withholding to satisfy tax obligations with respect to the exercise or vesting of equity awards, acquisitions of shares of capital stock of the Company in connection with the forfeiture of equity awards, or acquisitions of shares of capital stock of the Company in connection with the net exercise of equity awards, in each case outstanding on the date of this Agreement and in accordance with their terms as in effect on the date of this Agreement;

31

     (b) issue, deliver, sell or grant (i) any shares of its capital stock, (ii) any other securities, including any securities convertible into or exchangeable for, or any options, warrants or rights to acquire, any shares of capital stock of the Company, or (iii) any “phantom” stock, “phantom” stock rights, stock appreciation rights, restricted stock units, stock-based performance units or other rights that are linked to the value of Company Common Stock or the value of the Company or any part thereof, other than the issuance of Company Common Stock (and associated Company Rights) upon the exercise of Company Stock Options or Company SARs or upon the vesting of Company RSUs, in each case outstanding on the date of this Agreement and in accordance with their terms as in effect on the date of this Agreement;

     (c) amend its certificate of incorporation, by-laws or other comparable organizational documents, or adopt a plan or agreement of complete or partial liquidation or dissolution;

     (d) acquire or agree to acquire, in a single transaction or a series of related transactions, (i) whether by merging or consolidating with, or by purchasing an equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, limited liability company, joint venture, association or other business organization or division thereof or any other Person, or (ii) any assets that are material, individually or in the aggregate, to the Company and the Company Subsidiaries, taken as a whole;

     (e) (i) adopt, enter into, establish, terminate, amend or modify any collective bargaining agreement, Company Benefit Plan or Company Benefit Agreement, (ii) increase in any manner the compensation or benefits of, or pay any bonus to, or grant any loan to, any Company Personnel, except for increases in base salary and cash bonuses in the ordinary course of business consistent with past practice, (iii) pay or provide to any Company Personnel any material compensation or benefit not provided for under a Company Benefit Plan or Company Benefit Agreement as in effect on the date of this Agreement, other than the payment of base cash compensation in the ordinary course of business consistent with past practice, (iv) grant or amend any awards under any Company Benefit Plan (including the grant or amendment of any equity or equity-based or related compensation), except as otherwise permitted pursuant to Section 5.01(b), or remove or modify existing restrictions in any Company Benefit Plan or Company Benefit Agreement or awards made thereunder, (v) grant any severance, separation, change in control, retention, termination or similar compensation or benefits to, or increase in any manner the severance, separation, change in control, retention, termination or similar compensation or benefits of, any Company Personnel, other than by operation of the terms of any Company Benefit Plan or Company Benefit Agreement as in effect on the date of this Agreement, (vi) enter into any trust, annuity or insurance Contract or similar agreement with respect to, or take any action to fund or in any other way secure the payment of compensation or benefits under, any Company Benefit Plan or Company Benefit Agreement, (vii) take any action to accelerate the time of payment or vesting of any compensation or benefits under any Company Benefit Plan or Company Benefit Agreement, (viii) make any material determination under any Company Benefit Plan or Company Benefit Agreement that is inconsistent with the ordinary course of business or past practice or (ix) hire any executive officers or promote any employee into an executive officer position, in each case except as required to ensure that any Company Benefit Plan or Company Benefit Agreement in effect on the date of this Agreement is not out of compliance with applicable Law or as required to comply with any Company Benefit Plan or Company Benefit Agreement in effect on the date of this Agreement or as specifically required pursuant to this Agreement (and, in each case, only to the extent the Compensation Committee of the Company Board has duly approved (by vote of members of the Compensation Committee who have been determined by the Company Board to be “independent directors” within the meaning of Rule 14d-10(d)(2) under the Exchange Act at the time of such approval) the arrangements resulting from such action as an Employment Compensation Arrangement and taken all other actions necessary to satisfy the requirements of the non-exclusive safe harbor under Rule 14d-10(d)(2) under the Exchange Act with respect to such arrangements); provided that the foregoing clauses (i)-(ix) shall not restrict the Company or any of the Company Subsidiaries from entering into or making available to newly hired non-executive Company Personnel or to non-executive Company Personnel, in the context of promotions based on job performance or workplace requirements, in each case in the ordinary course of business, plans, agreements, benefits and compensation arrangements (including incentive grants) that have a value that is consistent with the past practice of making compensation and benefits available to newly hired or promoted employees in similar positions, except that the amount of any incentive grants shall be prorated based on a reasonable estimate of the amount of time from the date of grant through the expected date of completion of the Offer;

32

     (f) make any change in accounting methods, principles or practices materially affecting the reported consolidated assets, liabilities or results of operations of the Company, except as may be required (i) by GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization, or (ii) by applicable Law, including Regulation S-X under the Securities Act;

     (g) sell, lease (as lessor), license or otherwise dispose of (including through any “spin off”), or pledge, encumber or otherwise subject to any Lien (other than a Permitted Lien), any properties or assets that are material, individually or in the aggregate, to the Company and the Company Subsidiaries, taken as a whole, except sales or other dispositions of inventory and excess or obsolete assets in the ordinary course of business consistent with past practice;

33

     (h) (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any Company Subsidiary, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than to or in (A) the Company or any direct or indirect wholly owned subsidiary of the Company and (B) any joint venture of the Company or any Company Subsidiary in the ordinary course of business consistent with past practice;

     (i) other than in accordance with the Company’s 2009 capital expenditure budget set forth in Section 5.01(i) of the Company Disclosure Letter, make or agree to make any capital expenditure or expenditures that in the aggregate are in excess of $250,000;

     (j) except as required by Law or as otherwise is in the ordinary course of business consistent with past practice, make or change any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, amend any material Tax Return or file any claims for material Tax refunds, enter into any material closing agreement, settle any material Tax claim, audit or assessment or surrender any right to claim a material Tax refund, offset or other reduction in Tax liability;

     (k) waive, release, assign, discharge, settle or compromise any pending or threatened claim, action, litigation, arbitration or proceeding, other than any compromises, settlements or agreements that involve only the payment of monetary damages (net of insurance) not in excess of $100,000 individually or $300,000 in the aggregate;

     (l) subject to the Company’s rights under Sections 5.04 and 8.05, waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement to which the Company or any Company Subsidiary is a party;

     (m) engage in any business other than the business substantially as presently conducted by the Company and the Company Subsidiaries;

     (n) enter into, modify or amend in a manner that is materially adverse to the Company, or extend or terminate, or waive, release or assign any material rights or claims under any Specified Contract (other than any expiration of such Specified Contract in accordance with its terms) or any Contract that, if existing on the date hereof, would have been a Specified Contract;

     (o) sell, transfer, assign, license or otherwise dispose of any right, title or interest in any Intellectual Property owned by or licensed to the Company or any Company Subsidiary that is material to the business of the Company and the Company Subsidiaries, taken as a whole, other than in the ordinary course of business consistent with past practice;

34

     (p) engage in any discounting, rebate, promotional or other special incentive arrangements with respect to the sale of any of the Company’s or the Company Subsidiaries’ finished products, other than in the ordinary course of business consistent with past practice; or

     (q) authorize, commit or agree to take any of the foregoing actions.

     SECTION 5.02. No Frustration of Conditions. The Company and Parent shall not, and shall not permit any of their respective subsidiaries to, take any action (except as otherwise permitted by Section 5.04, 6.14 or 8.01) with the intent of causing, and that would or is reasonably likely to result in, any Offer Condition or any condition to the Merger set forth in Article VII not being satisfied.

     SECTION 5.03. Advice of Changes. The Company shall promptly give Parent written notice upon becoming aware of any material event, development or occurrence that would reasonably be expected to give rise to a failure of any Offer Condition or any condition to the Merger set forth in Article VII. Parent shall promptly give the Company written notice upon becoming aware of any material event, development or occurrence that would reasonably be expected to give rise to a failure of any Offer Condition or any condition to the Merger set forth in Article VII.

     SECTION 5.04. No Solicitation. (a) The Company shall not, nor shall it authorize or permit any Company Subsidiary to, nor shall it authorize or permit any officer, director or employee of, or any investment banker, attorney or other advisor or representative (collectively, “Representatives”) of, the Company or any Company Subsidiary to, (i) directly or indirectly solicit, initiate or knowingly encourage the submission of any Company Takeover Proposal, (ii) enter into any agreement or understanding with respect to any Company Takeover Proposal or (iii) directly or indirectly participate in any discussions or negotiations regarding, or furnish to any Person any information with respect to, or take any other action to facilitate or encourage any inquiries or the making of any proposal that constitutes, or could reasonably be expected to lead to, any Company Takeover Proposal; provided, however, that prior to the Offer Closing Date, in response to a bona fide written Company Takeover Proposal that was not solicited by the Company, any Company Subsidiary or any of their respective Representatives, that did not otherwise result from a breach of this Section 5.04(a) and that the Company Board determines, in good faith, after consultation with the Company’s outside counsel and independent financial advisor, constitutes or is reasonably likely to result in a Superior Company Proposal (a “Qualifying Company Takeover Proposal”), the Company may (A) furnish information with respect to the Company to the Person making such Qualifying Company Takeover Proposal and its Representatives pursuant to an Acceptable Confidentiality Agreement so long as the Company also provides Parent, in accordance with the terms of the Confidentiality Agreement, any non-public information with respect to the Company provided to such other Person which was not previously provided to Parent, and (B) participate in discussions or negotiations with such Person and its Representatives regarding such Qualifying Company Takeover Proposal, including soliciting the making of a revised Qualifying Company Takeover Proposal and waiving standstill provisions in any confidentiality agreement with such Person. Any violation of the restrictions set forth in the preceding sentence by any Representative or affiliate of the Company or any Company Subsidiary shall be deemed to be a breach of this Section 5.04(a) by the Company. The Company shall, and shall cause its Representatives to, immediately (i) cease all discussions and negotiations regarding any proposal pending on the date of this Agreement that constitutes, or could reasonably be expected to lead to, a Company Takeover Proposal, (ii) request the prompt return or destruction of all confidential information previously furnished to any Person within the last 18 months for the purposes of evaluating a possible Company Takeover Proposal and (iii) dismantle or shut down any physical or electronic data rooms relating to a possible Company Takeover Proposal and prohibit any access to any third party to any such physical or electronic data room.

35

     (b) Neither the Company Board nor any committee thereof shall (i) (A) withdraw or modify in a manner adverse to Parent, Holdings or Merger Sub, or propose publicly to withdraw or modify in a manner adverse to Parent, Holdings or Merger Sub, the approval or recommendation by the Company Board or any such committee of this Agreement, the Offer, the Merger or the other Transactions or (B) approve or recommend, or propose publicly to approve or recommend, any Company Takeover Proposal or resolve or agree to take any such action (any action described in this clause (i) being referred to herein as an “Adverse Recommendation Change”) or (ii) approve any letter of intent, memorandum of understanding, agreement in principle, acquisition agreement, option agreement, merger agreement, joint venture agreement, partnership agreement or other agreement relating to any Company Takeover Proposal (other than an Acceptable Confidentiality Agreement entered into in accordance with Section 5.03(a)), or resolve, agree or publicly propose to take any such action. Notwithstanding the foregoing, if, prior to the Offer Closing Date, the Company Board receives a Superior Company Proposal or there occurs an Intervening Event and, in either case, as a result thereof, the Company Board determines, in good faith, based on the advice of outside counsel, that it is necessary to do so in order to comply with their fiduciary obligations, the Company Board may make an Adverse Recommendation Change and, in the case of a Superior Company Proposal, in connection therewith, approve or recommend such Superior Company Proposal; provided, however, that the Company Board may not make an Adverse Recommendation Change unless (i) the Company has provided written notice to Parent that the Company Board intends to effect an Adverse Recommendation Change (a “Notice of Recommendation Change”), which notice shall specify the reasons therefor, (x) in the case of a Superior Company Proposal, include the material terms and conditions of any such Superior Company Proposal and attach a copy of the most current draft of any written agreement relating thereto and (y) in the case of an Intervening Event, include a description in reasonable detail of such Intervening Event, (ii) the Company has negotiated in good faith (including by complying with its obligations under the following sentence) with Parent with respect to any changes to the terms of this Agreement proposed by Parent for at least five business days following receipt by Parent of such Notice of Recommendation Change and (iii) taking into account any changes to the terms of this Agreement proposed by Parent to the Company, the Company Board has determined that any such Superior Company Proposal remains a Superior Company Proposal or that effecting an Adverse Recommendation Change as a result of such Intervening Event remains necessary in order for the Company Board to comply with their fiduciary obligations. The Company shall keep confidential any proposals made by Parent to revise the terms of this Agreement, other than in the event of any amendment to this Agreement and to the extent required to be disclosed in any filing with the SEC.

     (c) The Company shall promptly (and in any event within 24 hours) advise Parent orally and in writing of (i) any Company Takeover Proposal or any inquiry with respect to or that could reasonably be expected to lead to any Company Takeover Proposal and (ii) the material terms and conditions of any such Company Takeover Proposal or inquiry and the identity of the Person making any such Company Takeover Proposal or inquiry. If in writing, the Company shall provide Parent with a copy of any such Company Takeover Proposal. The Company shall keep Parent fully informed on a current basis of the status and any related developments, discussions and negotiations related to any such Company Takeover Proposal or inquiry.

36

     (d) Nothing contained in this Section 5.04 or elsewhere in this Agreement shall prohibit the Company from (i) taking and disclosing to its stockholders a position contemplated by Rule 14d-9 or Rule 14e-2(a) promulgated under the Exchange Act or (ii) making any disclosure to its stockholders if the Company Board determines, in good faith, after consultation with the Company’s outside counsel, that failure to do so would be inconsistent with its fiduciary duties under applicable Law.

     (e) For purposes of this Agreement:

     “Acceptable Confidentiality Agreement” means a customary confidentiality agreement that contains confidentiality, standstill and non-solicitation (with respect to employees of the Company) provisions that are no less favorable in the aggregate to the Company than those contained in the Confidentiality Agreement.

     “Company Takeover Proposal” means any inquiry, proposal or offer from any Person or group relating to (a) any direct or indirect acquisition or purchase, in a single transaction or a series of transactions, of (i) 10% or more (based on the fair market value thereof, as determined by the Company Board) of assets (including capital stock of the Company Subsidiaries) of the Company and Company Subsidiaries, taken as a whole, or (ii) 10% or more of the outstanding shares of any class of capital stock of the Company or (b) any tender offer, exchange offer, merger, consolidation, business combination, recapitalization, liquidation, dissolution, binding share exchange or similar transaction involving the Company, any of the Company Subsidiaries or Vivelle, other than, in each case, the transactions contemplated by this Agreement.

     “Intervening Event” means an event, fact, circumstance, development or other information, unknown to the Company Board as of the date of this Agreement, which becomes known prior to the Offer Closing Date; provided, however, that any change or development relating to any clinical trial of one or more products or product candidates of the Company or any of the Company Subsidiaries or any determination or communication by the FDA or any other Governmental Entity relating to any product or product candidate of the Company or any of the Company Subsidiaries shall not constitute an “Intervening Event”.

     “Superior Company Proposal” means any bona fide Company Takeover Proposal that if consummated would result in a person or group (or the shareholders of any person) owning, directly or indirectly, (a) all or substantially all of any class of equity securities of the Company or of the surviving entity in a merger or the resulting direct or indirect parent of the Company or such surviving entity or (b) all or substantially all of the assets of the Company and Company Subsidiaries, taken as a whole, (i) on terms which the Company Board determines, in good faith, after consultation with the Company’s outside counsel and independent financial advisor, would result in greater value to the stockholders of the Company from a financial point of view than the Transactions, taking into account all the terms and conditions of such proposal and this Agreement (including any changes to the financial terms of this Agreement proposed by Parent to the Company in response to such proposal or otherwise), (ii) that is reasonably capable of being completed, taking into account all financial, regulatory, legal and other aspects of such proposal and (iii) that is not subject to any financing condition.

37

ARTICLE VI

Additional Agreements

     SECTION 6.01. Preparation of Proxy Statement; Stockholders Meeting. (a) If the adoption of this Agreement by the Company’s stockholders is required by Law, the Company shall, as soon as practicable following the expiration of the Offer, prepare and file with the SEC the Proxy Statement in preliminary form, and each of the Company and Parent shall use its reasonable efforts to respond as promptly as practicable to any comments of the SEC with respect thereto. The Company shall promptly notify Parent of the receipt of any comments from the SEC or its staff and of any request by the SEC or its staff for amendments or supplements to the Proxy Statement or for additional information and shall supply Parent with copies of all correspondence between the Company or any of its representatives, on the one hand, and the SEC or its staff, on the other hand, with respect to the Proxy Statement. If at any time prior to receipt of the Company Stockholder Approval there shall occur any event that should be set forth in an amendment or supplement to the Proxy Statement, the Company shall promptly prepare and mail to its stockholders such an amendment or supplement. The Company shall provide Parent and its counsel an opportunity to review and to propose comments to the Proxy Statement prior to its being filed with the SEC and shall provide Parent and its counsel an opportunity to review all amendments and supplements to the Proxy Statement and all responses to requests for additional information prior to their being filed with, or sent to, the SEC. The Company shall use its reasonable efforts to cause the Proxy Statement to be mailed to the Company’s stockholders as promptly as practicable after filing with the SEC.

     (b) If the adoption of this Agreement by the Company’s stockholders is required by Law, the Company shall, at Parent’s request, as soon as practicable following the expiration of the Offer, duly call, give notice of, convene and hold a meeting of its stockholders (the “Company Stockholders Meeting”) for the purpose of seeking the Company Stockholder Approval. The Company shall, through the Company Board, recommend to its stockholders that they give the Company Stockholder Approval, except to the extent that the Company Board shall have withdrawn or modified its approval or recommendation of this Agreement, the Offer or the Merger as permitted by Section 5.04(b). Notwithstanding the foregoing, if Parent, Holdings, Merger Sub or any other subsidiary of Parent acquires at least 90.0% of the outstanding shares of the Company Common Stock, the parties shall, at the request of Parent, take all necessary and appropriate action to cause the Merger to become effective as soon as practicable after the expiration of the Offer without a stockholders meeting in accordance with Section 253 of the DGCL.

38

     (c) Parent shall cause all shares of Company Common Stock purchased pursuant to the Offer and all other shares of Company Common Stock owned by Parent, Holdings, Merger Sub or any other subsidiary of Parent to be voted in favor of the adoption of this Agreement.

     SECTION 6.02. Access to Information; Confidentiality. Except if prohibited by any applicable Law, the Company shall, and shall cause each of the Company Subsidiaries to, afford to Parent and to Parent’s Representatives, reasonable access during normal business hours during the period prior to the Effective Time to all their respective properties, books and records, Contracts and Company Personnel and, during such period, the Company shall, and shall cause each Company Subsidiary to, furnish, as promptly as practicable, to Parent all information concerning its business, properties and Company Personnel as Parent may reasonably request; provided, however, that the Company may withhold any document or information that is subject to the terms of a confidentiality agreement with a third party (provided that the Company shall use its reasonable best efforts to obtain the required consent of such third party to such access or disclosure) or subject to any attorney-client privilege (provided that the Company shall use its reasonable best efforts to allow for such access or disclosure (or as much of it as possible) in a manner that does not result in a loss of attorney-client privilege). If any material is withheld by the Company pursuant to the proviso to the preceding sentence, the Company shall inform Parent as to the general nature of what is being withheld. All information exchanged pursuant to this Section 6.02 shall be subject to the confidentiality letter agreement dated June 25, 2008, between the Company and Parent (the “Confidentiality Agreement”).

     SECTION 6.03. Reasonable Efforts; Notification. (a) Upon the terms and subject to the conditions set forth in this Agreement, each of the parties shall use its reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the Offer, the Merger and the other Transactions, including (i) the observance of all applicable waiting periods and the obtaining of all necessary actions or non-actions, waivers, consents and approvals from Governmental Entities and the making of all necessary registrations and filings (including filings with Governmental Entities) and the taking of all reasonable steps as may be necessary to obtain an approval or waiver from, or to avoid an action or proceeding by, any Governmental Entity, (ii) the obtaining of all necessary consents, approvals or waivers from third Persons, (iii) the defending of any lawsuits or other legal proceedings, whether judicial or administrative, challenging this Agreement or the consummation of the Transactions, including seeking to have any stay or temporary restraining order entered by any court or other Governmental Entity vacated or reversed and (iv) the execution and delivery of any additional instruments necessary to consummate the Transactions and to fully carry out the purposes of this Agreement; provided, however, that Parent or any of its affiliates shall not be required to (A) take or refrain from taking any action or agree to any restriction or condition (including any sales, divestitures, dispositions or changes in business practice) with respect to any of the existing or future assets or operations of the Company or any of the Company Subsidiaries that would, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect or (B) agree to, or proffer to, divest or hold separate any assets or any portion of any business of Parent or any of its affiliates (other than the Company or any of the Company Subsidiaries), in each case in order to resolve any objection to the Transactions raised by any United States Federal, state or local Governmental Entity. In connection with and without limiting the foregoing, the Company and the Company Board shall (A) take all action necessary to ensure that no state takeover statute or similar statute or regulation is or becomes applicable to any Transaction or this Agreement and (B) if any state takeover statute or similar statute or regulation becomes applicable to this Agreement, take all action necessary to ensure that the Transactions may be consummated as promptly as practicable on the terms contemplated by this Agreement and otherwise to minimize the effect of such statute or regulation on the Transactions.

39

     (b) The Company shall give prompt notice to Parent, and Parent, Holdings or Merger Sub shall give prompt notice to the Company, either orally or in writing, of (i) any representation or warranty made by it contained in this Agreement becoming untrue, unless the failure of any such representation or warranty to be true would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect or Parent Material Adverse Effect, as applicable, or (ii) the failure by it to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it under this Agreement, unless such failure would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect or Parent Material Adverse Effect, as applicable; provided, however, that no such notification shall affect the representations, warranties, covenants or agreements of the parties or the conditions to the obligations of the parties under this Agreement.

     SECTION 6.04. Equity Awards. (a) As of the Effective Time, the holder of any unexercised Company Stock Option (vested or unvested), Company SAR (vested or unvested), Company Restricted Share or Company RSU shall be entitled to receive (and Parent shall ensure that the Company shall deliver), in full satisfaction of the rights of the holder of such Company Stock Option, Company SAR, Company Restricted Share or Company RSU, as applicable:

     (i) in the case of each unexercised Company Stock Option or Company SAR, whether vested or unvested, that is outstanding immediately prior to the Effective Time, such Company Stock Option or Company SAR shall be canceled, with the holder of such Company Stock Option or Company SAR becoming entitled to receive an amount in cash equal to (A) the excess, if any, of (1) the Offer Price minus (2) the exercise price per share of Company Common Stock subject to such Company Stock Option or Company SAR, multiplied by (B) the number of shares of Company Common Stock subject to such Company Stock Option or Company SAR immediately prior to the Effective Time, which amount shall be payable to such holder at or as soon as practicable following the Effective Time; and

     (ii) in the case of each outstanding Company Restricted Share or Company RSU, such Company Restricted Share or Company RSU shall be converted into the right to receive the Merger Consideration pursuant to Section 2.07(d).

     (b) All amounts payable pursuant to this Section 6.04 shall be subject to any required withholding of taxes and shall be paid without interest. To the extent amounts are so withheld and paid over to the appropriate taxing authority, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding was made under this Section 6.04.

40

     (c) The Company shall take all reasonable steps as may be required to cause the transactions contemplated by this Section 6.04 and any other dispositions of Company equity securities (including derivative securities) in connection with this Agreement by each individual who is a director or officer of the Company subject to Section 16 of the Exchange Act to be exempt under Rule 16b-3 under the Exchange Act.

     (d) In this Agreement:

     “Company Restricted Share” means any share of Company Common Stock subject to vesting or forfeiture granted under a Company Stock Plan.

     “Company RSU” means any share of Company Common Stock subject to outstanding restricted stock units granted under a Company Stock Plan.

     “Company SAR” means any stock appreciation right linked to the price of Company Common Stock granted under a Company Stock Plan.

     “Company Stock Option” means (i) any option to purchase Company Common Stock granted under a Company Stock Plan and (ii) any option to purchase Company Common Stock not granted under a Company Stock Plan.

     “Company Stock Plans” means the Company 1999 Long-Term Incentive Plan, as amended, and the Company 2009 Equity Incentive Plan.

     SECTION 6.05. Employee Matters. (a) For a period of one year following the Effective Time, Parent shall provide or cause the Surviving Corporation to provide to employees of the Company and the Company Subsidiaries who remain in the employment of the Surviving Corporation and its subsidiaries (the “Continuing Employees”) (i) salary and incentive opportunities that are substantially comparable in the aggregate (which shall include value attributable to equity-based compensation, determined by the Company in the same manner as in connection with its most recent prior annual grant cycle, except that such value shall not take into account any reductions made thereto as a result of new hire sign-on awards) to those provided to such employees by the Company or the Company Subsidiaries during the 12-month period ending immediately prior to the Effective Time and (ii) employee benefits that are substantially comparable in the aggregate to those provided to such employees by the Company or the Company Subsidiaries during the 12-month period ending immediately prior to the Effective Time; provided, however, that neither Parent nor any of its subsidiaries shall have any obligation to provide equity or equity-based compensation. Parent and the Company agree to the matters set forth in Section 6.05(a) of the Company Disclosure Letter.

     (b) To the extent that any employee benefit plan of Parent or its subsidiaries is made available to any Continuing Employee, on or following the Effective Time, Parent shall cause to be granted to such Continuing Employee credit for all service with the Company and Company Subsidiaries prior to the Effective Time (as well as service with any predecessor employer of the Company or any such Company Subsidiary), to the extent such service was recognized by the Company or such Company Subsidiary for similar or analogous purposes prior to the Effective Time (such service, “Pre-Closing Service”) for all purposes, including determining eligibility to participate, level of benefits, vesting and benefit accruals; provided, however, that Pre-Closing Service need not be recognized (i) to the extent that such recognition would result in any duplication of benefits for the same period of service or (ii) to the extent that service of employees of the Company or any Company Subsidiary other than the Continuing Employees is not so credited.

41

     (c) With respect to any welfare plan maintained by Parent or any of its subsidiaries in which any Continuing Employee commences to participate after the Effective Time, Parent shall, and shall cause the Surviving Corporation to, (i) waive all limitations as to preexisting conditions and exclusions with respect to participation and coverage requirements applicable to such employees to the extent such conditions and exclusions were satisfied or did not apply to such employees under the welfare plans of the Company and the Company Subsidiaries prior to such commencement of participation and (ii) provide each Continuing Employee with credit for any co-payments and deductibles paid in the plan year of such commencement of participation in satisfying any analogous deductible or out-of-pocket maximum requirements to the extent applicable under any such plan.

     (d) Prior to the Offer Closing Date, the Company shall use reasonable efforts to cause the Company’s Nonqualified Deferred Compensation Plan Amended and Restated Master Trust Agreement (the “Trust Agreement”) to be amended so that none of the transactions contemplated by this Agreement (including the obtaining of the Company Stockholder Approval (if required by applicable Law), the consummation of the Offer or the Merger) shall constitute a “Change of Control” for purposes of the Trust Agreement.

     (e) The provisions of this Section 6.05 are solely for the benefit of the parties to this Agreement, and no Company Personnel or any other individual associated therewith (including any beneficiary or dependent thereof) shall be regarded for any purpose as a third-party beneficiary of this Agreement (except to the extent provided in Section 9.07 with respect to Section 6.06), and no provision of this Section 6.05 shall create such rights in any such Persons in respect of any benefits that may be provided, directly or indirectly, under any Company Benefit Plan or Company Benefit Agreement or any employee program or any plan or arrangement of Parent or any of its subsidiaries. No provision of this Section 6.05 shall be construed to limit the right of Parent or any of its subsidiaries to terminate the employment of any Continuing Employee at any time.

     SECTION 6.06. Indemnification. (a) Parent, Holdings and Merger Sub agree that all rights to indemnification and exculpation from liabilities for acts or omissions occurring at or prior to the Effective Time (and rights for advancement of expenses) now existing in favor of the current or former directors or officers of the Company and the Company Subsidiaries as provided in their respective certificates of incorporation or by-laws (or comparable organizational documents) and any indemnification or other agreements of the Company shall be assumed by the Surviving Corporation in the Merger, without further action, at the Effective Time, and shall survive the Merger and shall continue in full force and effect in accordance with their terms with respect to any claims against such directors or officers arising out of such acts or omissions, and Parent shall ensure that the Surviving Corporation complies with and honors the foregoing obligations.

42

     (b) For a period of not less than six years after the Effective Time, Parent shall cause to be maintained in effect the current or substantially similar policies of directors’ and officers’ liability insurance maintained by the Company (provided that Parent may substitute therefor policies with reputable and financially sound carriers of at least the same coverage and amounts containing terms and conditions which are no less advantageous) with respect to claims arising from or related to facts or events which occurred at or prior to the Effective Time (the “D&O Insurance”) for all persons who are currently covered by such D&O Insurance (the “Insured Parties”); provided, however, that Parent shall not be obligated to make annual premium payments for such insurance to the extent such premiums exceed 250% of the last annual premium paid prior to the date hereof by the Company for such insurance (such 250% amount, the “Maximum Premium”). The Company represents to Parent that the annual premium under such insurance is approximately $725,745 for the current policy year. If such insurance coverage cannot be obtained at all, or can only be obtained at an annual premium in excess of the Maximum Premium, Parent shall maintain the most advantageous policies of directors’ and officers’ insurance obtainable for an annual premium equal to the Maximum Premium.

     (c) This Section 6.06 is intended to be for the benefit of, and shall be enforceable by, each of the Insured Parties and their respective heirs and legal representatives. The indemnification provided for herein shall not be deemed exclusive of any other rights to which an Insured Party is entitled, whether pursuant to Law, contract or otherwise.

     (d) Parent shall pay all reasonable expenses, including reasonable attorneys’ fees, that may be incurred by any Insured Party in enforcing the indemnity and other obligations provided in this Section 6.06.

     SECTION 6.07. Fees and Expenses. (a) Except as provided below, all fees and expenses incurred in connection with this Agreement, the Offer, the Merger and the other Transactions shall be paid by the party incurring such fees or expenses, whether or not the Offer or the Merger is consummated.

     (b) The Company shall pay to Parent a fee of $17,150,000 (the “Company Termination Fee”) if:

     (i) the Company terminates this Agreement pursuant to Section 8.01(f);

     (ii) Parent terminates this Agreement pursuant to Section 8.01(d); or

     (iii) (A) after the date of this Agreement, a Company Takeover Proposal or an intention to make a Company Takeover Proposal (whether or not conditional) is publicly proposed or announced or otherwise becomes publicly known and such Company Takeover Proposal is not withdrawn prior to the final expiration date of the Offer, (B) the Minimum Tender Condition is not satisfied at the final expiration date of the Offer, (C) thereafter this Agreement is terminated by either Parent or the Company pursuant to Section 8.01(b)(i) and (D) within 12 months of such termination the Company enters into a definitive agreement to consummate the transactions contemplated by any Company Takeover Proposal or the Company consummates the transactions contemplated by any Company Takeover Proposal.

43

For purposes of this Section 6.07(b), the term “Company Takeover Proposal” shall have the meaning set forth in the definition of Company Takeover Proposal contained in Section 5.04(e) except that all references to 10% shall be deemed references to 50%. Any fee due under this Section 6.07(b) shall be reduced by any amount paid by the Company to Parent pursuant to Section 6.07(c), shall be paid by wire transfer of same-day funds to an account designated by Parent, and shall be paid (x) in the case of clause (i) above, prior to or simultaneously with the termination of this Agreement, (y) in the case of clause (ii) above, within one business day after such termination and (z) in the case of clause (iii) above, at the time of the earlier to occur of the two events referred to in clause (D) thereof.

     (c) The Company shall reimburse Parent, Holdings and Merger Sub for all out-of-pocket expenses actually incurred or payable by them in connection with the Transactions, up to a maximum aggregate amount of $2,000,000 (the “Expense Reimbursement”) if (i) the Minimum Tender Condition is not satisfied at the final expiration date of the Offer and (ii) thereafter this Agreement is terminated by either Parent or the Company pursuant to Section 8.01(b)(i). Any amount due under this Section 6.07(c) shall be paid by wire transfer of same-day funds to an account designated by Parent, and shall be paid within one business day after such termination of this Agreement.

     (d) The Company acknowledges and agrees that the agreements contained in Section 6.07(b) and 6.07(c) are an integral part of the Transactions, and that, without these agreements, Parent, Holdings and Merger Sub would not have entered into this Agreement; accordingly, if the Company fails to promptly pay any amount due pursuant to Section 6.07(b) or 6.07(c), and, in order to obtain such payment, Parent commences a suit, action or other proceeding that results in a Judgment against the Company for the Company Termination Fee or the Expense Reimbursement, the Company shall pay to Parent its reasonable costs and expenses (including reasonable attorneys’ fees and expenses) in connection with such suit, action or other proceeding.

     (e) Acceptance by Parent of the fee due under Section 6.07(b)(i) shall constitute acceptance by Parent of the validity of any termination of this Agreement under Section 8.01(f). Parent shall be deemed not to have accepted such fee if Parent returns such fee to the Company, by wire transfer of same-day funds to an account designated by the Company, within 30 days after Parent’s receipt of such fee. If Parent accepts payment of the Company Termination Fee described in this Section 6.07, such fee, and the right to receive any amounts payable by the Company pursuant to Section 6.07(f), shall constitute the sole and exclusive remedy of Parent, Holdings and Merger Sub in connection with any termination of this Agreement pursuant to Section 6.07(b)(i) and, in the event of any such termination, the Company shall have no remedies against Parent, Holdings or Merger Sub for any breach of this Agreement (other than Section 4.06 or the last sentence of Section 6.02).

     (f) (i) The filing fee required to be paid in connection with the filing required by the HSR Act, (ii) the transaction fee required to be paid by Parent in connection with the filing of the Offer Documents and (iii) the fees of any information agent, depositary, financial printer or other service provider retained in connection with the Offer by either Parent or the Company shall be shared equally by Parent and the Company.

44

     SECTION 6.08. Public Announcements. Parent, Holdings and Merger Sub, on the one hand, and the Company, on the other hand, shall consult with each other before issuing, and provide each other the opportunity to review and comment upon, any press release or other public statements with respect to the Offer, the Merger and the other Transactions, and shall not issue any such press release or make any such public statement prior to such consultation, except as may be required by applicable Law, court process or by obligations pursuant to any listing agreement with any national securities exchange. The parties agree that the initial press release to be issued with respect to the Transactions shall be in the form heretofore agreed to by the parties.

     SECTION 6.09. Transfer Taxes. Except as otherwise provided in the third sentence of Section 2.08(b), all stock transfer, real estate transfer, documentary, stamp, recording and other similar Taxes imposed by the United States or Japan or any state, county or local taxing authority within the United States or Japan (including interest, penalties and additions to any such Taxes) (“Transfer Taxes”) incurred in connection with the Offer or Merger shall be paid by either Merger Sub or the Surviving Corporation, and the Company shall cooperate with Merger Sub and Parent in preparing, executing and filing any Tax Returns with respect to such Transfer Taxes.

     SECTION 6.10. Directors. Promptly upon the acceptance for payment of, and payment by Merger Sub for, any shares of Company Common Stock pursuant to the Offer, Merger Sub shall be entitled to designate such number of directors on the Company Board as will give Merger Sub, subject to compliance with Section 14(f) of the Exchange Act, representation on the Company Board equal to at least that number of directors, rounded up to the next whole number, which is the product of (a) the total number of directors on the Company Board (giving effect to the directors elected pursuant to this sentence) multiplied by (b) the percentage that (i) such number of shares of Company Common Stock so accepted for payment and paid for by Merger Sub plus the number of shares of Company Common Stock otherwise owned by Parent, Holdings or Merger Sub or any other subsidiary of Parent bears to (ii) the number of such shares outstanding, and the Company shall, at such time, cause Merger Sub’s designees to be so elected; provided, however, that in the event that Merger Sub’s designees are appointed or elected to the Company Board, until the Effective Time the Company Board shall have at least three directors who are directors on the date of this Agreement and who will be independent for purposes of Rule 10A-3 under the Exchange Act (the “Independent Directors”); and provided further that, in such event, if the number of Independent Directors shall be reduced below three for any reason whatsoever, any remaining Independent Directors (or Independent Director, if there shall be only one remaining) shall be entitled to designate Persons to fill such vacancies who shall be deemed to be Independent Directors for purposes of this Agreement or, if no Independent Directors then remain, the other directors shall designate three Persons to fill such vacancies who will be independent for purposes of Rule 10A-3 under the Exchange Act, and such Persons shall be deemed to be Independent Directors for purposes of this Agreement. Subject to applicable Law, the Company shall take all action necessary to effect any such election, including mailing to its stockholders the Information Statement containing the information required by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder, and the Company shall make such mailing with the mailing of the Schedule 14D-9 (provided that Merger Sub shall have provided to the Company on a timely basis all information required to be included in the Information Statement with respect to Merger Sub’s designees). In connection with the foregoing, the Company shall promptly, at the option of Merger Sub, either increase the size of the Company Board or obtain the resignation of such number of its current directors as is necessary to enable Merger Sub’s designees to be elected or appointed to the Company Board as provided above.

45

     SECTION 6.11. Company Rights Agreement. The Company Board shall take all further action reasonably requested in writing by Parent (in addition to those actions referred to in Section 3.05) in order to render the Company Rights inapplicable to this Agreement, the Offer, the Merger and the other Transactions. Except as provided above with respect to this Agreement, the Offer, the Merger and the other Transactions, the Company Board shall not, without the prior written consent of Parent, amend, modify, take any action with respect to, or make any determination under, the Company Rights Agreement.

     SECTION 6.12. Stockholder Litigation. The Company shall give Parent the opportunity to participate in the defense or settlement of any stockholder litigation against the Company and its directors relating to any Transaction; provided, however, that no such settlement shall be agreed to without Parent’s consent, such consent not to be unreasonably withheld or delayed.

     SECTION 6.13. Rule 14d-10 Matters. Prior to the scheduled expiration of the Offer, the Company (acting through the Company Board and its Compensation Committee) shall take all such steps as may be required to cause to be exempt under Rule 14d-10(d) promulgated under the Exchange Act any employment compensation, severance or other employee benefit arrangement entered into on or after the date hereof by the Company, Parent or any of their respective affiliates with current or future directors, officers or employees of the Company and its affiliates and to ensure that any such arrangements fall within the safe harbor provisions of such Rule.

     SECTION 6.14. Vivelle Ventures LLC. (a) Notwithstanding anything in this Agreement to the contrary (including Section 5.01), if Novartis Pharmaceuticals Corporation (“Novartis”) serves upon the Company an Offering Notice (as defined in the Limited Liability Company Operating Agreement dated as of May 1, 1999, by and between Novartis and the Company (as amended from time to time, the “LLC Operating Agreement”)) pursuant to the terms and conditions of the LLC Operating Agreement, (i) Parent shall determine, in its sole discretion, whether to sell the Company’s Interest (as defined in the LLC Operating Agreement) or purchase Novartis’s Interest in accordance with the terms and conditions of the LLC Operating Agreement, (ii) Parent shall notify the Company in writing as to whether it desires the Company to sell its Interest or to purchase Novartis’s Interest (“Parent Determination”) on the date that is 30 days from the date on which the Company notified Parent that it received such Offering Notice, (iii) the Company shall not inform Novartis of the Company’s response to such Offering Notice prior to the final day of the period provided in the LLC Operating Agreement for responding to an Offering Notice (the “Response Period”) and (iv) Parent and the Company shall fully consult with respect to the appropriate course of action for the Company to take; provided, however, that (A) if the Offer is extended beyond the initial expiration date of the Offer because (x) the Minimum Tender Condition has not been satisfied at such time, (y) any waiting period under the HSR Act applicable to the purchase of Shares pursuant to the Offer shall not have expired or been terminated at such time or (z) Parent has asserted a condition contained in clauses (i), (ii) or (iii) of Exhibit A at such time, then notwithstanding clause (i) above the Company shall determine, in its sole discretion, whether to sell its Interest or purchase Novartis’s Interest in accordance with the terms and conditions of the LLC Operating Agreement, (B) if the Offer is extended beyond the initial expiration date of the Offer because Parent has asserted a condition contained in clauses (iv), (v), (vii) or (viii) of Exhibit A at such time, then notwithstanding clause (i) above the Company shall provide Parent with the option of determining, in its sole discretion, whether to sell the Company’s Interest or purchase Novartis’s Interest in accordance with the terms and conditions of the LLC Operating Agreement and (C) if (x) Merger Sub has not commenced the Offer within 10 business days after the date of this Agreement and (y) as a result of such failure to commence the Offer, the final day of the Response Period occurs earlier than the initial expiration date of the Offer, then notwithstanding clause (i) above the Company shall determine, in its sole discretion, whether to sell the Company’s Interest or purchase Novartis’s Interest in accordance with the terms and conditions of the LLC Operating Agreement.

46

     (b) If Parent elects to determine whether to sell the Company’s Interest or purchase Novartis’s Interest in accordance with the terms and conditions of the LLC Operating Agreement pursuant to clause (B) of the proviso contained in Section 6.14(a), Parent, Holdings and Merger Sub hereby irrevocably waive all conditions contained in Exhibit A (other than the Minimum Tender Condition and the condition contained in clause (i) of Exhibit A). Any such election by Parent to make the determination in response to an Offering Notice must be provided in writing to the Company with the Parent Determination. Any Parent Determination, and any such election, shall be irrevocable once made. If Parent elects to make the determination, Parent’s determination must be consistent with the Parent Determination.

     (c) Notwithstanding clause (A) or (B) of the proviso contained in Section 6.14(a), if the Offer Closing Date occurs prior to the Company informing Novartis of the Company’s response to an Offering Notice, Parent shall be entitled to determine, in its sole discretion, whether to sell the Company’s Interest or purchase Novartis’s Interest in accordance with the terms and conditions of the LLC Operating Agreement. The Company shall not inform Novartis of the Company’s response to such Offering Notice prior to the final day of the Response Period.

     (d) Each of Parent, Holdings and Merger Sub hereby agrees that, notwithstanding anything in this Agreement to the contrary (including Section 5.01), (i) subject to Section 6.14(a), the serving upon the Company of an Offering Notice and any action or steps taken by the Company in connection therewith, or with the sale, purchase and transfer of the relevant Interest, shall not be deemed (either alone or in combination) to constitute a breach of any of the Company’s representations, warranties, covenants or agreements contained in this Agreement and (ii) subject to Section 6.14(a), so long as (A) the Offer Closing Date has not occurred and (B) Parent, Holdings and Merger Sub have not irrevocably waived all conditions contained in Exhibit A (other than the Minimum Tender Condition and the condition contained in clause (i) of Exhibit A), if the determination in response to an Offering Notice is to purchase Novartis’s Interest in accordance with the terms and conditions of the LLC Operating Agreement, the Company shall be permitted to take all steps and actions as it determines, in its sole discretion (but after reasonable consultation with Parent), necessary or required to effectuate the purchase and transfer of Novartis’s Interest in response to an Offering Notice, including the issuance of shares of capital stock of the Company or the incurrence of indebtedness to finance such purchase.

47

     (e) For the avoidance of doubt, “Company Takeover Proposal” shall not include an Offering Notice or any inquiry, proposal or offer from Novartis relating to the acquisition or purchase of the Company’s Interest.

     (f) The Company shall notify Parent promptly (and in any event within 24 hours) of the Company’s receipt of an Offering Notice from Novartis. The Company shall notify Parent promptly (and in any event within 24 hours) of the Company’s response to Novartis in response to an Offering Notice.

     (g) The Company hereby agrees that, from the date of this Agreement to the Effective Time, it shall not serve upon Novartis an Offering Notice without the prior written consent of Parent.

     (h) The Company hereby agrees that, from the date of this Agreement to the Effective Time, (i) the Company shall not consent to any amendment of the LLC Operating Agreement and (ii) the Managers (as defined in the LLC Operating Agreement) designated by the Company (A) shall not approve or consent to any of the actions specified in Section 5.4 of the LLC Operating Agreement without prior reasonable consultation with Parent and (B) shall, to the extent practicable, keep Parent reasonably informed of any action to be taken by Vivelle that is material to the business of the Company, the Company Subsidiaries and Vivelle, taken as a whole.

     SECTION 6.15. Holdings and Merger Sub Compliance. Parent shall cause Holdings and Merger Sub to comply with all of their obligations under this Agreement and Holdings and Merger Sub shall not engage in any activities of any nature except as provided in or contemplated by this Agreement.

     SECTION 6.16. Delisting. From the Offer Closing Date to the Merger Closing Date, the Company shall cooperate with Parent and use reasonable best efforts to take, or cause to be taken, all actions, and do or cause to be done all things, reasonably necessary, proper or advisable on its part under applicable laws and rules and policies of Nasdaq to enable the de-listing by the Surviving Corporation of the Company Common Stock from Nasdaq and the deregistration of the Company Common Stock under the Exchange Act as promptly as practicable after the Effective Time.

     SECTION 6.17. Patent Litigation. The Company shall consult with Parent regarding, and, to the extent the Company controls the defense, permit Parent to participate in (at its own expense) and consider in good faith Parent’s views with respect to the defense of, any litigation initiated against the Company or any Company Subsidiary relating to the Orange Book listed patents for Daytrana, Vivelle-Dot or CombiPatch. The Company shall not take any action in connection with any such litigation that is reasonably likely to materially affect the outcome of such litigation without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed). The Company, to the extent practicable, shall consult with Parent regarding, and shall keep Parent fully informed of, any litigation initiated against Vivelle regarding the Orange Book listed patents for Vivelle-Dot or CombiPatch.

48

ARTICLE VII

Conditions Precedent to the Merger

     SECTION 7.01. Conditions to Each Party’s Obligation. The respective obligation of each party to effect the Merger is subject to the satisfaction or waiver on or prior to the Merger Closing Date of the following conditions:

     (a) Stockholder Approval. If required by Law, the Company shall have obtained the Company Stockholder Approval.

     (b) Antitrust. Any waiting period (and any extension thereof) applicable to the Merger under the HSR Act shall have been terminated or shall have expired.

     (c) No Injunctions or Restraints. No order, decree or ruling issued by any Governmental Entity of competent jurisdiction or Law or other legal prohibition (collectively, “Legal Restraints”) preventing the consummation of the Merger shall be in effect; provided that the party seeking to assert this condition shall have used its reasonable efforts to prevent the entry of any such Legal Restraint and to appeal as promptly as possible any such Legal Restraint that may be entered.

     SECTION 7.02. Condition to Obligations of Parent, Holdings and Merger Sub. The obligations of Parent, Holdings and Merger Sub to effect the Merger are further subject to the condition that Merger Sub shall have accepted shares of Company Common Stock for payment pursuant to the Offer.

     SECTION 7.03. Condition to Obligation of the Company. The obligation of the Company to effect the Merger is further subject to the condition that Merger Sub shall have accepted shares of Company Common Stock for payment pursuant to the Offer.

ARTICLE VIII

Termination, Amendment and Waiver

     SECTION 8.01. Termination. This Agreement may be terminated at any time:

   (a) prior to the Offer Closing Date, by mutual written consent of Parent, Holdings, Merger Sub and the Company;

   (b) by either Parent or the Company:

   (i) prior to the Offer Closing Date, if (A) the Offer Closing Date has not occurred on or before April 14, 2010 (the “Outside Date”) or (B) the Minimum Tender Condition has not been satisfied by the date that is 90 days after the initial expiration date of the Offer, in each case unless the failure to consummate the Offer is the result of a material breach of this Agreement by the party seeking to terminate this Agreement; or

49

   (ii) if any Legal Restraint permanently enjoining, restraining or otherwise prohibiting the Offer or the Merger shall be in effect and shall have become final and non-appealable; provided that the party seeking to terminate this Agreement pursuant to this clause (ii) shall have used its reasonable efforts to prevent the entry of any such Legal Restraint and to appeal as promptly as possible any such Legal Restraint that may be entered;

     (c) by Parent, prior to the Offer Closing Date, if the Company breaches or fails to perform in any material respect any of its representations, warranties or covenants contained in this Agreement, which breach or failure to perform (i) would give rise to the failure of the conditions set forth in clause (iv) or (v) of Exhibit A and (ii) cannot be or has not been cured prior to the earlier of (x) 30 days after the giving of written notice to the Company of such breach and (y) the Outside Date (provided that Parent is not then in material breach of any representation, warranty or covenant contained in this Agreement);

     (d) by Parent, prior to the Offer Closing Date, (i) if an Adverse Recommendation Change has occurred or (ii) if the Company Board fails to reaffirm publicly its adoption and recommendation of this Agreement and the Transactions within 10 business days (or, if shorter, such number of business days remaining prior to the Offer Closing Date) of receipt of Parent’s written request to do so following the public disclosure of a Company Takeover Proposal (which request may be made at any time that a Company Takeover Proposal is pending);

     (e) by the Company, prior to the Offer Closing Date, if Parent, Holdings or Merger Sub breaches or fails to perform in any material respect any of its representations, warranties or covenants contained in this Agreement (without regard to any qualifications or exceptions contained therein as to materiality or Parent Material Adverse Effect), which breach or failure to perform (i) had or would reasonably be expected to, individually or in the aggregate, have a Parent Material Adverse Effect and (ii) has not been cured prior to the earlier of (x) 30 days after the giving of written notice to Parent, Holdings or Merger Sub of such breach and (y) the Outside Date (provided that the Company is not then in material breach of any representation, warranty or covenant contained in this Agreement);

     (f) by the Company, prior to the Offer Closing Date, in accordance with Section 8.05(b);

     (g) by Parent, prior to the Offer Closing Date, if (i) the Offer is extended beyond the initial expiration date of the Offer because (A) the Minimum Tender Condition has not been satisfied at such time, (B) any waiting period under the HSR Act applicable to the purchase of Shares pursuant to the Offer shall not have expired or been terminated at such time or (C) Parent has asserted a condition contained in clauses (i), (ii) or (iii) of Exhibit A at such time and (ii) the Company’s response to Novartis in response to an Offering Notice is inconsistent with the Parent Determination; provided that Parent may only terminate this Agreement pursuant to this Section 8.01(g) within five business days of receipt of written notice from the Company of the Company’s response to Novartis in response to an Offering Notice; or

50

     (h) by Parent, prior to the Offer Closing Date, if (i) Parent elects not to determine whether to sell the Company’s Interest or purchase Novartis’s Interest in accordance with the terms and conditions of the LLC Operating Agreement pursuant to clause (B) of the proviso contained in Section 6.14(a) and (ii) the Company’s response to Novartis in response to an Offering Notice is inconsistent with the Parent Determination; provided that Parent may only terminate this Agreement pursuant to this Section 8.01(h) within five business days of receipt of written notice from the Company of the Company’s response to Novartis in response to an Offering Notice.

     SECTION 8.02. Effect of Termination. In the event of termination of this Agreement by either the Company or Parent as provided in Section 8.01, this Agreement shall forthwith become void and have no effect, without any liability or obligation on the part of Parent, Holdings, Merger Sub or the Company (except to the extent that such termination results from the intentional and material breach by a party of any representation, warranty or covenant set forth in this Agreement and subject to Section 6.07(d)), other than Section 3.18, Section 4.06, the last sentence of Section 6.02, Section 6.07, this Section 8.02 and Article IX, which provisions shall survive such termination.

     SECTION 8.03. Amendment. This Agreement may be amended by the parties at any time before or after receipt of the Company Stockholder Approval; provided, however, that (a) after receipt of the Company Stockholder Approval, there shall be made no amendment that by Law requires further approval by the stockholders of the Company without the further approval of such stockholders, (b) no amendment shall be made to this Agreement after the Effective Time and (c) except as provided above, no amendment of this Agreement by the Company shall require the approval of the stockholders of the Company. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties.

     SECTION 8.04. Extension; Waiver. At any time prior to the Effective Time, the parties may (a) extend the time for the performance of any of the obligations or other acts of the other parties, (b) waive any inaccuracies in the representations and warranties contained in this Agreement or in any document delivered pursuant to this Agreement or (c) subject to the proviso in Section 8.03, waive compliance with any of the agreements or conditions contained in this Agreement. Subject to the requirements of applicable Law, no extension or waiver by the Company shall require the approval of the stockholders of the Company. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. The failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of such rights.

     SECTION 8.05. Procedure for Termination, Amendment, Extension or Waiver. (a) A termination of this Agreement pursuant to Section 8.01, an amendment of this Agreement pursuant to Section 8.03 or an extension or waiver pursuant to Section 8.04 shall, in order to be effective, require, in the case of Parent, Holdings, Merger Sub or the Company, action by its Board of Directors or the duly authorized designee of its Board of Directors. Termination of this Agreement prior to the Effective Time shall not require the approval of the stockholders of the Company; provided, however, that after the election or appointment of Merger Sub’s designees to the Company Board pursuant to Section 6.10 and prior to the Effective Time, the approval of a majority of the Independent Directors shall be required for the Company to (i) amend or terminate this Agreement, (ii) exercise or waive any right of the Company under this Agreement or (iii) extend the time for performance of any obligation of Parent, Holdings or Merger Sub under this Agreement.

51

     (b) The Company may terminate this Agreement pursuant to Section 8.01(f) only if (i) the Company Board has received a Superior Company Proposal that was not solicited by the Company, any Company Subsidiary or any of their respective Representatives and that did not otherwise result from a breach of Section 5.04, (ii) as a result of such Superior Company Proposal, the Company Board shall have determined, in good faith, based on the advice of outside counsel, that it is necessary for the Company Board to make an Adverse Recommendation Change in order to comply with their fiduciary obligations, (iii) the Company has provided Parent with written notice that the Company Board intends to terminate this Agreement pursuant to Section 8.01(f), (iv) the Company has provided Parent with a Notice of Recommendation Change, (v) the Company has negotiated in good faith (including by complying with its obligations under the last sentence of Section 5.04(b)) with Parent with respect to any changes to the terms of this Agreement proposed by Parent for at least five business days following receipt by Parent of such Notice of Recommendation Change, (vi) taking into account any changes to the terms of this Agreement proposed by Parent to the Company, the Company Board has determined that such Superior Company Proposal remains a Superior Company Proposal and (vii) the Company (A) has paid, or simultaneously with the termination of this Agreement pays, the fee due under Section 6.07 that is payable if this Agreement is terminated pursuant to Section 8.01(f) and (B) concurrently with the termination of this Agreement, enters into a definitive agreement with respect to such Superior Company Proposal.

ARTICLE IX

General Provisions

     SECTION 9.01. Nonsurvival of Representations and Warranties. None of the representations and warranties in this Agreement or in any instrument delivered pursuant to this Agreement shall survive the Effective Time. This Section 9.01 shall not limit any covenant or agreement of the parties which by its terms contemplates performance after the Effective Time.

     SECTION 9.02. Notices. All notices, requests, claims, demands and other communications under this Agreement shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery by hand, by facsimile or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified by like notice):

     (a) if to Parent, Holdings or Merger Sub, to

Hisamitsu Pharmaceutical Co., Inc.
Marunouchi, 1-11-1, Chiyoda-Ku
Tokyo, 100-6221, Japan
Fax: 81-3-5293-1708
Attention: Mr. Nobuo Tsutsumi, Ph.D., General Manager of Legal Department

52

with copies (which shall not constitute notice) to:

Debevoise & Plimpton LLP
919 Third Avenue
New York, NY 10022
Fax: (212) 521-7569
Attention: Kevin Rinker, Esq.

and

Nishimura & Asahi
Ark Mori Building
1-12-32 Akasaka, Minato-Ku
Tokyo, 107-6029, Japan
Fax: 81-3-5561-9711/12/13/14
Attention: Yoshinobu Fujimoto, Esq.

     (b) if to the Company, to

Noven Pharmaceuticals, Inc.
11960 S.W. 144th St.
Miami, FL 33186
Fax: (305) 232-1836
Attention: General Counsel

with a copy to:

Cravath, Swaine & Moore LLP
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019
Fax: (212) 474-3700
Attention: Richard Hall, Esq.

     SECTION 9.03. Definitions. For purposes of this Agreement:

     An “affiliate” of any Person means another Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first Person. As used herein, “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such entity, whether through ownership of voting securities or other interests, by contract or otherwise.

53

     “Book-Entry Shares” means shares of Company Common Stock held in the Direct Registration System.

     A “business day” means any day on which the principal offices of the SEC in Washington, D.C. are open to accept filings or, in the case of determining a date when any payment is due, any day on which banks are not required or authorized by Law to close in New York, New York.

     “Company Material Adverse Effect” means any change, event, effect or occurrence that (i) has a material adverse effect on the business, assets, condition (financial or otherwise) or results of operations of the Company and the Company Subsidiaries, taken as a whole, or (ii) prevents or materially delays the consummation of the Offer, the Merger and the other Transactions or the ability of the Company to perform its obligations under this Agreement in any material respect; provided, however, that none of the following shall be deemed either alone or in combination to constitute, and none of the following shall be taken into account in determining whether there has been, or would reasonably be expected to be, a Company Material Adverse Effect: any change, event, effect or occurrence that results from (A) changes, circumstances or conditions generally affecting the industry in which the Company primarily operates, except to the extent that such effect has a disproportionate effect on the Company and the Company Subsidiaries, taken as a whole, relative to others in the industries in which the Company and the Company Subsidiaries operate, (B) general economic or regulatory, legislative or political conditions or securities, credit, financial or other capital markets conditions (including changes generally in prevailing interest rates, currency exchange rates, credit markets and price levels or trading volumes), in each case in the United States or elsewhere in the world, except to the extent such effect has a disproportionate effect on the Company and the Company Subsidiaries, taken as a whole, relative to others in the industries in which the Company and the Company Subsidiaries operate, (C) any change in applicable Law or GAAP (or authoritative interpretation thereof), (D) geopolitical conditions, the outbreak or escalation of hostilities, any acts of war, sabotage or terrorism, or any escalation or worsening of any such acts of war, sabotage or terrorism, except to the extent such effect has a disproportionate effect on the Company and the Company Subsidiaries, taken as a whole, relative to others in the industries in which the Company and the Company Subsidiaries operate, (E) the execution and delivery or performance of this Agreement or the announcement or pendency of this Agreement or the anticipated consummation of the Offer, the Merger and the other Transactions (it being understood and agreed that, for purposes of Sections 3.04, 3.05 and 6.03(a), changes, events, effects or occurrences resulting from the matters referred to in this clause (E) shall not be excluded in determining whether there has been, or would reasonably be expected to be, a Company Material Adverse Effect), (F) any failure, in and of itself, by the Company to meet any internal or published projections, forecasts, estimates or predictions in respect of revenues, earnings or other financial or operating metrics for or during any period (it being understood and agreed that the circumstances underlying any such change in the case of this clause (F) may be taken into account in determining whether there has been, or would reasonably be expected to be, a Company Material Adverse Effect), (G) the serving upon the Company of an Offering Notice or any action or steps taken in connection therewith or with the sale, purchase and transfer of the relevant Interest, (H) any challenge to, or litigation initiated against the Company, any Company Subsidiary or Vivelle relating to, the Orange Book listed patents for Daytrana, Vivelle-Dot or CombiPatch or any paragraph IV filing or notice thereof relating to Daytrana, Vivelle-Dot or CombiPatch, (I) any adverse action taken, or any adverse determination or communication, by the FDA with respect to, or any withdrawal or recall of, Daytrana to the extent arising from or as a result of issues related to the peel force specifications of Daytrana, (J) any suit, action or other legal proceeding arising out of or related to the Merger Agreement, the Offer, the Merger or the other Transactions, (K) any change in the market price, credit rating or trading volume of the Company’s securities (it being understood and agreed that the circumstances underlying any such change in the case of this clause (K) may be taken into account in determining whether there has been, or would reasonably be expected to be, a Company Material Adverse Effect) or (L) the matters set forth in Section 3.08(a) of the Company Disclosure Letter (or in any other section thereof to the extent that it is readily apparent on the face of such disclosure that it also qualifies or applies to Section 3.08(a) of the Company Disclosure Letter).

54

     “Company Officer” means any of the officers of the Company set forth in Section 9.03(a) of the Company Disclosure Letter.

     “Direct Registration System” means the service of the Paying Agent that provides for electronic direct registration of securities in a record holder’s name on the Company’s transfer books and allows shares to be transferred between record holders electronically.

     “knowledge” means, with respect to any matter in question, the actual knowledge as of the date hereof after reasonable inquiry of employees of the Company or Parent, as applicable, of the executive officers of the Company set forth in Section 9.03(b) of the Company Disclosure Letter or the executive officers of Parent, as applicable.

     “Parent Material Adverse Effect” means any change, effect, event or occurrence that prevents or materially delays (a) the consummation of the Offer, the Merger and the other Transactions or (b) the ability of Parent to perform its obligations under this Agreement in any material respect.

     A “Person” means any individual, firm, corporation, partnership, company, limited liability company, trust, joint venture, association, Governmental Entity or other entity.

     A “subsidiary” of any Person means another Person, an amount of the voting securities, other voting ownership or voting partnership interests of which is sufficient to elect at least a majority of its Board of Directors or other governing body (or, if there are no such voting interests, 50% or more of the equity interests of which) is owned directly or indirectly by such first Person.

     SECTION 9.04. Interpretation. The headings contained in this Agreement and in the table of contents to this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. All Exhibits annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any terms used in any Exhibit but not otherwise defined therein shall have the meaning as defined in this Agreement. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The word “will” shall be construed to have the same meaning as the word “shall”. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if”. The word “or” shall not be exclusive. Unless the context requires otherwise (i) any definition of or reference to any agreement, instrument or other document or any Law herein shall be construed as referring to such agreement, instrument or other document or Law as from time to time amended, supplemented or otherwise modified, (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof and (iv) all references herein to Articles, Sections and Exhibits shall be construed to refer to Articles and Sections of, and Exhibits to, this Agreement.

55

     SECTION 9.05. Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule or law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the Transactions is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the extent possible.

     SECTION 9.06. Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other electronic image scan transmission shall be effective as delivery of a manually executed counterpart of this Agreement.

     SECTION 9.07. Entire Agreement; No Third-Party Beneficiaries; No Other Representations or Warranties. (a) This Agreement, taken together with the Confidentiality Agreement, the Company Disclosure Letter and the Exhibits hereto, (i) constitute the entire agreement, and supersede all prior agreements and understandings, both written and oral, among the parties with respect to the Transactions and (ii) except for Section 6.06, are not intended to confer upon any Person other than the parties any rights or remedies. Notwithstanding clause (ii) of the immediately preceding sentence, following the Effective Time the provisions of Article II shall be enforceable by holders of Certificates and holders of Book-Entry Shares.

     (b) Except for the representations and warranties contained in Article III, each of Parent, Holdings and Merger Sub acknowledges that neither the Company nor any Person on behalf of the Company makes any other express or implied representation or warranty with respect to the Company or any of the Company Subsidiaries or with respect to any other information provided to Parent, Holdings or Merger Sub in connection with the Transactions. Neither the Company nor any other Person will have or be subject to any liability or indemnification obligation to Parent, Holdings, Merger Sub or any other Person resulting from the distribution to Parent, Holdings or Merger Sub, or Parent’s, Holdings’ or Merger Sub’s use of, any such information, including any information, documents, projections, forecasts or other material made available to Parent, Holdings or Merger Sub in certain “data rooms” or management presentations in expectation of the Transactions, unless and then only to the extent that any such information is expressly included in a representation or warranty contained in Article III.

56

     (c) Except for the representations and warranties contained in Article IV, the Company acknowledges that none of Parent, Holdings, Merger Sub or any other Person on behalf of Parent, Holdings or Merger Sub makes any other express or implied representation or warranty with respect to Parent, Holdings or Merger Sub or with respect to any other information provided to the Company in connection with the Transactions.

     SECTION 9.08. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof.

     SECTION 9.09. Assignment. Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise by any of the parties without the prior written consent of the other parties, except that Merger Sub may assign, in its sole discretion, any of or all its rights, interests and obligations under this Agreement to Parent or to any direct or indirect wholly owned subsidiary of Parent, but no such assignment shall relieve Merger Sub of any of its obligations under this Agreement. Any purported assignment without such consent shall be void. Subject to the preceding sentences, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns.

     SECTION 9.10. Specific Enforcement. The parties acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with its specific terms or were otherwise breached, and that monetary damages, even if available, would not be an adequate remedy therefor. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the performance of the terms and provisions of this Agreement in any court referred to in clause (a) below, without proof of actual damages (and each party hereby waives any requirement for the securing or posting of any bond in connection with such remedy), this being in addition to any other remedy to which they are entitled at law or in equity. The parties further agree not to assert that a remedy of specific enforcement is unenforceable, invalid, contrary to law or inequitable for any reason, nor to assert that a remedy of monetary damages would provide an adequate remedy for any such breach. In addition, each of the parties hereto (a) consents to submit itself to the personal jurisdiction of the Court of Chancery of the State of Delaware (unless the Federal courts have exclusive jurisdiction over the matter, in which case the United States District Court for the District of Delaware) in the event any dispute arises out of this Agreement, the Offer, the Merger or any other Transaction, (b) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court and (c) agrees that it will not bring any action relating to this Agreement, the Offer, the Merger or any other Transaction in any court other than the Court of Chancery of the State of Delaware or, if applicable, the United States District Court for the District of Delaware.

57

     SECTION 9.11. Waiver of Jury Trial. Each party hereto hereby waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or other proceeding arising out of this Agreement, the Offer, the Merger or any other Transaction. Each party hereto (a) certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such party would not, in the event of any action, suit or proceeding, seek to enforce the foregoing waiver and (b) acknowledges that it and the other parties hereto have been induced to enter into this Agreement by, among other things, the mutual waiver and certifications in this Section 9.11.

[remainder of page intentionally blank; signature pages follow]

58

     IN WITNESS WHEREOF, Parent, Holdings, Merger Sub and the Company have duly executed this Agreement, all as of the date first written above.

HISAMITSU PHARMACEUTICAL CO. INC., as Parent,
by
	/s/	Hirotaka Nakatomi
	Name:	Hirotaka Nakatomi
	Title:	President & Chief Executive Officer
HISAMITSU U.S., INC., as Holdings,
by
	/s/	Kosuke Sugiyama
	Name:	Kosuke Sugiyama
	Title:	President
NORTHSTAR MERGER SUB, INC., as Merger Sub,
by
	/s/	Kosuke Sugiyama
	Name:	Kosuke Sugiyama
	Title:	Chief Executive Officer
NOVEN PHARMACEUTICALS, INC., as the Company,
by
	/s/	Peter Brandt
	Name:	Peter Brandt
	Title:	President & Chief Executive Officer

Exhibit A

to

Agreement and Plan of Merger

Offer Conditions

     Notwithstanding any other term of the Offer or this Agreement, Merger Sub shall not be required to, and neither Parent nor Holdings shall be required to cause Merger Sub to, accept for payment or, subject to any applicable rules and regulations of the SEC, including Rule 14e-1(c) under the Exchange Act (relating to Merger Sub’s obligation to pay for or return tendered shares of Company Common Stock promptly after the termination or withdrawal of the Offer), to pay for any shares of Company Common Stock tendered pursuant to the Offer unless (a) there shall have been validly tendered in accordance with the terms of the Offer and not withdrawn prior to the expiration of the Offer that number of shares of Company Common Stock which would represent at least a majority of the Fully Diluted Shares (the “Minimum Tender Condition”) and (b) any waiting period under the HSR Act applicable to the purchase of shares of Company Common Stock pursuant to the Offer shall have expired or been terminated. The term “Fully Diluted Shares” means all outstanding securities entitled generally to vote in the election of directors of the Company on a fully diluted basis, after giving effect to the exercise or conversion of all options, rights and securities exercisable or convertible into such voting securities, other than potential dilution attributable to the Company Rights and the Top-Up Option. Furthermore, notwithstanding any other term of the Offer or this Agreement, Merger Sub shall not be required to, and neither Parent nor Holdings shall be required to cause Merger Sub to, accept for payment or, subject as aforesaid, to pay for any shares of Company Common Stock not theretofore accepted for payment or paid for if, at the expiration of the Offer, any of the following conditions exists:

     (i) there shall be any Legal Restraint preventing the consummation of the Offer or the Merger in effect; provided that, subject to the proviso in Section 6.03(a), the party seeking to assert this condition shall have used its reasonable efforts to prevent the entry of any such Legal Restraint and to appeal as promptly as possible any such Legal Restraint that may be entered;

     (ii) there shall be pending any suit, action or proceeding by any United States Federal, state or local Governmental Entity challenging the acquisition by Parent or its affiliates of shares of Company Common Stock or otherwise seeking to enjoin, restrain, prevent or prohibit the making or consummation of the Offer or the Merger that is reasonably likely to prevail; provided that the party seeking to assert this condition shall have used its reasonable efforts to consummate and make effective, in the most expeditious manner practicable, the Offer as required by Section 6.03(a);

     (iii) any waiting period required under the Foreign Exchange and Foreign Trade Law of Japan (Law No. 228 of 1949, as amended) applicable to the purchase of shares of Company Common Stock pursuant to the Offer shall not have expired or been terminated; provided that the party seeking to assert this condition shall have used its reasonable efforts to consummate and make effective, in the most expeditious manner practicable, the Offer as required by Section 6.03(a);

     (iv) (A) any representation and warranty of the Company in this Agreement (other than those set forth in Sections 3.03, 3.04 (other than the representation set forth in the last sentence of Section 3.04(b)), 3.05(c), 3.06(d), 3.08(a) and 3.11(h)) shall not be true and correct at such time, except to the extent such representation and warranty expressly relates to an earlier date (in which case on and as of such earlier date), other than for such failures to be true and correct that would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect (for purposes of determining the satisfaction of this condition, without regard to any qualifications or exceptions contained therein as to materiality or Company Material Adverse Effect), (B) any representation and warranty of the Company set forth in Sections 3.03, 3.04 (other than the representation set forth in the last sentence of Section 3.04(b)), 3.05(c) and 3.11(h) shall not be true and correct in all material respects at such time, except to the extent such representation and warranty expressly relates to an earlier date (in which case on and as of such earlier date), and (C) any representation and warranty of the Company set forth in Section 3.06(d) or 3.08(a) shall not be true and correct in all respects at such time, except to the extent such representation and warranty expressly relates to an earlier date (in which case on and as of such earlier date);

     (v) the Company shall have failed to perform in all material respects all obligations to be performed by it under this Agreement;

     (vi) this Agreement shall have been terminated in accordance with its terms;

     (vii) there shall have occurred or exist any change, event, effect or occurrence since the date of this Agreement that has had or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect; or

     (viii) the Company shall have failed to furnish Parent with a certificate executed on behalf of the Company by the chief executive officer or chief financial officer of the Company certifying that the matters set forth in clauses (iv) and (v) of this Exhibit A have not occurred and continue to exist.

     The foregoing conditions shall be in addition to, and not a limitation of, the rights of Parent, Holdings and Merger Sub to extend, terminate or modify the Offer pursuant to the terms and conditions of this Agreement.

2

     The foregoing conditions are for the sole benefit of Parent, Holdings and Merger Sub and, subject to the terms and conditions of this Agreement, may be waived by Parent, Holdings and Merger Sub in whole or in part at any time and from time to time in their sole discretion (other than the Minimum Tender Condition). The failure by Parent, Holdings, Merger Sub or any other affiliate of Parent at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right, the waiver of any such right with respect to particular facts and circumstances shall not be deemed a waiver with respect to any other facts and circumstances and each such right shall be deemed an ongoing right that may be asserted at any time and from time to time.

3

EX-99.D.2

EXHIBIT (d)(2)

June 25, 2008

Hisamitsu Pharmaceutical Co., Inc.

Marunouchi 1-11-1, Chiyoda-ku

Tokyo 100-6221, Japan

Attention:   Hirotaka Nakatomi

President & Chief Executive Officer

Dear Mr. Nakatomi:

In connection with the consideration of a possible negotiated transaction or transactions between Noven Pharmaceuticals, Inc. and Hisamitsu Pharmaceutical Co., Inc. (individually, a “Party”, and collectively, the “Parties”), including potential licensing transactions, joint ventures or other collaborations, each Party has requested or will request certain information from the other Party. As a condition to being furnished such information, each Party agrees to treat any information concerning the other Party which is furnished by or on behalf of the other Party (collectively, the “Evaluation Material”) in accordance with the provisions of this agreement.

Unless the context requires otherwise, references to a “Party” in this agreement are deemed to include the directors, officers, employees, advisors and agents of the Party, and each Party shall be responsible for any breach of this agreement by its directors, officers, employees, advisors and agents. For purposes of this agreement, the term “Owner” means the Party supplying Evaluation Material, and the term “Recipient” means the Party receiving Evaluation Material. The term “Evaluation Material” does not include information which (1) is or becomes generally available to the public other than as a result of a disclosure by the Recipient in violation of this agreement, (2) was in the possession of the Recipient prior to receipt thereof from the Owner provided that such information is not known by the Recipient to be the subject of another confidentiality agreement with or other obligation of secrecy to the Owner or another party, (3) becomes available to the Recipient on a non-confidential basis from a source other than the Owner, provided that such source is not bound by a confidentiality agreement with, or other obligation of secrecy to, the Owner or another party, or (4) is independently developed by the Recipient without use of any Evaluation Material of the Owner, as evidenced by the Recipient’s written records.

Each Party agrees that (1) it will use the Evaluation Material solely for the purposes of evaluating a possible negotiated transaction between the Parties (the “Purpose”) and for no other purpose, (2) it will maintain the Evaluation Material confidential, (3) it will not at any time or in any manner, directly or indirectly, disclose to any person any or all of the Evaluation Material, and (4) it will not disclose to any person either the fact that information has been provided under this agreement or that discussions or negotiations are taking or have taken place concerning the Purpose, or any terms, conditions or other facts with respect to any such discussions or negotiations or the status thereof.

Notwithstanding the foregoing, the Evaluation Material may be disclosed to a Party’s directors, officers, employees, advisors and agents who need to know such information for the Purpose; provided that such directors, officers, employees, advisors and agents shall be informed by the Party of the confidential nature of such information and the restrictions contained in this agreement and shall be directed to treat such information in accordance with the terms of this agreement. In addition, nothing contained in this agreement shall be deemed to prevent disclosure of the fact that the Evaluation Material has been made available to either Party, that discussions or negotiations are taking place concerning a possible transaction involving either Party, or any of the terms, conditions or other facts with respect thereto, including the status thereof, if, in the opinion of a Party’s legal counsel, such disclosure is required to be made by law, in connection with any filings made with the Securities and

Hisamitsu Pharmaceutical Co., Inc.

June 25, 2008

Page 2

Exchange Commission, or by the disclosure policies of the principle stock exchange on which such Party’s stock is traded, but in each such case, only after prior notice to and consultation with the other Party.

To secure the confidentiality of the Evaluation Material, the Recipient shall: (1) keep separate all the Evaluation Material and all information generated by the Recipient based thereon from other documents and records of the Recipient; (2) keep all documents and any other material relating to or incorporating any of the Evaluation Material at the usual place of business of the Recipient or at the place of business of a Recipient’s advisors used in connection with the Purpose except as specifically permitted in writing by the Owner; (3) take all reasonable precautions to maintain the confidentiality of the Evaluation Material; (4) make copies of the Evaluation Material only to the extent required for the Purpose by the Recipient; and (5) at the request of the Owner made at any time, deliver to the Owner, within 10 business days of such request, all Evaluation Material, including originals or copies thereof, that are in the possession of the Recipient, and destroy all notes, memoranda, extracts, reports or other writings that relate to or incorporate any part of the Evaluation Material prepared by the Recipient, except that one archival copy of written material to be kept confidential and segregated from Recipient’s regular files may be retained by Recipient’s legal counsel solely for purposes of verifying compliance with this Agreement.

In the event that either Party is requested or required in an investigation, legal proceeding or similar process to disclose any of the Evaluation Material, such Party shall provide the other Party with prompt written notice of any such request or requirement so that the other Party may seek a protective order or other appropriate remedy or waive compliance with the provisions of this agreement. If, in the absence of a protective order or other remedy or the receipt of a waiver by the other Party, such Party is nonetheless, in the written opinion of counsel, legally compelled to disclose Evaluation Material, such Party may, without liability hereunder, disclose only that portion of the Evaluation Material which counsel advises that it is legally required to disclose, provided that such Party exercises its best efforts to preserve the confidentiality of the Evaluation Material, including, without limitation, by cooperating with the other Party to obtain an appropriate protective order or other reliable assurance that confidential treatment will be accorded the Evaluation Material.

Except as shall otherwise be agreed in writing in the future by the Parties: (1) the Owner does not make any representation or warranty as to the accuracy or completeness of the Evaluation Material disclosed by such Owner; and (2) the Owner shall not have any liability to the Recipient resulting from the use by the Recipient of the Evaluation Material.

Each Party agrees that for a period commencing on the date of this agreement and expiring on the earlier of: (i) two years from the date of this agreement; or (ii) the public announcement by Noven of a partnership or collaboration agreement entered into between the parties, neither it nor any of its affiliates (as defined in Rule 12b-2 promulgated pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) will, unless specifically invited in writing by the other Party, directly or indirectly, in any manner:

(a) acquire, offer or propose to acquire, solicit an offer to sell or agree to acquire, directly or indirectly, alone or in concert with others, by purchase or otherwise, any direct or indirect beneficial interest in any voting securities or direct or indirect rights, warrants or options to acquire, or securities convertible into or exchangeable for, any voting securities of the other Party or any of its affiliates;

(b) make, or in any way participate, directly or indirectly, alone or in concert with others, any “solicitation” of “proxies” to vote (as such terms are used in the proxy rules of the Securities and Exchange Commission promulgated pursuant to Section 14 of the Exchange Act) or seek to advise or influence in any manner whatsoever any person or entity with respect to the voting of any voting securities of the other Party or any of its affiliates;

(c) form, join or in any way participate in a “group” within the meaning of Section 13(d)(3) of the Exchange Act with respect to any voting securities of the other Party or any of its affiliates;

(d) acquire, offer to acquire or agree to acquire, directly or indirectly, alone or in concert with others, by purchase, exchange or otherwise, (i) any of the assets, tangible and intangible, of the other Party or any of its

Hisamitsu Pharmaceutical Co., Inc.

June 25, 2008

Page 3

affiliates or (ii) direct or indirect rights, warrants or options to acquire any assets of the other Party or any of its affiliates, except for such assets as are then being offered for sale by the other Party or any of its affiliates;

(e) arrange, or in any way participate, directly or indirectly, in any financing for the purchase of any voting securities or securities convertible or exchangeable into or exercisable for any voting securities or assets of the other Party or any of its affiliates, except for such assets as are then being offered for sale by the other Party or any of its affiliates;

(f) otherwise act, alone or in concert with others, to seek to propose to the other Party or any of its affiliates or any of their respective stockholders any business combination, restructuring, recapitalization or similar transaction to or with the other Party or any of its affiliates or otherwise seek, alone or in concert with others, to control, change or influence the management, board of directors or policies of the other Party or any of its affiliates or nominate any person as a director of the other Party or any of its affiliates who is not nominated by the then incumbent directors or propose any matter to be voted upon by the shareholders of the other Party or any of its affiliates; or

(g) announce an intention to do, or enter into any agreement or understanding with others to do, any of the actions restricted or prohibited under clauses (a) through (f) of this paragraph.

Notwithstanding the preceding paragraph, either Party or any of its affiliates may purchase less than five percent of any class of securities of the other Party registered under Section 12 or 15 of the Exchange Act; provided that such percent limit shall apply collectively to any Party and its affiliates to the extent such Party and such affiliates are acting as a “group” within the meaning of Section 13(d)(3) of the Exchange Act.

Each Party agrees that for a period of three years following the date of this agreement it will not, directly or indirectly, employ, offer employment to, or participate in any discussions concerning employment with, any person who, as of the date of this agreement or at any time during the three years following the date of this agreement, is an employee of the other Party or any of its subsidiaries; provided that this paragraph shall not prohibit general solicitations of employment made in newspapers or other publications of broad circulation.

The Parties acknowledge and agree that any breach of this agreement by any Party will cause irreparable harm to the other Party for which monetary damages would be inadequate, and that, in addition to such other remedies that may be available, including recovery of damages, the injured Party shall be entitled to seek specific enforcement of the provisions hereof and injunctive relief.

The Parties acknowledge that they are aware and will advise their directors, officers, employees, advisors and agents who are informed as to the matters related to the Purpose, that the United States securities laws and Japanese unfair competition laws prohibit any person who has received from an issuer material non-public information concerning the issuer (which includes the existence of conversations regarding the Purpose) from purchasing or selling securities of such issuer or from communicating such information to any person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities.

This Agreement shall be governed by the laws of the State of New York, without regard to principles of conflict of law, may not be amended except pursuant to a writing signed by the Parties, and shall be binding on and inure to the benefit of the Parties and their successors and assigns.

Each Party understands and agrees that no contract or agreement providing for any transaction shall be deemed to exist between the Parties by virtue of this agreement or any written or oral expression with respect to any transaction unless and until a final definitive agreement is executed and delivered by the Parties.

Please confirm that the foregoing fully and accurately sets forth the agreement between the Parties by executing a counterpart hereof and returning it to the undersigned.

Very truly yours,

Hisamitsu Pharmaceutical Co., Inc.

June 25, 2008

Page 4

NOVEN PHARMACEUTICALS, INC.

By:  /s/  Peter Brandt

Peter Brandt

President & Chief Executive Officer

CONFIRMED AND AGREED:

HISAMITSU PHARMACEUTICAL CO., INC.

By:  /s/  Hirotaka Nakatomi

Hirotaka Nakatomi

President & Chief Executive Officer

EX-99.D.3

EXHIBIT (d)(3)

STRICTLY CONFIDENTIAL

June 4, 2009

Hisamitsu Pharmaceutical Co., Inc.

1-11-1 Marunouchi

Chiyoda-ku, Tokyo 100-6221

Japan

Attention:  Mr. Hirotaka Nakatomi
  President and Chief Executive Officer

Dear Mr. Nakatomi:

In connection with a possible acquisition of Noven Pharmaceuticals, Inc. (the “Company”) by Hisamitsu Pharmaceutical Co., Inc. (“Hisamitsu”) or one of its subsidiaries (the “Acquisition”), and in recognition of the fact that Hisamitsu will be dedicating significant time, effort and resources in order to perform its due diligence and evaluate the proposed Acquisition, the Company and Hisamitsu hereby agree as follows:

During the period (the “Exclusivity Period”) beginning on the date hereof and ending at 5:00 p.m., New York City time, on July 1, 2009 (the “Termination Date”), the parties shall negotiate in good faith the terms of a definitive agreement in connection with the Acquisition. During the Exclusivity Period, the Company shall not, nor shall it permit any of its officers, directors, agents, advisors (including legal and financial advisers), representatives or affiliates to, (a) directly or indirectly solicit, initiate or knowingly encourage the submission of any Company Takeover Proposal (as defined below), (b) enter into any agreement or understanding with respect to any Company Takeover Proposal or (c) directly or indirectly participate in any discussions or negotiations regarding, or furnish to any person any information with respect to, or take any other action to facilitate any inquiries or the making of any proposal that constitutes, or that could reasonably be expected to lead to, any Company Takeover Proposal; provided that nothing contained in this letter agreement shall prohibit or otherwise restrict (i) the Company’s investor relations activities conducted in the ordinary course of business, (ii) any action or activity relating to, or the ability of the Company to engage in discussions or negotiations regarding, employee and director equity compensation arrangements of the Company and (iii) any ordinary course action or activity relating to the administration of the Company’s insider trading policy.

As used herein, “Company Takeover Proposal” means any inquiry, proposal or offer from any person (other than Hisamitsu) or group relating to (a) any direct or indirect acquisition or purchase, in a single transaction or a series of transactions, of (i) 5% or more (based on the fair market value thereof, as determined by the board of directors of the Company) of the assets of the Company and its subsidiaries, taken as a whole, or (ii) 10% or more of the outstanding shares of any class of capital stock of the Company or (b) any tender offer, exchange offer, merger, consolidation, business combination, recapitalization, liquidation, dissolution, binding share exchange or similar transaction involving the Company, any of its subsidiaries or Vivelle Ventures LLC. For the avoidance of doubt, “Company Takeover Proposal” shall not include an Offering Notice (as defined in the Limited Liability Company Operating Agreement dated as of May 1, 1999, by and between Novartis Pharmaceuticals Corporation and the Company (as amended from time to time, the “LLC Operating Agreement”)) or any inquiry, proposal or offer from Novartis Pharmaceuticals Corporation relating to the acquisition or purchase of the Company’s Interest (as defined

in the LLC Operating Agreement) or any discussions or negotiations with Novartis Pharmaceuticals Corporation regarding the foregoing.

During the Exclusivity Period, the Company hereby agrees that it will not serve upon Novartis Pharmaceuticals Corporation an Offering Notice without the prior written consent of Hisamitsu.

During the Exclusivity Period, so long as the parties remain engaged in discussions and negotiations regarding the Acquisition, the Company will provide Hisamitsu and its representatives with reasonable access, during regular business hours and upon reasonable prior notice, to the properties, facilities and personnel of the Company, its subsidiaries and Vivelle Ventures LLC and to all financial statements, contracts, books, records and other relevant information pertaining thereto, all as reasonably requested by Hisamitsu or any of its representatives in order to perform their due diligence investigation; provided that the Company may withhold access if it determines, in its sole discretion, that the withholding of such access is reasonably necessary to maintain a confidential transaction process.

This letter agreement shall automatically terminate on the Termination Date.

Each of the parties agrees that no contract, agreement or commitment with respect to the Acquisition or any other transaction shall exist or be deemed to exist by virtue of this letter agreement, any other written or oral expression with respect to the Acquisition, whether sent before, after or simultaneously with this letter agreement, or otherwise unless and until a definitive agreement related thereto has been duly executed and delivered.

Each of the parties agrees that monetary damages would not be a sufficient remedy for any breach of this letter agreement by the other party and that the non-breaching party shall be entitled to equitable relief, including an injunction or injunctions and specific performance, as a remedy for any such breach. Such remedy shall not be deemed to be the exclusive remedy for a breach by either party of this letter agreement but shall be in addition to all other remedies available at law or in equity.

During the Exclusivity Period, the Company shall promptly notify Hisamitsu orally and in writing of receipt by the Company of any Company Takeover Proposal or any inquiry with respect to any Company Takeover Proposal.

Each of the parties acknowledges and agrees that this letter agreement shall be treated as confidential in accordance with the terms and conditions of the Confidentiality Agreement dated June 25, 2008, between the parties.

This letter agreement may not be amended or any provision hereof waived or modified except by an instrument in writing signed by each of the parties hereto. This letter agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one agreement. Delivery of an executed counterpart of a signature page of this letter agreement by facsimile or electronic transmission shall be effective as delivery of a manually executed counterpart of this letter agreement.

This letter agreement shall be governed and construed in accordance with the laws of the State of New York (without giving effect to the principles of conflict of laws thereof), and the parties hereto agree to submit to the exclusive jurisdiction of the courts thereof in connection with any dispute arising in connection with this letter agreement.

[remainder of page intentionally left blank]

2

Please confirm your agreement with the foregoing by signing and returning one copy of this letter to the undersigned, whereupon this letter agreement shall become a binding agreement between us and Hisamitsu.

Sincerely,

NOVEN PHARMACEUTICALS, INC.

By:  /s/  Peter Brandt

Name:     Peter Brandt

Title:  President and Chief Executive

Officer

AGREED AND ACKNOWLEDGED as of the date first written above.

HISAMITSU PHARMACEUTICAL CO., INC.

By:  /s/  Hirotaka Nakatomi

Name:     Hirotaka Nakatomi

Title:  President and Chief Executive

Officer

3

EX-99.D.4

Exhibit (d)(4)

EXECUTION VERSION

AMENDED AND RESTATED
EMPLOYMENT AGREEMENT

     THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of the 14th day of July, 2009, by and between NOVEN PHARMACEUTICALS, INC., a Delaware corporation (the “Company”), and JEFFREY EISENBERG (“Executive”) (collectively, the “Parties”).

Recitals

     A. On July 14, 2009, the Company and Hisamitsu Pharmaceutical Co., Inc. (“Hisamitsu”) entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which (i) Hisamitsu has agreed to cause a subsidiary of Hisamitsu to commence a tender offer to acquire shares of common stock of the Company (subject to the terms and conditions set forth in the Merger Agreement) (the “Tender Offer”) and (ii) at the “Effective Time” (as defined in the Merger Agreement), a subsidiary of Hisamitsu will merge with and into the Company, with the Company continuing as the surviving corporation in such merger;

     B. Executive and the Company are parties to a letter agreement, dated as of January 2, 2008 (the “Letter Agreement”), pursuant to which Executive serves as Executive Vice President of the Company, and an Employment Agreement (Change of Control), dated as of November 18, 2008 (the “Change of Control Agreement”); and

     C. The Company desires to retain the continued services and dedication of Executive to the business and affairs of the Company following the Effective Date (as defined below) as its President and Chief Executive Officer and a member of its Board of Directors (the “Board”), and Executive desires to continue to serve the Company in such capacity following the Effective Date, in each case subject to the terms and conditions herein.

Agreement

     NOW, THEREFORE, in consideration of the premises and mutual covenants set forth in this Agreement, the Parties agree as follows:

     1. Employment.

     1.1 Employment and Term. The Company agrees to employ Executive and Executive agrees to serve the Company, on the terms and conditions set forth in this Agreement, for the period commencing on the day on which the Effective Time occurs or, if earlier, the first business day following the date on which representatives of Hisamitsu hold a majority of the seats on the Board (the earlier of such dates, the “Effective Date”) and expiring on the second anniversary of the Effective Date, unless sooner terminated as set forth in this Agreement (the “Term”); provided, however, that commencing on the second anniversary of the Effective Date and on each annual anniversary date thereafter, the Term of this Agreement shall be automatically extended for an additional one (1) year period unless, at least sixty (60) days prior to such annual anniversary date, the Company shall have delivered to Executive or Executive shall have delivered to the Company written notice that the Term of the Executive’s employment under this Agreement will not be extended.

     1.2 Duties of Executive. Executive shall serve as the President and Chief Executive Officer of the Company and shall have powers and authority superior to any other officer or employee of the Company or of any subsidiary of the Company. Subject to the preceding sentence, during the Term of employment, Executive shall in good faith use reasonable business efforts to perform all services as may be commensurate with his position and reasonably assigned to him by the Board and, following the Effective Time, the Chief Executive Officer of Hisamitsu and shall exercise such power and authority commensurate with his position and such other power and authority as may from time to time be delegated to him by the Board and, following the Effective Time, the Chief Executive Officer of Hisamitsu. In addition, following the Effective Time, Executive shall regularly consult with and provide information to the Chairman of the Board with respect to the Company’s business and affairs. Executive shall be required to report solely to, and shall be subject solely to the supervision and direction of, the Board and the Chief Executive Officer of Hisamitsu, and no other person or group shall be given authority to supervise or direct Executive in the performance of his duties. Executive shall devote substantially all of his working time, efforts and attention to the business and affairs of the Company. It shall not be a violation of this Agreement for Executive to: (a) serve on corporate, civic or charitable boards or committees (it being agreed that in no event shall Executive serve on the board of directors of more than two other corporations and the acceptance of any new corporate directorship after the Effective Date of this Agreement shall be subject to the consent of the Board, which shall not be unreasonably withheld); (b) deliver lectures, fulfill speaking engagements or teach at educational institutions; and (c) manage personal investments, so long as such activities do not unreasonably interfere with the performance of Executive’s responsibilities as an employee of the Company (or as a director of the Company, if serving as such), in accordance with this Agreement.

     2. Compensation.

     2.1 Base Salary. Executive shall receive a base salary at the annual rate of $475,000 (as increased from time to time, the “Base Salary”) during the Term of this Agreement, with such Base Salary payable in installments consistent with the Company’s normal payroll schedule. The Base Salary shall also be reviewed, at least annually, for merit increases (if any) and may, by action and in the discretion of the Board, be increased. Once increased, the Base Salary may not be decreased.

2

     2.2 Annual Incentive Compensation. Executive shall participate in the Company’s annual incentive bonus plan (the “Annual Incentive Bonus Plan”). The Annual Incentive Bonus Plan will be based on the achievement of Company and individual performance goals to be established by the Board in consultation with Executive, with annual target incentive bonuses of at least seventy-five percent (75%) of the Base Salary, which percentage will not be subject to reduction notwithstanding any provisions to the contrary contained in any applicable Annual Incentive Bonus Plan; provided, that, with respect to the fiscal year 2009, any bonus awarded to Executive will be determined by determining (i) the bonus to which Executive would have been entitled if he had served as Executive Vice President for the entire fiscal year (at Executive’s prior base salary and prior target percentage), (ii) the bonus to which Executive would have been entitled if he had served as Chief Executive Officer for the entire fiscal year (as provided in this Section 2.2) and (iii) the pro rata portion of each of (i) and (ii) by reference to the date of this Agreement. It is intended that performance measures selected shall be reasonably attainable at target. It is agreed that such Annual Incentive Bonus Plan shall not create any implication that the Board shall award any such bonus or incentive compensation unless targets are met; provided, that in the event that the Company agrees, in connection with the transactions contemplated by the Merger Agreement, to provide guaranteed bonuses to one or more other executives of the Company who are parties to change of control agreements and who enter into new compensation arrangements with the Company, then Executive shall be provided with a guaranteed bonus on the most favorable terms as set forth in any of those compensation arrangements.

     2.3 Long-Term Incentive Compensation. Within sixty (60) days following the Effective Time, the Company shall establish a Management Incentive Plan (the “LTI Plan”) consistent with the terms and conditions currently agreed to by the Company and Hisamitsu and shall designate Executive as a participant in the LTI Plan. Executive shall have a target award of $1,687,500, and a maximum award of $3,375,000, under the LTI Plan with respect to the performance cycle ending December 31, 2013 (or a lower adjusted amount if Executive and the Company mutually agree in writing on a performance period of less than four years applicable to Executive).

     2.4 Withholding. All payments under this Agreement or otherwise pursuant to Executive’s employment relationship shall be made net of any applicable withholding taxes or other amounts required to be withheld by law.

     3. Expense Reimbursement and Other Benefits.

     3.1 Expense Reimbursement. During the Term of Executive’s employment under this Agreement, the Company, upon the submission of reasonable supporting documentation by Executive, shall reimburse Executive for all reasonable expenses actually paid or incurred by Executive in the course of and pursuant to the business of the Company, including expenses for travel and entertainment. Notwithstanding anything herein to the contrary or otherwise, except to the extent any expense reimbursement provided pursuant to this Agreement or otherwise is not taxable income to Executive within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended from time to time (the “Code”, and Section 409A thereof and its implementing regulations and guidance, “Section 409A”), (a) the amount of expenses eligible for reimbursement provided to Executive during any calendar year will not affect the amount of expenses eligible for reimbursement or in-kind benefits provided to Executive in any other calendar year, (b) the reimbursements for expenses for which Executive is entitled to be reimbursed shall be made on or before the last day of the calendar year following the calendar year in which the applicable expense is incurred, (c) the right to payment or reimbursement or in-kind benefits hereunder may not be liquidated or exchanged for any other benefit and (d) the reimbursements shall be made pursuant to objectively determinable and nondiscretionary Company policies and procedures regarding such reimbursement of expenses.

3

     3.2 Employee Benefit Plans. During the Term of Executive’s employment under this Agreement, Executive shall be entitled to participate in all incentive, savings, and retirement plans, practices, policies and programs provided by the Company to other officer-level executives of the Company, in each case, in accordance with their respective terms in effect from time to time. Nothing in this Agreement shall preclude the Company from amending or terminating any such plan at any time.

     3.3 Health and Welfare Benefit Plans. During the Term of Executive’s employment under this Agreement, Executive and/or Executive’s family, as the case may be, shall be eligible for participation in and shall receive all benefits under health and welfare benefit plans, practices, policies and programs provided by the Company to other officer-level executives of the Company, in each case, in accordance with their respective terms in effect from time to time (including, without limitation, medical, prescription, dental, disability, salary continuance, employee life, group life, accidental death and travel accident insurance plans and programs). Nothing in this Agreement shall preclude the Company from amending or terminating any such plan at any time.

     3.4 Working Facilities. In connection with his employment by the Company, Executive shall be based at the Company’s offices in the New York or Miami areas, as elected by the Executive, unless otherwise agreed to in writing by the Board, subject to reasonable business travel on behalf of the Company, which will include, without limitation, quarterly travel to Tokyo, Japan, and regular travel to the Company’s offices in New York to attend Board meetings. During the Term of Executive’s employment under this Agreement, the Company shall furnish Executive with an office, a secretary and such other facilities and services suitable to his position and adequate for the performance of his duties under this Agreement.

     3.5 Vacation. During the Term of Executive’s employment under this Agreement, Executive shall be entitled to paid annual vacation according to the Company’s policy applicable to other officer-level executives of the Company, which in no event shall be less than seven (7) weeks per calendar year.

4

     3.6 Fringe Benefits. During the Term of Executive’s employment under this Agreement, Executive shall be entitled to fringe benefits according to the Company’s regular plans, practices, policies and programs applicable to other officer-level executives of the Company.

     4. Termination.

     4.1 Termination by Either Party.

     (a) The Company or Executive may terminate Executive’s employment for any reason or no reason at any time.

     (b) If the Company terminates Executive’s employment without Cause (as defined in this Section 4) or Executive terminates Executive’s employment with Good Reason (as defined in this Section 4), subject to Executive’s execution (and non-revocation, if applicable) of the waiver and release in the form attached hereto as Exhibit A within thirty (30) days following the Date of Termination (as defined in this Section 4), the Company shall pay Executive severance pay in an amount equal to the following:

     (i) If such termination occurs during the period of the Term commencing on the Effective Date and ending on the day prior to the second anniversary of the Effective Date, Executive shall be paid, in a lump sum within thirty (30) days following the Date of Termination, (A) an amount equal to two times the sum of: (x) Executive’s annual Base Salary in effect on the Date of Termination; plus (y) the Highest Annual Bonus (as defined in this Agreement); and (B) the Highest Annual Bonus prorated for the number of days during the current fiscal year that Executive has worked up through the date of termination. For this purpose, the “Highest Annual Bonus” is the greater of: (x) the annual incentive compensation bonus paid or payable by the Company to Executive pursuant to Section 2.2 of this Agreement (or prior annual incentive plan of the Company) in respect of the Company’s most recent completed fiscal year; and (y) the average of the annual incentive compensation bonuses paid or payable by the Company to Executive pursuant to Section 2.2 of this Agreement (or prior annual incentive plan of the Company) in respect of the three completed fiscal years immediately preceding the fiscal year in which the termination occurs. In addition, in the event of such a termination within such period, Executive shall be entitled to the additional benefits set forth on Exhibit B hereto.

5

     (ii) If such termination occurs during the period of the Term commencing on the second anniversary of the Effective Date, Executive shall be paid eighteen (18) months of Executive’s Base Salary in effect at the date of such termination within thirty (30) days following the Date of Termination, as well as a prorated bonus, such prorated bonus being in an amount equal to the payment that would have been paid to Executive pursuant to the applicable Annual Incentive Bonus Plan had Executive continued to the end of the applicable performance period, multiplied by a fraction, the numerator of which is the number of completed days of employment during such performance period and the denominator of which is the total number of days in the performance period (“Termination Prorated Bonus”) and which shall be paid when it would otherwise have been paid if Executive’s employment had continued. For purposes of determining the amount of the Termination Prorated Bonus, subjective performance criteria shall be disregarded, and Board discretion to adjust the resulting figure downward shall be applied only if and to the same extent applied to the Company’s other executive officers.

     (iii) On any such termination of employment, Executive shall be paid, within thirty (30) days following the Date of Termination, an amount equal to the Base Salary (and benefits) and annual incentive compensation (for the prior calendar year) earned by Executive (to the extent such payments have not been made) on or prior to the Date of Termination but unpaid as of the Date of Termination (but subject to the terms of the applicable incentive compensation plans), as well as any accrued but unused vacation in accordance with Company policies. In addition, Executive shall be entitled to any amounts due under any Company benefit, fringe, equity or payroll practices plans or policies in accordance with their respective terms and any amounts earned on or prior to the Date of Termination but unpaid as of the Date of Termination under the Company’s long-term incentive compensation plan (but subject to the terms thereof). The amounts and benefits under this Section (iii) shall be referred to as “Accrued Amounts.”

     (c) If the Company terminates Executive’s employment with Cause (as defined in this Section 4) or Executive terminates Executive’s employment without Good Reason (as defined in this Section 4), the Company shall pay to Executive his Accrued Amounts.

     (d) If Executive’s employment terminates due to Executive’s death or Disability (as defined in this Section 4), the Company shall pay to Executive (or his estate, beneficiary or legal representative), his Accrued Amounts, as well as a Termination Prorated Bonus. For the purposes of this Agreement, “Disability” shall mean the absence of the Executive from the Executive’s duties with the Company on a full time basis for one hundred and eighty (180) days in any period of three hundred sixty-five (365) consecutive days as a result of incapacity due to mental or physical illness (“Disability”). Upon the end of the aforesaid period and while the Disability continues, the Company may terminate the Executive for Disability on written notice (the date specified in such notice, the “Disability Effective Date”).

6

     (e) If the Company gives notice of non extension of the Term of employment under this Agreement, then, upon the end of the then-current Term, Executive’s employment hereunder shall end and (so long as no intervening termination of employment has occurred, in which case Section 4.1(b), (c) or (d) shall apply, as applicable) such termination shall be treated as a termination (x) to which Section 4.1(b)(i) of this Agreement applies if such notice is given prior to the second anniversary of the Effective Date and (y) to which Section 4.1(b)(ii) applies if given thereafter.

     (f) Any Termination Prorated Bonus, if any, shall be paid at the time it would be paid if the Executive continued employment. Notwithstanding anything contained in any Annual Incentive Bonus Plan, payment of any Termination Prorated Bonus pursuant to this Section 4.1 shall be in complete and total satisfaction of any obligation of the Company to Executive under such Annual Incentive Bonus Plan with respect to the performance period to which the Termination Prorated Bonus relates.

     4.2 Termination for Cause by Company. In the case of the Company terminating this Agreement, “Cause” means any one or more of the following:

     (a) a material act or acts of personal dishonesty taken by Executive which is either (x) at the expense of the Company, or (y) reasonably likely to bring significant disrepute to the Company;

     (b) any violation by Executive of his material obligations under this Agreement (other than as a result of incapacity due to physical or mental illness) which is demonstrably willful and deliberate on his part and which is not remedied within ten business days after receipt of written notice from the Company;

     (c) the conviction (or plea of no contest) of Executive for any criminal act which is a felony or a misdemeanor in each case involving moral turpitude; or

     (d) a material breach by Executive of his Confidentiality and Invention Agreement with the Company;

Termination of this Agreement for Cause by the Company shall be effective only upon a majority vote of the Board; provided however, that Executive shall first be given an opportunity to make a presentation to the Board in Executive’s defense.

7

     4.3 Termination for Good Reason by Executive. In the case of Executive terminating his employment under this Agreement, “Good Reason” means, without Executive’s prior written consent, the occurrence of any of the following events following the Effective Date: (A) (i) any diminution in Executive’s title or material diminution in Executive’s authority, duties, responsibilities or reporting lines as President and Chief Executive Officer of the Company (other than temporarily as a result of Executive’s physical or mental incapacity), excluding any such diminution arising by reason of the Company no longer being a public company, or (ii) the assignment to Executive of duties inconsistent with such positions; and provided, that the foregoing shall not be violated by the Board’s good faith actions with regard to acquisitions, dispositions or realignment of the Company’s lines of business; or (B) a material breach by Company of this Agreement including, without limitation, as to location of office, travel or compensation. In order for a termination by Executive to constitute a termination for Good Reason, Executive must notify the Company of the circumstances claimed to constitute Good Reason in writing not later than the sixtieth (60th) day after it has arisen or occurred and must provide the Company with at least thirty (30) days within which to cure such circumstances before terminating employment, and, failing a cure, Executive must terminate his employment within thirty (30) days following the expiration of such cure period.

     4.4 Notice of Termination. Any termination by the Company for Cause or by the Executive for Good Reason shall be communicated by Notice of Termination to the other Party given in accordance with Section 8. For purposes of this Agreement, a “Notice of Termination” means a written notice which: (a) indicates the specific termination provision in this Agreement relied upon; (b) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated; and (c) if the Date of Termination is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than fifteen (15) days after the giving of such notice, but subject to compliance with and further notice and cure provisions contained herein). The failure by the Executive or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company under this Agreement or preclude the Executive or the Company from asserting such fact or circumstance in enforcing the Executive’s or the Company’s rights under this Agreement.

     4.5 Date of Termination. “Date of Termination” means: (a) if the Executive’s employment is terminated by the Company for Cause, or by the Executive for Good Reason, the date of receipt of the Notice of Termination or any later date specified therein, as the case may be; (b) if the Executive’s employment is terminated by the Company other than for Cause or Disability, the Date of Termination shall be the date on which the Company notifies the Executive of such termination; and (c) if the Executive’s employment is terminated by reason of death or Disability, the Date of Termination shall be the date of death of the Executive or the Disability Effective Date, as the case may be.

8

     4.6 Resolution of Disputes. If, during the period commencing on the Effective Date and ending on the day prior to the second anniversary of the Effective Date, there shall be any dispute between the Company and the Executive (but excluding any dispute by Executive not in good faith) (a) as to whether Cause existed or (b) as to whether Good Reason existed, then, unless and until there is a final arbitration award pursuant to Section 16 or final non-appealable judgment by a court of competent jurisdiction declaring that such termination was for Cause or was not with Good Reason, the Company shall pay all amounts, and provide all benefits, to the Executive and/or the Executive’s family or other beneficiaries, as the case may be, that the Company would be required to pay pursuant to this Section 4 as though such termination were by the Company without Cause or by the Executive with Good Reason; provided, however, that the Company shall not be required to pay any disputed amounts pursuant to this paragraph except upon receipt of a written promise by or on behalf of the Executive to repay all such amounts to which the Executive is ultimately adjudged by such court not to be entitled.

     5. Restrictive Covenants.

     5.1 Confidentiality and Intellectual Property. Executive has previously executed the Company’s Confidentiality and Invention Agreement and, from and after the Effective Date, shall materially comply therewith; provided, that any express provision therein that is substantially similar in intent to an express provision of this Section 5 shall be superseded.

     5.2 Non-Competition and Non-Solicitation. Executive agrees that, both during employment and for a period of eighteen (18) months following the termination of this Agreement or his employment for any reason, Executive will not, directly or indirectly (in any capacity, on Executive’s own behalf or on behalf of any other person or entity):

     (a) Anywhere in the World, own an interest in any business, including but not limited to, an individual proprietorship, partnership, corporation, joint stock company, joint venture, limited liability company, trust or other form of business entity, or unincorporated organization (except for (i) an ownership interest not exceeding five percent (5%) of a publicly-traded entity and (ii) equity compensation, as provided in Section 5.2(b)), that is a Company Competitive Business or a Hisamitsu Competitive Business (in each case as defined by this Agreement). For purposes of this Agreement, (i) “Company Competitive Business” shall mean any business that is engaged in the acquisition, manufacture, development or sale of any product which materially competes in the same markets as any material product of Noven Pharmaceuticals, Inc. or any of its subsidiaries (the “Company Group”) or which is under active development by the Company Group and is reasonably expected to be a material product of the Company Group; provided, however, that Company Competitive Business shall not include any business having $5 billion or greater in annual revenues (in the fiscal year preceding Executive’s termination from employment with the Company) which business does not acquire, manufacture, develop, or sell any non-hormonal treatment for menopause (the “Special Exception”); and (ii) “Hisamitsu Competitive Business” shall mean any business that is engaged in the acquisition, manufacture, development or sale of any material product which materially competes in the same markets as any product of Hisamitsu or any of its subsidiaries (excluding the Company Group) (the “Hisamitsu Group”) or which is under active development by the Hisamitsu Group and is reasonably expected to be a material product of the Hisamitsu Group, but only if Executive had substantial exposure to research, development, sales, marketing or other material non-public strategic information with respect to such product as part of Executive’s responsibilities to the Company, and subject to the Special Exception;

9

     (b) Anywhere in the World, as an individual proprietor, principal, partner, shareholder, joint venturer, member, trustee, officer, director, consultant, broker, employee, agent, trustee, independent contractor, or in any manner whatsoever, perform any work for or provide any services to or receive any remuneration from any person or entity that is a Company Competitive Business or a Hisamitsu Competitive Business; provided, that being employed by (and receiving compensation (including equity compensation) from) an employer with a Company Competitive Business or a Hisamitsu Competitive Business, standing alone, shall not be considered a violation of this Agreement so long as (A) the employer has more than one discrete and readily distinguishable part of its business, (B) Executive’s duties are not at or involving the part of the business of the employer that constitutes a Company Competitive Business or a Hisamitsu Competitive Business, including, without limitation, serving in a capacity where any person involved in the Company Competitive Business or Hisamitsu Competitive Business reports to Executive (excluding, however, reporting arrangements of two or more levels so long as the revenue of the Company Competitive Business or the Hisamitsu Competitive Business is not material to the employer and is (or is projected to be) two-thirds or less of the revenue of the corresponding Hisamitsu or Company business during the applicable period) and (C) Executive notifies the Company of such employment prior to commencement of his employment with such new employer. For this purpose, “employment” and corollary terms shall mean the provision of services to any such person or entity as employee, independent contractor or in any other capacity;

     (c) Divert or attempt to divert from the Company or otherwise tortiously interfere with any business relationship which exists/existed between the Company and any specific prospective or existing client of the Company Group or the Hisamitsu Group other than in the good faith performance of his duties for permitted activities hereunder; and/or

10

     (d) Hire or engage any Company employee or exclusive contractor to enter into an employment or business relationship with any other person or entity or recruit, solicit or otherwise induce any Company employee or exclusive contractor to terminate his/her employment or engagement with the Company. This covenant applies as to any employee or exclusive contractor who, at the time of the recruitment/hire, is currently employed or engaged with the Company or who was employed or engaged with the Company at any time during the six month period preceding the date of the attempted employment, recruitment, or solicitation. The hiring, recruitment or solicitation of any such Company employee or exclusive contractor by an entity with which Executive is employed or associated shall not be deemed to be a direct or indirect act on Executive’s own behalf if such hiring, recruitment, or solicitation results from a general solicitation for candidates and Executive did not assist the entity in identifying the individual(s) hired, recruited or solicited. Furthermore, the foregoing shall not be violated by advertising not targeted at Company employees or exclusive contractors or by serving as a reference upon request with regard to an entity with which Executive is not associated.

     5.3 Enforcement and Survival. It is the intention of the Company and Executive that this Section 5 be enforceable to the fullest extent permissible. Accordingly, Executive agrees that in the event that any restriction stated in this Section, or any portion thereof, shall be declared or held to be invalid or unenforceable by a court of competent jurisdiction, then such restriction shall be amended or modified, as necessary, to render it valid and enforceable.

     (a) Executive further agrees that a breach of this Section 5 would result in irreparable and continuing damage to the Company. Accordingly, notwithstanding anything in this Agreement to the contrary, in the event of a breach or threatened breach by Executive, the Company shall be entitled to pursue immediately any and all remedies it may have against Executive in a court of competent jurisdiction by specific performance, injunction, or such other remedies and relief as may be available. Executive’s obligations under this Section 5 are independent of any obligation of the Company. The existence of any other claim or cause of action by Executive, including but not limited to, any other claim or cause of action under this Agreement, does not constitute a defense to the enforcement by the Company of the covenants contained in this Section; provided, however, in the event the Company ceases (or fails) to pay Executive any severance pay to which Executive is entitled in accordance with the terms of Section 4 of this Agreement which is not remedied within ten (10) business days after receipt of written notice from Executive, Executive shall then be relieved of all obligations under subsections 5.2(a) and 5.2(b). Executive agrees that prior to the commencement of any employment or consulting relationship with any person or entity, Executive will advise the person or entity of the restrictive covenant terms contained in this Agreement.

11

     (b) The covenants provided for in this Section 5 shall survive the termination of this Agreement and of Executive’s employment.

     6. Service of Executive as Director. For so long as Executive serves as an employee of the Company, the Executive shall serve as a member of the Board. Executive’s current Indemnity Agreement with the Company shall continue in full force and effect (except for such amendments thereto to which Executive agrees in writing).

     7. Governing Law and Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of Florida without reference to principles of conflicts of laws. For any action allowed by this Agreement to be filed in a court of law, the parties agree that for any such action, venue shall be exclusively in the state in which Executive’s principal office is located and agree that any dispute concerning the interpretation or application of this Agreement shall be heard BY A JUDGE AND NOT A JURY. The parties waive any and all objection to jurisdiction or venue.

     8. Notices: Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given when delivered by hand or when deposited in the United States mail, by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to the Company:

Noven Pharmaceuticals, Inc.
11960 S.W. 144th Street
Miami, Florida 33186
Attention: Chairman of Compensation Committee

With a copy to:

Hisamitsu Pharmaceutical Co., Inc.,
Marunouchi, 1-11-1, Chiyoda-Ku
Tokyo, 100-6221, Japan
Fax: 81-3-5293-1708
Attention: Mr. Nobuo Tsutsumi, General Manager of Legal Department

If to Executive:

Jeffrey Eisenberg

(at the last address provided by Executive to the Company’s Human Resources Department)

or to such other addresses as either Party hereto may from time to time give notice of to the other in the aforesaid manner.

12

     9. Successors.

     (a) This Agreement is personal to Executive and without the prior written consent of the Company shall not be assignable by Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives.

     (b) This Agreement shall inure to the benefit of, be enforceable by, and be binding upon the Company’s successors and permitted assigns. The Company may only assign this Agreement to an entity acquiring all or substantially all of its assets.

     (c) The Company will require any successors or permitted assigns (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement, and to assure that it is financially capable of performing, all of the Company’s financial obligations under this Agreement, in the same manner and to the same extent that the Company would be required to perform them if no such succession had taken place. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets which assumes and agrees to perform this Agreement by operation of law or otherwise.

     10. Severability. In the event that any paragraph or provision of this Agreement shall be held to be illegal or unenforceable, the entire Agreement shall not fall on account thereof, but shall otherwise remain in full force and effect, and such paragraph or provision shall be enforced to the maximum extent permissible.

     11. Waivers. The waiver by either Party hereto of a breach or violation of any term or provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach or violation.

     12. Damages. Nothing contained herein shall be construed to prevent the Company or Executive from seeking and recovering from the other damages sustained by either or both of them as a result of its or his breach of any term or provision of this Agreement.

     13. No Third Party Beneficiary. Nothing expressed or implied in this Agreement is intended, or shall be construed, to confer upon or give any person (other than the Parties hereto and, in the case of Executive, his heirs, personal representative(s) and/or legal representative) any rights or remedies under or by reason of this Agreement.

     14. Full Settlement. The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against Executive or others.

13

     15. Certain Additional Payments by the Company.

     (a) Anything in this Agreement to the contrary notwithstanding, in the event that any payment, distribution or other action by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (but determined without regard to any additional payments required under this Section 15) (each a “Payment”), would be subject to an excise tax imposed by Section 4999 of the Code, or any interest or penalties are incurred by the Executive with respect to any such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), the Company shall make a payment to the Executive (a “Gross-Up Payment”) in an amount such that after payment by the Executive of all taxes (including any Excise Tax) imposed upon the Gross-Up Payment, the Executive retains (or has had paid to the Internal Revenue Service on his behalf) an amount of the Gross-Up Payment equal to the sum of (x) the Excise Tax imposed upon the Payments, plus (y) the product of (i) any deductions disallowed because of the inclusion of the Gross-Up Payment in the Executive’s adjusted gross income, multiplied by (ii) the actual applicable marginal rate of federal income taxation for the calendar year in which the Gross-Up Payment is to be made. For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to pay federal income taxes at his actual marginal rates of federal income taxation for the calendar year in which the Gross-Up Payment is to be made.

     (b) Subject to the provisions of paragraph (c) of this Section 15, all determinations required to be made under this Section 15 (including whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment, and the assumptions to be utilized in arriving at such determination) shall be made by the Company’s independent public accountants (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Company and the Executive within fifteen (15) business days of the receipt of notice from the Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the applicable change of control transaction, the Executive shall appoint (with the consent of the Company, which consent shall not be unreasonably withheld or delayed) another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 15, shall be paid by the Company to the Executive within five (5) days of the receipt of the Accounting Firm’s determination. If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall furnish the Executive with a written opinion that failure to report the Excise Tax on the Executive’s applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and the Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (“Underpayment”), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 15 and the Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive.

14

     (c) The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten (10) business days after the Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the thirty (30) day period following the date on which he gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall:

     (i) give the Company any information reasonably requested by the Company relating to such claim,

     (ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company,

     (iii) cooperate with the Company in good faith in order effectively to contest such claim, and

     (iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 15(c), the Company shall control all proceedings taken in connection with such contest and, at its reasonable option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall reasonably determine; provided, however, that if the Company directs the Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

15

     (d) If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 15(c), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to the Company’s complying with the requirements of Section 15(c)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 15(c), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

     (e) Subject to any earlier time limits set forth in this Section 15, all payments and reimbursements to which Executive is entitled under this Section 15 shall be paid to or on behalf of Executive not later than the end of the taxable year of Executive next following the taxable year of Executive in which Executive (or the Company, on Executive’s behalf) remits the related taxes (or, in the event of an audit or litigation with respect to such tax liability, not later than the end of the taxable year of the Executive next following the taxable year of Executive in which there is a final resolution of such audit or litigation (whether by reason of completion of the audit, entry of a final and non-appealable judgment, final settlement, or otherwise)).

16

     16. Negotiation and Arbitration. If the Parties should have a material dispute arising out of or relating to this Agreement or the Parties’ respective rights and duties hereunder, except as otherwise provided for by Section 5, then the Parties will resolve such dispute in the following manner: (a) any Party may at any time deliver to the other a written dispute notice setting forth a brief description of the issue for which such notice initiates the dispute resolution mechanism contemplated by this Section; (b) during the twenty (20) day period following the delivery of the notice described in clause (a) above, appropriate representatives of the various Parties will meet and seek to resolve the disputed issue through negotiation; (c) if representatives of the Parties are unable to resolve the disputed issue through negotiation, then within ten (10) days after the period described in clause (b) above, the Parties will refer the issue (to the exclusion of a court of law) to final and binding arbitration in the county in which Executive’s principal offices are located. In any arbitration pursuant to this Agreement: (x) the rules and regulations (“Rules”) promulgated by the American Arbitration Association (“AAA”) shall apply to the proceedings and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof; (y) discovery shall be allowed and governed by the Florida Code of Civil Procedure; and (z) the award or decision shall be rendered by a majority of the members of a Board of Arbitration consisting of three (3) members, one of whom shall be appointed by each of the respective Parties and the third of whom shall be the chairman of the panel and be appointed by mutual agreement of said two Party-appointed arbitrators. In the event of failure of said two arbitrators to agree within thirty (30) days after the commencement of the arbitration proceeding upon the appointment of the third arbitrator, the third arbitrator shall be appointed by the AAA in accordance with the Rules. In the event that either Party shall fail to appoint an arbitrator within ten (10) days after the commencement of the arbitration proceedings, such arbitrator and the third arbitrator shall be appointed by the AAA in accordance with the Rules. Nothing set forth above shall be interpreted to prevent the Parties from agreeing in writing to submit any dispute to a single arbitrator in lieu of a three (3) member Board of Arbitration. Upon the completion of the selection of the Board of Arbitration (or if the Parties otherwise agree in writing to a single arbitrator) an award or decision shall be rendered within no more than thirty (30) days. Notwithstanding the foregoing, the request by either Party for preliminary or permanent injunctive relief, whether prohibitive or mandatory, shall not be subject to arbitration and may be adjudicated by the courts located within the county in which Executive’s offices are located. ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM OR PROCEEDING RELATING TO OR ARISING OUT OF THIS AGREEMENT, OR ANY TRANSACTION OR CONDUCT IN CONNECTION HEREWITH, IS WAIVED. The Company agrees to pay promptly as incurred, to the full extent permitted by law, all reasonable legal fees and expenses which Executive may reasonably incur as a result of any dispute or contest (regardless of the outcome thereof) by the Company, the Executive (but excluding disputes or contests by Executive not in good faith or that are frivolous) or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any dispute or contest by the Executive about the amount of any payment pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Code; provided, that this sentence shall not apply to disputes or contests by the Company (i) involving enforcement of the provisions of Section 5 by injunctive or other, similar equitable relief, or (ii) for damages for the violation of Section 5 (unless such dispute or contest for damages also involves a claim by Executive that amounts owed to him hereunder have not been paid). Amounts shall be invoiced within sixty (60) days of being incurred and shall be paid within fifteen (15) days after being invoiced.

17

     17. Compliance with Code Section 409A.

     (a) General. It is the intention of both the Company and Executive that the benefits and rights to which Executive could be entitled pursuant to this Agreement comply with Section 409A, to the extent that the requirements of Section 409A are applicable thereto, and the provisions of this Agreement shall be construed in a manner consistent with that intention. If Executive or the Company believes, at any time, that any such benefit or right that is subject to Section 409A does not so comply, it shall promptly advise the other and shall negotiate reasonably and in good faith to amend the terms of such benefits and rights such that they comply with Section 409A (with the most limited possible economic effect on Executive and on the Company).

     (b) Distributions on Account of Separation from Service. No payment or benefit which is nonqualified deferred compensation within the meaning of Section 409A required to be paid under this Agreement on account of termination of Executive’s employment shall be made unless and until Executive incurs a “separation from service” within the meaning of Section 409A.

     (c) Six Month Delay for Specified Employees. If Executive is a “specified employee,” then no payment or benefit that is payable on account of Executive’s “separation from service”, as that term is defined for purposes of Section 409A, shall be made before the date that is six months after Executive’s “separation from service” (or, if earlier, the date of Executive’s death) if and to the extent that such payment or benefit constitutes nonqualified deferred compensation under Section 409A and such deferral is required to comply with the requirements of Section 409A. Any payment or benefit delayed by reason of the prior sentence shall be paid out or provided in a single lump sum at the end of such required delay period in order to catch up to the original payment schedule. For purposes of this Section, Executive shall be considered to be a “specified employee” if, at the time of his or her separation from service, Executive is a “key employee”, within the meaning of Section 416(i) of the Code, of the Company (or any person or entity with whom the Company would be considered a single employer under Section 414(b) or Section 414(c) of the Code) any stock in which is publicly traded on an established securities market or otherwise.

18

     (d) No Acceleration of Payments. Neither the Company nor Executive, individually or in combination, may accelerate any payment or benefit that is subject to Section 409A, except in compliance with Section 409A and the provisions of this Agreement, and no amount that is subject to Section 409A shall be paid prior to the earliest date on which it may be paid without violating Section 409A.

     (e) Treatment of Each Installment as a Separate Payment. For purposes of applying the provisions of Section 409A to this Agreement, each separately identified amount to which Executive is entitled under this Agreement shall be treated as a separate payment. In addition, to the extent permissible under Section 409A, any series of installment payments under this Agreement shall be treated as a right to a series of separate payments.

     (f) Selection of Payment Dates. If any Section of this Agreement provides for payment within a time period, the determination of when such payment shall be made shall be solely in the discretion of the Company.

     18. Merger Clause. Effective as of the Effective Date, this Agreement contains the complete, full, and exclusive understanding of Executive and the Company as to its subject matter and shall, on such date, supersede the Letter Agreement and the Change of Control Agreement (it being understood that, during the period commencing on the date of this Agreement and ending on the Effective Date (the “Interim Period”), the Letter Agreement and the Change of Control Agreement shall continue to be fully effective in accordance with their terms); provided, that Executive shall provide Hisamitsu with copies of any notices Executive provides to the Company under the Letter Agreement and the Change of Control Agreement during the Interim Period at the same time such notices are provided to the Company. Any amendments to this Agreement shall be effective and binding on Executive and the Company only if any such amendments are in writing and signed by both Parties. In the event that the Merger Agreement is terminated by the parties thereto, this Agreement shall cease to be of force or effect, and neither the Company nor Executive shall have any right, claim, liability or obligation hereunder. In addition, this Agreement shall cease to be of force or effect, and neither the Company nor Executive shall have any right, claim, liability or obligation hereunder, in the event that (i) the Tender Offer is consummated and, immediately following the consummation of the Tender Offer, Hisamitsu owns (directly or indirectly) less than a majority of the Fully Diluted Shares (as defined in the Merger Agreement) or (ii) a third party unaffiliated with Hisamitsu and its affiliates owns a majority of the Fully Diluted Shares. In the event that either of the immediately preceding two sentences is applicable, the Letter Agreement and the Change of Control Agreement shall continue to be fully effective in accordance with their terms as in effect immediately prior to the date of this Agreement.

19

     19. No Set-off; Sole Right to Severance Pay. In the event of any termination of employment under this Agreement, Executive shall be under no obligation to seek other employment and there shall be no offset against any amounts due Executive under this Agreement on account of any remuneration attributable to any subsequent employment that Executive may obtain. The payments to be provided to Executive pursuant to Section 4 of this Agreement shall constitute the exclusive payments in the nature of severance or termination pay or salary continuation which shall be due to Executive upon a termination of employment and shall be in lieu of any other such payments under any plan, program, policy or other arrangement of the Company or any of its affiliates.

[Remainder of Page Intentionally Left Blank]

20

     IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written.

COMPANY: NOVEN PHARMACEUTICALS, INC.
By:	/s/ Peter Brandt
	Name:	Peter Brandt
	Title:	President & Chief Executive Officer

EXECUTIVE:
By:	/s/ Jeffrey F. Eisenberg
		Jeffrey F. Eisenberg

21

EXHIBIT A

WAIVER AND RELEASE

This Waiver and General Release (the “Agreement”) is entered into by and between NOVEN PHARMACEUTICALS, INC., a Delaware corporation (the “Company”), and JEFFREY EISENBERG (“Executive”) (collectively, the “Parties”).

RECITALS

WHEREAS, the Company and Executive have agreed to a separation of employment; and

WHEREAS, the Parties desire to resolve all matters between them, including all matters related to and/or arising out of Executive’s employment with the Company (including, without limitation, the ending of Executive’s employment with the Company), and the facts and circumstances underlying the same, and to settle and compromise any and all claims and differences between them, of any sort, origin, or description.

NOW, THEREFORE, in consideration of the premises and of the mutual promises and agreements contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Executive and the Company agree as follows:

     1. Termination of Employment. As of [INSERT DATE], Executive’s employment with the Company has ended. Executive shall no longer be eligible to participate in, or be covered by, any employee benefit plan or program offered by or through the Company, and he shall not receive any benefits or payments from the Company, except as otherwise specified in this Agreement.

     2. Payments. Executive shall also be entitled to [the payments identified in Section 4 of the Employment Agreement, as applicable and Sections 15 and 16 of the Employment Agreement].

     3. Benefits. Executive shall also be entitled to [the benefits identified in Section 4 of the Employment Agreement, as applicable]. Executive shall [also be entitled to payment under the LTI Plan, in accordance with the terms of the LTI Plan.]

     4. General Waiver and Release of All Claims. [To be modified as necessary to comport with applicable state and local laws and to comply with then-current state of the law]. In exchange for the promises contained in this Agreement, Executive agrees that Executive or any person acting by, through, or under Executive, VOLUNTARILY, KNOWINGLY AND WILLINGLY RELEASES AND FOREVER DISCHARGES the Company, including its parent and subsidiary corporations, affiliates, all related domestic and foreign businesses, entities, corporations, and partnerships, including but not limited to                                                                                              As well as, in such capacity, all current and former directors, officers, executives, shareholders, partners, employees, successors in interest, predecessors, representatives, agents, insurers, attorneys, divisions, joint venturers, investors, and assigns and each of them (collectively “Company Releasees”), FROM ANY AND ALL CLAIMS OR OBLIGATIONS OF ANY KIND OR NATURE WHATSOEVER whether now known or unknown and later discovered, suspected or unsuspected, which arose on or before the Effective Date (as herein defined) of this Agreement; provided, however, that Executive does not waive any vested rights in any Company plan or program or any right to be provided a defense or to be indemnified that he may have under any indemnification agreement or the Company’s Articles of Incorporation or Bylaws. Executive understands that this release includes but is not limited to any right that Executive may have relating in any way to Executive’s employment by the Company or the conclusion of such employment, including without limitation any claims under the law of contracts or torts, the Age Discrimination in Employment Act of 1967, as amended (29 U.S.C. Sections 621 et seq.), including the Older Workers Benefit Protection Act of 1990; Title VII of the Civil Rights Act of 1964, as amended (42 U.S.C. Sections 2000e et seq.), including the Civil Rights Act of 1991 and the Civil Rights Acts of 1886, 1970 and 1971 (42 U.S.C. Sections 1981 et seq.); the Americans With Disabilities Act (42 U.S.C. Sections 12101 et seq.); and the Rehabilitation Act of 1973; or any other federal, state, or local statutory or common laws relating to discrimination or employment. Executive declares and represents that the Executive has been paid all wages or other compensation owed by any or all of the Company Releasees and represents that he has not suffered any on-the-job injuries or work-related accidents or injuries, occupational diseases or disabilities, whether temporary, permanent, partial, or total, for which the Executive has not been fully compensated. Executive further agrees that he has been granted all leave, including all leave under the Family and Medical Leave Act, to which he may have been entitled, if any.

Executive agrees that he will not institute any action or actions, cause or causes of action (in law or in equity), suits, debts, liens, claims, demands, now known or unknown and later discovered, suspected or unsuspected, fixed or contingent which Executive may have or claim to have in state or federal court, or with any state, federal or local government agency or with any administrative or advisory body arising from or attributable to any or all of the Company Releasees, including but not limited to, all employee benefit plans sponsored or administered by Company. Executive also agrees that if a claim is prosecuted in Executive’s name before any court or administrative agency, Executive waives and agrees not to take any award of money or other damages from such suit. Executive also agrees that if a claim is prosecuted in Executive’s name, Executive will immediately request, in writing, that the claim on Executive’s behalf be withdrawn. Executive also agrees that he is waiving on behalf of Executive and Executive’s attorneys all claims for attorneys’ fees, expenses and court costs, including the same at all appellate levels.

     5. Review and Revocation. Executive acknowledges that he has been advised in writing to consult with an attorney before signing this Agreement and that he has been afforded the opportunity to consider the terms of this Agreement for twenty-one (21) days prior to its execution. Executive understands that he can use all or any part of this 21-day period to decide whether to sign this Agreement. Executive and Company agree that any material or non-material changes which may be made in this Agreement after the Agreement is initially provided to the Executive shall not re-start the running of the 21-day period. Executive further acknowledges that he has read this Agreement in its entirety; that he fully understands all of its terms and their significance; that he has signed it voluntarily and of his own free will; and that he intends to abide by its provisions without exception.

     6. Effective Date and Revocation. So long as Executive does not revoke this Agreement, this Agreement shall become effective on the eighth day following the date the Executive signs this Agreement (“Effective Date”). For a period of seven (7) days following the date the Executive signs this Agreement, Executive may revoke this Agreement by providing written notice of revocation to: [INSERT CONTACT PERSON]. In the event that Executive revokes the Agreement prior to the eighth day after his execution of it, this Agreement and the promises contained herein shall automatically be null and void.

     7. No Admission of Liability. The execution of this Agreement does not constitute an admission by any Company Releasee or Executive of any violation of any civil rights or other employment discrimination statute, or any other legal statute, provision, regulation, ordinance, order or action under common law or of any wrongdoing of any kind, and this Agreement shall not be offered or used to establish any such liability.

     8. No re-Employment. [Executive agrees that he will not seek reemployment with the Company or work on the property of the Company or any related entity as a contractor or in any other capacity at any time in the future.]

     9. Restrictive Covenants. Notwithstanding anything in this Agreement, and specifically notwithstanding the “Entire Agreement” clause of this Agreement, any and all restrictive covenants, including but not limited to any non-competition, non-solicitation, intellectual property or confidentiality covenants, included in any agreement by and between the Executive and the Company (or any entity related to the Company), including but not limited to the Employment Agreement [INSERT ANY OTHER EXPRESS REFERENCES TO EMPLOYMENT AGREEMENT(S) AND OTHER SOURCES OF RESTRICTIVE COVENANTS HERE], shall survive the execution and delivery of this Agreement and shall continue in full force and effect in accordance with their terms subsequent to the Effective Date of this Agreement.

2

     10. Return of Property. Executive agrees that all property of the Company or any related entity, including but not limited to any trade secrets, confidential information, business documents, books, records, accounts, credit cards and/or equipment, has been returned to the Company as of the date the Executive executes this Agreement. It is acknowledged the Executive may retain his rolodex and electronic address book.

     11. Cooperation. Executive agrees to reasonably cooperate with the Company and its attorneys in connection with any threatened or pending litigation against the Company or its Affiliates as to matters with regard to his employment period with the Company (other than those in which he may be personally liable to the Company), and to make himself, upon reasonable notice, to prepare for and appear at deposition or trial in connection with any such matters; provided, however, that such cooperation does not unreasonably interfere with the performance of services by Executive for any employer subsequent to the Company. The Company shall promptly reimburse any reasonable expenses incurred by Executive in connection with such cooperation.

     12. Severability. In the event that any provision of this Agreement shall be held to be illegal or unenforceable, the entire Agreement shall not fall on account thereof, but shall otherwise remain in full force and effect, and such paragraph or provision shall be enforced to the maximum extent permissible.

     13. Entire Agreement. This Agreement constitutes the complete understanding between the parties and supersedes all prior agreements between the parties, except the non-competition and non-solicitation and confidentiality and intellectual property covenants contained in the Employment Agreement and the Indemnity Agreement [INSERT BY EXPRESS REFERENCE ANY OTHER AGREEMENTS THAT ARE TO SURVIVE THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO ANY RESTRICTIVE COVENANTS INCLUDED IN ANY SUCH AGREEMENTS]. The parties acknowledge that the other has not made any representation to him or it other than as set forth herein. Any modification of this Agreement shall be in writing and signed by each of the parties.

     14. Governing Law; Jurisdiction and Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of Florida without reference to principles of conflicts of laws. For any action allowed by this Agreement to be filed in a court of law, the parties agree that for any such action, venue shall be exclusively in the state in which Executive’s principal office is located; agree that any dispute concerning the interpretation or application of this Agreement shall be resolved in accordance with Section 16 of the Employment Agreement, which shall continue in full force and effect. The parties waive any and all objections to jurisdiction or venue.

     15. Successors and Assigns. The Company may assign this Agreement to the same extent it may assign the Employment Agreement. Executive shall not assign this Agreement, but it shall inure to the benefit of the Executive’s executors, administrators and heirs. This Agreement shall be binding upon, inure to the benefit of, and be enforceable by the Company and its successors and permitted assigns. The Company will require any successor or assign (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement, and to assure that it is financially capable of performing, all of the Company’s financial obligations under this Agreement, in the same manner and to the same extent that the Company would be required to perform them if no such succession had taken place. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets which assumes and agrees to perform this Agreement by operation of law or otherwise.

3

The undersigned have executed this Agreement as of the date first forth above.

NOVEN PHARMACEUTICALS, INC.
(“Company”)
By:
	in his/her capacity as authorized representative of the Company
Print Name:
Title:
Date:
EXECUTIVE
By:
Print
Name:
Date:

4

Exhibit B
Additional Benefits

In the event of a termination of employment to which Section 4.1(b)(i) applies, Executive will be entitled to the following additional benefits:

     For the remainder of the period from the Date of Termination until the day prior to the second anniversary of the Effective Date, or such longer period as any plan, program, practice or policy may provide, the Company shall continue benefits to Executive and/or Executive’s family at least equal to those which would have been provided to them in accordance with the medical, welfare (excluding severance and disability or similar salary continuation plans) and fringe benefit plans, programs, practices and policies of the Company and its affiliated companies as generally in effect during such period, subject to paragraph (c) below (excluding tax-qualified plans). If Executive becomes re-employed with another employer and is eligible to receive medical or other welfare benefits under another employer provided plan, the medical and other welfare benefits described herein shall be secondary to those provided under such other plan during such applicable period of eligibility. For purposes of determining eligibility of Executive for retiree benefits pursuant to such plans, practices, programs and policies, Executive shall be considered to have remained employed until the day prior to the second anniversary of the Effective Date and to have retired on the last day of such period.

     Except to the extent this benefit is provided under clause (a) above or is otherwise an Accrued Amount, the Company shall provide Executive with outplacement benefits for a one-year period on terms consistent with the highest level of such benefits provided under policies and practices as generally in effect during such period.

     If any benefit (including a medical plan coverage) to be provided under clause (a) above is a taxable benefit and is not a death benefit, the Company shall provide such benefit to Executive by paying to Executive, on the sixtieth day after said termination, an amount in cash equivalent (on an after-tax basis from Executive’s point of view) to the Company’s cost of providing such benefit to Executive on an individual basis, but assuming that any cost to Executive under the plan or program would have been borne by Executive (in an equal dollar amount) under such individual arrangement. In addition, the Company shall permit Executive and his dependents to participate in the Company’s medical plans until the second anniversary (or such later date as required under COBRA) at the COBRA premium cost.

5