Noven Pharmaceuticals, Inc. (Form: 8-K)

NON-COMPETITION AGREEMENT (this “Agreement”), dated as of August 14, 2007, between Noven Pharmaceuticals, Inc., a Delaware corporation (the “Parent”), and Phillip Satow, an individual (the “Seller Affiliate”).

WHEREAS the Seller Affiliate is a member of Satow Associates, LLC, a New York limited liability company (“Satow Associates”) that is a member of JDS Pharmaceuticals, LLC, a Delaware limited liability company (the “Company”), and is an affiliate and indirect owner of the Company;

WHEREAS pursuant to, and subject to the terms and conditions of, the Agreement and Plan of Merger, dated as of July 9, 2007, by and among the Parent, Noven Acquisition, LLC, a Delaware limited liability company and wholly-owned subsidiary of the Parent (the “Sub”), the Company and Satow Associates, in its capacity as Member Representative (the “Merger Agreement”), the Sub shall be merged with and into the Company and the Company shall continue as the surviving entity in the Merger (as defined in the Merger Agreement) and will become a subsidiary of the Parent;

WHEREAS pursuant to, and subject to the terms and conditions of the Merger Agreement, the Seller Affiliate shall receive the consideration provided for the Merger Agreement in exchange for the Units, Phantom Units and Hurdle Units (each as defined in the Merger Agreement) held directly or indirectly, through Satow Associates, by the Seller Affiliate.

WHEREAS following the Merger, the Parent intends to continue to conduct and operate the business of the Company;

WHEREAS each of the Parent and the Seller Affiliate acknowledges and agrees that a material aspect of the Parent’s decision to enter into the Merger Agreement is the acquisition of the Company’s goodwill for the purpose of the Parent’s and the Company’s continuing to carry on the Company’s business or a business similar to the Company’s business;

WHEREAS as an inducement to the Parent to consummate the Merger and in consideration of the benefits set forth herein, the Seller Affiliate is entering into this Agreement;

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements hereinafter set forth, the parties hereto agree as follows:

SECTION 1. Effectiveness. This Agreement shall be effective as of the Effective Date (as defined in the Merger Agreement), and shall be null and void ab initio and of no further force and effect if the Merger Agreement is terminated in accordance with its terms prior to the consummation of the Merger.

SECTION 2. Non-competition. The Seller Affiliate covenants and agrees that, during the Restricted Period (as defined in Section 5), without the prior written consent of the Parent and except as a result of his status, or performance of his duties, as a director of those companies (and any successors thereto) for whom he is acting as a director on the date hereof and which are set forth on Schedule A to this Agreement, he shall not, directly or indirectly, either on his own behalf or on the behalf of any other entity (a) become “Associated With” any “Competing Business” (each as defined below), (b) solicit, sell, call upon or induce others to solicit, sell or call upon, directly or indirectly, any distributor or other purchaser of the Parent’s or the Company’s products within the twelve months preceding any such action by the Seller Affiliate (collectively, “Purchasers”), or any prospective Purchasers, for the purpose of inducing any such Purchaser to purchase, a Competitive Product (as defined below), (c) except in connection with the performance of his services for the Parent or the Company, solicit or attempt to solicit any person (other than April Thoren) who is then employed or engaged to perform services by the Parent or the Company to become employed by or enter into contractual relations with any individual or entity other than the Parent or the Company, or in any manner induce, seek to induce, entice or endeavor to entice any such person (other than April Thoren) to leave his or her employment or engagement with the Parent or the Company or (d) except in the performance of his services with the Parent or the Company, induce any supplier, vendor, consultant or independent contractor of the Parent or the Company to terminate or negatively alter his, her or its relationship with the Parent or the Company.

SECTION 3. Payment. Effective as of the Closing (as defined in the Merger Agreement), the Parent shall grant the Seller Affiliate a number of stock appreciation rights with respect to Parent common stock with an aggregate Black-Scholes value (as determined based on the assumptions used by the Parent for financial accounting purposes) equal to $265,200 (the “SARs). All such SARs shall be fully vested as of the Closing, shall be exercisable for seven years following the Closing and shall be settled in Parent common stock. Each of the Parent and the Seller Affiliate acknowledge that (a) following the Closing, the Seller Affiliate shall serve as a consultant to the Company, which shall be a subsidiary of the Parent following the Closing, pursuant to a Consulting Agreement dated on or about the date hereof between the Company and the Consultant and (b) the terms of the SARs shall be set forth in an award agreement substantially in the form of award agreement generally provided under the Parent’s 1999 Long-Term Incentive Plan (modified as appropriate to reflect the terms of this Section 3).

SECTION 4. Certain Definitions. For purposes of this Agreement, the following terms shall have the following meanings:

(a) “Associated With” means serving as an owner, officer, employee, independent contractor, agent or a holder of 5% or more of any class of equity securities of, or as a director, trustee, member, consultant or partner of, any person, corporation (for profit or not for profit) or other entity engaged in a Competing Business; provided, however, that the Seller Affiliate shall not be deemed to be “Associated With” any Competing Business for which he acts solely as a consultant or employee if his services do not relate to a Competitive Product.

(b) “Competing Business” means any business that is engaged in the acquisition, manufacture, development or sale of Competitive Products.

(c) “Competitive Products” means any pharmaceutical or biotechnology products which compete in the same markets (which, for purposes of this Agreement, shall mean products having the same FDA approved labeled indications or products commonly prescribed for indications for which the Company’s products are commonly prescribed) as any product of the Company which is sold or is under active development by the Company during the Restricted Period.

SECTION 5. Non-compete/Non-solicit Period. The covenant not to compete and the nonsolicitation covenant set forth in Section 2 shall restrict the Seller Affiliate from the Effective Date until three (3) years after the Effective Date (such period, the “Restricted Period”).

SECTION 6. Reasonableness of Provisions; Severability; Compliance. Each of the Seller Affiliate and the Parent acknowledges and agrees that the covenants and agreements contained in this Agreement have been negotiated in good faith by the parties hereto, and are reasonable and are not more restrictive or broader than necessary to protect the interests of the parties hereto, and would not achieve their intended purpose if they were on different terms or for periods of time shorter than the periods of time provided herein or applied in more restrictive geographical areas than are provided herein. Each party further acknowledges that the Parent would not enter into the Merger Agreement and the transactions contemplated thereby in the absence of the covenants and agreements contained in this Agreement and such covenants and agreements are essential to protect the value of the Parent and the Company. It is expressly understood and agreed that although Seller Affiliate and the Parent consider the restrictions contained in this Agreement to be reasonable, if a final judicial determination is made by a court of competent jurisdiction that the time or territory restriction in this Agreement or other restriction contained in this Agreement is an unenforceable restriction against the Seller Affiliate, such provision shall not be rendered void but shall be deemed amended to apply to such maximum time and territory, if applicable, or otherwise to such maximum extent as such court may judicially determine or indicate to be enforceable. Alternatively, if any court of competent jurisdiction finds that any restriction contained in this Agreement, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein. In the event that any one or more of the other provisions of this Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and nonenforceability of the remaining provisions of this Agreement shall not be affected thereby. The Seller Affiliate agrees to comply with the covenants contained in this Agreement in accordance with their terms, and the Seller Affiliate shall not, and hereby agrees to waive and release any right or claim to, challenge the reasonableness, validity or enforceability of any of the covenants contained in this Agreement.

SECTION 7. Jurisdiction. The parties hereto intend to and hereby confer jurisdiction to enforce the covenants contained in this Agreement upon the courts of any state within the geographical scope of such covenants. In the event that the courts of any one or more of such states shall hold such covenants wholly unenforceable by reason of the breadth of such covenants or otherwise, it is the intention of the parties hereto that such determination not bar or in any way affect the Parent’s right to the relief provided above in the courts of any other states within the geographical scope of such covenants as to breaches of such covenants in such other respective jurisdictions, the above covenants as they relate to each state being, for this purpose, severable into diverse and independent covenants.

SECTION 8. Equitable Relief. The Seller Affiliate acknowledges and agrees that the Parent’s remedies at law for breach of any of the provisions of this Agreement would be inadequate and, in recognition of this fact, the Seller Affiliate agrees that, in the event of such breach, in addition to any remedies at law it may have, the Parent shall be entitled to obtain equitable relief in the form of specific performance, a temporary restraining order, a temporary or permanent injunction or any other equitable remedy that may be available. The Seller Affiliate further acknowledges that should the Seller Affiliate violate any of the provisions of this Agreement, it will be difficult to determine the amount of damages resulting to the Parent or its affiliates and that in addition to any other remedies the Parent may have, the Parent shall be entitled to temporary and permanent injunctive relief.

SECTION 9. Notification of Subsequent Employer. The Seller Affiliate hereby agrees that prior to accepting employment with any other person or entity at any time during the Restricted Period, the Seller Affiliate will provide such prospective employer with written notice of the provisions of this Agreement, with a copy of such notice delivered simultaneously to the Parent.

SECTION 10. Not An Employment Agreement. This Agreement is not, and nothing in this Agreement shall be construed as, an agreement to provide employment to the Seller Affiliate.

SECTION 11. Notices. All notices, requests, consents and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given if delivered personally, sent by overnight courier or mailed first class, postage prepaid, by registered or certified mail (notices mailed shall be deemed to have been given on the date mailed), as follows (or to such other address as either party shall designate by notice in writing to the other in accordance herewith):

(a) Governing Law; Waiver of Jury Trial. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York applicable to agreements made and to be performed entirely in New York. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF OR ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT. Each party certifies and acknowledges that (i) no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver, (ii) each such party understands and has considered the implications of this waiver, (iii) each such party makes this waiver voluntarily and (iv) each such party has been induced to enter into this agreement by, among other things, the mutual waivers and certifications in this Section 12(a). With respect to any such litigation, the out-of-pocket fees and expenses (including reasonable attorneys’ fees) of the prevailing party shall be borne by the nonprevailing party upon final resolution of all claims related to such litigation by a court of competent jurisdiction.

(b) Section Headings. The section headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

(c) Advance Determination of Permitted/Prohibited Conduct. The Seller Affiliate may request an advance written determination from the Parent as to whether his taking a proposed action or his involvement in a proposed endeavor would, in the Parent’s opinion, constitute a material breach of the provisions of this Agreement. In that event, and provided that the Seller Affiliate discloses in writing all material facts about the proposed action or endeavor, the advance written determination shall be made as soon as practicable in the circumstances, without any unreasonable delay or withholding; provided, that if circumstances materially change after the advance determination is made (e.g., the extent of the Seller Affiliate’s involvement with a proposed endeavor changes after the Seller Affiliate undertakes it), the Parent may reconsider, revise and/or reverse the determination upon thirty days advance written notice to the Seller Affiliate.

(d) Assignability. This Agreement, and the Seller Affiliate’s rights and obligations hereunder, may not be assigned by the Seller Affiliate.

(e) Amendments. This Agreement may be amended, modified, superseded, canceled, renewed or extended and the terms or covenants hereof may be waived, only by a written instrument executed by both of the parties hereto, or in the case of a waiver, by the party waiving compliance. The failure of the Parent at any time or times to require performance of any provision hereof shall in no manner affect the right at a later time to enforce the same. No waiver by the Parent of the breach of any term or covenant contained in this Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such breach, or a waiver of the breach of any other term or covenant contained in this Agreement.

(f) Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and enforceable against the parties actually executing such counterpart, and all of which together shall constitute one and the same instrument.

(g) Further Assurances. The Seller Affiliate shall, from time to time, upon the request of the Parent, duly execute, acknowledge and deliver or cause to be duly executed, acknowledged and delivered, all such further instruments and documents reasonably requested by the Buyer to further effectuate the intent and purposes of Section 9.

(h) Entire Agreement. This Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter hereof and supersedes all prior agreements, arrangements and understandings, written or oral, relating to the subject matter hereof; provided, however, that this Agreement does not impair, diminish, restrict or waive any other restrictive covenant of the Seller Affiliate to the Company or the Parent under any other agreement, policy, plan or program of the Company or the Parent not expressly set forth herein.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

By: /s/ Robert C. Strauss
Name: Robert C. Strauss
Title: President, Chief Executive Officer and Chairman of the Board

CONSULTING AGREEMENT (this “Agreement”) dated as of August 14, 2007, between JDS Pharmaceuticals, LLC, a Delaware limited liability company (the “Company”), and Phillip Satow, an individual (the “Consultant”).

WHEREAS the Company is party to an Agreement and Plan of Merger among Noven Pharmaceuticals, Inc., a Delaware corporation (“Parent”), Noven Acquisition, LLC, a Delaware limited liability company and wholly-owned subsidiary of Parent, and the Company dated as of July 9, 2007 (the “Merger Agreement”); and

WHEREAS the Company desires to retain the Consultant, and the Consultant desires, to provide the Consulting Services (as defined below) upon the terms and subject to the conditions hereinafter set forth;

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and obligations hereinafter set forth, the Company and the Consultant hereby agree, intending to be legally bound, as follows:

SECTION 1.01. Term. The term of the Consultant’s consultancy under this Agreement (the “Consulting Term”) shall commence upon the Closing Date (as defined in the Merger Agreement) and, unless sooner terminated pursuant to this Agreement, shall expire 12 months after the Closing Date (the “Expiration Date”). The Consultant agrees and acknowledges that the Company has no obligation to extend the Consulting Term or to continue the consulting relationship with the Company after the Expiration Date and expressly acknowledges that no promises or understandings to the contrary have been made or reached.

SECTION 1.02. Consulting Services. As of the commencement of the Consulting Term, the Company hereby retains the Consultant, and the Consultant hereby agrees to serve as a consultant to the Company, on the terms and subject to the conditions of this Agreement. During the Consulting Term, the Consultant shall provide consulting services with respect to the Company’s business as reasonably requested by the President, Chairman and CEO of the Parent (the “CEO”), the Vice President, Marketing and Sales of the Parent and such other executive of the Parent (not less senior than vice president) as may be designated in writing by the CEO and agreed to in writing by the Consultant (such agreement not to be unreasonably withheld) (the “Consulting Services”).

SECTION 1.03. Location. The duties to be performed by the Consultant in connection with the Consulting Services shall be performed in the New York City metropolitan area, subject to such reasonable travel requirements as the parties hereto may agree in good faith are necessary to fully perform such duties. Expenses related to such travel shall be reimbursed in accordance with Section 2.02.

SECTION 1.04. Time and Effort. Unless otherwise agreed by the parties hereto, the Consultant shall make himself available (by telephone or otherwise) on such business days as are requested by the Company, with reasonable advance notice, and shall, in the performance of the Consulting Services, spend (a) no more than 20 hours per week during the first three months of the Consulting Term, (b) no more than 15 hours per week during the second three months of the Consulting Term and (c) no more than 10 hours per week during the final six months of the Consulting Term, in each case not including any travel time. During the Consulting Term, the Consultant shall serve the Company faithfully, loyally, honestly and to the best of his ability.

SECTION 1.05. Acknowledgment. The Consultant and the Company each acknowledge that the Consultant may serve as a member of the board of directors of Parent (such service, the “Director Services”) and that the Consultant shall be compensated for any such Director Services by Parent in accordance with the policies and programs applicable to other non-employee members of the board of directors of Parent.

SECTION 2.01. Service Fee. (a) During the Consulting Term, the Company shall pay the Consultant a service fee of $250.00 per hour of Consulting Services provided (the “Service Fee”). At the end of each month during the Consulting Term (such month the “Specified Month”), the Consultant shall furnish the Company with an invoice for the Service Fee for such Specified Month, together with records substantiating the hours worked during such Specified Month as requested by the Company. Within 15 days following receipt of an acceptable invoice and accompanying records, the Company shall pay the Consultant the Service Fee for such Specified Month covered by such invoice, provided that if the Consultant has not spent the Minimum Number of Hours (as defined below) performing the Consulting Services during any week during the Consulting Period because the Company failed to request sufficient Consulting Services to fill such minimum, the payment with respect to such week shall be no less than $250 multiplied by the applicable Minimum Number of Hours. The term “Minimum Number of Hours” shall mean (i) 10, for each week during the first three months of the Consulting Term, (ii) 7.5, for each week during the next three months of the Consulting Term, and (iii) 5, for each week during the final six months of the Consulting Term.

SECTION 2.02. Expense Reimbursement. The Company shall reimburse the Consultant for all necessary and reasonable “out-of-pocket” business expenses (including business class travel) incurred on behalf of the Company in the performance of the Consulting Services, subject to the travel and expense policy established by the Company from time to time, provided that the Consultant furnishes to the Company adequate records and other documentary evidence required to substantiate such expenditures.

SECTION 2.03. Secretarial Support. For the first six months of the Consulting Term and in connection with the Consulting Services, the Company shall use its commercially reasonable efforts to cause April Thoren to be exclusively engaged as the Consultant’s full-time secretary and shall use its commercially reasonable efforts to cause Ms. Thoren to provide the Consultant with substantially the same level and type of secretarial support provided by the Company immediately prior to the consummation of the Merger; provided that if Ms. Thoren terminates her employment with the Company or Ms. Thoren’s employment is terminated at the Consultant’s request, in each case, prior to the end of the Consulting Term, the Company shall provide a replacement secretary consistent with the terms described in this Section 2.03 and shall not be in breach of this Section 2.03 for providing such a replacement secretary. For the remainder of the Consulting Term and in connection with the Consulting Services, the Company shall provide the Consultant with appropriate secretarial support, as agreed upon in good faith by the Consultant and the Company.

SECTION 2.04. Termination of Services. This Agreement and the Consulting Term shall terminate on the Expiration Date or, if earlier, upon the death or disability of the Consultant. In the event of any such termination, the Consultant shall be entitled to receive (i) any accrued but unpaid Service Fee and (ii) reimbursement for any unreimbursed business expenses properly incurred by the Consultant prior to the date of termination to the extent such expenses are reimbursable under Section 2.02.

SECTION 3.01. Status. (a) It is understood by the parties hereto that the Consultant shall at all times during the Consulting Term be an independent contractor of the Company and there shall not be implied any relationship of employer-employee, partnership, joint venture, principal and agent or the like by the agreements contained herein with respect to any Consulting Services contemplated by this Agreement. The Consultant shall not be entitled to participate in any employee benefit plans or other benefits or conditions of employment available to the employees of the Company and its affiliates by reason of providing the Consulting Services contemplated by this Agreement.

(b) From the commencement of the Consulting Term, the Consultant shall not have any authority to act as an agent of the Company and its affiliates by reason of providing the Consulting Services contemplated by this Agreement, and the Consultant shall not represent to the contrary to any person. Under no circumstances shall the Consultant have or claim to have any power of decision hereunder in any activity on behalf of the Company, nor shall the Consultant have the power or authority hereunder to obligate, bind or commit the Company in any respect, in either case by reason of providing the Consulting Services contemplated by this Agreement. With respect to the provision of the Consulting Services, the Consultant shall not (i) direct the work of any employee of the Company, (ii) make any management decisions on behalf of the Company or (iii) undertake to commit the Company to any course of action in relation to third persons. Although the Company may specify the results to be achieved by the Consultant and may control and direct him in that regard, the Company shall not exercise or have the power to exercise such level of control over the Consultant as would indicate or establish that a relationship of employer and employee exists between the Company and the Consultant by reason of providing the Consulting Services contemplated by this Agreement. Subject to the terms of this Agreement, the Consultant shall have full and complete control over the manner and method of rendering the Consulting Services hereunder.

SECTION 3.02. Taxes. To the extent consistent with applicable law, the Company shall not withhold or deduct from any amounts payable under this Agreement any amount or amounts in respect of income taxes or other employment taxes of any other nature on behalf of the Consultant. The Consultant shall be solely responsible for the payment of any Federal, state, local or other income and/or self-employment taxes in respect of the amounts payable to the Consultant under this Agreement and shall hold the Company and its affiliates and their officers, directors and employees harmless from any liability arising from the Consultant’s failure to comply with the foregoing provisions of this sentence.

SECTION 4.01. Recognition of the Company’s Rights; Nondisclosure. The Consultant understands that during the term of this Agreement, he may have, or he may have had, access to the Company’s Proprietary Information (as defined below) and that such access is, or has been, given in trust and confidence. As such, the Consultant agrees not to disclose, directly or indirectly, to any unauthorized person or entity, and agrees not to make use of, without the prior written permission of the Company at any time during or after the term of this Agreement, any such Proprietary Information, except for and on behalf of the Company and solely within the course and scope of his duties under this Agreement.

SECTION 4.02. Proprietary Information. The term “Proprietary Information” shall mean any and all confidential and/or proprietary knowledge, data or information (whether or not reduced to writing or other medium) concerning the organization, business or finances of the Company and its affiliates. By way of illustration, but not limitation, the term “Proprietary Information” includes: trade secrets, inventions, mask works, ideas, processes, products, designs, methods, show-how, Know-How (defined below), or any other information related to the acquisition, development formulation, manufacture, testing, marketing, distribution or consumption of the pharmaceutical or biotechnology products of the Company and its affiliates and which is not generally known to the public or within the pharmaceutical or biotechnology industries. For purposes of the preceding definition, the term “Know-How” shall mean all (i) methods, processes, techniques, compositions, technology, information, data, results of tests, studies, statistical and other analyses and expertise, whether patented or unpatented, related to all pharmaceutical and biotechnology products of the Company and its affiliates, including pharmacology, toxicology, drug stability, clinical and non-clinical safety and efficacy studies, marketing studies and absorption, excretion, metabolism studies, quality control and quality assurance; (ii) information regarding plans for budgets, customer and supplier lists and accounts, pricing and costing methods, projects, business plans, product acquisition candidates, proposals, licenses, prices, costs and nonpublic financial information; and (iii) information regarding the skills and compensation of other service providers and employees of the Company and its affiliates. The Consultant also agrees to safeguard all such Proprietary Information by all reasonable steps and to abide by all Company policies and procedures regarding storage, copying and handling of Proprietary Information. The Consultant acknowledges and agrees that the above obligation also applies to all confidential and proprietary information of third parties entrusted to the Company and its affiliates. This obligation shall be in force unless and until such confidential information becomes generally available to the public by publication or other legal means (but not as a result of the unlawful use or publication). Notwithstanding the foregoing, it is understood that, at all such times, the Consultant is free to use information which is generally known in the trade or industry, which is not gained as a result of a breach of this Agreement, and his own skill, knowledge, know-how and experience to whatever extent and in whichever way he wishes.

SECTION 4.03. No Improper Use of Information Prior Employers or Others. During the course of the Consultant’s duties under this Agreement, the Consultant shall not improperly use or disclose any confidential or proprietary information or trade secrets, if any, of any former employer or other person to whom he has an obligation of confidentiality.

SECTION 4.04. Company Property. The Consultant agrees that during the term of this Agreement he shall not make, use or permit to be used any Company Property (defined below) otherwise than for the benefit of the Company. The term “Company Property” shall include all intellectual property, notes, notebooks, memoranda, reports, lists, records, data, graphics, computers, test equipment, models, tools, cellular telephones, pagers credit and/or calling cards, keys, access cards, documentation or other materials of any nature and in any form, whether written, printed, electronic or in digital format or otherwise, relating to any matter within the scope of the business of the Company or its affiliates or concerning any of their respective dealings or affairs and any other property of the Company or its affiliates in his possession, custody or control (whether prepared by him or others). The Consultant further agrees that he shall not, after the termination of the Consulting Term, use any such Company Property and shall use his reasonable best efforts to prevent others from using the same. The Consultant acknowledges and agrees that all Company Property shall be and remain the sole and exclusive property of the Company or its affiliates, as applicable.

SECTION 4.05. Return of Company Materials. At the termination of the Consulting Term, the Consultant will deliver to the Company any and all Company Property, together with all copies thereof, and any other material containing third party confidential or proprietary information, or Proprietary Information of the Company.

SECTION 4.06. Works for Hire. Without limiting any of the foregoing provisions of Article IV, the Consultant acknowledges and agrees that all works produced by or through the Consultant for the Company in connection with this Agreement shall be works made-for-hire within the meaning of the Copyright Act, Title 17 of the United States Code, and the sole property of the Company. The Company shall own the exclusive rights to such works excepting any skills or intellectual knowledge pre-existing or gained in so producing; provided, however, that if a work does not qualify as a statutory work made-for-hire, then the Consultant agrees to assign, and hereby assigns, all rights and copyright rights in such works to the Company.

SECTION 5.01. Effectiveness. This Agreement shall be null and void ab initio and of no further force and effect if the Merger Agreement is terminated in accordance with its terms prior to the consummation of the Merger (as defined in the Merger Agreement).

SECTION 5.02. Termination of Employment Agreement. Each of the Company and the Consultant acknowledge and agree that, effective as of the Closing, the Consultant’s service with the Company as an employee of the Company and the Employment Agreement between the Seller Affiliate and the Company dated August 25, 2004 (the “Employment Agreement”), shall terminate and no payments shall be made under the Employment Agreement, including under Section 3 thereof.

SECTION 5.03. Governing Law; Waiver of Jury Trial. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York applicable to agreements made and to be performed entirely in New York. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF OR ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT. Each party certifies and acknowledges that (i) no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver, (ii) each such party understands and has considered the implications of this waiver, (iii) each such party makes this waiver voluntarily and (iv) each such party has been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this Section 5.03. With respect to any such litigation, the out-of-pocket fees and expenses (including reasonable attorneys’ fees) of the prevailing party shall be borne by the nonprevailing party upon final resolution of all claims related to such litigation by a court of competent jurisdiction.

SECTION 5.04. Section Headings. The section headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

SECTION 5.05. Assignability. This Agreement, and the Consultant’s rights and obligations hereunder, may not be assigned by the Consultant.

SECTION 5.06. Amendments. This Agreement may be amended, modified, superseded, canceled, renewed or extended and the terms or covenants hereof may be waived, only by a written instrument executed by each of the parties hereto, or in the case of a waiver, by the party waiving compliance. The failure of the Company at any time or times to require performance of any provision hereof shall in no manner affect the right at a later time to enforce the same. No waiver by the Company of the breach of any term or covenant contained in this Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such breach, or a waiver of the breach of any other term or covenant contained in this Agreement.

SECTION 5.07. Successors. This Agreement shall be binding upon and shall inure to the benefit of the successors and permitted assigns of the Company and the personal or legal representatives, executors, administrators, heirs, successors, distributees, devisees and legatees of the Consultant. The Consultant acknowledges and agrees that all his covenants and obligations to the Company, as well as the rights of the Company under this Agreement, shall run in favor of and will be enforceable by the Company and its affiliates and their respective successors and permitted assigns.

SECTION 5.08. Entire Agreement. This Agreement contains the entire understanding of the parties with respect to the subject hereof, and all oral or written agreements or representations, express or implied, (including, effective as of the Closing, the Employment Agreement) with respect to the subject matter hereof are set forth in this Agreement.

SECTION 5.09. Notice. All notices, requests, demands and other communications required or permitted to be delivered or given under this Agreement shall be in writing and shall be deemed to have been duly delivered or given when received.


Cravath, Swaine & Moore LLP
825 Eighth Avenue
New York, NY 10019
Attention: Telephone: Facsimile: E-mail:		Richard Hall, Esq. (212) 474-1293 (212) 474-3700 rhall@cravath.com

SECTION 5.10. Severability. If any term, provision, covenant or condition of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable in any jurisdiction, then such provision, covenant or condition shall, as to such jurisdiction, be modified or restricted to the extent necessary to make such provision valid, binding and enforceable, or, if such provision cannot be modified or restricted, then such provision shall, as to such jurisdiction, be deemed to be excised from this Agreement and any such invalidity, illegality or unenforceability with respect to such provision shall not invalidate or render unenforceable such provision in any other jurisdiction, and the remainder of the provisions hereof shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

SECTION 5.11. Survival. The rights and obligations of the Company and the Consultant under the provisions of this Agreement, shall survive and remain binding and enforceable, notwithstanding the termination of the Consulting Term, to the extent necessary to preserve the intended benefits of such provisions.

SECTION 5.12. Cooperation. The Consultant shall provide his reasonable cooperation to the Company in connection with any suit, action or proceeding (or any appeal therefrom) that relates to events occurring during his performance of services hereunder other than a suit between the Consultant, on the one hand, and the Company, on the other hand, provided that the Company shall reimburse the Consultant for expenses reasonably incurred in connection with such cooperation.

SECTION 5.13. Consultant Representation. The Consultant hereby represents to the Company that the execution and delivery of this Agreement by the Consultant and the Company and the performance by the Consultant of his duties hereunder shall not constitute a breach of, or otherwise contravene, or be prevented, interfered with or hindered by, the terms of any employment agreement or other agreement or policy to which the Consultant is a party or otherwise bound.

SECTION 5.14. Determinations. Unless otherwise expressly provided in this Agreement, all determinations of the Company shall be in the sole discretion of the Company.

SECTION 5.15. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and enforceable against the parties actually executing such counterpart, and all of which together shall constitute one and the same instrument.

SECTION 5.16. Construction. (a) The headings in this Agreement are for convenience only, are not a part of this Agreement and shall not affect the construction of the provisions of this Agreement.

(b) As used in this Agreement, the words “include” and “including”, and variations thereof, shall not be deemed to be terms of limitation but rather will be deemed to be followed by the words “without limitation”.

IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first written above.

NON-COMPETITION AND EMPLOYMENT AGREEMENT (this “Agreement”), dated as of August 14, 2007, among Noven Pharmaceuticals, Inc., a Delaware corporation (the “Parent”), JDS Pharmaceuticals, LLC, a Delaware limited liability company (the “Company”), and Michael Satow, an individual (the “Seller Affiliate”).

WHEREAS the Seller Affiliate is a member of Satow Associates, LLC, a New York limited liability company that is a member of the Company (“Satow Associates”), and as such the Seller Affiliate is an affiliate and indirect owner of the Company;

WHEREAS pursuant to, and subject to the terms and conditions of the Merger Agreement, the Seller Affiliate shall receive the consideration provided for in the Merger Agreement in exchange for the Units, Phantom Units and Hurdle Units (each as defined in the Merger Agreement) held directly or indirectly, through Satow Associates, by the Seller Affiliate.

WHEREAS following the Merger, the Parent intends to continue to conduct and operate the business of the Company;

WHEREAS the Parent and the Company wish that the Seller Affiliate continue to be employed with the Company following the Closing (as defined in the Merger Agreement), and the Seller Affiliate wishes to continue his employment with the Company following the Closing, on the terms and conditions hereinafter set forth; and

WHEREAS as an inducement to the Parent to consummate the Merger, and in consideration of the payments and benefits to be provided to the Seller Affiliate by the Company under Section 6, the Seller Affiliate is entering into this Agreement;

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements hereinafter set forth, the parties hereto agree as follows:

SECTION 2. Non-competition. The Seller Affiliate covenants and agrees that, during the Restricted Period (as defined in Section 4), without the prior written consent of the Parent and except as a result of his status, or performance of his duties, as a director of those companies (and any successors thereto) for whom he is acting as a director on the date hereof and which are set forth on Schedule A to this Agreement, he shall not, directly or indirectly, either on his own behalf or on the behalf of any other entity (a) become “Associated With” any “Competing Business” (each as defined below), (b) solicit, sell, call upon or induce others to solicit, sell or call upon, directly or indirectly, any distributor or other purchaser of the Parent’s or the Company’s products within the twelve months preceding any such action by the Seller Affiliate (collectively, “Purchasers”), or any prospective Purchasers, for the purpose of inducing any such Purchaser to purchase, a Competitive Product (as defined below), (c) except in connection with the performance of his services for the Parent or the Company, solicit or attempt to solicit any person who is then employed or engaged to perform services by the Parent or the Company to become employed by or enter into contractual relations with any individual or entity other than the Parent or the Company, or in any manner induce, seek to induce, entice or endeavor to entice any such person to leave his or her employment or engagement with the Parent or the Company or (d) except in the performance of his services with the Parent or the Company, induce any supplier, vendor, consultant or independent contractor of the Parent or the Company to terminate or negatively alter his, her or its relationship with the Parent or the Company.

SECTION 3. Certain Definitions. For purposes of this Agreement, the following terms shall have the following meanings:

(b) “Competing Business” means any business that is engaged in the acquisition, manufacture, development or sale of Competitive Products.

SECTION 4. Non-compete/Non-solicit Period. The covenant not to compete and the nonsolicitation covenant set forth in Section 2 shall restrict the Seller Affiliate from the Effective Date until two (2) years after the termination of the Seller Affiliate’s employment with the Company (such period, the “Restricted Period”).

SECTION 5. Reasonableness of Provisions; Severability; Compliance. Each of the Seller Affiliate and the Parent acknowledges and agrees that the covenants and agreements contained in this Agreement have been negotiated in good faith by the parties hereto, and are reasonable and are not more restrictive or broader than necessary to protect the interests of the parties hereto, and would not achieve their intended purpose if they were on different terms or for periods of time shorter than the periods of time provided herein or applied in more restrictive geographical areas than are provided herein. Each party further acknowledges that the Parent would not enter into the Merger Agreement and the transactions contemplated thereby in the absence of the covenants and agreements contained in this Agreement and such covenants and agreements are essential to protect the value of the Parent and the Company. It is expressly understood and agreed that although Seller Affiliate and the Parent consider the restrictions contained in this Agreement to be reasonable, if a final judicial determination is made by a court of competent jurisdiction that the time or territory restriction in this Agreement or other restriction contained in this Agreement is an unenforceable restriction against the Seller Affiliate, such provision shall not be rendered void but shall be deemed amended to apply to such maximum time and territory, if applicable, or otherwise to such maximum extent as such court may judicially determine or indicate to be enforceable. Alternatively, if any court of competent jurisdiction finds that any restriction contained in this Agreement, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein. In the event that any one or more of the other provisions of this Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and nonenforceability of the remaining provisions of this Agreement shall not be affected thereby. The Seller Affiliate agrees to comply with the covenants contained in this Agreement in accordance with their terms, and the Seller Affiliate shall not, and hereby agrees to waive and release any right or claim to, challenge the reasonableness, validity or enforceability of any of the covenants contained in this Agreement.

(a) Following the Closing and for six months thereafter (such period, the “Retention Period”), unless earlier terminated (but subject to Section 6(d)), the Company shall continue to employ the Seller Affiliate at the same rate of base salary as in effect immediately prior to the Closing (the “Base Salary”).

(b) The Seller Affiliate shall be entitled to an annual bonus with respect to the 2007 fiscal year of the Company in an amount no less than $63,000 (the “Annual Bonus”). Such Annual Bonus shall be paid at the regularly scheduled time for annual bonus payments, which shall be in calendar year 2008. Subject to Section 6(d), the Seller Affiliate’s entitlement to such Annual Bonus shall be subject to the Seller Affiliate’s continued employment with the Company through the end of the Retention Period.

(c) The Seller Affiliate shall be entitled to an additional cash payment in an amount equal to $132,600, subject to his continued employment with the Company through the end of the Retention Period (such payment, the “Retention Bonus”). Payment of the Retention Bonus shall be made within 30 business days after the end of the Retention Period. Subject to Section 6(d), no Retention Bonus shall be paid if the Seller Affiliate’s employment with the Company is terminated prior to the end of the Retention Period.

(d) In the event, prior to the end of the Retention Period, (i) the Seller Affiliate’s employment with the Company is terminated by the Company without Cause (as defined below) or (ii) the Seller Affiliate terminates his employment with the Company prior to the end of the Retention Period due to (A) a decrease in his base salary or (B) a relocation of his office by more than 35 miles from where is office is located immediately prior to the Closing, the Seller Affiliate shall be entitled to (x) payment of the Retention Bonus, (y) payment of the Annual Bonus, and (z) payment of the amount of remaining Base Salary that the Seller Affiliate would have received had he remained employed by the Company through the last day of the Retention Period, such payments to be made in a single lump sum within 30 business days following such termination; provided, however, that no such payment shall be made, and all rights to such payment shall be forfeited, unless the Seller Affiliate signs a release in favor of the Parent of claims arising hereunder, the Company, their respective affiliates and their respective past and present parents, subsidiaries, affiliates, directors, officers, employees, shareholders, attorneys, agents, representatives and advisors and the successors, predecessors and assigns of each of the foregoing (and those acting on their behalf in any capacity whatsoever) in a form reasonably satisfactory to the Company and the Seller Affiliate no later than 25 business days following such termination. For purposes of this Agreement, “Cause” means any of the following: (i) the willful and continued refusal by the Seller Affiliate to perform his duties hereunder with the Company (other than any such refusal resulting from his incapacity due to mental illness or physical illness or injury) after the Seller Affiliate has received written demand of such performance from the board of directors of the Company, the Seller Affiliate has been given 30 days to comply with such demand and the Seller Affiliate has failed to comply with such demand; (ii) any act of fraud or moral turpitude in the performance of his duties hereunder or any misappropriation of material assets of the Company or similar conduct injurious to the Company; (iii) the conviction of the Seller Affiliate for a felony, or the entry by the Seller Affiliate of a plea of guilty or nolo contendere to a felony in the performance of his duties hereunder or otherwise materially affecting the Company; (iv) the willful engaging by the Seller Affiliate in gross misconduct materially and demonstrably injurious to the Company or its subsidiaries; and (v) any breach of the provisions of this Agreement which is materially and demonstrably injurious to the Company or any of its subsidiaries.

(e) No later than 30 business days following the Closing, the Company shall pay the Seller Affiliate a lump sum cash payment in the amount of $265,200 (the “Special Payment”).

(f) Each of the Seller Affiliate and the Company agree that, effective as of the Closing, the Employment Agreement between the Seller Affiliate and the Company dated August 25, 2004 (the “Employment Agreement”) shall be terminated and that no payments shall be made thereunder, including under Section 3 thereof.

(g) The Company may withhold from any amounts payable under this Agreement such Federal, state, local and foreign taxes as may be required to be withheld pursuant to any applicable law or regulation.

(a) Recognition of the Company’s Rights; Nondisclosure. The Seller Affiliate understands that during the term of his employment with the Company, he may have, or he may have had, access to the Company’s Proprietary Information (as defined below) and that such access is, or has been, given in trust and confidence. As such, the Seller Affiliate agrees not to disclose, directly or indirectly, to any unauthorized person or entity, and agrees not to make use of, without the prior written permission of the Company at any time during or after the term of this Agreement, any such Proprietary Information, except for and on behalf of the Company and solely within the course and scope of his duties as an employee of the Company.

(b) Proprietary Information. The term “Proprietary Information” shall mean any and all confidential and/or proprietary knowledge, data or information (whether or not reduced to writing or other medium) concerning the organization, business or finances of the Company and its affiliates. By way of illustration, but not limitation, the term “Proprietary Information” includes: trade secrets, inventions, mask works, ideas, processes, products, designs, methods, show-how, Know-How (defined below), or any other information related to the acquisition, development formulation, manufacture, testing, marketing, distribution or consumption of the pharmaceutical or biotechnology products of the Company and its affiliates and which is not generally known to the public or within the pharmaceutical or biotechnology industries. For purposes of the preceding definition, the term “Know-How” shall mean all (i) methods, processes, techniques, compositions, technology, information, data, results of tests, studies, statistical and other analyses and expertise, whether patented or unpatented, related to all pharmaceutical and biotechnology products of the Company and its affiliates, including pharmacology, toxicology, drug stability, clinical and non-clinical safety and efficacy studies, marketing studies and absorption, excretion, metabolism studies, quality control and quality assurance; (ii) information regarding plans for budgets, customer and supplier lists and accounts, pricing and costing methods, projects, business plans, product acquisition candidates, proposals, licenses, prices, costs and nonpublic financial information; and (iii) information regarding the skills and compensation of other service providers and employees of the Company and its affiliates. The Seller Affiliate also agrees to safeguard all such Proprietary Information by all reasonable steps and to abide by all Company policies and procedures regarding storage, copying and handling of Proprietary Information. The Seller Affiliate acknowledges and agrees that the above obligation also applies to all confidential and proprietary information of third parties entrusted to the Company and its affiliates. This obligation shall be in force unless and until such confidential information becomes generally available to the public by publication or other legal means (but not as a result of the unlawful use or publication). Notwithstanding the foregoing, it is understood that, at all such times, the Seller Affiliate is free to use information which is generally known in the trade or industry, which is not gained as a result of a breach of this Agreement, and his own skill, knowledge, know-how and experience to whatever extent and in whichever way he wishes.

(c) No Improper Use of Information Prior Employers or Others. During the course of the Seller Affiliate’s duties under this Agreement, the Seller Affiliate shall not improperly use or disclose any confidential or proprietary information or trade secrets, if any, of any former employer or other person to whom he has an obligation of confidentiality.

(d) Company Property. The Seller Affiliate agrees that during the term of this Agreement he shall not make, use or permit to be used any Company Property (defined below) otherwise than for the benefit of the Company. The term “Company Property” shall include all intellectual property, notes, notebooks, memoranda, reports, lists, records, data, graphics, computers, test equipment, models, tools, cellular telephones, pagers credit and/or calling cards, keys, access cards, documentation or other materials of any nature and in any form, whether written, printed, electronic or in digital format or otherwise, relating to any matter within the scope of the business of the Company or its affiliates or concerning any of their respective dealings or affairs and any other property of the Company or its affiliates in his possession, custody or control (whether prepared by him or others). The Seller Affiliate further agrees that he shall not, after the termination of the Consulting Term, use any such Company Property and shall use his reasonable best efforts to prevent others from using the same. The Seller Affiliate acknowledges and agrees that all Company Property shall be and remain the sole and exclusive property of the Company or its affiliates, as applicable.

(e) Return of Company Materials. At the termination of the Seller Affiliate’s employment with the Company, the Seller Affiliate will deliver to the Company any and all Company Property, together with all copies thereof, and any other material containing third party confidential or proprietary information, or Proprietary Information of the Company.

SECTION 8. Jurisdiction. The parties hereto intend to and hereby confer jurisdiction to enforce the covenants contained in this Agreement upon the courts of any state within the geographical scope of such covenants. In the event that the courts of any one or more of such states shall hold such covenants wholly unenforceable by reason of the breadth of such covenants or otherwise, it is the intention of the parties hereto that such determination not bar or in any way affect the Parent’s right to the relief provided above in the courts of any other states within the geographical scope of such covenants as to breaches of such covenants in such other respective jurisdictions, the above covenants as they relate to each state being, for this purpose, severable into diverse and independent covenants.

SECTION 9. Equitable Relief. The Seller Affiliate acknowledges and agrees that the Parent’s remedies at law for breach of any of the provisions of this Agreement would be inadequate and, in recognition of this fact, the Seller Affiliate agrees that, in the event of such breach, in addition to any remedies at law it may have, the Parent shall be entitled to obtain equitable relief in the form of specific performance, a temporary restraining order, a temporary or permanent injunction or any other equitable remedy that may be available. The Seller Affiliate further acknowledges that should the Seller Affiliate violate any of the provisions of this Agreement, it will be difficult to determine the amount of damages resulting to the Parent or its affiliates and that in addition to any other remedies the Parent may have, the Parent shall be entitled to temporary and permanent injunctive relief.

SECTION 10. Notification of Subsequent Employer. The Seller Affiliate hereby agrees that prior to accepting employment with any other person or entity at any time during the Restricted Period, the Seller Affiliate will provide such prospective employer with written notice of the provisions of this Agreement, with a copy of such notice delivered simultaneously to the Parent.

SECTION 11. Not An Employment Agreement. This Agreement is not, and nothing in this Agreement shall be construed as, an agreement to provide employment to the Seller Affiliate.

SECTION 12. Notices. All notices, requests, consents and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given if delivered personally, sent by overnight courier or mailed first class, postage prepaid, by registered or certified mail (notices mailed shall be deemed to have been given on the date mailed), as follows (or to such other address as either party shall designate by notice in writing to the other in accordance herewith):

(a) Governing Law; Waiver of Jury Trial. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York applicable to agreements made and to be performed entirely in New York. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF OR ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT. Each party certifies and acknowledges that (i) no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver, (ii) each such party understands and has considered the implications of this waiver, (iii) each such party makes this waiver voluntarily and (iv) each such party has been induced to enter into this agreement by, among other things, the mutual waivers and certifications in this Section 13(a). With respect to any such litigation, the out-of-pocket fees and expenses (including reasonable attorneys’ fees) of the prevailing party shall be borne by the nonprevailing party upon final resolution of all claims related to such litigation by a court of competent jurisdiction.

(b) Section Headings. The section headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

(c) Advance Determination of Permitted/Prohibited Conduct. The Seller Affiliate may request an advance written determination from the Parent or the Company as to whether his taking a proposed action or his involvement in a proposed endeavor would, in the Parent’s opinion, constitute a material breach of the provisions of this Agreement. In that event, and provided that the Seller Affiliate discloses in writing all material facts about the proposed action or endeavor, the advance written determination shall be made as soon as practicable in the circumstances, without any unreasonable delay or withholding; provided, that if circumstances materially change after the advance determination is made (e.g., the extent of the Seller Affiliate’s involvement with a proposed endeavor changes after the Seller Affiliate undertakes it), the Parent may reconsider, revise and/or reverse the determination upon thirty days advance written notice to the Seller Affiliate.

(d) Assignability. This Agreement, and the Seller Affiliate’s rights and obligations hereunder, may not be assigned by the Seller Affiliate.

(e) Amendments. This Agreement may be amended, modified, superseded, canceled, renewed or extended and the terms or covenants hereof may be waived, only by a written instrument executed by both of the parties hereto, or in the case of a waiver, by the party waiving compliance. The failure of any party hereto at any time or times to require performance of any provision hereof shall in no manner affect the right at a later time to enforce the same. No waiver by any party hereto of the breach of any term or covenant contained in this Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such breach, or a waiver of the breach of any other term or covenant contained in this Agreement.

(g) Further Assurances. The Seller Affiliate shall, from time to time, upon the request of the Parent or the Company, duly execute, acknowledge and deliver or cause to be duly executed, acknowledged and delivered, all such further instruments and documents reasonably requested by the Parent or the Company to further effectuate the intent and purposes of Section 9.

(h) Entire Agreement. This Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter hereof and supersedes all prior agreements, arrangements and understandings, written or oral, (including, effective as of the Closing, the Employment Agreement) relating to the subject matter hereof; provided, however, that this Agreement does not impair, diminish, restrict or waive any other restrictive covenant of the Seller Affiliate to the Company or the Parent under any other agreement, policy, plan or program of the Company or the Parent not expressly set forth herein.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

By: /s/ Robert C. Strauss
Name: Robert C. Strauss
Title: President, Chief Executive Officer and Chairman of the Board

Noven Pharmaceuticals, Inc.
11960 Southwest 144^th Street
Miami, Florida 33186
(305) 253-5099
www.noven.com

Phillip M. Satow, JDS CEO and Co-Founder, Appointed to Noven Board of Directors

Miami, FL – August 15, 2007 – Noven Pharmaceuticals, Inc. (NASDAQ: NOVN) today announced that it has completed the previously-announced acquisition of JDS Pharmaceuticals, LLC. JDS is a specialty pharmaceutical company that currently markets two branded prescription psychiatry products through a targeted sales force and is advancing a significant pipeline of high-potential products in psychiatry and women’s health.

Noven also announced that industry veteran Phillip M. Satow, JDS’s Chief Executive Officer and co-founder, was appointed to Noven’s Board of Directors, effective upon closing of the transaction.

“We are confident that the acquisition of JDS will significantly increase our growth rate and sales and earnings potential over the longer term, and will greatly improve the visibility of our pipeline and financial goals,” said Robert C. Strauss, Noven’s President, CEO & Chairman.

“The acquisition builds upon our existing strengths and capabilities by adding the infrastructure, products and category expertise necessary to market and sell products ourselves,” said Strauss. “It also significantly expands our pipeline opportunities. The JDS pipeline has the potential to result in the launch of one new product a year for each of the next four years, including what we expect will be the industry’s first once-daily lithium product (Lithium QD), and a women’s health product (Mesafem™) that fits perfectly with Noven’s existing expertise in menopausal therapy. We also have an opportunity to leverage the JDS sales infrastructure by gaining access to other psychiatry products that complement the existing JDS psychiatry portfolio.”

The acquisition provides Noven with substantial immediate, mid-term and long-term benefits, including:

•

A self-supporting, leveragable marketing/sales infrastructure, with two high-margin marketed products (Pexeva® and Lithobid®) and substantial expertise in the psychiatry category;

•

A next-generation psychiatry pipeline that includes one pending New Drug Application (Stavzor™) and one product in Phase 3 trials (Lithium QD);

•

A non-hormonal product (Mesafem™) entering Phase 3 for vasomotor symptoms (hot flashes/night sweats) associated with menopause that is highly complementary with Noven’s expertise in women’s health; and

•

Substantially greater sales and gross margin potential, and greater control over the success of its products.

Estimated Launch

Product

Indication

Status

Year

Lithobid®

(lithium carbonate)

Bipolar disorder

Marketed in U.S.

Launched

Pexeva®

Depression, panic

(paroxetine mesylate)

disorder, OCD & GAD

Marketed in U.S.

Launched

Stavzor™

Bipolar disorder,

NDA filed; October

(valproic acid softgel)

migraine & epilepsy

2007 PDUFA date

2008

Lithium QD (once-daily lithium)

Bipolar disorder

Phase 3

2009

Stavzor™ ER (extended release valproic

Bipolar disorder,

acid softgel)

migraine & epilepsy

Pre-clinical

2010

Mesafem™ (low-dose paroxetine

Vasomotor symptoms

mesylate)

(hot flashes)

Entering Phase 3

2011

The purchase price for the acquisition was $125 million cash paid at closing (August 14, 2007) plus the assumption of approximately $10 million in net non-contingent liabilities. Noven funded payment of the purchase price from cash and short-term investments. As of June 30, 2007, Noven had approximately $187 million in cash, cash equivalents and short-term investments. Noven received a $25 million sales milestone payment related to its Daytrana™ product in August 2007.

As previously announced, Noven expects to record a one-time charge in the 2007 third quarter for purchased in-process research and development expenses related to the allocated purchase price of acquired products in the development pipeline. This charge is expected to significantly exceed 50% of the acquisition purchase price. In addition, Noven’s ongoing financial results will reflect the impact of significant amortization and other transaction-related expenses associated with the JDS acquisition.

Effective upon closing of the transaction, Phillip M. Satow, JDS’s Chief Executive Officer and co-founder, was appointed to Noven’s Board of Directors. After 15 years with Pfizer and three years as Vice President and General Manager of the Carter Wallace pharmaceutical business, Mr. Satow served as Executive Vice President of Forest Laboratories and President of its Forest Pharmaceuticals subsidiary. He established the marketing and sales departments at Forest, which he led for 14 years through the launch of the highly-successful antidepressant Celexa^®. He co-founded JDS in August 2004 with his son, Michael Satow, JDS’s President and Chief Operating Officer.

“As a member of the Noven Board of Directors, Phil will be in a position to help guide the combined company toward achievement of its expanded and ambitious goals. Few in the industry have Phil’s expertise and track record of success in the psychiatry category. We are thrilled to have him on the team as we work to build on the business and opportunities that he helped create.”

Thomas Weisel Partners LLC served as financial advisor to Noven in connection with the JDS acquisition, and Cravath, Swaine & Moore LLP served as Noven’s legal advisor. Piper Jaffray & Co. served as financial advisor to JDS, and Latham & Watkins served as JDS’s legal counsel.

Noven Pharmaceuticals, Inc., headquartered in Miami, Florida, has established itself as a leading developer of advanced transdermal drug delivery technologies and prescription transdermal products. Its commercialized transdermal products include Vivelle-Dot^®, the most prescribed estrogen patch in the U.S., and Daytrana™, the first and only patch approved for the treatment of ADHD. With the acquisition of JDS, Noven has become a broader-based specialty pharmaceutical company with the infrastructure, products and category expertise to market and sell products itself, and with a substantially enhanced late-stage product pipeline. See www.noven.com for additional information.

Lithobid® and Pexeva® are registered trademarks, and Stavzor™ and Mesafem™ are trademarks, of JDS Pharmaceuticals, LLC. Celexa® is a registered trademark of Forest Laboratories, Inc. or its affiliates. Vivelle-Dot® is a registered trademark of Novartis AG or its affiliates. Daytrana™ is a trademark of Shire Pharmaceuticals Ireland Limited.

Except for historical information contained herein, the matters discussed in this press release contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that involve substantial risks and uncertainties. Statements that are not historical facts, including statements which are preceded by, followed by, or that include, the words “believes,” “anticipates,” “plans,” “expects” or similar expressions and statements are forward-looking statements. Noven’s estimated or anticipated future results, product performance or other non-historical facts are forward-looking and reflect Noven’s current perspective on existing trends and information. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained herein. These forward-looking statements are based largely on the current expectations of Noven and are subject to a number of risks and uncertainties that are subject to change based on factors which are, in many instances, beyond Noven’s control. These risks and uncertainties include: the expected benefits of the transaction, including expected revenue growth, may take longer than anticipated to achieve and may not be achieved in their entirety or at all; any costs or difficulties that Noven may encounter in the process of integration of the organization and operations of the acquired business into Noven’s existing organization and operations, including the possibility that such integration may be delayed or more costly or difficult than expected and may adversely affect Noven’s results of operations and financial condition; the risk that the proposed transaction disrupts current plans and operations and the potential difficulties in employee retention as a result of the transaction; disruption from the transaction making it more difficult for Noven to maintain its relationships with its partners, customers, employees or suppliers; uncertainties as to the future success of ongoing and planned clinical trials and the risk that results from early-stage clinical trials may not be indicative of results in later-stage trials; the unproven safety and efficacy of products under development; the difficulty of predicting FDA approvals, including timing, and that any expected period of exclusivity may not be realized; the difficulty of predicting acceptance of and demand for new pharmaceutical products; the impact of competitive products and pricing; risks relating to new product development and launch, including the possibility that any product launch may be delayed or that product acceptance may be less than anticipated; the possibility that patent applications may not result in issued patents, and that issued patents may not be enforceable or could be invalidated; and the impact of competitive responses to Noven’s sales, marketing and strategic efforts. For additional information regarding these and other risks associated with Noven’s business, readers should refer to Noven’s Annual Report on Form 10-K as well as other reports filed from time to time with the Securities and Exchange Commission. Unless required by law, Noven undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Company Contact:
Joseph C. Jones
Vice President – Corporate Affairs
(305) 253-1916


Delaware	0-17254	59-2767632
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)

11960 S.W. 144th Street, Miami, Florida		33186
_________________________________ (Address of principal executive offices)		___________ (Zip Code)


	Noven Pharmaceuticals, Inc.

August 20, 2007	By:	/s/ Jeff Mihm

		Name: Jeff Mihm
		Title: Vice President, General Counsel and Corporate Secretary


Exhibit No.		Description

10.1		Non-Competition Agreement between Noven Pharmaceuticals, Inc. and Phillip Satow, dated as of August 14, 2007.
10.2		Consulting Agreement between JDS Pharmaceuticals, LLC and Phillip Satow, dated as of August 14, 2007.
99.1		Non-Competition and Employment Agreement among Noven Pharmaceuticals, Inc., JDS Pharmaceuticals, LLC, and Michael Satow, dated as of August 14, 2007.
99.2		Press release issued by Noven Pharmaceuticals, Inc., dated August 15, 2007.


Date of Report (Date of Earliest Event Reported):		August 14, 2007


Registrant’s telephone number, including area code:		305-253-5099