EXHIBIT 10.25 TRANSACTION AGREEMENT DATED AS OF FEBRUARY 26, 2003

EXHIBIT 10.25

TRANSACTION AGREEMENT

DATED AS OF FEBRUARY 26, 2003

BY AND AMONG

NOVEN PHARMACEUTICALS, INC.,

SHIRE US INC.

AND

SHIRE PHARMACEUTICALS GROUP PLC

TABLE OF CONTENTS

PAGE
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ARTICLE I DEFINITIONS........................................................................ 1

Section 1.01. Definitions........................................................................ 1
Section 1.02. Other Definitions.................................................................. 7

ARTICLE II TRANSACTIONS AND CLOSING........................................................... 8

Section 2.01. Closing. .......................................................................... 8
Section 2.02. Closing Transactions............................................................... 8
Section 2.03. Regulatory Approval................................................................ 8
Section 2.04. Transaction Consideration.......................................................... 9
Section 2.05. Milestone Payments................................................................. 10
Section 2.06. Limited Right of Set-Off........................................................... 10
Section 2.07. Determination of Annual Net Sales.................................................. 10
Section 2.08. Assignment of Contracts and Rights; Cooperation.................................... 11

ARTICLE III PURCHASE AND SALE OF ASSETS........................................................ 12

Section 3.01. Purchase and Sale of Purchased Assets.............................................. 12
Section 3.02. Excluded Assets.................................................................... 13

ARTICLE IV ASSUMPTION OF LIABILITIES.......................................................... 13

Section 4.01. Assumption of Assumed Liabilities.................................................. 13
Section 4.02. Excluded Liabilities............................................................... 14

ARTICLE V REPRESENTATIONS AND WARRANTIES..................................................... 14

Section 5.01. Representations and Warranties of Purchaser and Guarantor.......................... 14
Section 5.02. Representations and Warranties of Seller........................................... 17
Section 5.03. Knowledge.......................................................................... 20

ARTICLE VI COVENANTS AND AGREEMENTS OF SELLER................................................. 20

Section 6.01. Conduct of Business................................................................ 20
Section 6.02. Access to Information; Cooperation After Closing Date.............................. 21
Section 6.03. Maintenance of Insurance Policies.................................................. 21

ARTICLE VII COVENANTS AND AGREEMENTS OF PURCHASER.............................................. 22

Section 7.01. Cooperation After Closing Date..................................................... 22
Section 7.02. Insurance.......................................................................... 22
Section 7.03. Certain Intellectual Property Matters.............................................. 22
Section 7.04. Purchaser Guaranty................................................................. 22

ARTICLE VIII COVENANTS AND AGREEMENTS OF THE PARTIES............................................ 23

Section 8.01. Confidentiality.................................................................... 23
Section 8.02. Press Releases..................................................................... 24
Section 8.03. Additional Formulations and Improvements........................................... 25
Section 8.04. Tax Matters........................................................................ 25
Section 8.05. Further Assurances................................................................. 25
Section 8.06. Certain Filings; Consents.......................................................... 25
Section 8.07. Antitrust Laws..................................................................... 26

ARTICLE IX REGULATORY MATTERS................................................................. 26

Section 9.01. Regulatory Responsibility.......................................................... 26
Section 9.02. Regulatory Procedures.............................................................. 26

ARTICLE X CONDITIONS TO CLOSING.............................................................. 28

Section 10.01. Conditions to Obligations of Each Party............................................ 28
Section 10.02. Conditions to Obligation of Purchaser and Guarantor................................ 29
Section 10.03. Conditions to Obligation of Seller................................................. 29
Section 10.04. Updated Disclosure Schedules....................................................... 29
Section 10.05. Effect of Waiver................................................................... 30

ARTICLE XI SURVIVAL; INDEMNIFICATION.......................................................... 30

Section 11.01. Survival of Provisions............................................................. 30
Section 11.02. Indemnification.................................................................... 30
Section 11.03. Certain Limitations................................................................ 33

ARTICLE XII TERMINATION........................................................................ 33

Section 12.01. Termination........................................................................ 33
Section 12.02. Effect of Termination.............................................................. 34

ARTICLE XIII MISCELLANEOUS...................................................................... 34

Section 13.01. Notices. .......................................................................... 34
Section 13.02. Disputes........................................................................... 36
Section 13.03. Independent Contractors............................................................ 37
Section 13.04. Assignment......................................................................... 37
Section 13.05. Binding Effect; Benefit............................................................ 37
Section 13.06. Amendments......................................................................... 37
Section 13.07. No Waiver.......................................................................... 38
Section 13.08. Counterparts....................................................................... 38
Section 13.09. Interpretation..................................................................... 38
Section 13.10. Governing Law...................................................................... 38
Section 13.11. Unenforceability................................................................... 38
Section 13.12. Entire Agreement................................................................... 39
Section 13.13. Expenses........................................................................... 39

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Section 13.14. Disclosure......................................................................... 40
Section 13.15. Guarantor Obligations.............................................................. 40

LIST OF EXHIBITS

Exhibit A Trademarks

LIST OF ATTACHMENTS

Attachment I Form of Assignment Agreement (Closing)
Attachment II Form of Assignment Agreement (Regulatory Approval)
Attachment III Form of License Agreement
Attachment IV Form of Noncompetition Agreement (Purchaser)
Attachment V Form of Noncompetition Agreement (Seller)
Attachment VI Form of Toll Conversion and Supply Agreement
Attachment VII Letter from Seller to the FDA
Attachment VIII Letter from Purchaser to the FDA
Attachment IX Press Release (Seller)
Attachment X Press Release (Purchaser)
Attachment XI Purchaser Guaranty

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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

TRANSACTION AGREEMENT

This TRANSACTION AGREEMENT (together with any Schedules and Attachments
hereto, this "Agreement"), is made as of this 26th day of February 2003, by and
among NOVEN PHARMACEUTICALS, INC., a Delaware corporation ("Seller"), SHIRE US
INC., a New Jersey corporation ("Purchaser"), and SHIRE PHARMACEUTICALS GROUP
PLC, a corporation organized under the laws of England and Wales ("Guarantor").

WITNESSETH:

WHEREAS, Seller is engaged in the business of developing transdermal drug
delivery systems and in connection therewith has developed the Technology and
the Product;

WHEREAS, upon the terms and subject to the conditions set forth in this
Agreement, Seller and Purchaser desire to enter into a transaction pursuant to
which, among other things, (a) Seller will transfer to Purchaser certain of the
assets held, owned or used by Seller in connection with the Business and assign
certain liabilities and obligations associated with the Business to Purchaser,
(b) Seller and Purchaser will enter into the License Agreement pursuant to which
Seller will license to Purchaser the Technology, and (c) Seller and Purchaser
will enter into the Toll Conversion and Supply Agreement pursuant to which
Seller will supply Purchaser with all of its requirements of the Product for
sale within the Territory;

WHEREAS, in order to induce Seller to enter into this Agreement, Guarantor
is willing to join in this Agreement and guarantee the obligations of Purchaser
hereunder on the terms and conditions set forth herein; and

WHEREAS, in connection with the Contemplated Transactions, Seller and
Purchaser desire to enter into certain ancillary agreements and arrangements to
effect the transactions contemplated by this Agreement;

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

ARTICLE I
DEFINITIONS

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

"ADHD" means Attention Deficit Hyperactivity Disorder and/or Attention
Deficit Disorder.

"Affiliate" means, when used with respect to a Person, any other Person
directly or indirectly controlling, controlled by or under common control with
the subject Person. For

Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

purposes of this Agreement, "control" means the direct or indirect ownership of
over 50% of the outstanding voting securities of a Person.

"Annual Net Sales" means, as of any calendar quarter, the gross amount
invoiced by Purchaser (or any Affiliate, successor, assignee or sublicensee of
Purchaser) on all sales of the Product in the Territory during the 12-month
period ending on the last day of such calendar quarter, less (i) discounts
actually allowed, (ii) credits actually allowed for claims, allowances or
returned products, (iii) prepaid freight, and (iv) sales taxes, value added
taxes, duties and other governmental charges or rebates actually paid in
connection with the sale (but excluding Income Taxes) to the extent not
reimbursed.

"Antitrust Laws" means all United States federal and state, and any
foreign, statutes, rules, regulations, orders, decrees, administrative and
judicial doctrines, and other laws that are designed or intended to prohibit,
restrict or regulate actions having the purpose or effect of monopolization or
restraint of trade.

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

"Assignment Agreement (Closing)" means the Xxxx of Sale, Assignment and
Assumption Agreement, in the form contemplated by Attachment I to this
Agreement, as the same may be amended, supplemented or otherwise modified from
time to time.

"Assignment Agreement (Regulatory Approval)" means the Xxxx of Sale and
Assignment Agreement, in the form contemplated by Attachment II to this
Agreement, as the same may be amended, supplemented or otherwise modified from
time to time.

"Business" means the business as conducted by Seller prior to the date of
this Agreement consisting of the development, manufacture, testing and clinical
and non-clinical trials of the Product, and which business, upon receipt of the
Regulatory Approval, shall additionally consist of marketing, advertising,
promoting, distributing, selling, using and otherwise disposing of the Product.

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

"Closing Date" means the date of the Closing as determined pursuant to
Section 2.01.

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

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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

"Confidential Information" means all secret, confidential or proprietary
data, know-how and related information, including all INDs, NDAs, Regulatory
Applications, Regulatory and Clinical Materials and related filings,
applications and data, the content of any unpublished patent applications,
operating methods and procedures, marketing, manufacturing, distribution and
sales methods and systems, sales figures, pricing policies and price lists and
other business information and shall include all information disclosed or
accessed by the parties pursuant to the provisions this Agreement.

"Contemplated Transactions" means the transactions contemplated by the
Transaction Documents.

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

"DEA" means the United States Drug Enforcement Administration and any
successor agency thereto.

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

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

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

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

"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended.

"Income Taxes" means Taxes on net income or gain and franchise Taxes where
the amount of such franchise Taxes is measured by reference to net income or
gain.

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

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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

"Intellectual Property" means (i) all patents, copyrights, technology,
know-how, processes, trade secrets, inventions (including inventions conceived
prior to the Closing Date but not documented as of the Closing Date),
proprietary data, formulae, research and development data and computer software
programs, (ii) all trademarks, trade names, service marks and service names,
(iii) all registrations, applications, recordings and common-law rights relating
thereto, all rights to xxx at law or in equity for any infringement or other
impairment thereto, including the right to receive all proceeds and damages
therefrom, and all rights to obtain renewals, continuations, divisions or other
extensions of legal protections pertaining thereto, and (iv) all other United
States, state and foreign intellectual property.

"License Agreement" means the License Agreement, in the form contemplated
by Attachment III to this Agreement, as the same may be amended, supplemented or
otherwise modified from time to time.

"Lien" means, with respect to any asset, any mortgage, lien, claim,
pledge, charge, security interest or other encumbrance of any kind in respect of
such asset.

"Manufacturing Facility" means Seller's facility located at 00000 X.X.
000xx Xxxxxx, Xxxxx, Xxxxxxx 00000.

"Material Adverse Effect" means (i) with respect to the Business, a
material adverse effect on the assets, financial condition or results of
operations of the Business taken as a whole, or (ii) with respect to any other
Person, a material adverse effect on the assets, financial condition or results
of operations of such Person and its Subsidiaries taken as a whole; provided,
that the receipt by Seller of any notice, correspondence or other communication
from the FDA (other than a Non-Approval Notice) and any questions or issues
raised by the FDA (other than those raised in connection with the issuance of a
Non-Approval Notice) shall not be deemed as having a Material Adverse Effect on
the Business.

"New Drug Application" or "NDA" means an application, including amendments
and supplements thereto, filed by a Person with the FDA to obtain FDA approval
of a new drug or therapy, as the context indicates, as defined in 21 C.F.R.
Section 314.3.

"Non-Approval Notice" means the issuance of a written notice by the FDA
notifying Seller that the Product NDA is not approved.

"Noncompetition Agreement (Purchaser)" means the Noncompetition Agreement
(Purchaser), in the form contemplated by Attachment IV to this Agreement, as the
same may be amended, supplemented or otherwise modified from time to time.

"Noncompetition Agreement (Seller)" means the Noncompetition Agreement
(Seller), in the form contemplated by Attachment V to this Agreement, as the
same may be amended, supplemented or otherwise modified from time to time.

"Noven Patents" has the meaning specified in the License Agreement.

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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

"Permitted Liens" means any of the following: (i) statutory Liens or
landlords', carriers', warehousemen's, mechanics', suppliers', materialmen's, or
other like Liens arising in the ordinary course of business with respect to
amounts not yet overdue for a period of 60 days or amounts being contested in
good faith by appropriate Proceedings; (ii) rights and licenses granted to
others in any Intellectual Property; (iii) Liens that have not had, and could
not reasonably be expected to have, a Material Adverse Effect on the Business;
and (iv) Liens disclosed in the Disclosure Schedules.

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

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

"Product" means the transdermal methylphenidate drug delivery system that
has and is being developed, manufactured and tested by Seller, and for which
there is currently pending the Product NDA.

"Product IND" means the IND (IND File No. 54,732) submitted to the FDA by
Seller on December 12, 1997, seeking approval to develop, test and perform
clinical and non-clinical trials of the Product, along with any amendments,
correspondence or supplements thereto and incorporated therein.

"Product NDA" means the NDA (NDA File No. 21-514) submitted to the FDA by
Seller on June 27, 2002, seeking approval to commercially market the Product for
the treatment of ADHD, along with any amendments, correspondence or supplements
thereto and incorporated therein.

"Product Study" means any investigation of, or request for, clinical or
non-clinical studies (including any Phase IV clinical studies) that may be
requested by the FDA with respect to the Product at any time, whether prior or
subsequent to Regulatory Approval of the Product.

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

"Regulatory Application" means the applications submitted by Seller to the
FDA seeking approval for the development, manufacture, testing, storage,
transport, marketing, advertisement,

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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

promotion, sale, use, distribution or other disposal of the Product in all or
any portion of the Territory, including the Product IND and the Product NDA.

"Regulatory Approval" means the issuance of an approval letter (as defined
in 21 C.F.R. Section 314.3) by the FDA pursuant to 21 C.F.R. 314.105 approving
the Product NDA and approving the Product for manufacturing, marketing, sale,
distribution and use in the United States, irrespective of any postmarketing
study commitments agreed to by Seller and/or Purchaser, including the
performance of one or more postmarketing Product Studies.

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

"Regulatory Standards" has the meaning specified in the Toll Conversion
and Supply Agreement.

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

"Seller Indemnity Cap Amount" means ***.

"Shire Ireland" means Shire Pharmaceuticals Ireland Limited, a Republic of
Ireland corporation.

"Subsidiary" as it relates to any Person, shall mean with respect to such
Person, any other Person of which the specified Person, either directly or
through or together with any other of its Subsidiaries, owns more than 50% of
the voting power in the election of directors or their equivalents, other than
as affected by events of default.

"Technology" has the meaning specified in the License Agreement.

"Territory" means the entire world.

"Toll Conversion and Supply Agreement" means the Toll Conversion and
Supply Agreement, in the form contemplated by Attachment VI to this Agreement,
as the same may be amended, supplemented or otherwise modified from time to
time.

"Trademark" means the registered trademark owned by Seller set forth on
Exhibit A, and all variations thereof.

"Transaction Documents" means this Agreement, the Assignment Agreement
(Closing), the Assignment Agreement (Regulatory Approval), the License
Agreement, the Toll Conversion and Supply Agreement, the Noncompetition
Agreement (Purchaser), the Noncompetition Agreement (Seller), the Purchaser
Guaranty, any agreements or documents prepared or executed

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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

pursuant to the transactions contemplated by such agreements, any exhibits or
attachments to any of the foregoing and any other written agreement signed by
Seller and Purchaser that is expressly identified as a Transaction Document, as
any of the foregoing may be amended, supplemented or otherwise modified from
time to time.

"United States Applicable Law" means any Applicable Law of any United
States Governmental Authority.

"United States Governmental Authority" means a Governmental Authority
organized under the laws of the United States of America, any state thereof or
the District of Columbia.

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

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

Agreement...................................................................... Preamble
Assumed Liabilities............................................................ 4.01
Closing........................................................................ 2.01
Closing Payment................................................................ 2.02(f)
Contracts...................................................................... 3.01(a)
Disclosing Party............................................................... 8.01
Excluded Assets................................................................ 3.02
Excluded Liabilities........................................................... 4.02
Guarantor...................................................................... Preamble
Indemnified Party.............................................................. 11.02(c)
Indemnifying Party............................................................. 11.02(c)
Indemnity Deductible Amount.................................................... 11.02(a)
IRS............................................................................ 2.04
Milestone Payments............................................................. 2.05
Milestones..................................................................... 2.05
Obligations.................................................................... 13.15
Offer.......................................................................... 8.03(a)
Offered Agreement.............................................................. 8.03(a)
Offeree........................................................................ 8.03(a)
Offeror........................................................................ 8.03(a)
Purchased Assets............................................................... 3.01
Purchaser...................................................................... Preamble
Purchaser Indemnitees.......................................................... 11.02(b)
Receiving Party................................................................ 8.01
Regulatory Approval Payment.................................................... 2.03(d)
Second Generation Product...................................................... 8.03(c)
Seller......................................................................... Preamble
Seller Indemnitees............................................................. 11.02(a)
Termination Fee................................................................ 12.02
Transaction Consideration...................................................... 2.04

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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

Voluntary Termination Date..................................................... 12.01(b)

ARTICLE II
TRANSACTIONS AND CLOSING

Section 2.01. Closing. Subject to the terms and conditions set forth
herein, the closing (the "Closing") of the Contemplated Transactions shall take
place at 10:00 a.m. at the offices of King & Spalding LLP, 0000 Xxxxxxxxxxxx
Xxxxxx, XX, Xxxxxxxxxx, X.X. 00000 on March 21, 2003; provided, however, that if
all of the conditions to Closing set forth in Article X have not been satisfied
(or waived) as of that date, the Closing shall, subject to the terms and
conditions set forth herein, take place on the third Business Day following the
satisfaction or waiver (by the party entitled to waive the condition) of all
conditions to Closing set forth in Article X, or at such other time and place as
the parties may agree. The Closing shall become effective at 12:01 a.m.,
Washington, D.C. time on the Closing Date.

Section 2.02. Closing Transactions. Upon the terms and subject to the
conditions set forth in this Agreement, the parties agree that at the Closing,
among other things:

(a) except as otherwise contemplated in Section 2.03(a), Seller will
transfer to Purchaser the Purchased Assets and Purchaser will assume the Assumed
Liabilities;

(b) to effect the transfer of the Purchased Assets and the
assumption of the Assumed Liabilities contemplated by the foregoing clause (a),
Seller and Purchaser will execute and deliver the Assignment Agreement
(Closing);

(c) Seller and Shire Ireland will execute and deliver the License
Agreement, and the Toll Conversion and Supply Agreement;

(d) Seller and Purchaser will execute and deliver the Noncompetition
Agreement (Purchaser) and the Noncompetition Agreement (Seller);

(e) Purchaser will execute and deliver to and for the benefit of
Seller the Purchaser Guaranty; and

(f) Purchaser will pay and deliver to Seller US$25,000,000 in
immediately available funds (the "Closing Payment"), by wire transfer to an
account or accounts designated by Seller by written notice to Purchaser at least
two Business Days prior to the Closing Date (or such shorter notice as Purchaser
shall agree to accept); and

(g) Seller and Purchaser will execute and deliver closing
certificates and other documents, agreements and notices as are reasonably
required in order to effectuate the Contemplated Transactions.

Section 2.03. Regulatory Approval. Upon the terms and subject to the
conditions set forth in this Agreement, within three days after Seller's receipt
of Regulatory Approval for the

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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

Product or, if Seller receives such Regulatory Approval prior to the Closing
Date, on the Closing Date:

(a) Seller will transfer to Purchaser the Regulatory Application,
the Regulatory and Clinical Materials and the Trademark;

(b) to effect the transfer of the Regulatory Application, the
Regulatory and Clinical Materials and the Trademark, Seller and Purchaser will
execute and deliver the Assignment Agreement (Regulatory Approval);

(c) Seller will deliver a letter to the FDA, in the form attached
hereto as Attachment VII, notifying the FDA of the transfer of the Regulatory
Application, to Purchaser;

(d) Purchaser will deliver a letter to the FDA, in the form attached
hereto as Attachment VIII, notifying the FDA of Purchaser's assumption of the
Regulatory Application from Seller; and

(e) Purchaser will pay and deliver to Seller US$50,000,000 (which
amount is in addition to the US$25,000,000 contemplated by Section 2.02(f)) in
immediately available funds (the "Regulatory Approval Payment"), by wire
transfer to an account or accounts designated by Seller by written notice to
Purchaser at least two Business Days prior to the date of such payment (or such
shorter notice as Purchaser shall agree to accept).

Section 2.04. Transaction Consideration. The consideration to be paid to
Seller for the sale of the Purchased Assets and the license of the Technology
pursuant to the License Agreement (the "Transaction Consideration"), shall, in
the aggregate, consist of the following:

(a) the Closing Payment;

(b) the Regulatory Approval Payment;

(d) the assumption by Purchaser of the Assumed Liabilities in
accordance with this Agreement.

After the Closing, the parties shall make consistent use of the allocation, fair
market value and useful lives specified in Schedule 2.04 hereto for all Tax
purposes and in any and all filings, declarations and reports with the Internal
Revenue Service (the "IRS") in respect thereof, including the reports required
to be filed under Section 1060 of the Internal Revenue Code, as amended, if
applicable, it being understood that Purchaser shall prepare and deliver IRS
Form 8594 to Seller within 45 days after the Closing Date if such form is
required to be filed with the IRS. In any Proceeding related to the
determination of any Tax, neither Purchaser nor Seller shall contend or
represent that the allocation of the Transaction Consideration set forth in
Schedule 2.04 is incorrect.

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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

Section 2.05. Milestone Payments. Purchaser shall pay and deliver to
Seller three payments in an aggregate amount equal to US$75,000,000
(collectively, the "Milestone Payments"), upon the achievement of certain
milestones determined with reference to Purchaser's Annual Net Sales of the
Product (the "Milestones"), as follows:

(a) Purchaser shall pay and deliver to Seller US$25,000,000 in
immediately available funds within 45 days after the last day of the first
calendar quarter during which the Annual Net Sales of the Product become equal
to or greater than US$25,000,000;

(b) Purchaser shall pay and deliver to Seller US$25,000,000 in
immediately available funds within 45 days of the last day of the first calendar
quarter during which the Annual Net Sales of the Product become equal to or
greater than US$50,000,000; and

(c) Purchaser shall pay and deliver to Seller US$25,000,000 in
immediately available funds within 45 days of the last day of the first calendar
quarter during which the Annual Net Sales of the Product become equal to or
greater than US$75,000,000;

provided, that if more than one Milestone shall be achieved in any single
calendar quarter, each Milestone Payment corresponding to the achievement of
such Milestones shall be paid and delivered to Seller within 45 days of the last
day of such quarter in accordance with this Section 2.05.

Section 2.06. Limited Right of Set-Off. Purchaser and Guarantor hereby
covenant and agree that except as otherwise expressly provided in this Section
2.06, each payment of the Transaction Consideration provided for in this Article
II shall be paid and delivered to Seller when due and payable in accordance with
the provisions of this Article II, and neither Purchaser nor Guarantor shall
have any right to set off against any amounts due or to become due to Seller
hereunder, any amounts that may become payable to Purchaser and/or Guarantor by
Seller pursuant to any provision of the Transaction Documents, any provision of
Applicable Law or otherwise; provided however, that notwithstanding the
foregoing, Purchaser may set off against any unpaid payment of the Transaction
Consideration due and payable to Seller hereunder any amounts due and payable to
Purchaser by Seller which amounts (a) are not subject to dispute between Seller
and Purchaser, or (b) have been determined to be due and payable pursuant to a
final and nonappealable judgment of a court of competent jurisdiction or a
final, nonappealable and binding arbitration award. ***.

Section 2.07. Determination of Annual Net Sales.

(a) Quarterly Reports. From the Closing until the payment in full of
the Milestone Payments, Purchaser shall provide financial reports to Seller on a
quarterly basis within 45 days after the last day of each calendar quarter,
setting forth the amount of Annual Net Sales of the Product for the 12-month
period ending as of the end of each such calendar quarter. Seller and Purchaser
hereby acknowledge and agree that such reports shall constitute Confidential
Information for purposes of this Agreement and shall be held as confidential by
Seller in accordance with Section 8.01 hereof.

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(b) Generation of Annual Net Sales. Until the payment in full of the
Milestone Payments, Purchaser shall exercise reasonable commercial efforts to
maximize the Annual Net Sales of the Product, and ***.

(c) Disputes. In the event Seller shall dispute the correctness of
Purchaser's calculation of Annual Net Sales for any 12-month period, Seller
shall, within 45 days of receipt of any such calculation, provide written notice
to Purchaser of such objection, setting forth in writing and in reasonable
detail the reasons therefor. Seller and Purchaser shall endeavor in good faith
to resolve any disputed matters within 45 days after Purchaser's receipt of
Seller's notice of objections. If Seller and Purchaser are unable to resolve the
disputed matters within such 45-day period, Seller and Purchaser shall select a
nationally known independent accounting firm (which firm shall not be the then
regular auditors of Seller, Purchaser or Guarantor) to resolve the matters in
dispute, and the determination of such firm in respect of the correctness of
each matter remaining in dispute shall be conclusive and binding on Seller and
Purchaser. In connection with the resolution of any dispute under this Section
2.07(c), each party shall bear its own costs and expenses and share the costs
and expenses of any independent accounting firm selected to resolve such
disputes, except that if Purchaser is determined to have underreported the
amount of Annual Net Sales for the period subject to such dispute by ten percent
or more, or if any such understatement shall have resulted in Purchaser not
paying Seller a Milestone Payment to which Seller was entitled, then Purchaser
shall reimburse Seller for any and all reasonable, actual out-of-pocket expenses
incurred by Seller in connection with the dispute, including any costs and
expenses payable to the independent accounting firm and any other costs and
expenses incurred by Seller in connection with such dispute resolution process.
Notwithstanding anything to the contrary in this Section 2.07(c), Seller's
failure to dispute the correctness of Purchaser's calculation of Annual Net
Sales for any 12-month period shall not prevent Seller from disputing the
calculation of Annual Net Sales for any calendar quarter of such undisputed
12-month period in connection with its dispute of any subsequent 12-month period
in accordance with this Section 2.07(c); provided however, that in the event
Seller shall dispute Purchaser's calculation of Annual Net Sales pursuant to
this Section 2.07(c), the final resolution of such dispute as to each of the
four calendar quarters of such 12-month period shall be binding upon Seller, and
shall not be further subject to dispute by Seller in connection with any
disputes as to future 12-month periods.

Section 2.08. Assignment of Contracts and Rights; Cooperation. Anything in
the Transaction Documents to the contrary notwithstanding, nothing in this
Agreement or in any of the Transaction Documents shall constitute an agreement
to assign or otherwise sell, convey or transfer any Purchased Asset or any
claim, right or benefit arising thereunder or resulting therefrom, or to enter
into any other agreement or arrangement with respect thereto, if any such
attempted assignment, sale, conveyance, transfer, manufacture or supply, or
entering into any agreement or arrangement pursuant thereto would, without the
consent or approval of any Person (including any Governmental Authority),
constitute a breach of, or other contravention under, any Contract or in any way
adversely affect the rights of Seller or Purchaser thereunder. With respect to
any such Contract or any claim, right or benefit arising thereunder or resulting
therefrom, promptly after the date hereof, the parties hereto will use
reasonable commercial efforts (but without any payment of money by Seller,
Purchaser any of their respective Affiliates to any third party) to obtain the
written consent of the other parties to any such Contract for the

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assignment thereof to Purchaser, or written confirmation from such parties
reasonably satisfactory in form and substance to Seller and Purchaser confirming
that such consent is not required. If such consent is not obtained with respect
to any such Contract or if an attempted assignment thereof would be ineffective
or would adversely affect the rights of Seller or Purchaser thereunder, the
parties will cooperate in a mutually agreeable arrangement under which Purchaser
would obtain the benefits thereunder in accordance with this Agreement,
including subcontracting or subleasing to Purchaser, subject to Applicable Law
and the terms of such Contract. In such case, Seller shall, until such time as
any required consents shall have been obtained, act as the agent of the
Purchaser in order to obtain for Purchaser the benefits of such Contract as
though the Contract had been assigned to the Purchaser. If Seller shall
thereafter obtain a required consent to a Contract retained by Seller pursuant
to this Section 2.08, such Contract shall thereupon be transferred to Purchaser
without need of further action by Seller or Purchaser or of further
documentation.

ARTICLE III
PURCHASE AND SALE OF ASSETS

Section 3.01. Purchase and Sale of Purchased Assets. Subject to the terms
and conditions of this Agreement, as of the Closing Date (or, as to subsections
(c), (d) and (e) of this Section 3.01, if Seller shall not have received
Regulatory Approval prior to the Closing Date, then as of the date contemplated
by Section 2.03), Seller shall sell, transfer, convey, assign and deliver to
Purchaser, and Purchaser shall purchase and accept, all right, title and
interest in and to the Purchased Assets. The "Purchased Assets" shall consist of
the following items and no others:

(a) to the extent assignable, (i) all of the contracts listed in
Schedule 3.01(a), and (ii) any and all contracts entered into by Seller with the
prior written consent of Purchaser after the date of this Agreement and prior to
the Closing Date in connection with any Product Studies assumed by Seller
pursuant to Section 9.02(b)(i) (collectively, the "Contracts");

(b) the domain name XxxxxXxxxx.xxx;

(d) the Regulatory and Clinical Materials; and

(e) the Trademark.

Notwithstanding that the Regulatory Application, including the Product IND and
the Product NDA, shall constitute a Purchased Asset under this Agreement,
Purchaser covenants and agrees that it will not make, have made, manufacture or
have manufactured any Product and will purchase all of its requirements of the
Product from Seller pursuant to the terms and conditions of the License
Agreement and the Toll Conversion and Supply Agreement, except as otherwise
expressly permitted by the terms of the Toll Conversion and Supply Agreement;
provided however, that Purchaser may manufacture or have manufactured the
Product to the extent the Toll Conversion and Supply Agreement is terminated but
the License Agreement remains in effect.

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Section 3.02. Excluded Assets. Notwithstanding anything to the contrary
contained herein, and subject to the transfer of any of the rights, title and
interest in and to the assets transferred by Seller under any of the Transaction
Documents, the Purchased Assets shall not include, and Seller shall retain all
of its rights, title and interest in and to, all assets, properties or rights of
Seller and its Affiliates other than those specifically enumerated as Purchased
Assets in Section 3.01 (the "Excluded Assets"). Without limiting the generality
of the foregoing, to the extent not expressly listed as a Purchased Asset in
Section 3.01, the Purchased Assets shall not include:

(a) any Intellectual Property owned, licensed or otherwise used by
Seller or any of its Affiliates;

(b) any right, title or interest in Seller's or any of its
Affiliates' corporate name, corporate service xxxx or corporate logo used with
respect to the Product;

(d) the labor of any employees of Seller;

(e) any refunds of Income Taxes or any prepaid Income Taxes arising
from or with respect to the Purchased Assets prior to the Closing Date or
arising from or with respect to the operations of the Business for periods (or
portions thereof) ending on or prior to the Closing Date;

(f) any assets of Seller and its Affiliates not held or owned by or
used exclusively in connection with the Business;

(g) any assets used in the manufacture of the Product;

(h) any licenses or permits relating to the manufacture of the
Product, including any regulatory approvals issued to Seller by the FDA, the DEA
or any other Governmental Authority;

(i) any rights or claims of Seller under any of the Transaction
Documents or the agreements and instruments delivered to Seller by Purchaser or
Guarantor pursuant to any of the Transaction Documents; or

(j) any assets related to Excluded Liabilities.

ARTICLE IV
ASSUMPTION OF LIABILITIES

Section 4.01. Assumption of Assumed Liabilities. Subject to the terms and
conditions of this Agreement, as of the Closing Date, Purchaser shall assume,
and shall be solely and

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exclusively liable with respect to, and shall pay, perform, discharge and
satisfy when due, the following liabilities and obligations of Seller arising
out of or relating to the Business, (collectively, the "Assumed Liabilities"):

(a) all liabilities and obligations, whether accrued, liquidated,
contingent, matured or unmatured, at or prior to the Closing, that Purchaser is
expressly assuming pursuant to this Agreement; and

(b) all liabilities of Seller and its Affiliates under the Contracts
arising on or after the Closing Date.

Section 4.02. Excluded Liabilities. The "Excluded Liabilities" are all
liabilities or obligations not expressly included in the definition of Assumed
Liabilities, it being agreed that Purchaser and Guarantor are not assuming any
liability of Seller other than the Assumed Liabilities. Without limiting the
foregoing, "Excluded Liabilities" include the following:

(a) all liabilities and obligations for any Income Taxes arising
from or related to the Business and the Purchased Assets in respect of any
period (or portion thereof) ending on or before the Closing Date or arising from
the payment to or receipt by Seller of the Transaction Consideration or any
portion thereof;

(b) all liabilities and obligations, whether presently in existence
or arising after the Closing Date, relating to fees, commissions or expenses
owed to any broker, finder, investment banker, accountant, attorney or other
intermediary or advisor employed by Seller in connection with the Contemplated
Transactions;

(d) all liabilities and obligations, whether presently in existence
or arising after the Closing Date, relating to or arising primarily out of
Excluded Assets including any liability or obligation to any current or former
employee or independent contractor of Seller.

ARTICLE V
REPRESENTATIONS AND WARRANTIES

Section 5.01. Representations and Warranties of Purchaser and Guarantor.
Each of Purchaser and Guarantor represents and warrants to Seller as of the date
hereof and as of the Closing Date that:

(a) Organization. Each of Purchaser and Guarantor is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation. As of the Closing Date, Purchaser will be
duly qualified to do business in each jurisdiction where the character of its
business (after giving effect to the Contemplated Transactions) make such
qualifications necessary to carry on its business.

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(b) Power, Authority and Enforceability. Each of Purchaser and
Guarantor has full corporate power and authority to enter into and perform the
Transaction Documents and to consummate the Contemplated Transactions. The
Transaction Documents have been or shall be duly executed and delivered by duly
authorized signatories of each Purchaser and Guarantor, as the case may be. The
Transaction Documents are valid and binding obligations of Purchaser and
Guarantor, as the case may be, enforceable against each of Purchaser and
Guarantor in accordance with their respective terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally.

(c) Compliance With Law. Except for violations or infringements that
have not had, or would not reasonably be expected to have, a Material Adverse
Effect on Purchaser or the Business, as the case may be, Purchaser is and has
been in compliance in all respects with any Applicable Law (statutory, judicial
or otherwise), ordinances, regulations, judgments, orders, directives,
injunctions, writs, decrees, or awards of any Governmental Authority.

(d) Governmental Authorization. The execution, delivery and
performance by Purchaser and Guarantor of the Transaction Documents requires no
action by or in respect of, consents or approvals of, or filing with, any
Governmental Authority other than (i) the notices to the FDA described in
Sections 2.03(c) and 2.03(d), (ii) compliance with any applicable requirements
of any Antitrust Laws (including the HSR Act), and (iii) the actions, consents,
approvals, permits or filings expressly referred to in this Agreement.

(e) No Violation. Neither the execution and delivery of the
Transaction Documents nor the consummation by Purchaser and Guarantor of the
Contemplated Transactions, will (i) conflict with or result in a breach of any
of the terms, conditions or provisions of Purchaser's or Guarantor's certificate
of incorporation or other governing or charter document, or of any statute or
administrative regulation, or, to the best of their knowledge, of any order,
writ, injunction, judgment or decree of any court or governmental authority or
of any arbitration award or any agreement binding upon Purchaser or Guarantor or
their respective assets, (ii) assuming compliance with the matters set forth in
Section 5.01(d), to the best of their knowledge, contravene or conflict with, or
constitute a violation of, any provisions of any Applicable Law binding upon
Purchaser or Guarantor, or (iii) assuming compliance with the matters set forth
in Section 5.01(d), constitute a default under, or give rise to any right of
termination, cancellation or acceleration of, or to a loss of any benefit to
which Purchaser or Guarantor is entitled under any provision of any contract,
agreement or other instrument of any license, franchise, permit or similar
authorization held by Purchaser or Guarantor and which default would have a
Material Adverse Effect on Purchaser, Guarantor or the Business.

(f) No Default. Neither Purchaser nor Guarantor is a party to any
unexpired, undischarged or unsatisfied written or oral contract, agreement,
indenture, mortgage, debenture, note or other instrument under the terms of
which performance by Purchaser or Guarantor according to the terms of the
Transaction Documents will be a default, or whereby timely performance by
Purchaser and Guarantor according to the terms of any of the Transaction
Documents may be prohibited, prevented or delayed and which in either case would
have a Material Adverse Effect on Purchaser, Guarantor or the Business.

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(g) Litigation. There is no Proceeding pending or, to knowledge of
Purchaser or Guarantor, threatened against Purchaser or Guarantor or any of
their respective Affiliates before any court, arbitrator, administrative agency
or other tribunal which (i) could reasonably be expected to have a Material
Adverse Effect upon Purchaser or the Business, (ii) could reasonably be expected
to prevent Purchaser or Guarantor from executing any Transaction Document or
consummating the Contemplated Transactions, or (iii) could reasonably be
expected to prevent or interfere with Seller's ability to obtain the Regulatory
Approval.

(h) Licenses and Permits. Subject to receipt of Regulatory Approval
of the Product and compliance with the requirements of any Antitrust Laws
(including the HSR Act), Purchaser has all licenses, franchises, permits and
other similar authorizations affecting, or relating in any way to, the Business
and the Product required by Applicable Law to be obtained by Purchaser to permit
Purchaser to conduct the Business in the manner contemplated by the Transaction
Documents and to market, promote, distribute, use, sell, or otherwise dispose of
the Product after the Closing Date.

(i) Inspections. Purchaser and Guarantor are informed and
sophisticated participants in the Contemplated Transactions and have engaged
expert advisors experienced in the evaluation and purchase of assets such as the
Business and the license of intellectual property such as the Technology.
Purchaser and Guarantor have undertaken an investigation, have been provided
with, have evaluated and have relied upon certain documents and information,
(including the Product IND and the Product NDA, each in its entirety) to assist
Purchaser and Guarantor in making an informed and intelligent decision with
respect to the execution of the Transaction Documents. Each of Purchaser and
Guarantor shall undertake prior to Closing such further investigation and
request such additional documents and information as each deems necessary. Each
of Purchaser and Guarantor acknowledges that Seller makes no representation or
warranty as to the prospects, financial or otherwise, of the Business or the
sale of the Product, and that any projections, estimates or forecasts of future
results or events provided by or on behalf of Seller are subject to uncertainty
and to the assumptions used in their preparation. Purchaser agrees that it shall
accept the Purchased Assets and the Assumed Liabilities as they exist on the
Closing Date (or, if any of such Purchased Assets are transferred to Purchaser
after the Closing Date pursuant to Section 2.03, on the date of such transfer)
based on Purchaser's inspection, examination and determination with respect
thereto as to all matters, and without reliance upon any express or implied
representations or warranties of any nature, whether in writing, orally or
otherwise, made by or on behalf of or imputed to Seller, except as expressly set
forth in the Transaction Documents. Notwithstanding the foregoing, nothing
herein shall in any way limit Purchaser's or Guarantor's ability to rely fully
on the representations, warranties and agreements of Seller expressly contained
in the Transaction Documents.

(j) Financing. Each of Purchaser and Guarantor has available to it
cash, marketable securities or other investments or available sources of credit
to enable it to effectuate the Contemplated Transactions on the terms and
conditions set forth in the Transaction Documents.

(k) Finder's Fees. There is no investment banker, broker, finder or
other intermediary that has been retained by or is authorized to act on behalf
of Purchaser or Guarantor

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who might be entitled to any fee or commission from Seller upon effectuation of
the Contemplated Transactions.

(l) Regulatory Approval. Purchaser and Guarantor acknowledge that
as of the date of this Agreement, no Regulatory Approval has been issued to
permit the marketing, promotion, sale, distribution, use or other disposal of
the Product by Purchaser, and further acknowledge the possibility that such
Regulatory Approval may not be issued prior to or after the Closing Date.

(m) Generic Drug Enforcement Act. Neither Purchaser, it Affiliates
nor any of their respective officers, directors, employees, agents or
consultants have been charged with or convicted under federal law for conduct
relating to the development or approval of, or otherwise relating to the
regulation of, any product under the Generic Drug Enforcement Act of 1992 or any
other relevant statute, law or regulation.

(n) Insurance. Schedule 5.01(n) contains a true and complete list
of all product liability, comprehensive general liability and property casualty
insurance policies maintained by Purchaser and/or Shire Ireland which will be
maintained by Purchaser and/or Shire Ireland after the Closing Date in
connection with the Business. Each of such policies is in full force and effect
in the amounts indicated.

Section 5.02. Representations and Warranties of Seller. Seller represents
and warrants to Purchaser and Guarantor as of the date hereof and as of the
Closing Date that:

(a) Organization. Seller is a corporation duly organized, existing
and in good standing under the laws of the State of Delaware. Seller has all
necessary corporate power and authority to engage in the Business in the
Territory as such business is now being conducted.

(b) Power, Authority and Enforceability. Seller has full corporate
power and authority to enter into and perform the Transaction Documents and to
consummate the Contemplated Transactions. The Transaction Documents have been or
shall be duly executed and delivered by duly authorized signatories of Seller.
The Transaction Documents are valid and binding obligations of Seller,
enforceable against Seller in accordance with their respective terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to or affecting creditors' rights generally.

(c) Compliance with Law. Except as set forth on Schedule 5.02(c)
and except for violations or infringements that have not had, or would not
reasonably be expected to have, a Material Adverse Effect on the Business or any
of the Purchased Assets, Seller, and its operation of the Business, is and has
been in compliance in all respects with any and all Applicable Law (statutory,
judicial or otherwise), ordinances, regulations, judgments, orders, directives,
injunctions, writs, decrees or awards of any Governmental Authority.

(d) Governmental Authorization. The execution, delivery and
performance by Seller of the Transaction Documents requires no action by or in
respect of, consents or approvals

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of, or filing with, any Governmental Authority other than (i) the notices to the
FDA described in Sections 2.03(c) and 2.03(d), (ii) compliance with any
applicable requirements of any Antitrust Laws (including the HSR Act), and (iii)
the actions, consents, approvals, permits or filings set forth in Schedule
5.02(d) or otherwise expressly referred to in this Agreement.

(e) No Violation. Except as set forth on Schedule 5.02(e), neither
the execution and delivery of the Transaction Documents by Seller nor the
consummation by Seller of the Contemplated Transactions will (i) conflict with
or result in a breach of any of the terms, conditions or provisions of Seller's
certificate of incorporation or bylaws, or of any statute or administrative
regulation, or, to the best of its knowledge, of any order, writ, injunction,
judgment or decree of any court or governmental authority or of any arbitration
award or any material agreement binding upon Seller or any of its Affiliates,
(ii) assuming compliance with the matters set forth in Section 5.02(d), to the
best of its knowledge, contravene or conflict with, or constitute a violation
of, any provisions of any Applicable Law binding upon Seller or any of its
Affiliates, or (iii) assuming compliance with the matters set forth in Section
5.02(d), constitute a default under, or give rise to any right of termination,
cancellation or acceleration of, or to a loss of any benefit to which Seller or
any of its Affiliates is entitled under any provision of any contract, agreement
or other instrument or any license, franchise, permit or similar authorization
held by Seller or any of its Affiliates and which default would have a Material
Adverse Effect on Seller or the Business.

(f) No Default. Neither Seller nor any of its Affiliates is a
party to any unexpired, undischarged or unsatisfied written or oral contract,
agreement, indenture, mortgage, debenture, note or other instrument under the
terms of which performance by Seller according to the terms of the Transaction
Documents will be a default, or whereby timely performance by Seller according
to the terms of any of the Transaction Documents may be prohibited, prevented or
delayed and which default would have a Material Adverse Effect on Seller or the
Business.

(g) Litigation. Except as set forth on Schedule 5.02(g), there is
no Proceeding pending or, to the knowledge of Seller, threatened against Seller
or any of its Affiliates before any court, arbitrator, administrative agency or
other tribunal which (i) could reasonably be expected to have a Material Adverse
Effect on the Business, the Product or any of the Purchased Assets, (ii) could
reasonably be expected to prevent Seller from executing any of the Transaction
Documents or consummating the Contemplated Transactions or (iii) could
reasonably be expected to prevent or interfere with Seller's ability to obtain
the Regulatory Approval.

(h) Absence of Certain Changes. Except (A) as disclosed in the
Product IND or the Product NDA, or (B) as set forth in Schedule 5.02(h), from
January 8, 2003 to the date of this Agreement there has not been:

(i) any event or occurrence that has had a Material Adverse
Effect on the Business, other than events or occurrences resulting from
changes, whether actual or prospective, in general conditions applicable
to the industries in which the Business is involved or general economic
conditions;

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(ii) any damage, destruction or other casualty loss affecting
the Business or any assets that would constitute Purchased Assets if
owned, held or used by Seller on the Closing Date that has had a Material
Adverse Effect on the Business; or

(iii) any cancellation, compromise, waiver or release by
Seller or, to the knowledge of Seller, by any third party, of any claim or
right (or a series of related claims or rights) related to the Business,
other than cancellations, compromises, waivers or releases in the ordinary
course of business that, in the case of any cancellation compromise,
waiver or release by any third party, has had a Material Adverse Effect on
the Business.

(i) Title to the Purchased Assets. Except as set forth in Schedule
5.02(i), Seller has good and marketable title to or, as the case may be, a valid
contract right in the Purchased Assets, free and clear of any Liens (other than
Permitted Liens).

(j) Licenses and Permits. Except as set forth in Schedule 5.02(j)
and subject to compliance with the requirements of any Antitrust Laws (including
the HSR Act), Seller and its Affiliates have all licenses, franchises, permits
and other similar authorizations affecting, or relating in any way to, the
Business required by Applicable Law to be obtained by Seller and its Affiliates
to permit Seller and its Affiliates to conduct the Business in substantially the
same manner as the Business has heretofore been conducted and to consummate the
Contemplated Transactions.

(k) Finder's Fees. There is no investment banker, broker, finder
or other intermediary that has been retained by or is authorized to act on
behalf of Seller who might be entitled to any fee or commission from Purchaser
or Guarantor upon consummation of the Contemplated Transactions.

(l) Contracts. Seller has heretofore delivered to Purchaser a true
and complete copy of the Contract listed on Schedule 3.01(a). Such Contract is
in full force and effect as a legal, binding and enforceable obligation of
Seller, and, to the knowledge of Seller, no event has occurred which constitutes
or with the giving of notice or passage of time, or both, would constitute, a
default thereunder by Seller or any other party thereto. Except as set forth in
Schedule 3.01(a), no consent of any third party is required to assign the
Contract to Purchaser.

(m) Insurance. Schedule 5.02(m) contains a true and complete list
of all product liability, comprehensive general liability and property casualty
insurance policies maintained by Seller in connection with the Business. Each of
such policies is in full force and effect in the amounts indicated.

(n) Manufacturing Facility. The Manufacturing Facility is in
substantial compliance with all Regulatory Standards and, to the knowledge of
Seller, there are no pending uncorrected citations or adverse conditions
affecting the Manufacturing Facility that would have a Material Adverse Effect
on the Business.

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(o) Intellectual Property. To the extent set forth in the License
Agreement, except as set forth in Schedule 5.02(o), (i) Seller has the right to
grant to Purchaser the rights granted under the License Agreement (other than
rights contemplated by the FDC Act as to which Seller makes no representation)
unencumbered by any Liens (other than Permitted Liens), (ii) to the knowledge of
Seller, Seller has not received any written notice alleging any infringement by
Seller of any intellectual property rights of another Person in respect of the
Product or the Noven Patents, (iii) to the knowledge of Seller, the Noven
Patents are valid and enforceable and Seller has no knowledge of any
infringement by a third party of any of the claims in the Noven Patents, (iv) to
the knowledge of Seller, making, having made, using or selling the Product does
not infringe any patent or other rights of any third party, and (v) the rights
granted to Purchaser under the License Agreement do not conflict with rights
granted by Seller to any other Person. Notwithstanding the foregoing, the
parties acknowledge and understand that, as of the Closing Date, (x) Seller does
not have approval from the FDA or any other Regulatory Authority to market,
offer to sell or sell the Product, (y) the Product has not been established by
the FDA or any other Regulatory Authority as safe or effective, and (z)
Purchaser is not authorized by Seller or Applicable Law to represent that the
Product has been approved for sale or is safe or effective. To the knowledge of
Seller, except for rights contemplated by the FDC Act as to which Seller makes
no representation, the Technology represents all data, information (whether
proprietary to Seller or not), technology, know-how, processes, methods, skills,
trade secrets, developments, discoveries and inventions, including patents,
necessary to manufacture the Product.

Section 5.03. Knowledge. Where a representation or warranty contained in
this Article V is stated to be to a party's knowledge, this knowledge shall mean
to the actual knowledge of the party's executive officers and shall be deemed as
a representation that a reasonable inquiry or investigation of the subject
matter thereof has been made of such individuals and shall thus include matters
that a prudent individual could reasonably be expected to discover or otherwise
become aware of during the course of such inquiry or investigation; it being
understood and agreed by Purchaser that, with respect to the representations and
warranties set forth in Section 5.02(o), a reasonable inquiry or investigation
shall not require and shall not include requesting or obtaining a
non-infringement opinion in respect of the Product.

ARTICLE VI
COVENANTS AND AGREEMENTS OF SELLER

Section 6.01. Conduct of Business. Except (i) with the written consent of
Purchaser (which consent shall not be unreasonably withheld or delayed), (ii) as
set forth in Schedule 6.01, (iii) as permitted below or required by Applicable
Law, or (iv) in accordance with the terms and conditions of Contracts in
existence on the date of this Agreement, from the date of this Agreement until
the Closing Date, Seller shall:

(a) conduct the Business only in accordance with its usual,
regular and ordinary course of business in substantially the same manner as
conducted prior to the date hereof;

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(b) use reasonable commercial efforts to diligently pursue receipt
of Regulatory Approval pending the Closing;

(c) maintain the Contracts in full force and effect, and comply
with all material obligations under the Contracts and not amend or terminate any
Contract; and

(d) subject to the limitations set forth in Section 6.02, allow
Purchaser and its representatives access to the books, records, and employees of
Seller at all times reasonably requested by Purchaser to verify Seller's
compliance with the foregoing obligations.

Section 6.02. Access to Information; Cooperation After Closing Date.
Except as may be necessary to comply with any Applicable Laws and subject to any
applicable privileges (including the attorney-client privilege), from the date
of this Agreement until the Closing Date, and from and after the Closing Date,
Seller shall, at Purchaser's expense (a) afford Purchaser and its
representatives reasonable access upon reasonable prior notice during normal
business hours to all employees, offices, properties, agreements, records, books
and affairs of Seller and provide copies of such information concerning the
Business as Purchaser may reasonably request for any proper purpose, (b)
instruct the employees and representatives of Seller to provide reasonable
cooperation to Purchaser in its investigation of the Business prior to the
Closing, and (c) cooperate fully with Purchaser with respect to matters relating
to the conduct of the Business prior to the Closing, including in the defense or
pursuit of any Purchased Asset, Assumed Liability or Indemnified Claim, or any
claim, allegation or action that relates to occurrences involving a Purchased
Asset, Assumed Liability, Indemnified Claim or the Business prior to the
Closing; provided, that Purchaser shall reimburse Seller for any out-of-pocket
expenses incurred by Seller in connection with any such defense, claim or
action. Notwithstanding the foregoing, neither Purchaser nor its representatives
shall have access to (i) any records or data of Seller related to Seller's costs
of manufacturing any product including the Product (except as otherwise
expressly provided in the Toll Conversion and Supply Agreement) or Seller's
pricing policies or price lists or (ii) personnel records of Seller relating to
individual performance or evaluation records, medical histories or records or
other information that in Seller's good faith opinion is sensitive or the
disclosure of which could subject any Seller to risk of liability.

Section 6.03. Maintenance of Insurance Policies. Except for the
replacement of existing insurance policies with substantially similar policies
upon expiration of existing policies, on and after the date of this Agreement
and until the Closing Date, Seller shall not take or fail to take any action if
such action or inaction, as the case may be, would adversely affect the
applicability of any insurance (including reinsurance) maintained by Seller and
in effect on the date of this Agreement that covers all or any part of the
assets that would constitute Purchased Assets (if owned, held or used by Seller
on the Closing Date), or the Business. Seller shall not have any obligation to
maintain the effectiveness of any such insurance policy after the Closing Date
or to make any monetary payment in connection with any such policy for any
period after the Closing Date.

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ARTICLE VII
COVENANTS AND AGREEMENTS OF PURCHASER

Section 7.01. Cooperation After Closing Date. Except as may be necessary
to comply with any Applicable Law and any applicable privileges (including the
attorney-client privilege), on and after the Closing Date, Purchaser shall, at
Seller's expense, (a) afford Seller and its representatives reasonable access
upon reasonable prior notice during normal business hours, to all employees,
offices, properties, agreements, records, books and affairs of Purchaser and
provide copies of such information concerning the Business as Seller may
reasonably request for any proper purpose, including in connection with (i) the
preparation of any Tax Returns, (ii) any judicial, quasi-judicial,
administrative, Tax, audit or arbitration proceeding, (iii) the preparation of
any financial statements or reports, and (iv) the defense or pursuit of any
claims, allegations or actions that relate to or may relate to any Excluded
Assets, Excluded Liabilities or Indemnified Claims; provided, that Seller may
review Purchaser's books and records concerning, and conduct an investigation
into, Annual Net Sales only pursuant to and during the times permitted by
Section 2.07(c), and (b) cooperate fully with Seller with respect to the defense
or pursuit of any Excluded Liability, Excluded Asset or Indemnified Claim, or of
any claim, allegation or action that relates to occurrences involving an
Excluded Liability, Excluded Asset, Indemnified Claim or the Business after the
Closing; provided, that Seller shall reimburse Purchaser for any out-of-pocket
expenses incurred by Purchaser in connection with any such defense, claim or
action.

Section 7.02. Insurance. Purchaser acknowledges and agrees that from and
after the Closing Date, neither Purchaser, the Business, any property owned or
leased by any of the foregoing, nor the Purchased Assets shall be insured under
any insurance policies maintained by Seller, except (a) in the case of a claims
made policy, to the extent a claim has been reported prior to the Closing Date,
and (b) in the case of a policy that is an occurrence policy, to the extent the
accident, event or occurrence that results in an insurable loss occurs prior to
the Closing Date and has been or will be noticed to the respective carrier in
accordance with the requirements of such policy.

Section 7.03. Certain Intellectual Property Matters. Purchaser hereby
acknowledges and agrees that except as otherwise specifically contemplated by
the License Agreement, Purchaser is not obtaining any rights in or to use any
Intellectual Property owned, licensed or otherwise used by Seller, and Purchaser
is not obtaining any rights in or licenses with respect to the name "Noven" or
any derivative thereof. Purchaser further acknowledges and agrees that except as
expressly contemplated herein, Purchaser shall not use any trademark, logo or
trade name of Seller or any trademarks, logos or trade names that are
confusingly similar thereto or that are a translation or transliteration thereof
into any language or alphabet. To the knowledge of Purchaser, no artwork or
labeling related to the Product shall violate or infringe any patent, copyright
or trademark laws or rights of any third party.

Section 7.04. Purchaser Guaranty. As a material inducement for Seller to
enter into this Agreement and the other Transaction Documents and to consummate
the Contemplated Transactions, Purchaser shall execute and deliver to and for
the benefit of Seller the Purchaser Guaranty for the purpose of guaranteeing the
performance by Shire Ireland of all of its duties and obligations under the
Transaction Documents to which it is a party.

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ARTICLE VIII
COVENANTS AND AGREEMENTS OF THE PARTIES

Section 8.01. Confidentiality.

(a) Pursuant to the terms of this Agreement, each party (in such
capacity, the "Disclosing Party"), has disclosed and will be disclosing to the
other parties and/or their Affiliates or representatives (in such capacity, the
"Receiving Party"), certain Confidential Information of the Disclosing Party.
The Receiving Party shall make no use of such Confidential Information except in
the exercise of its rights and the performance of its obligations set forth in
this Agreement. The Receiving Party shall use the same efforts to keep secret,
and prevent the disclosure to third parties of, Confidential Information of the
Disclosing Party as it would use with respect to its own Confidential
Information. Confidential Information disclosed by the Disclosing Party shall
remain the sole and absolute property of the Disclosing Party, subject to the
rights granted herein. The above restrictions on the use and disclosure of
Confidential Information shall not apply to any information which (i) is already
known to the Receiving Party at the time of disclosure by the Disclosing Party,
as demonstrated by competent proof, (ii) is or becomes generally available to
the public other than through any act or omission of the Receiving Party in
breach of this Agreement, (iii) is acquired by the Receiving Party from a third
party who is not, directly or indirectly, under an obligation of confidentiality
to the Disclosing Party with respect to same, or (iv) is developed independently
by the Receiving Party without use, direct or indirect, of information that is
required to be held confidential hereunder.

(b) In the event the Receiving Party is required (i) by Applicable
Law to disclose Confidential Information of the Disclosing Party to any
Regulatory Authorities to obtain Regulatory Approval for the Product or to
comply with the requirement of any Regulatory Authority, (ii) to disclose
Confidential Information of the Disclosing Party to respond to an inquiry of a
Regulatory Authority or Governmental Authority concerning the Product, or (iii)
to disclose Confidential Information of the Disclosing Party in a judicial,
administrative or arbitration proceeding to enforce such party's rights under
this Agreement, it may do so only if it (A) provides the Disclosing Party with
as much advance written notice as possible of the required disclosure, (B)
cooperates with the Disclosing Party in any attempt to prevent or limit the
disclosure, and (C) limits disclosure, if any, to the specific purpose at issue.

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

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

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

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

(v) nothing in this Section 8.01 shall be interpreted to
limit the ability of either Seller or Purchaser to disclose its own
Confidential Information to the other party or any other Person on such
terms and subject to such conditions as it deems advisable or appropriate;

provided, however, that in each such case any third party recipients of any
Confidential Information (other than a Regulatory Authority or other
Governmental Authority) undertake substantially the same confidentiality
obligation as the parties hereunder with respect to such Confidential
Information.

(d) The parties agree that, with effect from the date of this
Agreement, the terms of this Section 8.01 shall supersede and replace the
confidentiality obligations of the parties under the letter of intent between
Seller and Purchaser dated as of January 8, 2003, which agreement is hereby
terminated and of no further force or effect.

(e) Each of Seller and Purchaser acknowledge and agree that the
terms and conditions of this Agreement shall be considered Confidential
Information of each party and shall be treated accordingly. Notwithstanding the
foregoing, Purchaser acknowledges and agrees that Seller may be required to
disclose some or all of the information included in this Agreement in order to
comply with its obligations under the Securities Laws, and hereby consents to
such disclosure to the extent deemed advisable or appropriate by counsel to
Seller (but only after consulting with Purchaser to the extent practicable).

(f) Each party specifically recognizes that any breach by it of
this Section 8.01 may cause irreparable injury to the other party and that
actual damages may be difficult to ascertain, and in any event, may be
inadequate. Accordingly (and without limiting the availability of legal or
equitable, including injunctive, remedies under any other provisions of this
Agreement), each party agrees that in the event of any such breach,
notwithstanding the provisions of Section 13.02 or Article XII hereof, the other
party shall be entitled to seek, by way of private litigation in the first
instance, injunctive relief and such other legal and equitable remedies as may
be available.

Section 8.02. Press Releases. Prior to the Closing, no party shall issue
any publicity, news or press release or make any public statement, written or
oral, with respect to this Agreement, any of the Contemplated Transactions or to
the existence of an arrangement among the parties without the prior written
approval of the other parties or except as may be required by

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Applicable Law or any listing agreement with any national securities exchange,
in which case no party shall issue any such press release or make any such
public statement without prior consultation with the other parties and without
complying with Applicable Law; provided, however, that each of Seller and
Purchaser hereby agree to the release by the other, on or after the date of this
Agreement, of a press release substantially in the forms attached hereto as
Attachment IX and Attachment X, respectively. Notwithstanding the foregoing, no
provision of this Agreement shall relieve any of the parties of their respective
obligations under Section 8.01.

Section 8.03. Additional Formulations and Improvements.

(a) ***.

(b) ***.

Section 8.04. Tax Matters. All transfer Taxes and similar fees and
governmental charges and all sales, use and similar Taxes and governmental
charges resulting from or relating to the transfer of the Purchased Assets to
Purchaser by Seller or resulting from or relating to the Contemplated
Transactions, shall be shared equally by Seller and Purchaser. The parties will
cooperate to minimize all such sales, transfer and/or use Taxes, recording fees
and personal property title application fees.

Section 8.05. Further Assurances. The parties shall execute such further
documents, and perform such further acts as may be reasonably necessary to
transfer and convey the Purchased Assets to Purchaser on the terms herein
contained, and to otherwise comply with the terms of this Agreement and to
consummate the Contemplated Transactions, including providing information
reasonably requested by other Persons necessary for such Persons to evaluate
whether to consent to the assignment of any Contracts or related rights or
obligations. Seller and Purchaser shall execute and deliver, as appropriate or
required and as the case may be, such other documents, certificates, agreements
and other writings and to take such other actions as may be necessary or
desirable to consummate or implement the Contemplated Transactions. Except as
otherwise expressly set forth in the Transaction Documents, nothing in this
Section 8.05 or elsewhere in the Transaction Documents shall require any of
Seller, Purchaser or any of their respective Affiliates to make any payments or
issue any guarantee in order to obtain any consents or approvals necessary or
desirable in connection with the consummation of the Contemplated Transactions.

Section 8.06. Certain Filings; Consents. Seller and Purchaser shall
cooperate with each other (a) in determining whether any action by or in respect
of, or filing with, any Governmental Authority is required, or any actions,
consents, approvals or waivers are required to be obtained from parties to any
Contracts, in connection with the consummation of the Contemplated Transactions,
and (b) subject to the terms and conditions of this Agreement, in taking any
such actions or making any such filings, furnishing information required in
connection therewith and seeking timely to obtain any such actions, consents,
approvals or waivers.

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Section 8.07. Antitrust Laws. Seller and Purchaser shall make the filings
required under the HSR Act and any other Antitrust Laws on or before the third
day following the date of this Agreement (or, if such third day is not a
Business Day, on the first Business Day thereafter). Seller and Purchaser shall
also comply at the earliest practicable date with any request for additional
information, documents, or other materials received from the Federal Trade
Commission or the Department of Justice or any other Governmental Authority,
including international competition authorities. Purchaser shall use all
reasonable commercial efforts to resolve objections, if any, that may be
asserted by any Governmental Authority with respect to the Contemplated
Transactions under any Antitrust Laws, including the HSR Act, the Xxxxxxx Act,
as amended, the Xxxxxxx Act, as amended, and the Federal Trade Commission Act,
as amended. If any judicial or administrative action or proceeding is initiated
(or threatened to be initiated) challenging the Contemplated Transactions as
violative of any Antitrust Law or any other Applicable Law and Seller desires to
oppose any such action or proceeding, the parties shall each cooperate to
contest and resist any such action or proceeding, and to have vacated, lifted,
reversed or overturned any decree, judgment, injunction, ruling, decision,
finding or other order (whether temporary, preliminary, or permanent) until such
time as a final, non-appealable order has been entered.

ARTICLE IX
REGULATORY MATTERS

Section 9.01. Regulatory Responsibility. Following the transfer of the
Regulatory Application and the Regulatory and Clinical Materials pursuant to
this Agreement, and except as otherwise contemplated in Section 4.02, Section
9.02 or in any of the Transaction Documents, Purchaser shall be solely
responsible for maintaining the Regulatory Application and obtaining all further
regulatory approvals regarding the Product, as well as all ongoing regulatory
compliance relating to the Product. For a period of up to one year after the
date of the transfer of the Regulatory Application and Regulatory and Clinical
Materials, Seller shall reasonably assist Purchaser by providing information
regarding the regulatory compliance activities performed by Seller prior to such
transfer in order to ensure an orderly transition of regulatory responsibilities
regarding the Business. Notwithstanding anything to the contrary herein,
Purchaser hereby covenants and agrees that neither it nor any of its Affiliates
or representatives shall amend, supplement or otherwise modify the Product IND
or the Product NDA in any manner, including for the purpose of obtaining
regulatory approval for improvements upon and additional formulations of the
Product, without the prior written consent of Seller, which consent shall not be
unreasonably withheld or delayed.

Section 9.02. Regulatory Procedures.

(a) In the event the Regulatory Approval has not been issued prior
to the Closing Date, Seller and Purchaser shall cooperate in good faith after
the Closing Date to obtain Regulatory Approval of the Product. Except as
otherwise provided herein, Seller shall use reasonable commercial efforts to
diligently pursue receipt of Regulatory Approval.

(b) Notwithstanding anything to the contrary in this Article IX:

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(i) If at any time after the date of this Agreement and
prior to the Closing Date the FDA shall request that a Product Study be
conducted, Seller shall have the option to assume exclusive control of
such Product Study; provided, that (A) if such Product Study shall be
required to be completed prior to Regulatory Approval and as a
prerequisite to such Regulatory Approval, and if Seller shall not have
assumed control of such Product Study as of the Closing Date, the
provisions of subsection (ii) below shall apply from and after the Closing
Date, and (B) if such Product Study shall be required to be either (1)
commenced prior to the date of Regulatory Approval but may be completed
after the date of Regulatory Approval and the completion is not a
prerequisite to Regulatory Approval, or (2) commenced and completed after
the date of Regulatory Approval, then, and in either case, the provisions
of subsection (iii) below shall apply from and after the Closing Date.

(ii) If at any time after the Closing Date and prior to
receipt by Seller of Regulatory Approval, the FDA shall request that a
Product Study be conducted, and such Product Study shall be required to be
completed prior to Regulatory Approval and as a prerequisite to such
Regulatory Approval, Seller shall have the option to assume exclusive
control of such Product Study and to conduct such Product Study in its
discretion and at its expense by providing notice of such election to
Purchaser within 60 days of the date of any such request for a Product
Study. In the event that Seller shall refuse to conduct any such Product
Study within such 60-day period (whether by written notice to Purchaser of
such refusal or by lapse of such 60-day period), Purchaser shall have the
option to assume exclusive control of such Product Study and conduct such
Product Study in its discretion and at its expense by providing notice to
Seller of its election within 60 days from the date of Seller's refusal.
In the event Purchaser shall so elect to conduct any such Product Study
within such 60-day period, Seller shall transfer to Purchaser the
Regulatory Application and any Regulatory and Clinical Materials, to the
extent and only to the extent necessary to permit Purchaser to conduct
such Product Study. In the event Purchaser shall refuse to conduct any
such Product Study (whether by written notice to Seller of such refusal or
by lapse of such 60-day period), Seller shall have the option to (A)
conduct such Product Study in its discretion and at its expense
notwithstanding its prior refusal, or (B) within two years from the date
of such request for a Product Study, repurchase from Purchaser all of the
Purchased Assets transferred hereunder and terminate the license to the
Technology granted to Purchaser under the License Agreement, for an
aggregate consideration of *** and on other terms and conditions to be
negotiated by Seller and Purchaser in good faith; provided, that nothing
in this Section 9.02(b)(ii) shall require Seller to (x) exercise either of
the options contemplated in subsections (A) or (B) of this sentence, or
(y) take or refrain from taking any action in response to Purchaser's
refusal to conduct such Product Study.

(iii) If at any time after the Closing Date and prior to
receipt by Seller of Regulatory Approval the FDA shall request that a
Product Study be conducted, and such Product Study shall be required to be
either (A) commenced prior to the date of Regulatory Approval, but may be
completed after the date of Regulatory Approval and the completion is not
a prerequisite to Regulatory Approval, or (B) commenced and completed
after Regulatory Approval, then, and in either case, Purchaser shall
assume

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exclusive control of such Product Study and conduct such Product Study in
its discretion and at its expense. In such event, Seller shall transfer to
Purchaser the Regulatory Application and any Regulatory and Clinical
Materials, to the extent and only to the extent necessary to permit
Purchaser to conduct such Product Study.

(c) If (i) at any time after the Closing Date Seller or Purchaser
shall receive a Non-Approval Notice, or (ii) Regulatory Approval shall not have
been obtained by the second anniversary of the Closing Date, then in either
case, Purchaser shall have the right to demand that Seller repurchase from
Purchaser all of the Purchased Assets transferred hereunder and terminate the
license to the Technology granted to Purchaser under the License Agreement, for
an aggregate consideration of US$5,000,000 and on other terms and conditions to
be negotiated by Seller and Purchaser in good faith; provided, that Purchaser
shall provide written notice of such demand within 90 days of the issuance of
such Non-Approval Notice or the second anniversary of the Closing Date, as the
case may be.

ARTICLE X
CONDITIONS TO CLOSING

Section 10.01. Conditions to Obligations of Each Party. The obligations of
Seller, Purchaser and Guarantor to consummate the Closing are subject to the
satisfaction (or waiver by each of Seller, Purchaser and Guarantor) of the
following conditions:

(a) any applicable waiting period (and any extension thereof)
under the HSR Act relating to the Contemplated Transactions shall have expired
or been terminated, and there shall not be (i) any Proceeding pending in which a
United States Governmental Authority is seeking to enjoin the Contemplated
Transactions, or (ii) a final, nonappealable order entered by a United States
Governmental Authority that enjoins or otherwise prohibits the Contemplated
Transactions;

(b) no provision of any United States Applicable Law and no
judgment, injunction, order or decree shall prohibit the Closing;

(c) no Proceeding shall be pending or threatened in writing before
any court or other United States Governmental Authority that seeks to prohibit
the Closing, or impose damages or obtain other relief in connection with the
Contemplated Transactions that (i) is brought by any United States Governmental
Authority having jurisdiction in respect thereof, or (ii) is brought by any
Person (other than a Governmental Authority) if in the case of this clause (ii)
such Proceeding reasonably could be expected to prohibit the Closing or result
in a Material Adverse Effect on the Business; and

(d) all actions by or in respect of, or filings with, any United
States Governmental Authority required to permit the consummation of the Closing
shall have been taken or made.

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Section 10.02. Conditions to Obligation of Purchaser and Guarantor. The
obligations of Purchaser and Guarantor to consummate the Closing are subject to
the satisfaction (or waiver by Purchaser or Guarantor) of the following further
conditions:

(a) (i) Seller shall have performed in all material respects all
of its obligations under this Agreement required to be performed by it at or
prior to Closing, (ii) the representations and warranties of Seller contained
herein shall be true and correct at and as of the date of this Agreement and as
of the Closing Date, as if made at and as of each such date, except that those
representations and warranties that by their express terms are made as of a
specific date shall be required to be true and correct only as of such date, in
each case except for inaccuracies that could not reasonably be expected to have
a Material Adverse Effect on the Business, and (iii) Purchaser shall have
received a certificate signed by an officer of Seller to the foregoing effect;

(b) since the date of this Agreement, no event shall have occurred
that has had a Material Adverse Effect on the Business, other than those
resulting from changes, whether actual or prospective, in general conditions
applicable to the industries in which the Business is involved or general
economic conditions; and

Section 10.03. Conditions to Obligation of Seller. The obligation of
Seller to consummate the Closing is subject to the satisfaction (or waiver by
Seller) of the following further conditions:

(a) (i) each of Purchaser and Guarantor shall have performed in
all material respects all of their respective obligations under this Agreement
required to be performed by them at or prior to Closing, (ii) the
representations and warranties of Purchaser and Guarantor contained herein shall
be true and correct at and as of the date of this Agreement and as of the
Closing Date, as if made at and as of each such date, except that those
representations and warranties that by their express terms are made as of a
specific date shall be required to be true and correct only as of such date, in
each case except for inaccuracies that could not reasonably be expected to have
a Material Adverse Effect on Purchaser, Guarantor or the Business, and (iii)
Seller shall have received certificates signed by an officer of each of
Purchaser and Guarantor to the foregoing effect; and

(b) Purchaser shall have executed and delivered, on or before the
Closing Date, the Transaction Documents.

Section 10.04. Updated Disclosure Schedules. At any time prior to the
Closing, Seller shall be entitled to deliver to Purchaser and Guarantor updates
to, or substitutions of, the Disclosure Schedules; provided, that such updates
or substitutions are clearly marked as such and are addressed to Purchaser and
Guarantor at their respective addresses listed in Section 13.01. In the event
that Seller delivers updated or substitute Disclosure Schedules within three
days of any scheduled Closing Date, Purchaser and Guarantor shall be entitled to
extend, by written notice to Seller, the scheduled Closing Date to the third day
after receipt of the updated or substitute Disclosure Schedules, or if such day
is not a Business Day, to the next Business Day. The delivery by Seller of
updated or substitute

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Disclosure Schedules shall not prejudice any rights of Purchaser or Guarantor
under this Agreement, including the right to claim that the representations and
warranties of Seller, when made on the date of this Agreement, were untrue.
Notwithstanding the foregoing, in the event Seller delivers updated or
substituted Disclosure Schedules, and as a result of such updated or substituted
Disclosure Schedules the closing condition set forth in Section 10.02(a)(ii) is
not satisfied, Purchaser shall have the right to terminate this Agreement by
written notice to Seller within three days after delivery of such updated or
substituted Disclosure Schedules (or if such day is not a Business Day, on the
next Business Day); provided, that unless any representation or warranty of
Seller updated by such updated or substituted Disclosure Schedules shall have
been untrue when made on the date of this Agreement, neither Purchaser nor
Guarantor shall have any claim for Damages or any other remedy against Seller
arising out of such representations and warranties other than the right to
terminate this Agreement pursuant to this Section 10.04; and provided further,
that if Purchaser and Guarantor shall consummate the Closing notwithstanding the
condition to closing set forth in Section 10.02(a)(ii), the updated or
substitute Disclosure Schedules shall replace, in whole or in part as the case
may be, the Disclosure Schedules previously delivered hereunder for all
purposes.

Section 10.05. Effect of Waiver. Any waiver by Purchaser of the conditions
specified in 10.02(a)(ii), and any waiver by Seller of the conditions specified
in Section 10.03(a)(ii), if made knowingly, shall also be deemed a waiver of any
claim for Damages arising out of, resulting from or related to the matters
waived.

ARTICLE XI
SURVIVAL; INDEMNIFICATION

Section 11.01. Survival of Provisions.

(a) The rights of the respective parties to make a claim for
breach of any of the representations or warranties made in this Agreement shall
survive the Closing Date and remain in full force and effect for a period of ***
thereafter, except that the representations and warranties contained in Sections
5.01(a), 5.01(b), 5.02(a), 5.02(b) and 5.02(i) shall survive indefinitely.

(b) The rights of the respective parties to make a claim for
breach of any of the covenants, agreements, duties or obligations set forth in
this Agreement that, by their terms, are to have effect after the Closing Date
shall survive the Closing Date and remain in full force and effect for the
period contemplated thereby until such covenants, agreements, duties and
obligations have been fully performed in accordance with their respective terms,
or if no period is so contemplated, indefinitely.

Section 11.02. Indemnification. In order to distribute among themselves
the responsibility for claims arising out of this Agreement, and except as
otherwise specifically provided for herein, from and after the Closing Date, the
parties shall indemnify each other as provided in this Section 11.02.

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

(i) the storage, handling, use, marketing, advertising,
promotion, distribution or sale of the Product by Purchaser and/or its
Affiliates, sublicensees, distributors or agents in the Territory, the
conduct of the Business by Purchaser and/or its Affiliates, sublicensees,
distributors or agents in the Territory or Purchaser's ownership or use of
the Purchased Assets, in each case on and after the Closing Date,
including (A) liabilities for product liability and returned goods, (B)
liabilities in respect of product warranty obligations or services and any
returned Product sold, (C) governmental and nongovernmental chargebacks,
rebates or discounts with respect to the Product, and (D) liabilities
relating to errors and omissions or claims of design and other defects
with respect to any Product sold, including any clinical and non-clinical
trials conducted on or after the Closing Date by Purchaser;

(ii) the breach by Purchaser or Guarantor of this Agreement
including (A) any material inaccuracy in or material breach of any
representation or warranty made by Purchaser or Guarantor in this
Agreement; provided, however, that (1) Purchaser shall not have any
liability under this Section 11.02(a)(ii)(A) unless and until, and then
only to the extent, the aggregate, cumulative amount of such Damages
exceeds *** (the "Indemnity Deductible Amount"), and (2) in no event shall
the aggregate, cumulative liability of Purchaser for Damages under this
Section 11.02(a)(ii)(A) exceed ***; and provided further that Purchaser
shall only have liability under this Section 11.02(a)(ii)(A) to the extent
a Seller Indemnitee provides written notice to Purchaser of its claim for
indemnification within the applicable period of limitations contemplated
in Section 11.01(a), and (B) any material breach by Purchaser of, or
material failure by Purchaser or Guarantor to comply with, any of their
covenants or obligations pursuant to this Agreement, including those
covenants and obligations which are a part of Purchaser's responsibility
for the Assumed Liabilities;

(iii) the enforcement by Seller Indemnitees of their rights
under this Section 11.02(a);

(iv) Purchaser's material violation of any Applicable Law;
and

(v) arising out of or related in any way to the Assumed
Liabilities (including Purchaser's failure to perform or in the due course
pay and discharge any Assumed Liability);

provided, however, that, in each such case, Purchaser shall not be liable
hereunder to the extent such Damages arise from misconduct or negligence of, or
a violation of any Applicable Law by, Seller, its Affiliates, agents, employees
or contractors, or from the breach by Seller of the provisions of any of the
Transaction Documents.

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

(i) the storage, handling, use, marketing, advertising,
promotion, distribution or sale of the Product by Seller and/or its
Affiliates, sublicensees, distributors or agents in the Territory, the
conduct of the Business by Seller and/or its Affiliates, sublicensees,
distributors or agents in the Territory, or Seller's ownership or use of
the Purchased Assets, in each case, prior to the Closing Date, excluding
all Assumed Liabilities, and on and after the date of a repurchase
contemplated by Section 9.02(b)(ii) or 9.02(c);

(ii) the breach by Seller of this Agreement including (A) any
material inaccuracy in or material breach of any representation or
warranty made by Seller in this Agreement; provided, however, that (1)
Seller shall not have any liability under this Section 11.02(b)(ii)(A)
unless and until, and then only to the extent, the aggregate, cumulative
amount of such Damages exceeds the Indemnity Deductible Amount, and (2) in
no event shall the aggregate, cumulative liability of Seller for Damages
under this Section 11.02(b)(ii)(A) exceed the Seller Indemnity Cap Amount;
and provided further that Seller shall only have liability under this
Section 11.02(b)(ii)(A) to the extent a Purchaser Indemnitee provides
written notice to Seller of its claim for indemnification within the
applicable period of limitations contemplated in Section 11.01(a), and (B)
any material breach by Seller of, or material failure by Seller to comply
with, any of its covenants or obligations pursuant to this Agreement;

(iii) the enforcement by Purchaser Indemnitees of their rights
under this Section 11.02(b);

(iv) Seller's material violation of any Applicable Law; and

(v) arising out of or in any way related to the Excluded
Liabilities;

provided, however, that (x) in each such case, Seller shall not be liable
hereunder to the extent such Damages arise from misconduct or negligence of, or
violation of Applicable Law by, Purchaser, its Affiliates, agents, employees or
contractors, or from the breach by Purchaser of the provisions of any of the
Transaction Documents, ***.

(c) Procedure. If any Proceeding arises as to which a right of
indemnification provided in this Article XI applies, the Person seeking
indemnification (the "Indemnified Party"), shall within 20 days notify the party
obligated under this Article XI to indemnify the Indemnified Party (the
"Indemnifying Party"), thereof in writing, except to the extent that such
failure to notify within 20 days does not prejudice the Indemnifying Party's
ability to defend or contest any such Proceeding, and allow the Indemnifying
Party and its insurers the opportunity to assume direction and control of the
defense against such Proceeding, at its sole expense, including the

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Securities and Exchange Commission. Asterisks denote omissions.

settlement thereof at the sole option of the Indemnifying Party or its insurers;
provided, however, that the Indemnifying Party may not enter into any compromise
or settlement without the prior written consent of the Indemnified Party unless
such compromise or settlement includes as an unconditional term thereof the
giving by each plaintiff or claimant to the Indemnified Party of a release from
all liability in respect of such claim and only if such compromise or settlement
does not include any admission of legal wrongdoing on the part of the
Indemnified Party. The Indemnified Party shall fully cooperate with the
Indemnifying Party and its insurer in the disposition of any such matter and the
Indemnified Party will have the right and option to participate in (but not
control) the defense of any Proceeding as to which this Article XI applies, with
separate counsel at its election and cost. If the Indemnifying Party fails or
declines to assume the defense of any such Proceeding within 30 days after
notice thereof, the Indemnified Party may assume the defense thereof for the
account and at the risk of the Indemnifying Party. The Indemnifying Party shall
pay promptly to the Indemnified Party any Damages to which the indemnity under
this Article XI applies, as incurred.

Section 11.03. Certain Limitations.

(a) Except as otherwise provided in Section 8.01(f), the sole and
exclusive remedy with respect to any breach of any representation, warranty,
covenant or agreement contained herein and for the other matters described in
Sections 11.02(a) and 11.02(b) (other than (i) with respect to a breach of the
terms of a covenant or agreement, as to which Purchaser or Seller, as the case
may be, also shall be entitled to seek specific performance or other equitable
relief and (ii) with respect to claims for fraud) shall be a claim for Damages
(whether by contract, in tort or otherwise, and whether in law, in equity or
both) made pursuant to this Article XI. No party shall be entitled to recover
any punitive, incidental or consequential damages whatsoever under this Article
XI except to the extent any such punitive, incidental or consequential damages
shall be payable to a third party.

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

ARTICLE XII
TERMINATION

Section 12.01. Termination. This Agreement may be terminated at any time
prior to the Closing Date:

(a) by mutual written agreement of Seller and Purchaser;

(b) by Seller or Purchaser if the Closing shall not have been
consummated by April 15, 2003 (as such date may be extended pursuant to this
clause (b), the "Voluntary Termination Date"); provided, however, that neither
Seller nor Purchaser may terminate this Agreement pursuant to this clause (b) if
the Closing shall not have been consummated by the Voluntary Termination Date by
reason of the failure of such party or any of its Affiliates to

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perform in all material respects any of its or their respective covenants or
agreements contained in this Agreement; and provided further, that if the only
reason the Closing shall not have occurred on or prior to April 15, 2003 is that
the condition set forth in Section 10.01(a) has not been satisfied by such date,
neither Seller nor Buyer may unilaterally terminate this Agreement until May 31,
2003;

(c) by either Seller or Purchaser if there shall be any United
States Applicable Law that makes consummation of the Contemplated Transactions
illegal or otherwise prohibited or if consummation of the Contemplated
Transactions would violate any nonappealable final order, decree or judgment of
any United States Governmental Authority having competent jurisdiction over such
Person; or

(d) by Purchaser pursuant to Section 10.04.

Any party desiring to terminate this Agreement pursuant to this Section 12.01
shall give written notice of such termination to the other parties to this
Agreement.

Section 12.02. Effect of Termination. If this Agreement is terminated as
permitted by Section 12.01, (a) this Agreement shall forthwith become void and
of no further force or effect, except for the following provisions, which shall
remain in full force and effect: (i) the representations and warranties set
forth in Sections 5.01(k) and 5.02(k) (Finder's Fees), (ii) Section 8.01
(Confidentiality), (iii) Section 8.02 (Press Releases), (iv) Section 8.04 (Tax
Matters), (v) this Section 12.02, (vi) Section 13.10 (Governing Law), (vii)
Section 13.12 (Entire Agreement), (viii) Section 13.13 (Expenses), and (ix)
Section 13.15 (Guaranty), and except that any and all claims arising prior to
such termination shall survive such termination; and (b) except as otherwise set
forth herein, such termination shall be without liability of any party to any
other party to this Agreement; provided, however, that if the Contemplated
Transactions fail to close as a result of a breach of the provisions of this
Agreement by any party, such party shall be fully liable for any and all Damages
incurred or suffered by the other parties as a result of all such breaches if
the other parties are ready, willing and able to otherwise satisfy their
respective obligations under the Transaction Documents. Notwithstanding the
foregoing, in the event Purchaser shall terminate this Agreement pursuant to
Section 10.04 by reason of the failure of the closing condition set forth in
Section 10.02(a)(ii), Seller shall have no liability to either Purchaser or
Guarantor arising out of such termination unless, and only to the extent that,
any representation or warranty of Seller shall have been untrue when made on the
date of this Agreement. The rights and remedies provided in this Section 12.02
shall be cumulative and not exclusive of any rights or remedies provided by
Applicable Law.

ARTICLE XIII
MISCELLANEOUS

Section 13.01. Notices. All notices, claims, certificates, requests,
demands and other communications hereunder shall be in writing and shall be
delivered personally or sent by facsimile transmission, air courier, or
registered or certified mail, return receipt requested, addressed as follows:

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if to Seller:

Noven Pharmaceuticals, Inc.
00000 X.X. 000xx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: CEO & General Counsel
Telecopy: 000-000-0000

with copies (which shall not constitute notice) to:

King & Spalding LLP
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx X. Xxxxxxxx
Telecopy: 202-626-3737

if to Purchaser:

Shire US Inc.
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Telecopy: 000-000-0000

with copies (which shall not constitute notice) to:

Shire Pharmaceuticals Group plc
Hampshire International Business Park
Xxxxxxxx
Xxxxxxxxxxx
Xxxxxxxxx XX00 0XX
Xxxxxx Xxxxxxx
Attention: Group General Counsel
Telecopy: 011-44-1256-894710

and to:
Xxxxx & Berne LLP
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopy: 000-000-0000

if to Guarantor:

Shire Pharmaceuticals Group plc

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Securities and Exchange Commission. Asterisks denote omissions.

Hampshire International Business Park
Xxxxxxxx
Xxxxxxxxxxx
Xxxxxxxxx XX00 0XX
Xxxxxx Xxxxxxx
Attention: Group General Counsel
Telecopy: 011-44-1256-894710

with copies (which shall not constitute notice) to:

Xxxxx & Berne LLP
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopy: 000-000-0000

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

Section 13.02. Disputes. In the event of any controversy or claim arising
out of, relating to or in connection with any provision of this Agreement, or
the rights or obligations of the parties hereunder, the parties shall try to
settle their differences amicably between themselves. Any party may initiate
such informal dispute resolution by sending written notice of the dispute to the
other parties, and within 10 days after such notice, appropriate representatives
of the parties shall meet for attempted resolution by good faith negotiations.
If such representatives are unable to resolve promptly such disputed matter, it
shall be referred to the presidents of Seller, Purchaser and/or Guarantor, as
the case may be, or their respective designees, for discussion and resolution.
If such personnel are unable to resolve such dispute within 30 days of
initiating such negotiations, the parties agree first to try in good faith to
settle the dispute by mediation in Washington, D.C. under the Commercial
Mediation Rules of the American Arbitration Association. If following any such
mediation the parties still have not been able to resolve any such dispute, the
parties agree to submit the dispute to final and binding arbitration before a
single arbitrator in Washington, D.C. under the Commercial Arbitration Rules of
the American Arbitration Association. The parties agree that a judgment may be
entered on the arbitrator's award in any court of competent jurisdiction. The
arbitrator in reviewing any claim under this Agreement shall have the exclusive
authority to determine any issues as to the arbitrability of any such claim or
related disputes under this Agreement. In reaching a decision, the arbitrator
shall interpret, apply and be bound by this Agreement and by Applicable Law. The
arbitrator shall have no authority to add to, detract from or modify this
Agreement or any Applicable Law in any respect. The arbitrator may not grant any
remedy or relief that a court of competent jurisdiction

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could not grant, nor any relief or remedy greater than that sought by the
parties nor any punitive, incidental or consequential damages, except to the
extent any such punitive, incidental or consequential damages shall be payable
to a third party. Any up-front costs of the arbitrator shall be borne equally by
the parties; provided, however, that the non-prevailing party in any such
arbitration shall pay, and to the extent applicable reimburse the prevailing
party for, the costs and expenses of the arbitrator, including costs and
expenses payable to the American Arbitration Association and to the arbitrator;
and provided further, that in the event each party prevails as to certain claims
in connection with any such arbitration, the fees of the arbitrator shall be
paid and/or reimbursed in accordance with the decision of the arbitrator. Each
party shall bear its own costs incurred in connection with attorneys' fees and
related expenses. Notwithstanding the foregoing provisions of this Section
13.02, nothing in this Agreement shall limit or in any way restrict the ability
of either party to seek injunctive or other equitable relief in a court or other
judicial body. For purposes of this Section 13.02, neither the Milestone
Payments nor any other portion of the Transaction Consideration shall constitute
punitive, incidental or consequential damages.

Section 13.03. Independent Contractors. In making and performing the
Transaction Documents, the parties are acting and shall act as independent
contractors. Nothing in this Agreement shall be deemed to create an agency,
joint venture or partnership relationship among the parties hereto. No party
shall have the authority to obligate another party in any respect, and no party
shall hold itself out as having any such authority. All personnel of Seller
shall be solely employees of Seller and shall not represent themselves as
employees of Purchaser or Guarantor. All personnel of Purchaser and Guarantor
shall be solely employees of Purchaser and Guarantor and shall not represent
themselves as employees of Seller.

Section 13.04. Assignment. No party shall have a right to assign this
Agreement or delegate any of its rights, interests, duties or obligations
hereunder without the prior written consent of the other parties (which consent
may be granted in such parties' sole discretion); provided, however, that any
party may assign this Agreement to any of its Affiliates without the prior
written consent of the other parties; and provided, further that no such
assignment of this Agreement shall relieve the assignor of any of its
obligations or liabilities under this Agreement. Notwithstanding the foregoing,
any party may assign this Agreement without the other parties' prior written
consent in connection with the transfer or sale of all or substantially all of
its assets or business or its merger or consolidation with another Person upon
written notice to the other parties. Any attempted assignment in violation of
this Section 13.04 shall be void.

Section 13.05. Binding Effect; Benefit. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their successors and
permitted assigns. Nothing in this Agreement, express or implied, is intended to
confer on any Person other than the parties hereto, and their respective
successors and permitted assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement.

Section 13.06. Amendments. This Agreement shall not be modified, amended
or supplemented except pursuant to an instrument in writing executed and
delivered on behalf of each of the parties hereto.

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Section 13.07. No Waiver. The failure in any one or more instances of a
party to insist upon performance of any of the terms, covenants or conditions of
this Agreement, to exercise any right or privilege conferred in this Agreement,
or the waiver by said party of any breach of any of the terms, covenants or
conditions of this Agreement, shall not be construed as a subsequent waiver of
any such terms, covenants, conditions, rights or privileges, but the same shall
continue and remain in full force and effect as if no such forbearance or waiver
had occurred. No waiver shall be effective unless it is in writing and signed by
an authorized representative of the waiving party.

Section 13.08. Counterparts. This Agreement shall become binding when any
one or more counterparts hereof, individually or taken together, shall bear the
signatures of each of the parties hereto. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original as against the
party whose signature appears thereon, but all of which taken together shall
constitute but one and the same instrument. Each party may execute this
Agreement on a facsimile of the Agreement. In addition, facsimile signatures of
authorized signatories of either party shall be valid and binding and delivery
of a facsimile signature by either party shall constitute due execution and
delivery of this Agreement.

Section 13.09. Interpretation. The article and section headings contained
in this Agreement are for convenience of reference only and shall not affect the
meaning or interpretation of this Agreement. As used in this Agreement, any
reference to the masculine, feminine or neuter gender shall include all genders,
the plural shall include the singular, and singular shall include the plural.
Unless the context otherwise requires, the term "party" when used herein means a
party hereto. References herein to a party or other Person include their
respective successors and assigns. The words "include," "includes" and
"including" when used herein shall be deemed to be followed by the phrase
"without limitation" unless such phrase otherwise appears. Unless the context
otherwise requires, references herein to Articles, Sections, Schedules and
Attachments shall be deemed references to Articles and Sections of, and
Schedules and Attachments to, this Agreement. Unless the context otherwise
requires, the words "hereof," "hereby" and "herein" and words of similar meaning
when used in this Agreement refer to this Agreement in its entirety and not to
any particular Article, Section or provision hereof. With regard to each and
every term and condition of this Agreement, the parties understand and agree
that the same have or has been mutually negotiated, prepared and drafted, and
that if at any time the parties desire or are required to interpret or construe
any such term or condition or any agreement or instrument subject thereto, no
consideration shall be given to the issue of which party actually prepared,
drafted or requested any term or condition of this Agreement.

Section 13.10. Governing Law. This Agreement and any claims, disputes or
causes of action relating to or arising out of this Agreement shall be construed
in accordance with and governed by the substantive laws of the State of
Delaware, without giving effect to the conflict of laws principles thereof.

Section 13.11. Unenforceability. If any provisions of this Agreement are
determined to be invalid or unenforceable in any jurisdiction, such provisions
shall be ineffective to the extent of such invalidity or unenforceability in
such jurisdiction, without rendering invalid or unenforceable the remaining
provisions hereof or affecting the validity or enforceability of any of

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such provisions of this Agreement in any other jurisdiction. The parties will
use their best efforts to substitute the invalid or unenforceable provision with
a valid and enforceable one which conforms, as nearly as possible, with the
original intent of the parties.

Section 13.12. Entire Agreement.

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

(b) THE PARTIES HERETO ACKNOWLEDGE AND AGREE THAT NO
REPRESENTATION, WARRANTY, PROMISE, INDUCEMENT, UNDERSTANDING, COVENANT OR
AGREEMENT HAS BEEN MADE OR RELIED UPON BY ANY PARTY HERETO OTHER THAN THOSE
EXPRESSLY SET FORTH IN THE TRANSACTION DOCUMENTS. WITHOUT LIMITING THE
GENERALITY OF THE DISCLAIMER SET FORTH IN THE PRECEDING SENTENCE, (I) NEITHER
SELLER NOR ANY OF ITS AFFILIATES HAS MADE OR SHALL BE DEEMED TO HAVE MADE ANY
REPRESENTATIONS OR WARRANTIES, IN ANY PRESENTATION OR WRITTEN INFORMATION
RELATING TO THE BUSINESS GIVEN OR TO BE GIVEN IN CONNECTION WITH THE
CONTEMPLATED TRANSACTIONS, IN ANY FILING MADE OR TO BE MADE BY OR ON BEHALF OF
SELLER OR ANY OF ITS AFFILIATES WITH ANY GOVERNMENTAL AUTHORITY, AND NO
STATEMENT MADE IN ANY SUCH PRESENTATION OR WRITTEN MATERIALS, MADE IN ANY SUCH
FILING OR CONTAINED IN ANY SUCH OTHER INFORMATION SHALL BE DEEMED A
REPRESENTATION OR WARRANTY HEREUNDER OR OTHERWISE, AND (II) SELLER EXPRESSLY
DISCLAIMS ANY IMPLIED WARRANTIES, INCLUDING WARRANTIES OF FITNESS FOR A
PARTICULAR PURPOSE AND WARRANTIES OF MERCHANTABILITY. EACH OF PURCHASER AND
GUARANTOR ACKNOWLEDGES THAT SELLER HAS INFORMED IT THAT NO PERSON HAS BEEN
AUTHORIZED BY SELLER OR ANY OF ITS AFFILIATES TO MAKE ANY REPRESENTATION OR
WARRANTY IN RESPECT OF THE BUSINESS OR IN CONNECTION WITH THE CONTEMPLATED
TRANSACTIONS, UNLESS IN WRITING AND CONTAINED IN THIS AGREEMENT OR IN ANY OF THE
TRANSACTION DOCUMENTS TO WHICH THEY ARE A PARTY.

Section 13.13. Expenses. Except as expressly set forth herein, each party
hereto shall bear all fees and expenses incurred by such party in connection
with, relating to or arising out of the execution, delivery and performance of
this Agreement and the consummation of the Contemplated Transactions, including
attorneys', accountants' and other professional fees and expenses.

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Section 13.14. Disclosure. Certain information set forth in the Disclosure
Schedules has been included and disclosed solely for informational purposes and
may not be required to be disclosed pursuant to the terms and conditions of this
Agreement. The disclosure of any such information shall not be deemed to
constitute an acknowledgement or agreement that the information is required to
be disclosed in connection with the representations and warranties made in this
Agreement or that the information is material, nor shall any information so
included and disclosed be deemed to establish a standard of materiality or
otherwise be used to determine whether any other information is material.

Section 13.15. Guarantor Obligations. Guarantor hereby absolutely,
unconditionally and irrevocably guarantees, as principal obligor, and not merely
as surety, to Seller and its successors and assigns (a) the due and punctual
payment in full of the Transaction Consideration, the discharge of the Assumed
Liabilities and all other obligations of Purchaser hereunder, including
Purchaser's indemnification obligations under Article XI and Purchaser's
obligations under the Transaction Documents, and (b) the performance by Shire
Ireland of all of its duties and obligations under the Transaction Documents to
which it is a party (collectively, the "Obligations"). The foregoing obligation
of Guarantor constitutes a continuing guaranty of payment, and not of
collection, and is and shall be absolute and unconditional under any and all
circumstances, including circumstances that might otherwise constitute a legal
or equitable discharge of a surety or guarantor. Guarantor waives any right to
require that resort for payment first be had by Seller against Purchaser and/or
Shire Ireland, as the case may be. The obligation of Guarantor hereunder shall
not be discharged, impaired or otherwise affected by the failure of Seller to
assert any claim or demand against Purchaser and/or Shire Ireland, as the case
may be, or to enforce any remedy hereunder. Notwithstanding the foregoing, (i)
nothing in this Section 13.15 shall create any liabilities or obligations for
Guarantor to the extent Purchaser and/or Shire Ireland, as the case may be,
would not have liability or otherwise be responsible to Seller hereunder, and
(ii) Guarantor shall have the right to assert as a defense (including rights of
set off and counterclaim) to any of its obligations hereunder any defense that
would be available to it had it duly authorized and entered into the Obligations
directly.

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

NOVEN PHARMACEUTICALS, INC.

By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President, CEO and Chairman

SHIRE US INC.

By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President and CEO

SHIRE PHARMACEUTICALS GROUP PLC

By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Attorney in Fact

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ATTACHMENT III

LICENSE AGREEMENT

DATED AS OF ____________ __, 2003

BY AND BETWEEN

NOVEN PHARMACEUTICALS, INC.

AND

SHIRE PHARMACEUTICALS IRELAND LIMITED

TABLE OF CONTENTS

PAGE

ARTICLE I DEFINITIONS....................................................... 1

Section 1.01. Definitions....................................................... 1
Section 1.02. Other Definitions................................................. 5

ARTICLE II LICENSE GRANTS.................................................... 5

Section 2.01. License Grant: Patents........................................... 5
Section 2.02. Limitations on License Granted Under Section 2.01................. 6
Section 2.03. Quality Control................................................... 6
Section 2.04. Sublicense........................................................ 6

ARTICLE III INTELLECTUAL PROPERTY MATTERS..................................... 7

Section 3.01. Infringement or Other Actions Regarding the Technology............ 7
Section 3.02. Other Third Party Claims.......................................... 7
Section 3.03. Maintenance of Noven Patents...................................... 8

ARTICLE IV CONFIDENTIALITY................................................... 8

Section 4.01. Confidentiality................................................... 8
Section 4.02. Press Releases................................................... 10

ARTICLE V REPRESENTATIONS AND WARRANTIES OF SHIRE IRELAND.................. 10

Section 5.01. Representations and Warranties of Shire Ireland.................. 10

ARTICLE VI INDEMNIFICATION.................................................. 11

Section 6.01. Indemnification.................................................. 11
Section 6.02. Certain Limitations.............................................. 12

ARTICLE VII TERM AND TERMINATION............................................. 13

Section 7.01. Term............................................................. 13
Section 7.03. Effect of Termination............................................ 13

ARTICLE VIII MISCELLANEOUS.................................................... 14

Section 8.01. Notices.......................................................... 14
Section 8.02. Disputes......................................................... 15
Section 8.03. Independent Contractors.......................................... 16
Section 8.04. Assignment....................................................... 16
Section 8.05. Binding Effect; Benefit.......................................... 16
Section 8.06. Amendments....................................................... 16

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PAGE

Section 8.07. No Waiver........................................................ 16
Section 8.08. Counterparts..................................................... 17
Section 8.09. Interpretation................................................... 17
Section 8.10. Governing Law.................................................... 17
Section 8.11. Unenforceability................................................. 17
Section 8.12. Entire Agreement................................................. 18
Section 8.13. Expenses......................................................... 18
Section 8.14. Force Majeure.................................................... 19

LIST OF EXHIBITS

Exhibit A Noven Patents

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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

LICENSE AGREEMENT

This LICENSE AGREEMENT (together with any Exhibits and Schedules hereto,
this "Agreement") is entered into as of this ___ day of ________ 2003 (the
"Effective Date"), by and between NOVEN PHARMACEUTICALS, INC., a Delaware
corporation ("Noven"), and SHIRE PHARMACEUTICALS IRELAND LIMITED, a Republic of
Ireland corporation ("Shire Ireland").

W I T N E S S E T H:

WHEREAS, Noven, and Shire US Inc., a New Jersey corporation ("Shire"), and
Shire Pharmaceuticals Group plc, a corporation organized under the laws of
England and Wales, are parties to the Transaction Agreement, dated as of
February 26, 2003 (the "Transaction Agreement"), pursuant to which Noven has
agreed to transfer to Shire certain of the assets held, owned or used by Noven
in connection with the Business;

WHEREAS, simultaneously with the execution of this Agreement, Noven and
Shire Ireland are entering into a Toll Conversion and Supply Agreement (the
"Toll Conversion and Supply Agreement"), pursuant to which Noven will
manufacture and supply to Shire Ireland certain of Shire Ireland's requirements
of the Product for sale within the Territory; and

WHEREAS, Noven desires to license to Shire Ireland the Technology on the
terms and conditions set forth in this Agreement;

NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties contained herein and for other good and valuable consideration,
including the payments to be made to Noven by Shire in accordance with the
Transaction Agreement, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound, hereby agree as
follows:

ARTICLE I
DEFINITIONS

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

"ADHD" means Attention Deficit Hyperactivity Disorder and/or Attention
Deficit Disorder.

"Affiliate" means, when used with respect to a Person, any other Person
directly or indirectly controlling, controlled by or under common control with
the subject Person. For purposes of this Agreement, "control" means the direct
or indirect ownership of over 50% of the outstanding voting securities of a
Person.

Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

"Business" means the business as conducted by Noven prior to the Effective
Date consisting of the development, manufacture, testing and clinical and
non-clinical trials of the Product, and which business, upon receipt of the
Regulatory Approval, shall additionally consist of marketing, advertising,
promoting, distributing, selling, using and otherwise disposing of the Product.

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

"Competing Product" means ***.

"Contemplated Transactions" means the transactions contemplated by the
Transaction Documents.

"Develop" means, with respect to the Product, to conduct clinical and
non-clinical development and commercialization activities, including (subject to
the requirements and restrictions of Applicable Law) the right to market and
sell the Product throughout the Territory, which activities shall not, in any
event, include modifications to the structure or composition of the Product and
shall not include any right to manufacture the Product.

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

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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

thereto.

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

"Field" means therapeutic uses of the Product, whether or not for the
treatment of ADHD.

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

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

"Inventions" means the inventions relating to the Product that are owned
by Noven during the term of this Agreement and are the subject of the Noven
Patents.

"Milestone Payments" has the meaning specified in the Transaction
Agreement.

"New Drug Application," or "NDA," means an application, including
amendments and supplements thereto, filed by a Person with the FDA to obtain FDA
approval of a new drug or therapy, as the context indicates, as defined in 21
C.F.R. Section 314.3.

"Noven Patents" means all patents and patent applications, as listed in
Exhibit A, in the Territory covering Inventions for use in the Field in the
Territory, and any improvement patents, reissues, confirmations, renewals,
extensions, counterparts, divisions, continuations, continuations-in-part or
patents-of-addition issued or assigned to Noven of the patents or patent
applications listed in Exhibit A, but only to the extent covering the Product in
the Field in the Territory. Subject to the parties reaching an agreement
pursuant to Section 8.03(c) of the Transaction Agreement, the term "Noven
Patents" also shall include any of Noven's future patents and patent
applications for Inventions relating to methylphenidate.

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

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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

"Product" means the transdermal methylphenidate drug delivery system that
has and is being developed, manufactured and tested by Noven, and for which
there is currently pending the Product NDA, and all improvements, modifications
and variations to the transdermal methylphenidate drug delivery system made by
Noven or its Affiliates during the term of this Agreement.

"Product IND" means the IND (IND File No. 54,732) submitted to the FDA by
Noven on December 12, 1997, seeking approval to develop, test and perform
clinical and non-clinical trials of the Product, along with any amendments,
correspondence or supplements thereto and incorporated therein.

"Product NDA" means the NDA (NDA File No. 21-514) submitted to the FDA by
Noven on June 27, 2002, seeking approval to commercially market the Product for
the treatment of ADHD, along with any amendments, correspondence or supplements
thereto and incorporated therein.

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

"Regulatory Approval" has the meaning specified in the Transaction
Agreement.

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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

equivalents, other than as affected by events of default.

"Technology" means any and all data, information (whether proprietary to
Noven or not), technology, know-how, processes, methods, skills, trade secrets,
developments, discoveries and inventions, owned by Noven, to the extent but only
to the extent related to the Product, including the Noven Patents.
Notwithstanding the foregoing, Technology shall not include data, information
(whether proprietary to Noven or not), technology, know-how, processes, methods,
skills, trade secrets, developments, discoveries and inventions related to the
manufacture of the Product or specifications, processes or procedures relating
thereto, except to the extent required to obtain Regulatory Approval for the
Product.

"Territory" means the entire world.

"Transaction Documents" has the meaning specified in the Transaction
Agreement.

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

Term Section

Agreement............................................... Preamble
Disclosing Party........................................ 4.01
Effective Date.......................................... Preamble
Indemnified Party....................................... 6.01(c)
Indemnifying Party...................................... 6.01(c)
Noven................................................... Preamble
Noven Indemnitees....................................... 6.01(a)
Obligations............................................. 8.15
Receiving Party......................................... 4.01
Shire................................................... Recitals
Shire Ireland........................................... Preamble
Shire Ireland Indemnitees............................... 6.01(b)
Toll Conversion and Supply Agreement.................... Recitals
Transaction Agreement................................... Recitals

ARTICLE II
LICENSE GRANTS

Section 2.01. License Grant: Patents. Except as otherwise provided herein
and subject to the terms and conditions of this Agreement, including the
provisions of Article VII, with effect from the Effective Date, Noven hereby
grants to Shire Ireland an unconditional, irrevocable, royalty-free, perpetual,
exclusive license in the Territory of rights under the Noven Patents, including
the right to grant sublicenses in accordance with Section 2.04, to Develop, use,
make, have made, sell or otherwise dispose of the Product under the Technology;
provided, however, that notwithstanding the foregoing, Shire Ireland shall not
have the right to make or have made the Product other than (a) as expressly
contemplated or provided in the Toll Conversion and

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Supply Agreement, or (b) following the termination of the Toll Conversion and
Supply Agreement in accordance with its terms. Notwithstanding the foregoing,
nothing in this Agreement shall limit in any way Noven's right (i) to make or
have made the Product under the terms and conditions of the Toll Conversion and
Supply Agreement or for the other purposes contemplated by clause (ii) or clause
(iii) of this sentence, (ii) to Develop, use or otherwise dispose of the
Product, or to authorize another Person to Develop, use or otherwise dispose of
the Product, for the purpose of conducting research or clinical trials of
improved transdermal methylphenidate drug delivery products or other products
with an indication for ADHD, or of products for indications other than ADHD and
which do not include delivery of methylphenidate, or (iii) to Develop, use,
promote, sell or otherwise dispose of a product other than the Product, whether
on its own, together with another Person or through a license or other grant of
rights to another Person.

Section 2.02. Limitations on License Granted Under Section 2.01. Shire
Ireland shall not be entitled to exercise the rights granted to it under Section
2.01 unless such rights are exercised pursuant to an effective and active
Regulatory Approval and in accordance with all Applicable Laws.

Section 2.03. Quality Control. Shire Ireland shall only Develop, market,
promote, sell, distribute, use or otherwise dispose of the Product, and any
materials used in connection with the Product, including any labeling, packaging
and advertising, in accordance with all Applicable Laws. Notwithstanding the
fact that Shire Ireland shall be obligated to ensure that the Product is
manufactured, stored, marketed, promoted, sold, distributed, used or otherwise
disposed of in accordance with Applicable Law, Noven shall have the right to
take any and all actions it deems necessary or appropriate (including seeking or
obtaining preliminary or permanent injunctive relief) to ensure that the Product
is used in a manner consistent with the terms and conditions of this Agreement,
in a manner consistent with Applicable Law.

Section 2.04. Sublicense. Prior to the date on which Shire has paid Noven
the full amount of the Milestone Payments, Shire Ireland shall not have the
right to sublicense any of the rights granted by Noven under Section 2.01. On
and after the date Shire has paid Noven the full amount of the Milestone
Payments, Shire Ireland shall have the right to sublicense the rights granted by
Noven under Section 2.01; provided, that (i) Shire Ireland shall give written
notice of such sublicense to Noven, (ii) the sublicensee shall confirm in
writing to and for the benefit of Noven that it will comply with the covenants
and agreements of Shire Ireland hereunder, and (iii) no such sublicense pursuant
to this Section 2.04 shall relieve Shire Ireland of any of its obligations or
liabilities under this Agreement. Except as otherwise provided in the Toll
Conversion and Supply Agreement, Noven shall have no obligation to supply the
Product to any sublicensee of Shire Ireland (or of any Affiliate, successor,
assignee or delegatee of Shire Ireland, as the case may be) pursuant to this
Section 2.04. Notwithstanding the foregoing, Shire Ireland may sublicense the
rights granted by Noven under Section 2.01 to any of its Affiliates without the
prior written consent of Noven; provided, that no such sublicense shall relieve
Shire Ireland of any of its obligations or liabilities under this Agreement.

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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

ARTICLE III
INTELLECTUAL PROPERTY MATTERS

Section 3.01. Infringement or Other Actions Regarding the Technology.

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

(b) Subject to Xxxxxxx 0.00, Xxxxx Xxxxxxx shall have the right to
take such action as it deems appropriate to protect and enforce the Noven
Patents in the Territory against any Competing Product, including initiating an
appropriate Proceeding or threatening to initiate an appropriate Proceeding to
prevent or eliminate the infringement of such Noven Patents with regard to any
Competing Product, or the unfair competition, inappropriate or unauthorized use,
disparagement or other tortious act by any third party in relation to the
Technology in the Territory. Subject to Section 3.01(c) below, Noven agrees to
cooperate with Shire Ireland if and to the extent reasonably requested by Shire
Ireland, including joining as a party to such Proceeding, if necessary to
maintain standing.

(d) ***.

(e) All amounts awarded as damages, profits or otherwise in
connection with any action specified in Section 3.01(b) taken by Shire Ireland
shall be ***. If Shire Ireland elects not to take any action of the nature
specified in Section 3.01(b) within 60 days of becoming aware or receiving
notice under Section 3.01(a) of any infringement, threatened infringement,
unfair competition, disparagement or other tortious act identified in Section
3.01(a), Shire Ireland shall give Noven notice of such decision, and Noven
thereafter shall have the right to take any action of the nature specified in
Section 3.01(b). In such event, all amounts awarded as damages, profits or
otherwise in connection with any action taken by Noven shall be ***.

(f) Notwithstanding the provisions of Section 3.01(b), Noven shall
have the right, and Shire Ireland shall not have the right, to take such actions
as it deems appropriate to protect and enforce the Technology in any Proceeding
other than a Proceeding seeking to protect or enforce the Technology in the
Territory against a Competing Product. All amounts awarded as damages, profits
or otherwise in connection with any action specified in this Section 3.01(f)
taken by Noven shall be paid to and become the sole property of Noven.

Section 3.02. Other Third Party Claims.

(a) If, at any time on or after the Effective Date, any party shall
become aware of any Proceeding or threat of any Proceeding by a third party
alleging that any of the Noven Patents (or any

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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

claims asserted in the Noven Patents) are invalid or unenforceable, or otherwise
seeking to limit the scope, construction or interpretation of any of the Noven
Patents (or any claims asserted in the Noven Patents), such party shall promptly
notify the other parties of the same.

(b) ***.

Section 3.03. Maintenance of Noven Patents. Noven shall pay all
necessary maintenance and related expenses to maintain the Noven Patents in
those jurisdictions within the Territory where the Noven Patents are currently
filed as of the Effective Date. Noven shall, from and after the Effective Date,
upon the request and at the expense of Shire Ireland, use reasonable commercial
efforts to file additional applications and to take such other reasonable
actions necessary to obtain protection of the Noven Patents in additional
jurisdictions within the Territory. Noven agrees to consult with Shire Ireland
with regard to the prosecution of the Noven Patents to the extent relating to
the Product.

ARTICLE IV
CONFIDENTIALITY

Section 4.01. Confidentiality.

(a) Pursuant to the terms of this Agreement, each party (in
such capacity, the "Disclosing Party"), has disclosed and will be disclosing to
the other parties and/or their Affiliates or representatives (in such capacity,
the "Receiving Party"), certain Confidential Information of the Disclosing
Party. The Receiving Party shall make no use of such Confidential Information
except in the exercise of its rights and the performance of its obligations set
forth in this Agreement. The Receiving Party shall use the same efforts to keep
secret, and prevent the disclosure to third parties of, Confidential Information
of the Disclosing Party as it would use with respect to its own Confidential
Information. Confidential Information disclosed by the Disclosing Party shall
remain the sole and absolute property of the Disclosing Party, subject to the
rights granted herein. The above restrictions on the use and disclosure of
Confidential Information shall not apply to any information which (i) is already
known to the Receiving Party at the time of disclosure by the Disclosing Party,
as demonstrated by competent proof, (ii) is or becomes generally available to
the public other than through any act or omission of the Receiving Party in
breach of this Agreement, (iii) is acquired by the Receiving Party from a third
party who is not, directly or indirectly, under an obligation of confidentiality
to the Disclosing Party with respect to same, or (iv) is developed independently
by the Receiving Party without use, direct or indirect, of information that is
required to be held confidential hereunder.

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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

arbitration proceeding to enforce such party's rights under this Agreement, it
may do so only if it (A) provides the Disclosing Party with as much advance
written notice as possible of the required disclosure, (B) cooperates with the
Disclosing Party in any attempt to prevent or limit the disclosure, and (C)
limits disclosure, if any, to the specific purpose at issue.

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

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

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

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

(v) nothing in this Section 4.01 shall be interpreted to
limit the ability of either Noven or Shire Ireland to disclose its own
Confidential Information to the other parties or any other Person on such terms
and subject to such conditions as it deems advisable or appropriate;

(d) Each of Noven and Shire Ireland acknowledge and agree that the
terms and conditions of this Agreement shall be considered Confidential
Information of each party and shall be treated accordingly. Notwithstanding the
foregoing, Shire Ireland acknowledges and agrees that Noven may be required to
disclose some or all of the information included in this Agreement in order to
comply with its obligations under the Securities Laws, and hereby consents to
such disclosure to the extent deemed advisable or appropriate by counsel to
Noven (but only after consulting with Shire Ireland to the extent practicable).

(e) Each party specifically recognizes that any breach by it of this
Section 4.01

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Securities and Exchange Commission. Asterisks denote omissions.

may cause irreparable injury to the other parties and that actual damages may be
difficult to ascertain, and in any event, may be inadequate. Accordingly (and
without limiting the availability of legal or equitable, including injunctive,
remedies under any other provisions of this Agreement), each party agrees that
in the event of any such breach, notwithstanding the provisions of Section 8.02
or Article VI hereof, the other parties shall be entitled to seek, by way of
private litigation in the first instance, injunctive relief and such other legal
and equitable remedies as may be available.

Section 4.02. Press Releases. Except as may be required by
Applicable Law, no party shall originate any publicity, press or news release or
other public announcement, written or oral, whether to the public press or
otherwise, relating to this Agreement, or to the existence of an arrangement
between the parties, without the prior written approval of the other parties. In
the event disclosure of this Agreement, or any of the terms and conditions of
this Agreement is required by Applicable Law, the party required to so disclose
such information shall, to the extent possible, provide to the other parties for
their prior approval (such approval not to be unreasonably withheld or delayed)
a written copy of such public announcement. When practicable, the party required
to disclose such information will provide such copy to the other parties at
least five Business Days prior to disclosure.

ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SHIRE IRELAND

Section 5.01. Representations and Warranties of Shire Ireland. Shire
Ireland represents and warrants to Noven as of the Effective Date that:

(a) Organization. Shire Ireland is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation. As of the Closing Date, Shire Ireland will be duly qualified to
do business in each jurisdiction where the character of its business (after
giving effect to the Contemplated Transactions) make such qualifications
necessary to carry on its business.

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

(c) No Violation. Neither the execution and delivery of this
Agreement nor the consummation by Shire Ireland of the transactions contemplated
hereby, will (i) conflict with or result in a breach of any of the terms,
conditions or provisions of Shire Ireland's certificate of incorporation or
other governing or charter document, or of any statute or administrative
regulation, or, to the best of its knowledge, of any order, writ, injunction,
judgment or decree of

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Securities and Exchange Commission. Asterisks denote omissions.

any court or governmental authority or of any arbitration award or any agreement
binding xxxx Xxxxx Xxxxxxx or its assets, or (ii) to the best of its knowledge,
contravene or conflict with, or constitute a violation of, any provisions of any
Applicable Law binding xxxx Xxxxx Xxxxxxx.

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

ARTICLE VI
INDEMNIFICATION

Section 6.01. Indemnification. In order to distribute between themselves
the responsibility for claims arising out of this Agreement, and except as
otherwise specifically provided for herein, from and after the Effective Date,
the parties shall indemnify each other as provided in this Section 6.01.

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

(i) the breach by Shire Ireland of this Agreement including
any material breach by Shire Ireland of, or material failure by Shire Ireland to
comply with, any of its covenants or obligations pursuant to this Agreement;

(ii) the enforcement by Noven Indemnitees of their rights
under this Section 6.01(a); and

(iii) Shire Ireland's material violation of any Applicable
Law;

provided, however, that, in each such case, Shire Ireland shall not be liable
hereunder to the extent such Damages arise from misconduct or negligence of, or
a violation of any Applicable Law by Noven, its Affiliates, agents, employees or
contractors, or from the breach by Noven of the provisions of any of the
Transaction Documents.

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

(i) the breach by Noven of this Agreement including any
material breach by Noven of, or material failure by Noven to comply with, any of
its covenants or

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obligations pursuant to this Agreement;

(ii) the enforcement by Shire Ireland Indemnitees of their
rights under this Section 6.01(b); and

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

provided, however, that, in each such case, Noven shall not be liable hereunder
to the extent such Damages arise from misconduct or negligence of, or a
violation of any Applicable Law by Shire Ireland, its Affiliates, agents,
employees or contractors, or from the breach by Shire Ireland of any of the
provisions of the Transaction Documents.

(c) Procedure. If any Proceeding arises as to which a right of
indemnification provided in this Article VI applies, the Person seeking
indemnification (the "Indemnified Party"), shall within 20 days notify the party
obligated under this Article VI to indemnify the Indemnified Party (the
"Indemnifying Party"), thereof in writing, except to the extent that such
failure to notify within 20 days does not prejudice the Indemnifying Party's
ability to defend or contest any such Proceeding, and allow the Indemnifying
Party and its insurers the opportunity to assume direction and control of the
defense against such Proceeding, at its sole expense, including the settlement
thereof at the sole option of the Indemnifying Party or its insurers; provided,
however, that the Indemnifying Party may not enter into any compromise or
settlement without the prior written consent of the Indemnified Party unless
such compromise or settlement includes as an unconditional term thereof the
giving by each plaintiff or claimant to the Indemnified Party of a release from
all liability in respect of such claim and only if such compromise or settlement
does not include any admission of legal wrongdoing on the part of the
Indemnified Party. The Indemnified Party shall fully cooperate with the
Indemnifying Party and its insurer in the disposition of any such matter and the
Indemnified Party will have the right and option to participate in (but not
control) the defense of any Proceeding as to which this Article VI applies, with
separate counsel at its election and cost. If the Indemnifying Party fails or
declines to assume the defense of any such Proceeding within 30 days after
notice thereof, the Indemnified Party may assume the defense thereof for the
account and at the risk of the Indemnifying Party. The Indemnifying Party shall
pay promptly to the Indemnified Party any Damages to which the indemnity under
this Article VI applies, as incurred.

Section 6.02. Certain Limitations.

(a) Except as otherwise provided in Section 4.01(e), the sole and
exclusive remedy with respect to any breach of any representation, warranty,
covenant or agreement contained herein and for the other matters described in
Sections 6.01(a) and 6.01(b) (other than (i) with respect to a breach of the
terms of a covenant or agreement, as to which Shire Ireland or Noven, as the
case may be, also shall be entitled to seek specific performance or other
equitable relief and (ii) with respect to claims for fraud) shall be a claim for
Damages (whether by contract, in tort or otherwise, and whether in law, in
equity or both) made pursuant to this Article VI. No party shall be entitled to
recover any punitive, incidental or consequential damages whatsoever under this
Article VI, except to the extent any such punitive, incidental or consequential
damages are payable to a third party.

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

ARTICLE VII
TERM AND TERMINATION

Section 7.01. Term. This Agreement and the license granted hereunder shall
terminate and be of no further force or effect upon the earlier of:

(a) the date of a termination of the Toll Conversion and Supply
Agreement by Noven pursuant to Section 10.02(b) thereof, but only if such
termination occurs prior to payment in full of each of the Milestone Payments;

(b) the termination of this Agreement pursuant to Section
9.02(b)(ii) or Section 9.02(c) of the Transaction Agreement; or

Section 7.02. Certain Termination Events.

(a) ***.

(b) This Agreement shall terminate and shall be of no further force
or effect on the date on which the last of the Noven Patents in force in the
Territory shall (a) expire by its terms, or (b) be adjudicated invalid or
unenforceable in the Territory by the judgment of a court of competent
jurisdiction, which judgment shall not be subject to appeal; provided, that
following any such termination, nothing in this Agreement shall limit the right
of Shire Ireland to market and sell the Product.

Section 7.03. Effect of Termination. Upon termination, this Agreement
shall forthwith become void and of no further force or effect, except for the
following provisions, which shall remain in full force and effect: (a) Section
4.01 (Confidentiality), (b) Section 4.02 (Press Releases), (c) this Section
7.03, (d) Section 8.10 (Governing Law), (e) Section 8.12 (Entire Agreement) and
(f) Section 8.13 (Expenses). The rights and remedies provided in this Article
VII shall be cumulative and not exclusive of any rights or remedies provided by
Applicable Law. Any termination of this Agreement shall not affect any right or
claim hereunder that arises prior to such termination, which claims and rights
shall survive any such termination.

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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

ARTICLE VIII
MISCELLANEOUS

Section 8.01. Notices. All notices, claims, certificates, requests,
demands and other communications hereunder shall be in writing and shall be
delivered personally or sent by facsimile transmission, air courier or
registered or certified mail, return receipt requested, addressed as follows:

if to Noven:

Noven Pharmaceuticals, Inc.
00000 X.X. 000xx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: CEO & General Counsel
Telecopy: 000-000-0000

with copies (which shall not constitute notice) to:

King & Spalding LLP
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx X. Xxxxxxxx
Telecopy: 202-626-3737

if to Shire Ireland:

Shire Pharmaceuticals Ireland Limited
Xxxxxxxxxx
Xxxxxxxxxx
Xxxxxx 00
Xxxxxxx
Attention: General Counsel
Telecopy: 011-353-1623-7469

with copies (which shall not constitute notice) to:

Shire Pharmaceuticals Group plc
Hampshire International Business Park
Xxxxxxxx
Xxxxxxxxxxx
Xxxxxxxxx XX00 0XX
Xxxxxx Xxxxxxx
Attention: Group General Counsel
Telecopy: 011-44-1256-894710

-14-

Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

and to:

Xxxxx & Berne LLP
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopy: 000-000-0000

Section 8.02. Disputes. In the event of any controversy or claim arising
out of, relating to or in connection with any provision of this Agreement, or
the rights or obligations of the parties hereunder, the parties shall try to
settle their differences amicably between themselves. Any party may initiate
such informal dispute resolution by sending written notice of the dispute to the
other parties, and within 10 days after such notice, appropriate representatives
of the parties shall meet for attempted resolution by good faith negotiations.
If such representatives are unable to resolve promptly such disputed matter, it
shall be referred to the presidents of Noven and Shire Ireland, or their
respective designees, for discussion and resolution. If such personnel are
unable to resolve such dispute within 30 days of initiating such negotiations,
the parties agree first to try in good faith to settle the dispute by mediation
in Washington, D.C. under the Commercial Mediation Rules of the American
Arbitration Association. If following any such mediation the parties still have
not been able to resolve any such dispute, the parties agree to submit the
dispute to final and binding arbitration before a single arbitrator in
Washington, D.C. under the Commercial Arbitration Rules of the American
Arbitration Association. The parties agree that a judgment may be entered on the
arbitrator's award in any court of competent jurisdiction. The arbitrator in
reviewing any claim under this Agreement shall have the exclusive authority to
determine any issues as to the arbitrability of any such claim or related
disputes under this Agreement. In reaching a decision, the arbitrator shall
interpret, apply and be bound by this Agreement and by Applicable Law. The
arbitrator shall have no authority to add to, detract from or modify this
Agreement or any Applicable Law in any respect. The arbitrator may not grant any
remedy or relief that a court of competent jurisdiction could not grant, nor any
relief or remedy greater than that sought by the parties, nor any punitive,
incidental or consequential damages, except to the extent any such punitive,
incidental or consequential damages are payable to a third party. Any up-front
costs of the arbitrator shall be borne equally by the parties; provided,
however, that the non-prevailing party in any such arbitration shall pay, and to
the extent applicable reimburse the prevailing party for, the costs and expenses
of the arbitrator, including costs and expenses payable to the American
Arbitration Association and to the arbitrator; and provided further, that in the
event each party prevails as to certain claims in connection with any such
arbitration, the fees of the arbitrator shall be paid and/or reimbursed in

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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

accordance with the decision of the arbitrator. Each party shall bear its own
costs incurred in connection with attorneys' fees and related expenses.
Notwithstanding the foregoing provisions of this Section 8.02, nothing in this
Agreement shall limit or in any way restrict the ability of any party to seek
injunctive or other equitable relief in a court or other judicial body.

Section 8.03. Independent Contractors. In making and performing this
Agreement, the parties are acting and shall act as independent contractors.
Nothing in this Agreement shall be deemed to create an agency, joint venture or
partnership relationship between the parties hereto. No party shall have the
authority to obligate another party in any respect, and no party shall hold
itself out as having any such authority. All personnel of Noven shall be solely
employees of Noven and shall not represent themselves as employees of Shire
Ireland. All personnel of Shire Ireland shall be solely employees of Shire
Ireland and shall not represent themselves as employees of Noven.

Section 8.04. Assignment. Prior to the date on which Shire has paid Noven
the full amount of the Milestone Payments, Shire Ireland shall not have the
right to assign this Agreement or delegate any of its rights, interests, duties
or obligations hereunder. On and after the date Shire has paid Noven the full
amount of the Milestone Payments, Shire Ireland shall have the right to assign
this Agreement or delegate any of its rights, interests, duties or obligations;
provided, that (i) Shire Ireland shall give written notice of such assignment or
delegation to Noven, (ii) the assignee or delegatee shall confirm in writing to
and for the benefit of Noven that it will comply with the covenants and
agreements of Shire Ireland hereunder, and (iii) no such assignment or
delegation pursuant to this Section 8.04 shall relieve Shire Ireland of any of
its obligations or liabilities under this Agreement. Notwithstanding the
foregoing, at any time during the term of this Agreement any party may assign
this Agreement to any of its Affiliates without the prior written consent of the
other parties; provided, that no such assignment of this Agreement shall relieve
the assignor of any of its obligations or liabilities under this Agreement.
Notwithstanding the foregoing, any party may assign this Agreement without the
other parties' prior written consent in connection with the transfer or sale of
all or substantially all of its assets or business or its merger or
consolidation with another Person upon written notice to the other parties.
Except as otherwise provided in the Toll Conversion and Supply Agreement, Noven
shall have no obligation to supply the Product to any assignee or delegatee of
Shire Ireland pursuant to this Section 8.04. Any attempted assignment in
violation of this Section 8.04 shall be void.

Section 8.05. Binding Effect; Benefit. This Agreement shall inure to the
benefit of and be binding upon the parties hereto, and their successors and
permitted assigns. Nothing in this Agreement, express or implied, is intended to
confer on any Person other than the parties hereto, and their respective
successors and permitted assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement.

Section 8.06. Amendments. This Agreement shall not be modified, amended or
supplemented except pursuant to an instrument in writing executed and delivered
on behalf of each of the parties hereto.

Section 8.07. No Waiver. The failure in any one or more instances of a
party to insist

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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

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

Section 8.08. Counterparts. This Agreement shall become binding when any
one or more counterparts hereof, individually or taken together, shall bear the
signatures of each of the parties hereto. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original as against the
party whose signature appears thereon, but all of which taken together shall
constitute but one and the same instrument. Each party may execute this
Agreement on a facsimile of the Agreement. In addition, facsimile signatures of
authorized signatories of any party shall be valid and binding and delivery of a
facsimile signature by any party shall constitute due execution and delivery of
this Agreement.

Section 8.09. Interpretation. The article and section headings contained
in this Agreement are for convenience of reference only and shall not affect the
meaning or interpretation of this Agreement. As used in this Agreement, any
reference to the masculine, feminine or neuter gender shall include all genders,
the plural shall include the singular, and singular shall include the plural.
Unless the context otherwise requires, the term "party" when used herein means a
party hereto. References herein to a party or other Person include their
respective successors and assigns. The words "include," "includes" and
"including" when used herein shall be deemed to be followed by the phrase
"without limitation" unless such phrase otherwise appears. Unless the context
otherwise requires, references herein to Articles, Sections, Exhibits and
Schedules shall be deemed references to Articles and Sections of, and Exhibits
and Schedules to, this Agreement. Unless the context otherwise requires, the
words "hereof," "hereby" and "herein" and words of similar meaning when used in
this Agreement refer to this Agreement in its entirety and not to any particular
Article, Section or provision hereof. With regard to each and every term and
condition of this Agreement, the parties understand and agree that the same have
or has been mutually negotiated, prepared and drafted, and that if at any time
the parties desire or are required to interpret or construe any such term or
condition or any agreement or instrument subject thereto, no consideration shall
be given to the issue of which party actually prepared, drafted or requested any
term or condition of this Agreement.

Section 8.10. Governing Law. This Agreement and any claims, disputes or
causes of action relating to or arising out of this Agreement shall be construed
in accordance with and governed by the substantive laws of the State of
Delaware, without giving effect to the conflict of laws principles thereof.

Section 8.11. Unenforceability. If any provisions of this Agreement are
determined to be invalid or unenforceable in any jurisdiction, such provisions
shall be ineffective to the extent of such invalidity or unenforceability in
such jurisdiction, without rendering invalid or unenforceable the remaining
provisions hereof or affecting the validity or enforceability of any of such
provisions of this Agreement in any other jurisdiction. The parties will use
their best efforts

-17-

Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

to substitute the invalid or unenforceable provision with a valid and
enforceable one which conforms, as nearly as possible, with the original intent
of the parties.

Section 8.12. Entire Agreement.

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

(b) THE PARTIES HERETO ACKNOWLEDGE AND AGREE THAT NO REPRESENTATION,
WARRANTY, PROMISE, INDUCEMENT, UNDERSTANDING, COVENANT OR AGREEMENT HAS BEEN
MADE OR RELIED UPON BY ANY PARTY HERETO OTHER THAN THOSE EXPRESSLY SET FORTH IN
THE TRANSACTION DOCUMENTS. WITHOUT LIMITING THE GENERALITY OF THE DISCLAIMER SET
FORTH IN THE PRECEDING SENTENCE, (I) NEITHER NOVEN NOR ANY OF ITS AFFILIATES HAS
MADE OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATIONS OR WARRANTIES, IN ANY
PRESENTATION OR WRITTEN INFORMATION RELATING TO THE BUSINESS OR THE TECHNOLOGY
GIVEN OR TO BE GIVEN IN CONNECTION WITH THE CONTEMPLATED TRANSACTIONS, IN ANY
FILING MADE OR TO BE MADE BY OR ON BEHALF OF NOVEN OR ANY OF ITS AFFILIATES WITH
ANY GOVERNMENTAL AUTHORITY OR REGULATORY AUTHORITY, AND NO STATEMENT MADE IN ANY
SUCH PRESENTATION OR WRITTEN MATERIALS, MADE IN ANY SUCH FILING OR CONTAINED IN
ANY SUCH OTHER INFORMATION SHALL BE DEEMED A REPRESENTATION OR WARRANTY
HEREUNDER OR OTHERWISE, AND (II) NOVEN EXPRESSLY DISCLAIMS ANY IMPLIED
WARRANTIES, INCLUDING WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE AND
WARRANTIES OF MERCHANTABILITY. SHIRE IRELAND ACKNOWLEDGES THAT NOVEN HAS
INFORMED IT THAT NO PERSON HAS BEEN AUTHORIZED BY NOVEN OR ANY OF ITS AFFILIATES
TO MAKE ANY REPRESENTATION OR WARRANTY IN RESPECT OF THE BUSINESS OR THE
TECHNOLOGY OR IN CONNECTION WITH THE CONTEMPLATED TRANSACTIONS, UNLESS IN
WRITING AND CONTAINED IN THIS AGREEMENT OR IN ANY OF THE TRANSACTION DOCUMENTS
TO WHICH THEY ARE A PARTY.

Section 8.13. Expenses. Except as expressly set forth herein, each party
hereto shall bear all fees and expenses incurred by such party in connection
with, relating to or arising out of the execution, delivery and performance of
this Agreement and the consummation of the Contemplated Transactions, including
attorneys', accountants' and other professional fees and expenses.

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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

Section 8.14. Force Majeure. If the performance of this Agreement or any
obligation hereunder (except the payment of money) by any party is prevented or
hindered, by reason of any cause beyond the reasonable control of the affected
party, including fire, flood, riot, war, explosions, acts of God (including
hurricanes and tropical storms), acts of a public enemy, labor disturbances or
any governmental action, the party so affected, upon notice to the other
parties, shall be excused from such performance; provided that the party so
affected shall use diligent effort to avoid or remove such cause or causes of
non-performance and shall continue to perform hereunder with the utmost dispatch
whenever such cause or causes are removed.

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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

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

NOVEN PHARMACEUTICALS, INC.

By:
------------------------------------
Name:
Title:

SHIRE PHARMACEUTICALS IRELAND LIMITED

By:
------------------------------------
Name:
Title:

-20-

ATTACHMENT VI

TOLL CONVERSION AND SUPPLY AGREEMENT

DATED AS OF ____________ __, 2003

BY AND BETWEEN

NOVEN PHARMACEUTICALS, INC.

AND

SHIRE PHARMACEUTICALS IRELAND LIMITED

TABLE OF CONTENTS

PAGE
----

ARTICLE I DEFINITIONS............................................. 1

Section 1.01. Definitions............................................. 1
Section 1.02. Other Definitions....................................... 6

ARTICLE II MANUFACTURE AND SUPPLY.................................. 6

Section 2.01. Supply of Product....................................... 6
Section 2.02. Materials............................................... 7
Section 2.03. Labeling................................................ 7
Section 2.04. Compliance with Applicable Law.......................... 7
Section 2.05. Steering Committee...................................... 8

ARTICLE III FORECASTS, ORDERS, DELIVERY AND ACCEPTANCE.............. 8

Section 3.01. Forecasts............................................... 8
Section 3.02. Initial Order........................................... 9
Section 3.03. Future Orders........................................... 9
Section 3.04. Annual Installed Capacity............................... 9
Section 3.05. Active Ingredient Quota................................. 9
Section 3.06. Excused Vendor Default.................................. 9
Section 3.07. Delivery................................................ 10
Section 3.08. Shipment................................................ 10
Section 3.09. Acceptance of Product................................... 11

ARTICLE IV CONVERSION PRICE AND PAYMENT............................ 12

Section 4.01. Invoice................................................. 12
Section 4.02. Conversion Price........................................ 12
Section 4.03. Adjustment of Product Gross Cost Resulting
from Adjustments to Active Ingredient Cost.............. 12
Section 4.04. Active Ingredient Supplier.............................. 13
Section 4.05. Adjustment Pursuant to Producer Price Index............. 13
Section 4.06. Adjustment for Modification of Specifications........... 13
Section 4.07. Taxes................................................... 14
Section 4.08. Adjustment for Late Deliveries.......................... 14

ARTICLE V MANUFACTURING STANDARDS AND QUALITY ASSURANCE........... 14

Section 5.01. Product Warranties...................................... 14
Section 5.02. Manufacturing Standards; Release of Product............. 15
Section 5.03. Specifications.......................................... 15

ARTICLE VI AUDITS AND INSPECTION RIGHTS............................ 15

Section 6.01. Records and Audits...................................... 15
Section 6.02. Inspections by Governmental or Regulatory Agencies...... 15

ARTICLE VII ADDITIONAL COVENANTS AND AGREEMENTS OF THE PARTIES...... 16

Section 7.01. Confidentiality......................................... 16
Section 7.02. Safety.................................................. 17
Section 7.03. Product Recall.......................................... 17
Section 7.04. Insurance............................................... 18
Section 7.05. Ultimate Use of Product................................. 18
Section 7.06. Intellectual Property Matters........................... 18
Section 7.07. No Debarred Persons..................................... 19
Section 7.08. Labeling................................................ 19
Section 7.09. Second Source Arrangements.............................. 19

ARTICLE VIII REPRESENTATIONS AND WARRANTIES OF PRINCIPAL............. 19

Section 8.01. Representations and Warranties of Principal............. 19

ARTICLE IX INDEMNIFICATION......................................... 20

Section 9.01. Indemnification......................................... 20
Section 9.02. Certain Limitations..................................... 22

ARTICLE X TERM AND TERMINATION.................................... 23

Section 10.01. Term.................................................... 23
Section 10.02. Certain Termination Events.............................. 23
Section 10.03. Optional Termination by Manufacturer.................... 24
Section 10.04. Obligations on Termination.............................. 24
Section 10.05. Effect of Termination................................... 24
Section 10.06. Anticipatory Breach..................................... 25

ARTICLE XI MISCELLANEOUS........................................... 25

Section 11.01. Notices................................................. 25
Section 11.02. Disputes................................................ 26
Section 11.03. Independent Contractors................................. 27
Section 11.04. Assignment.............................................. 27
Section 11.05. Binding Effect; Benefit................................. 28
Section 11.06. Amendments.............................................. 28
Section 11.07. No Waiver............................................... 28
Section 11.08. Counterparts............................................ 28
Section 11.09. Interpretation.......................................... 28
Section 11.10. Governing Law........................................... 29
Section 11.11. Unenforceability........................................ 29

-ii-

Section 11.12. Entire Agreement........................................ 29
Section 11.13. Expenses................................................ 30
Section 11.14. Force Majeure........................................... 30

-iii-

LIST OF EXHIBITS

Exhibit A Negotiated Batch Yield
Exhibit B Specifications
Exhibit C Form of Purchase Order
Exhibit D Estimated Conversion Price Based on Negotiated Batch Yield
Exhibit D1 Form of Manufacturer Invoicing to Principal
Exhibit E Quality Assurance Agreement
Exhibit F Mechanism for Adjustment of Product Gross Price Resulting
from Adjustment to Active Ingredient Cost

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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

TOLL CONVERSION AND SUPPLY AGREEMENT

This TOLL CONVERSION AND SUPPLY AGREEMENT (together with any Exhibits and
Schedules hereto, this "Agreement"), is made as of this __ day of _______ 2003
(the "Effective Date"), by and between NOVEN PHARMACEUTICALS, INC., a Delaware
corporation ("Manufacturer"), and SHIRE PHARMACEUTICALS IRELAND LIMITED, a
Republic of Ireland corporation ("Principal").

W I T N E S S E T H:

WHEREAS, Manufacturer, and Shire US Inc., a New Jersey corporation
("Shire"), and Shire Pharmaceuticals Group plc, a corporation organized under
the laws of England and Wales, are parties to the Transaction Agreement, dated
as of February 26, 2003 (the "Transaction Agreement"), pursuant to which
Manufacturer has agreed to transfer to Shire certain of the assets held, owned
or used by Manufacturer in connection with the Business;

WHEREAS, simultaneously with the execution of this Agreement, Manufacturer
and Principal are entering into a License Agreement (the "License Agreement"),
pursuant to which Manufacturer will license to Principal the exclusive rights to
the Technology to use, sell or otherwise dispose of the Product in the
Territory;

WHEREAS, Manufacturer desires to manufacture the Product and to supply
Principal with certain of its requirements of the Product for sale in accordance
with the License Agreement; and

WHEREAS, Principal desires to purchase certain of its requirements of the
Product from Manufacturer pursuant to the terms and conditions set forth in this
Agreement;

ARTICLE I
DEFINITIONS

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

"Active Ingredient" means methylphenidate base.

"Active Ingredient Cost" means ***.

"ADHD" means Attention Deficit Hyperactivity Disorder and/or Attention
Deficit Disorder.

Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

"Batch" means, as to each size of the Product, respectively, the actual
number of complete and usable units of such size of the Product yielded from a
standard size kettle of raw materials as determined by applicable FDA validation
requirements and blended for production of such size, it being understood and
agreed that the actual yield obtained by Manufacturer from any such Batch will
vary from time to time. The estimated number of units of each size of the
Product expected to be yielded from each Batch produced thereof, as of the
Effective Date, shall be as described in Exhibit A hereto, as such exhibit may
be amended, modified or otherwise supplemented from time to time in accordance
with the terms of this Agreement.

"Business" means the business as conducted by Manufacturer prior to the
Effective Date consisting of the development, manufacture, testing and clinical
and non-clinical trials of the Product, and which business, upon receipt of the
Regulatory Approval, shall additionally consist of marketing, advertising,
promoting, distributing, selling, using and otherwise disposing of the Product.

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

"Contemplated Transactions" means the transactions contemplated by the
Transaction Documents.

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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

"Conversion Price" means ***.

"DEA" means the United States Drug Enforcement Administration and any
successor agency thereto.

"Excused Vendor Default" means ***.

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

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

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

"GMP" means the current Good Manufacturing Practices as that term is
defined by the FDA which are in force or hereafter adopted by the FDA in (i) its
applicable regulations promulgated or issued thereunder, and (ii) good
manufacturing practices as required by applicable regulations of any Regulatory
Authority.

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

"Intellectual Property" means (i) all patents, copyrights, technology,
know-how, processes, trade secrets, inventions (including inventions conceived
prior to the Effective Date but not documented as of the Effective Date),
proprietary data, formulae, research and development data and computer software
programs, (ii) all trademarks, trade names, service marks and service names,
(iii) all registrations, applications, recordings and common-law rights relating
thereto, all rights to xxx at law or in equity for any infringement or other
impairment thereto, including the right to receive all proceeds and damages
therefrom, and all rights to obtain renewals, continuations, divisions or other
extensions of legal protections pertaining thereto, and (iv) all other United
States, state and foreign intellectual property.

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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

"Manufacture" means to formulate, process, produce, package, handle,
store, hold, label, test, analyze, sample, release and ship the Product in
accordance with the terms of the Specifications.

"Manufacturing Facility" means Manufacturer's facility located at 00000
X.X. 000xx Xxxxxx, Xxxxx, Xxxxxxx 00000, or such other FDA-approved facility of
Manufacturer approved by Principal for the purpose of Manufacture hereunder.

"Materials" means all ingredients, items or substances (including those
that may not appear in the Product) used or required for use by Manufacturer to
Manufacture the Product, including the Active Ingredient, all other active drug
ingredients, excipients, packaging components, printed materials and
manufacturing materials that may have direct Product contact.

"Milestone Payments" has the meaning specified in the Transaction
Agreement.

"Out of Trend Event" means ***.

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

"Product" means the transdermal methylphenidate drug delivery system that
has and is being developed, manufactured and tested by Manufacturer and for
which there is currently pending the Product NDA, and all improvements,
modifications and variations to the transdermal methylphenidate drug delivery
system made by Manufacturer or its Affiliates during the term of the License
Agreement. ***.

"Product IND" means the IND (IND File No. 54,732) submitted to the FDA by
Manufacturer on December 12, 1997, seeking approval to develop, test and perform
clinical and non-clinical trials of the Product, along with any amendments,
correspondence or supplements thereto and incorporated therein.

"Product NDA" means the NDA (NDA File No. 21-514) submitted to the FDA by
Manufacturer on June 27, 2002, seeking approval to market the Product for the
treatment of ADHD, along with any amendments, correspondence or supplements
thereto and incorporated therein.

"Regulatory and Clinical Materials" means all documents, supporting
materials and other materials relating to the Regulatory Application, any
regulatory approval or other matter required

-4-

Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

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

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

"Regulatory Approval" has the meaning specified in the Transaction
Agreement.

"Regulatory Standards" means (i) the facility license requirements of all
regulatory agencies applicable to the equipment and facilities used in the
Manufacture of the Product or used in the storage of Materials, (ii) any laws,
regulations, policies, or standards of any Governmental Authority that apply to
Manufacturer's Manufacture of the Product or the storage of Materials, and (iii)
any conditions or specifications contained in the Product IND, the Product NDA
or the Regulatory Approval for the Materials and the Product.

***.

"Specifications" means, collectively, the Manufacturer manufacturing,
packaging and standard testing procedures for the Product, including all
applicable control procedures and analytical test methods contained therein, as
described in Exhibit B attached hereto, as such exhibit may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms of this Agreement.

"Technology" has the meaning specified in the License Agreement.

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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

"Territory" means the United States of America.

"Transaction Documents" has the meaning specified in the Transaction
Agreement.

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

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

Agreement............................................................. Preamble
Alternative Supplier.................................................. 7.09(b)
Annual Installed Capacity............................................. 3.04
Disclosing Party...................................................... 7.01
Force Majeure Event................................................... 11.14
Effective Date........................................................ Preamble
Indemnified Party..................................................... 9.01(c)
Indemnifying Party.................................................... 9.01(c)
Index................................................................. 4.05(a)
License Agreement..................................................... Recitals
Manufacturer.......................................................... Preamble
Manufacturer Indemnitees.............................................. 9.01(a)
Manufacturing Problem................................................. 10.06(a)
Obligations........................................................... 11.15
Principal............................................................. Preamble
Principal Indemnitees................................................. 9.01(b)
Purchase Order........................................................ 3.03
Quality Assurance Agreement........................................... 5.02
Receiving Party....................................................... 7.01
Rejection Notice...................................................... 3.09(a)
Shortfall............................................................. 10.06(d)
Steering Committee.................................................... 2.05
Shire................................................................. Recitals
Technical Dispute..................................................... 3.09(c)
Term.................................................................. 10.01
Transaction Agreement................................................. Recitals

ARTICLE II
MANUFACTURE AND SUPPLY

Section 2.01. Supply of Product. Subject to the terms and conditions of
this Agreement, the Transaction Agreement and the License Agreement, from and
after the Effective Date, Manufacturer shall Manufacture on a toll basis and
deliver exclusively for and to Principal the Product ordered by Principal
pursuant to the terms of this Agreement, and, except as otherwise expressly
provided herein, Principal shall order and purchase from Manufacturer at least
***

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(calculated on a calendar year basis) of Principal's requirements of the Product
for sale, use or other disposal within the Territory. Notwithstanding the
foregoing, Manufacturer's obligation to supply Product to Principal hereunder is
subject to exception for an Excused Vendor Default and, in respect of the Active
Ingredient, also subject to the payment by Principal for the Active Ingredient
in the quantities requested by Manufacturer from time to time and the ordering
by Principal of the quantities requested for delivery at the times requested by
Manufacturer from time to time.

Section 2.02. Materials. Subject to the terms and conditions of this
Agreement, the Transaction Agreement and the License Agreement, Manufacturer
shall (a) procure at its expense from third parties sufficient quantities of
Materials as required from time to time for the Manufacture of the Product;
provided, that Principal shall procure at its sole expense sufficient quantities
of Active Ingredient as are requested from time to time by Manufacturer for the
Manufacture of the Product, and (b) ensure that all Materials used by
Manufacturer conform to the Specifications and are tested in accordance with,
and will meet, all applicable Regulatory Standards including GMPs.

Section 2.03. Labeling. Manufacturer covenants and agrees that the
labeling, including any inserts, utilized in the packaging of the Product will
conform to the package and/or label copy provided by Principal, which packaging
and labeling shall be in compliance with the terms and conditions of the Quality
Assurance Agreement.

Section 2.04. Compliance with Applicable Law. Principal hereby covenants
and agrees that Principal and its Affiliates shall store, handle, transport,
market, promote, sell, distribute, use and otherwise dispose of any Product
supplied by Manufacturer, and any materials used in connection with such
Product, including any labeling, packaging and advertising, in accordance with
all Applicable Laws.

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Section 2.05. Steering Committee.

(a) To facilitate the Manufacture of Product hereunder,
Manufacturer and Principal shall each within 30 days of the Effective Date
nominate representatives from their respective employees, full time consultants
or Affiliates to a Steering Committee (the "Steering Committee") to serve in an
advisory capacity with respect to their respective obligations under this
Agreement to (i) review manufacturing operations for the purpose of considering,
proposing and developing improvements to the ordering and manufacturing process
and to the way the parties communicate and interact, (ii) consider strategic
planning and facilitate manufacturing operations, (iii) provide ongoing advisory
services with respect to manufacturing services hereunder, and (iv) attempt to
resolve amicably any disputes arising between Manufacturer and Principal with
respect to day-to-day operations. The Steering Committee is intended to provide
a mechanism to xxxxxx a better working relationship between the parties. Except
as otherwise expressly provided herein, the Steering Committee shall not have
any authority or responsibility hereunder or require any matter to be brought
(and no party shall be required to bring any matter) before the Steering
Committee prior to pursuing any available remedy. Furthermore, no action of the
Steering Committee shall conflict or be inconsistent with the terms of this
Agreement absent an amendment to this Agreement agreed to by the parties in
writing.

(b) Manufacturer and Principal shall appoint as members of the
Steering Committee a reasonable number of suitably qualified and experienced
representatives of each of Manufacturer and Principal and shall each designate
one member appointed by it to be the principal contact in relation to the day to
day management of and administration of this Agreement. Each of Manufacturer and
Principal shall appoint no more than four persons to the Steering Committee.

(c) The Steering Committee shall meet at regular intervals on such
dates and at such locations as may be agreed upon by Manufacturer and Principal,
by video or telephone conference. In particular, the Steering Committee shall
strive to meet at least once per quarter, but in any event shall meet no less
than twice per year during the term of this Agreement unless otherwise agreed by
Manufacturer and Principal. The Steering Committee may also meet upon 15 days'
written request by either Manufacturer or Principal, should circumstances
necessitate such a meeting.

ARTICLE III
FORECASTS, ORDERS, DELIVERY AND ACCEPTANCE

Section 3.01. Forecasts. Within seven Business Days after the first day of
each calendar month during the Term, Principal will provide Manufacturer with a
non-binding (except as otherwise provided in Section 3.03), rolling 12-month
forecast of its requirements for Batches of the Product. Such 12-month forecast
shall indicate the number of Batches of each size of the Product, as well as the
number of Batches of placebos of each size of the Product, forecasted to be
ordered by Principal for each month. Principal shall use reasonable commercial
efforts to ensure that its forecasts are as accurate as possible.

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Section 3.02. Initial Order. Manufacturer and Principal hereby acknowledge
and agree that, in order to address Principal's initial requirements for the
commercial launch of the Product and for the month after commercial launch***.

Section 3.03. Future Orders. From and after the initial production period
contemplated by Section 3.02, Principal shall submit to Manufacturer standard
form purchase orders in the form of Exhibit C hereto (each, a "Purchase Order"),
for each order placed by Principal pursuant to this Agreement. With respect to
each of the 12-month forecasts to be provided by Principal in accordance with
Section 3.01, the quantities set forth for the first three months of each such
12-month period shall constitute firm and binding orders for such forecasted
quantities and shall be subject to binding Purchase Orders. The quantities set
forth for the fourth, fifth and six months of each such 12-month period shall
constitute partially binding orders, such that Principal shall be bound to
purchase, for any particular month, *** of the Batches of each size of the
Product forecasted by Principal for such month at the time that such month was
the sixth month in any 12-month forecast; provided, that upon request by
Principal, Manufacturer shall attempt in good faith to supply a quantity of the
Product in excess of *** of the Batches previously forecasted by Principal for
any such month. Each Purchase Order shall indicate a specific delivery date,
which date shall be no sooner than 90 days after submission of any such Purchase
Order to Manufacturer. Principal shall be bound to purchase, and Manufacturer,
subject to Sections 3.06, 3.07 and 11.14, shall be bound to Manufacture and
deliver to Principal by the applicable delivery date, the Product ordered
pursuant to each Purchase Order properly submitted to Manufacturer. Each
Purchase Order shall be placed in a minimum quantity, as to each size of the
Product, equal to one Batch of such Product size and in increments of additional
Batches thereafter. In the event that the terms and conditions of any Purchase
Order are inconsistent with or conflict with the terms and conditions of this
Agreement, the terms and conditions of this Agreement shall govern.

Section 3.04. Annual Installed Capacity. Manufacturer and Principal
acknowledge and agree that Manufacturer's maximum installed capacity for
production of the Product for the remainder of calendar year 2003 is *** units
of Product per month (the "Annual Installed Capacity"). ***. For calendar years
after 2003, the Steering Committee shall consult to evaluate and review the
Annual Installed Capacity as represented by Manufacturer to Principal from time
to time and the then effective forecasts delivered by Principal to identify any
potential shortfalls in Manufacturer's capacity that need to be addressed by
Manufacturer and Principal. Forecasts submitted by Principal pursuant to Section
3.01 and orders placed by Principal pursuant to Sections 3.02 and 3.03, as to
any month, shall be for quantities of the Product that fall within
Manufacturer's Annual Installed Capacity for such month.

Section 3.05. Active Ingredient Quota. On April 1 of each calendar year,
Principal shall deliver to Manufacturer a forecast of its requirements of the
Product for the following calendar year, for the purpose of assisting
Manufacturer in projecting its demand for the Active Ingredient for such
calendar year for submission to and approval by the DEA. The Steering Committee
shall consult in good faith in September of each calendar year in order to
determine whether any adjustments to such projection and the related quota are
appropriate.

Section 3.06. Excused Vendor Default. In the event Manufacturer or
Principal shall become aware of an actual or potential Excused Vendor Default
that such party reasonably

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anticipates will adversely affect Manufacturer's ability to ship on the delivery
date set forth in any Purchase Order such party shall provide notice thereof to
the other as soon as practicable. In the event of such an Excused Vendor
Default, Manufacturer and Principal shall cooperate to establish a reasonable
new delivery date. Manufacturer's failure to meet any delivery date set forth in
a Purchase Order by reason of an Excused Vendor Default shall neither (a)
constitute a breach by Manufacturer of the terms of this Agreement pursuant to
Section 10.02(b), nor (b) be considered as a delivery failure for purposes of
Section 4.08 or Section 10.02(c).

Section 3.07. Delivery. The actual number of units delivered pursuant to
any Purchase Order for the Manufacture of the Product shall be equal to the
number of units of each size of the Product or placebos of the Product, as the
case may be, produced in each Batch thereof, subject to reduction of the number
of units produced in any Batch by the number of units not suitable for release
or otherwise retained pursuant to the provisions of the Quality Assurance
Agreement. In the event Manufacturer shall deliver less than *** of the units
ordered by Principal pursuant to any Purchase Order (which number of units shall
be determined with reference to the number of units estimated to be yielded by
each Batch ordered by Principal as reflected on Exhibit A), Manufacturer shall
notify Principal in writing of the amount of such shortfall upon delivery of the
Product to Principal. Principal shall, within 30 days of receipt of such
delivery, either (a) accept such delivery in full satisfaction of the Purchase
Order (as to quantity only and not in waiver of Principal's opportunity to
reject such Product pursuant to Section 3.09), or (b) issue a replacement
Purchase Order for an additional Batch of the Product, and Manufacturer shall
use reasonable commercial efforts to deliver such Product within 60 days of the
date of such replacement Purchase Order; provided, that in either case Principal
shall accept and pay Manufacturer the Conversion Price for the units of Product
delivered and Manufacturer shall, to the extent applicable, be subject to the
financial provisions of Section 4.08. Principal's failure to issue a replacement
Purchase Order within such 30-day period shall be deemed as an acceptance of
such delivery pursuant to subsection (a) above. Any replacement Purchase Order
submitted by Principal to Manufacturer pursuant to this Section 3.07 shall be
subject to the same terms and conditions of this Agreement as a Purchase Order
submitted pursuant to Section 3.03.

Section 3.08. Shipment. Title to and insurable interest in the Active
Ingredient shall remain with Principal at all times during Manufacture of the
Product. Shipment of the Product shall be FOB Manufacturer's Manufacturing
Facility. Title to shipments of the Product (other than that portion
constituting the Active Ingredient) and risk of loss in respect thereof shall
pass to Principal upon placement of such shipments at the disposal of
Principal's designated carrier at Manufacturer's Manufacturing Facility.
Principal shall ensure the use of temperature-controlled vehicles for shipment
of the Product to ensure that the viability of the Product is maintained in
accordance with the Specifications. All actual transportation costs and all
costs and charges associated with shipping the Product shall be borne entirely
by Principal; provided, that Manufacturer shall arrange for and pay the costs of
handling and transporting the Product to Principal and shall invoice Principal
for such costs and expenses. Principal shall deliver to Manufacturer a list of
preferred carriers, and Manufacturer shall select the carrier therefrom.

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Section 3.09. Acceptance of Product.

(a) Principal shall, (i) in the case of defects which are
determinable by testing upon receipt in accordance with standard quality control
procedures or are otherwise apparent, within 30 days after Principal receives
delivery of shipment of the Product, or (ii) in the case of latent defects,
within 30 days from the date that Principal should have discovered such defect,
notify Manufacturer in writing of any rejection of any such Product (a
"Rejection Notice"), on the basis of (A) any non-compliance with the
Specifications of all or any part of said shipment or the occurrence of an Out
of Trend Event that gives rise to a right of rejection under Section 3.09(f), or
(B) failure of any such shipment to conform with any product warranty set forth
in Section 5.01, to the extent such non-compliance or failure is not due to the
fault of Principal. Failure to provide a possible Rejection Notice to
Manufacturer within the applicable 30-day period shall constitute acceptance by
Principal of the shipment, and Manufacturer shall have no liability for any
deviations for which it has not received notice within such 30-day period. Any
such possible Rejection Notice shall state in reasonable detail (sufficient to
enable Manufacturer to identify the nature of the problem for tests or studies
to be conducted by or on its behalf or to dispute the same) the reason why
Principal believes the Product may not be acceptable to Principal. Principal
shall, within five days of the delivery by Principal of any such possible
Rejection Notice, provide samples of the Product being rejected, if appropriate,
and copies of written reports relating to tests, studies or investigations
performed to that date by or on behalf of Principal on the Batch of the Product
being rejected.

(b) Principal's test results or basis for rejection shall be
conclusive unless Manufacturer notifies Principal, within 30 days of receipt by
Manufacturer of the Rejection Notice, that it disagrees with such test results
or basis for rejection. If Principal and Manufacturer fail to agree within 10
days after Manufacturer's notice to Principal as to whether any Product
identified in the Rejection Notice deviates from the Specifications,
representative samples of the Batch of the Product in question shall be
submitted to a mutually acceptable independent laboratory or consultant (if not
a laboratory analysis issue) for analysis or review. The results of such
evaluation shall be binding upon the parties. If Manufacturer and Principal
determine by agreement or if such evaluation certifies that the Product was
properly rejected by Principal, Principal may reject the Product in the manner
contemplated by Section 3.09(e). The party that is determined to have been
incorrect in its determination of whether the Product should be rejected shall
pay the costs of any such evaluation. ***.

(c) In the event of a dispute (other than disputes in relation to
the matters set out in Section 3.09(b)) between Manufacturer and Principal that
is exclusively related to technical aspects of the manufacturing, packaging,
labeling, quality control testing, handling, storage or other activities under
this Agreement (a "Technical Dispute"), Manufacturer and Principal shall make
all reasonable efforts to resolve the dispute by amicable negotiations pursuant
to Section 11.02.

(d) If any order of the Product is rejected by Principal,
Principal's duty to pay all amounts payable to Manufacturer in respect of the
rejected Product shall be suspended unless the rejection is rescinded as per
Section 3.09(b). If only a portion of an order is rejected, only the duty to pay
the amount allocable to such portion shall be suspended.

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(e) In the event an order or partial order is rejected by
Principal pursuant to the provisions of this Section 3.09, Principal shall
return to Manufacturer (or, at the election of Manufacturer, destroy and provide
evidence of such destruction to Manufacturer) any units of such rejected
Product. Manufacturer shall, at Principal's election, (i) credit the original
invoice in respect of the rejected Product and re-invoice Principal for the
units that were not rejected and offset any reasonable expenses related to the
return or destruction against other amounts then due Manufacturer hereunder, or
(ii) at Manufacturer's cost and expense, replace such rejected Product with
conforming Product as soon as practicable after Manufacturer's receipt of
Principal's instructions to deliver replacement Product and credit Principal any
reasonable expenses related to the return or destruction of the rejected
Product; provided, however, that in either case Manufacturer shall have no
liability or obligation to Principal under this Section 3.09(e) if it is
determined that any such defect is attributable to the failure by any Person
(including Principal) to properly store, transport or care for any unit of such
Product after such Product left Manufacturer's possession.

(f) If an Out of Trend Event shall occur, Manufacturer and
Principal shall commence a review of the relevant data and commence an
investigation in accordance with the terms and conditions of the Quality
Assurance Agreement. The results of such investigation shall be reviewed by the
Steering Committee or its designees and if the Steering Committee or its
designees determines that the Out of Trend Event is reasonably expected to
result in a recall or other adverse event and Principal decides not to release
the Batch that is the subject of the Out of Trend Event, Principal shall be
entitled to reject such Product within 30 days of such determination.

ARTICLE IV
CONVERSION PRICE AND PAYMENT

Section 4.01. Invoice. Manufacturer shall invoice Principal promptly
following the release and shipment of an order of the Product. Subject to the
provisions of Section 3.09(d) and Section 3.09(e), payment for each delivery of
the Product to Principal shall be due within 30 days after the date of
Manufacturer's invoice. All payments required to be made hereunder shall be paid
in United States dollars and made by corporate check drawn on a United States
bank or a United States branch of a foreign bank, or by wire transfer of
immediately available funds to the financial institution, account number and
account party's name designated in writing by Manufacturer to Principal from
time to time. Overdue invoices shall bear interest at the rate of 1.5% per month
until such amount is paid.

Section 4.02. Conversion Price. Subject to adjustment as set forth in this
Article IV, Principal agrees to pay Manufacturer the Conversion Price per unit
of the Product, which Conversion Price for units of each size of the Product,
and for placebos of the Product, respectively, as of the Effective Date shall be
as set forth in Exhibit D. ***.

Section 4.03. Adjustment of Product Gross Cost Resulting from Adjustments
to Active Ingredient Cost. Manufacturer and Principal acknowledge that changes
in the Active Ingredient Cost will impact the calculations of Product Gross Cost
as presented on Exhibit D1. Exhibit F

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provides the mechanism for adjusting Product Gross Cost for changes in the
Active Ingredient Cost. In the event of any change in the Active Ingredient
Cost, Principal shall advise Manufacturer in writing of such change.

Section 4.04. Active Ingredient Supplier. In the event Principal shall
purchase the Active Ingredient from any supplier other than the supplier of the
Active Ingredient specified in the Product NDA, Principal shall make any
required filings with applicable Regulatory Authorities and shall pay and/or
reimburse Manufacturer for (a) the cost of auditing alternative suppliers of the
Active Ingredient, and (b) the qualification or other costs and expenses of
changing suppliers of the Active Ingredient, including any changeover costs
(such as, for example, scrap and waste costs) associated with the selection of a
new supplier of the Active Ingredient. Any alternative supplier of the Active
Ingredient selected by Principal shall conform to Manufacturer's alternative raw
materials acceptance process, which determination shall be made in
Manufacturer's sole discretion. A copy of Manufacturer's alternative raw
materials acceptance process will be provided to Principal upon signing of this
Agreement.

Section 4.05. Adjustment Pursuant to Producer Price Index.

(a) On January 1, 2005 and on January 1 of each year thereafter,
the Conversion Price shall be adjusted pursuant to the Producer Price Index for
Pharmaceutical Preparations published by the U.S. Department of Labor, Bureau of
Labor Statistics (the "Index"). Any such adjustment shall be determined by
multiplying the respective Conversion Price for each size of the Product, and
for placebos of the Product, by a fraction, the numerator of which shall be the
value of the Index set forth in this Section 4.05(a) for the month of June of
the year prior to the year in which the computation is made, and the denominator
of which shall be the value of the Index for June 2003. For example, when
adjusting the Conversion Price in January 2005, the numerator shall be the Index
value for June 2004 and the denominator shall be the Index value for June 2003.
Notwithstanding the foregoing, for any given calendar year no increase of the
Conversion Price in excess of *** shall be made pursuant to this Section
4.05(a).

(b) Should the publication of said Index be discontinued by said
U.S. Department of Labor, then such other indexes as may be published by said
Department most nearly approaching said discontinued Index shall be used in
determining the adjustment hereunder. Should said Department discontinue the
publication of any such index, then such index as may be published by another
United States governmental agency, as most nearly approximating the Index, shall
govern and be substituted as the Index hereunder.

Section 4.06. Adjustment for Modification of Specifications. In the event
a change in the Specifications pursuant to Section 5.03 shall result in
increased packaging or production costs to Manufacturer, (a) ***, (b) Principal
shall reimburse Manufacturer for the costs of implementing any changes requested
by Principal in labeling, packaging and preprinting of backing or pouch
materials and of discontinuing stock of the same due to such changes, and (c)
any inventory of Manufacturer, including work-in-progress and finished goods
rendered obsolete or rejected as a result of a formula, process, artwork or
packaging change requested by Principal or required by any Regulatory Authority
shall be reimbursed to Manufacturer by Principal at Manufacturer's standard
cost.

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Section 4.07. Taxes. In addition to the Conversion Price provided for in
this Article IV, Principal shall reimburse Manufacturer for any federal,
provincial or local excise or other tax or assessment that Manufacturer may be
required to pay upon the sale, production or transportation of the Product
(excluding taxes based on Manufacturer's income or Manufacturer's franchise fees
or taxes and excluding amounts Manufacturer is required to pay in connection
with the importation of Material).

Section 4.08. Adjustment for Late Deliveries. In the event that a
particular order of the Product is not delivered within 30 days of the delivery
date set forth on the applicable Purchase Order therefor, Principal may, in its
sole discretion, on the 31st day after such delivery date, impose a ***
reduction in the Conversion Price for such order and may, in the event such
order has not been delivered within 60 days and/or 90 days after such
acknowledged delivery date, in its sole discretion, on the 61st and/or 91st day
after such delivery date, impose additional *** reductions in the Conversion
Price for each such shipment; provided, that Principal shall only have rights
pursuant to this Section 4.08 in the event Manufacturer shall fail to deliver
Product pursuant to a Purchase Order for any reason other than yield variations;
and provided further, that Manufacturer shall have no rights pursuant to this
Section 4.08 in the event that the cause for such late delivery is due to (a) a
circumstance contemplated by Section 11.14, (b) an Excused Vendor Default, or
(c) the fault of Principal.

ARTICLE V
MANUFACTURING STANDARDS AND QUALITY ASSURANCE

Section 5.01. Product Warranties. Manufacturer hereby covenants and agrees
that:

(a) Manufacturer will Manufacture and deliver to Principal the
Product in accordance with, and the Product will conform with, the
Specifications for such product and all requirements set forth in the Product
NDA, including specifications and requirements relating to composition, purity,
appearance and stability, and the Product shall be capable of maintaining such
until the applicable expiration date for such Product;

(b) Manufacturer will comply with all Applicable Laws relating to
the Manufacture of such Product, including all then current GMPs applicable to
the Manufacture of the Product which are in force or hereafter adopted by the
FDA or any successor agency thereto, and it will ship the Product in accordance
with DEA requirements and Applicable Law;

(c) the Product shall not be misbranded, adulterated, manufactured,
packaged or transported in violation of Articles 501, 502, 505 or 506A of the
FDC Act, as amended from time to time; and

(d) all Product supplied by Manufacturer hereunder shall be
transferred to Principal free and clear of all liens, title claims,
encumbrances, security interests and other third party claims.

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Section 5.02. Manufacturing Standards; Release of Product. Each Batch of
the Product manufactured by Manufacturer shall comply with the provisions of the
Quality Assurance Agreement attached hereto as Exhibit E (the "Quality Assurance
Agreement").

Section 5.03. Specifications. The Specifications may be amended only by
mutual agreement of Manufacturer and Principal, provided, that notwithstanding
the foregoing, Manufacturer may unilaterally amend the Specifications at any
time prior to receipt of Regulatory Approval to the extent required by any
Regulatory Authority. In the event of an amendment to the Specifications
pursuant to this Section 5.03 the Conversion Price shall be adjusted in
accordance with Section 4.06.

ARTICLE VI
AUDITS AND INSPECTION RIGHTS

Section 6.01. Records and Audits.

(a) Manufacturer shall keep complete and accurate records concerning
costs incurred in qualifying additional suppliers of the Active Ingredient and
costs incurred in implementing changes in Specifications and any other costs and
expenses relevant to the changes in the amounts payable to Manufacturer
hereunder. Such records shall be kept in accordance with GAAP applied on a
consistent basis. If Manufacturer or Principal shall invoke any of Sections 4.04
or 4.06, then Manufacturer shall, at Principal's request and expense, make those
records applicable to such Section available for examination by independent
certified public accountants or auditors designated by Principal and approved by
Manufacturer, which approval shall not be unreasonably withheld or delayed;
provided, that Principal shall only have access to such records of Manufacturer
in connection with the invocation of the provisions of either Section 4.04 or
4.06.

(b) Principal shall keep complete and accurate records concerning
the Active Ingredient Cost. Such records shall be kept in accordance with GAAP
applied on a consistent basis. If Manufacturer or Principal shall invoke Section
4.03, then Principal shall, at Manufacturer's request and expense, make such
records available for examination by independent certified public accountants or
auditors designated by Manufacturer and approved by Principal, which approval
shall not be unreasonably withheld or delayed; provided, that Manufacturer shall
only have access to such records of Principal in connection with the invocation
of the provisions of Section 4.03.

Section 6.02. Inspections by Governmental or Regulatory Agencies.
Manufacturer shall promptly give Principal advance notice, to the extent that
advance notice is given to Manufacturer, of any site visit to the Manufacturing
Facility by any Governmental Authority the purpose of which is to inspect the
manufacture, storage, disposal or transportation of the Product in accordance
with the terms and conditions of the Quality Assurance Agreement.

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ARTICLE VII
ADDITIONAL COVENANTS AND AGREEMENTS OF THE PARTIES

Section 7.01. Confidentiality.

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

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

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

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

(v) nothing in this Section 7.01 shall be interpreted to limit
the ability of either Manufacturer or Principal to disclose its own
Confidential Information to the other parties or any other Person on such
terms and subject to such conditions as it deems advisable or appropriate;

(d) Each of Manufacturer and Principal acknowledge and agree that
the terms and conditions of this Agreement shall be considered Confidential
Information of each party and shall be treated accordingly. Notwithstanding the
foregoing, Principal acknowledges and agrees that Manufacturer may be required
to disclose some or all of the information included in this Agreement in order
to comply with its obligations under the Securities Laws, and hereby consents to
such disclosure to the extent deemed advisable or appropriate by counsel to
Manufacturer (but only after consulting with Principal to the extent
practicable).

(e) Each party specifically recognizes that any breach by it of this
Section 7.01 may cause irreparable injury to the other parties and that actual
damages may be difficult to ascertain, and in any event, may be inadequate.
Accordingly (and without limiting the availability of legal or equitable,
including injunctive, remedies under any other provisions of this Agreement),
each party agrees that in the event of any such breach, notwithstanding the
provisions of Section 11.02 or Article IX hereof, the other parties shall be
entitled to seek, by way of private litigation in the first instance, injunctive
relief and such other legal and equitable remedies as may be available.

Section 7.02. Safety. Manufacturer shall comply with all applicable health
and safety regulations, policies and procedures relating to the manufacture and
packaging of the Product, including the transmission by Manufacturer to its
employees of health and safety information relating to the Product, its
manufacture, storage, disposal and transportation.

Section 7.03. Product Recall. Product recalls shall be conducted in
accordance with the terms of the Quality Assurance Agreement. Each of
Manufacturer and Principal shall make a permanent, complete and accurate record
of all costs incurred by its connection with any Product recall, a copy of which
shall be delivered to the other as soon after the completion of such recall

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or seizure as practically may be done. If the cause of or reason for said recall
or seizure arises from or is attributable to Manufacturer's negligence or breach
of this Agreement, Manufacturer shall reimburse Principal for all reasonable
costs incurred by Principal in effecting such recall or seizure. If the cause of
or reason for said recall or seizure is directly attributable to the negligence
of, or breach of this Agreement by, Principal, Principal shall reimburse
Manufacturer for all reasonable costs incurred by Manufacturer at Principal's
request in effecting such recall or seizure. If Manufacturer and Principal
cannot agree which party is at fault, then an independent technical expert,
acceptable to both, will be designated to make the determination. The so
designated technical expert shall not be an employee, consultant, officer,
director or shareholder of or otherwise associated with any party or an
Affiliate of any party. The technical expert's determination shall be, in the
absence of fraud or manifest error, binding and conclusive upon the parties.

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

Section 7.05. Ultimate Use of Product. Manufacturer and Principal
acknowledge and agree that Manufacturer has no control over the ultimate use of
the Product and Manufacturer shall have no liability in connection with any such
use, provided, that such liability does not result from Manufacturer's
negligence or breach of the terms of this Agreement.

Section 7.06. Intellectual Property Matters. Manufacturer and Principal
acknowledge and agree that all matters governing the ownership, license, and
rights, title and interest in and to the Technology and any other Intellectual
Property associated with the Product, including any improvements, inventions,
discoveries or other future developments related thereto, shall be governed by
the terms and conditions of the License Agreement.

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Section 7.07. No Debarred Persons. Each of Manufacturer and Principal
covenants and agrees that it has not and will not use in any capacity the
services of any Person debarred under subsections (a) or (b) of Section 306 of
the FDC Act in connection with its performance of this Agreement.

Section 7.08. Labeling. All labeling and artwork approved, designated or
supplied by Principal shall be in compliance with all Applicable Laws and
Regulatory Standards. Compliance with all federal, state and local laws shall be
the sole responsibility of Principal, provided that Manufacturer shall process
such packaging and labeling in accordance with the Specifications and all
applicable Regulatory Standards, including the GMPs.

Section 7.09. Second Source Arrangements.

(a) For a period commencing on the Closing Date and expiring ***,
Manufacturer and Principal shall consult in good faith with a view toward
determining whether they are able to reach an agreement upon terms and
conditions on which Manufacturer shall establish a second site of Manufacturer
for purposes of the Manufacture of the Product.

(b) In the event that, by ***, Manufacturer and Principal are unable
to reach agreement upon the terms and conditions on which Manufacturer shall
establish a second site of Manufacturer for purposes of the Manufacture of the
Product, Principal shall be entitled to take steps to qualify a third-party
second source supplier of the Product (the "Alternative Supplier"), which
Alternative Supplier shall be subject to approval of Manufacturer, which
approval shall not be unreasonably withheld or delayed. All costs and expenses,
including out-of-pocket expenses incurred by Manufacturer, associated with
qualifying an Alternative Supplier shall be borne by Principal.

(c) Upon the written request of Principal, in the event Principal
seeks to qualify an Alternative Supplier pursuant to Section 7.09(b),
Manufacturer shall provide reasonable assistance to such Alternative Supplier
and access to such of its Confidential Information and Technology as may be
reasonably necessary for the Alternative Supplier to Manufacture the Product for
sale to Principal.

Section 7.10. Active Ingredient Supply Arrangement. ***.

ARTICLE VIII
REPRESENTATIONS AND WARRANTIES OF PRINCIPAL

Section 8.01. Representations and Warranties of Principal. Principal
represents and warrants to Manufacturer as of the Effective Date that:

(a) Organization. Principal is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation. As of the Closing Date, Principal will be duly qualified to do
business in each jurisdiction where the character of its business (after giving
effect to the Contemplated Transactions) make such qualifications necessary to
carry on its business.

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

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

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

ARTICLE IX
INDEMNIFICATION

Section 9.01. Indemnification. In order to distribute between themselves
the responsibility for claims arising out of this Agreement, and except as
otherwise specifically provided for herein, from and after the Effective Date,
the Manufacturer and Principal shall indemnify each other as provided in this
Section 9.01.

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

(i) the storage, handling, use, marketing, advertising,
promotion, distribution or sale of the Product by Principal and/or its
Affiliates, sublicensees, distributors or agents in the Territory and the
conduct of the Business by Principal and/or its Affiliates, sublicensees,
distributors or agents in the Territory, including (A) liabilities for
product liability and returned goods, (B) liabilities in respect of
product warranty obligations or services and any returned Product sold,
(C) governmental and nongovernmental chargebacks, rebates or discounts
with respect to the Product, and (D)

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liabilities relating to errors and omissions or claims of design and other
defects with respect to any Product sold, including any clinical and
non-clinical trials;

(ii) the breach by Principal of or any of its Affiliates
sublicensees, distributors or agents of this Agreement including any
material breach by Principal of, or material failure by Principal to
comply with, any of its covenants or obligations pursuant to this
Agreement;

(iii) the enforcement by Manufacturer Indemnitees of their
rights under this Section 9.01(a);

(iv) any negligence or willful misconduct by Principal under
this Agreement or by Principal or its Affiliates in the conduct of the
Business or in connection with the Product or the Technology;

(v) Principal's material violation of any Applicable Law; and

(vi) any bodily injury, illness or death of any person caused
or alleged to be caused by the use, distribution or sale of the Product
(except to the extent any such bodily injury, illness or death shall be
the result of a breach by Manufacturer of its covenants and obligations
set forth in Section 5.01);

provided, however, that, in each such case, Principal shall not be liable
hereunder to the extent such Damages arise from misconduct or negligence of, or
a violation of any Applicable Law by, Manufacturer, its Affiliates, agents,
employees, or contractors, or from the breach by Manufacturer of the provisions
of any of the Transaction Documents.

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

(i) the breach by Manufacturer of this Agreement including any
material breach by Manufacturer of, or material failure by Manufacturer to
comply with, any of its covenants or obligations pursuant to this
Agreement;

(ii) the enforcement by Principal Indemnitees of their rights
under this Section 9.01(b);

(iii) any negligence or willful misconduct by Manufacturer
under this Agreement or by Manufacturer or its Affiliates in the conduct
of the Business or in connection with the Product or the Technology;

(iv) Manufacturer's material violation of any Applicable Law;
and

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(v) any bodily injury, illness or death of any person to the
extent any such bodily injury, illness or death shall be the result of a
breach by Manufacturer of its covenants and obligations set forth in
Section 5.01;

provided, however, that, in each such case, Manufacturer shall not be liable
hereunder to the extent such Damages arise from misconduct or negligence of, or
a violation of any Applicable Law by, Principal, its Affiliates, agents,
employees, or contractors, or from the breach by Principal of the provisions of
any of the Transaction Documents.

(c) Procedure. If any Proceeding arises as to which a right of
indemnification provided in this Article IX applies, the Person seeking
indemnification (the "Indemnified Party"), shall within 20 days notify the party
obligated under this Article IX to indemnify the Indemnified Party (the
"Indemnifying Party"), thereof in writing, except to the extent that such
failure to notify within 20 days does not prejudice the Indemnifying Party's
ability to defend or contest any such Proceeding, and allow the Indemnifying
Party and its insurers the opportunity to assume direction and control of the
defense against such Proceeding, at its sole expense, including the settlement
thereof at the sole option of the Indemnifying Party or its insurers; provided,
however, that the Indemnifying Party may not enter into any compromise or
settlement without the prior written consent of the Indemnified Party unless
such compromise or settlement includes as an unconditional term thereof the
giving by each plaintiff or claimant to the Indemnified Party of a release from
all liability in respect of such claim and only if such compromise or settlement
does not include any admission of legal wrongdoing on the part of the
Indemnified Party. The Indemnified Party shall fully cooperate with the
Indemnifying Party and its insurer in the disposition of any such matter and the
Indemnified Party will have the right and option to participate in (but not
control) the defense of any Proceeding as to which this Article IX applies, with
separate counsel at its election and cost. If the Indemnifying Party fails or
declines to assume the defense of any Proceeding within 30 days after notice
thereof, the Indemnified Party may assume the defense thereof for the account
and at the risk of the Indemnifying Party. The Indemnifying Party shall pay
promptly to the Indemnified Party any Damages to which the indemnity under this
Article IX applies, as incurred.

Section 9.02. Certain Limitations.

(a) Except as otherwise provided in Section 7.01(d), the sole and
exclusive remedy with respect to any breach of any representation, warranty,
covenant or agreement contained herein and for the other matters described in
Sections 9.01(a) and 9.01(b) (other than (i) with respect to a breach of the
terms of a covenant or agreement, as to which Principal or Manufacturer, as the
case may be, also shall be entitled to seek specific performance or other
equitable relief and (ii) with respect to claims for fraud) shall be a claim for
Damages (whether by contract, in tort or otherwise, and whether in law, in
equity or both) made pursuant to this Article IX. No party shall be entitled to
recover any punitive, incidental or consequential damages whatsoever under this
Article IX except to the extent any such punitive, incidental or consequential
damages shall be payable to a third party.

(b) Notwithstanding anything to the contrary contained herein,
although a party may be entitled to make a claim for indemnification pursuant to
more than one section of

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this Article IX, a party shall not be entitled to recover indemnification for
the same claim under more than one section of this Article IX.

ARTICLE X
TERM AND TERMINATION

Section 10.01. Term. This Agreement shall continue in full force and
effect until the earlier of (a) the termination of the License Agreement, or (b)
termination of this Agreement in accordance with Section 10.02 or Section 10.03
(the Effective Date until such termination, the "Term").

Section 10.02. Certain Termination Events.

(a) Manufacturer shall have the right to terminate this Agreement
upon *** written notice at any time during the Term (i) as to any permitted
assignee or delegatee of Principal (other than an Affiliate of Principal)
pursuant to Section 11.04, and (ii) as to any permitted sublicensee of Principal
under the License Agreement (other than an Affiliate of Principal); provided,
that (A) in either case, such assignee, delegatee or sublicensee shall have the
right to have a third party manufacture on its behalf its requirements of the
Product in accordance with the terms and conditions of this Agreement and ***.
Notwithstanding the foregoing, nothing in this Section 10.02(a) shall limit the
right of Manufacturer to terminate this Agreement pursuant to Section 10.03 or
any other provision of this Article X.

(b) Except as otherwise contemplated by Sections 3.06, 3.07, 3.09
and 10.02(c), either Manufacturer or Principal shall have the right to terminate
this Agreement if the other commits any continuing or material breach of any of
the provisions of this Agreement and (in the case of a breach which is capable
of remedy) fails to remedy the same within 60 days after receipt of written
notice giving full particulars of the breach and requiring it to be so remedied;
provided, that neither Manufacturer nor Principal may terminate this Agreement
if the other's breach cannot reasonably be cured within 60 days so long as such
breaching party commences efforts to cure within such 60-day period and
thereafter diligently pursues the same through completion.

(c) In the event that at any time during the Term Manufacturer
shall, during any period of six consecutive months, fail to supply *** of the
aggregate number of units of the Product (which number of units shall be
determined with reference to the number of units estimated to be yielded by each
Batch ordered by Principal as reflected in Exhibit A) ordered pursuant to
Purchase Orders properly submitted by Principal during such period (other than
(w) by reason of a circumstance contemplated by Section 11.14, (x) by reason of
an Excused Vendor Default, (y) by reason of the fault of Principal, or (z) in
connection with a delivery accepted by Principal pursuant to Section 3.07(a)),
Principal shall have the right to:

(i) have a third party manufacture on its behalf that portion
of Principal's requirements of the Product which Manufacturer is not able
to supply;

(ii) terminate this Agreement; or

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(iii) withdraw any Purchase Orders submitted pursuant to
Section 3.03;

provided, that in the event Principal shall elect to terminate this Agreement
pursuant to clause (ii) or withdraw any Purchase Orders pursuant to clause (iii)
of this Section 10.02(c), Principal shall, to the extent requested by
Manufacturer, purchase from Manufacturer at Manufacturer's cost all Materials
purchased by Manufacturer for the Manufacture and delivery of the Product to
Principal.

(d) Either Manufacturer or Principal may terminate this Agreement
with immediate effect with respect to any Product that is permanently and
completely withdrawn from the market in the Territory for serious adverse health
or safety reasons.

(e) Either Manufacturer or Principal may terminate this Agreement
with immediate effect in the event a Force Majeure Event as to the other shall
exist and be continuing for a period of 180 consecutive days. Principal may
terminate this Agreement with immediate effect in the event an Excused Vendor
Default shall exist and be continuing for a period of 180 consecutive days.

Section 10.03. Optional Termination by Manufacturer.

(a) In the event that Manufacturer and Principal reach an agreement
under Section 7.09(a) pursuant to which Manufacturer establishes a second site
of Manufacturer for purposes of manufacturing the Product, Manufacturer shall be
entitled at its option and as a matter of right, to terminate this Agreement
***.

(b) In the event that Manufacturer and Principal do not reach an
agreement under Section 7.09(a) pursuant to which Manufacturer establishes a
second site of Manufacturer for purposes of manufacturing the Product,
Manufacturer shall be entitled, at its option and as a matter of right, to
terminate this Agreement ***.

Section 10.04. Obligations on Termination. Within 30 days of any
expiration or termination of this Agreement, (a) Principal shall cease to use
and shall deliver to Manufacturer, upon written request, all Confidential
Information of Manufacturer, except for any documents or records that Principal
is required to retain by Applicable Law, and (b) Manufacturer shall cease to use
and shall deliver to Principal, upon written request, all Confidential
Information of Principal except for any documents or records that Manufacturer
is required to retain by Applicable Law. Additionally, upon termination,
Manufacturer shall, at Principal's option, provide such support as may be
reasonably necessary to transfer in a timely manner the Manufacture of the
Product to a third party.

Section 10.05. Effect of Termination. Upon termination, this Agreement
shall forthwith become void and of no further force or effect, except for the
following provisions, which shall remain in full force and effect: (a) Section
7.01 (Confidentiality), (b) this Section 10.05, (c) Section 11.10 (Governing
Law), (d) Section 11.12 (Entire Agreement), and (e) Section 11.13 (Expenses).
The rights and remedies provided in this Article X shall be cumulative and not
exclusive of any rights or remedies provided by Applicable Law. Any termination
of this

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Agreement shall not affect (i) any right or claim hereunder that arises prior to
such termination, which claims and rights shall survive any such termination, or
(ii) except as set forth in the License Agreement, any of the rights or
obligations of either Manufacturer or Principal under the License Agreement or
the Transaction Agreement.

Section 10.06. Anticipatory Breach.

(a) ***.

(b) ***.

(d) ***.

(e) ***.

ARTICLE XI
MISCELLANEOUS

Section 11.01. Notices. All notices, claims, certificates, requests,
demands and other communications hereunder shall be in writing and shall be
delivered personally or sent by facsimile transmission, air courier or
registered or certified mail, return receipt requested, addressed as follows:

if to Manufacturer:

Noven Pharmaceuticals, Inc.
00000 X.X. 000xx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: CEO & General Counsel
Telecopy: 000-000-0000

with copies (which shall not constitute notice) to:

King & Spalding LLP
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx X. Xxxxxxxx
Telecopy: 202-626-3737

if to Principal:

Shire Pharmaceuticals Ireland Limited
Pharmapark
Chapelizod

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Xxxxxx 00
Ireland
Attention: General Counsel
Telecopy: 011-353-1623-7469

with copies (which shall not constitute notice) to:

Shire Pharmaceuticals Group plc
Hampshire International Business Park
Xxxxxxxx
Xxxxxxxxxxx
Xxxxxxxxx XX00 0XX
Xxxxxx Xxxxxxx
Attention: Group General Counsel
Telecopy: 011-44-1256-894710

and to:

Xxxxx & Berne LLP
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopy: 000-000-0000

Section 11.02. Disputes. In the event of any controversy or claim arising
out of, relating to or in connection with any provision of this Agreement, or
the rights or obligations of the parties hereunder, the parties shall try to
settle their differences amicably between themselves. Any party may initiate
such informal dispute resolution by sending written notice of the dispute to the
other parties, and within 10 days after such notice, appropriate representatives
of the parties shall meet for attempted resolution by good faith negotiations.
If such representatives are unable to resolve promptly such disputed matter, it
shall be referred to the presidents of Manufacturer and Principal, or their
respective designees, for discussion and resolution. If such personnel are
unable to resolve such dispute within 30 days of initiating such negotiations,
the parties agree first to try in good faith to settle the dispute by mediation
in Washington, D.C. under the Commercial Mediation Rules of the American
Arbitration Association. If following any such mediation the parties still have
not been able to resolve any such dispute, the parties agree to submit the
dispute to final and binding arbitration before a single arbitrator in

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Washington, D.C. under the Commercial Arbitration Rules of the American
Arbitration Association. The parties agree that a judgment may be entered on the
arbitrator's award in any court of competent jurisdiction. The arbitrator in
reviewing any claim under this Agreement shall have the exclusive authority to
determine any issues as to the arbitrability of any such claim or related
disputes under this Agreement. In reaching a decision, the arbitrator shall
interpret, apply and be bound by this Agreement and by Applicable Law. The
arbitrator shall have no authority to add to, detract from or modify this
Agreement or any Applicable Law in any respect. The arbitrator may not grant any
remedy or relief that a court of competent jurisdiction could not grant, nor any
relief or remedy greater than that sought by the parties, nor any punitive,
incidental or consequential damages, except to the extent any such punitive,
incidental or consequential damages shall be payable to a third party. Any
up-front costs of the arbitrator shall be borne equally by the parties;
provided, however, that the non-prevailing party in any such arbitration shall
pay, and to the extent applicable reimburse the prevailing party for, the costs
and expenses of the arbitrator, including costs and expenses payable to the
American Arbitration Association and to the arbitrator; and provided further,
that in the event each party prevails as to certain claims in connection with
any such arbitration, the fees of the arbitrator shall be paid and/or reimbursed
in accordance with the decision of the arbitrator. Each party shall bear its own
costs incurred in connection with attorneys' fees and related expenses.
Notwithstanding the foregoing provisions of this Section 11.02, nothing in this
Agreement shall limit or in any way restrict the ability of any party to seek
injunctive or other equitable relief in a court or other judicial body.

Section 11.03. Independent Contractors. In making and performing this
Agreement, the parties are acting and shall act as independent contractors.
Nothing in this Agreement shall be deemed to create an agency, joint venture or
partnership relationship between the parties hereto. No party shall have the
authority to obligate another party in any respect, and no party shall hold
itself out as having any such authority. All personnel of Manufacturer shall be
solely employees of Manufacturer and shall not represent themselves as employees
of Principal. All personnel of Principal shall be solely employees of Principal
and shall not represent themselves as employees of Manufacturer.

Section 11.04. Assignment. Prior to the date on which Shire has paid
Manufacturer the full amount of the Milestone Payments, Principal shall not have
the right to assign this Agreement or delegate any of its rights, interests,
duties or obligations hereunder. On and after the date Shire has paid
Manufacturer the full amount of the Milestone Payments, Principal shall have the
right to assign this Agreement or delegate any of its rights, interests, duties
or obligations; provided, that (a) Principal shall give written notice of such
assignment or delegation to Manufacturer, and (b) the assignee or delegatee
shall confirm in writing to and for the benefit of Manufacturer that it will
comply with the covenants and agreements of Principal hereunder. Manufacturer
shall not have the right to assign this Agreement or delegate any of its rights,
interests duties or obligations hereunder without the prior written consent of
Principal, which consent shall not be unreasonably withheld. Notwithstanding the
foregoing, at any time during the term of this Agreement either party may assign
this Agreement to any of its Affiliates without the prior written consent of the
other parties; provided, that no such assignment of this Agreement shall relieve
the assignor of any of its obligations or liabilities under this Agreement.
Notwithstanding the foregoing, any party may assign this Agreement without the
other parties' prior written consent in connection with the transfer or sale of
all or substantially all of its assets

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or business or its merger or consolidation with another Person upon written
notice to the other parties. Any attempted assignment in violation of this
Section 11.04 shall be void.

Section 11.05. Binding Effect; Benefit. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their successors and
permitted assigns. Nothing in this Agreement, express or implied, is intended to
confer on any Person other than the parties hereto and their respective
successors and permitted assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement.

Section 11.06. Amendments. This Agreement shall not be modified, amended
or supplemented except pursuant to an instrument in writing executed and
delivered on behalf of each of the parties hereto.

Section 11.07. No Waiver. The failure in any one or more instances of a
party to insist upon performance of any of the terms, covenants or conditions of
this Agreement, to exercise any right or privilege conferred in this Agreement,
or the waiver by said party of any breach of any of the terms, covenants or
conditions of this Agreement, shall not be construed as a subsequent waiver of
any such terms, covenants, conditions, rights or privileges, but the same shall
continue and remain in full force and effect as if no such forbearance or waiver
had occurred. No waiver shall be effective unless it is in writing and signed by
an authorized representative of the waiving party.

Section 11.08. Counterparts. This Agreement shall become binding when any
one or more counterparts hereof, individually or taken together, shall bear the
signatures of each of the parties hereto. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original as against the
party whose signature appears thereon, but all of which taken together shall
constitute but one and the same instrument. Each party may execute this
Agreement on a facsimile of the Agreement. In addition, facsimile signatures of
authorized signatories of any party shall be valid and binding and delivery of a
facsimile signature by any party shall constitute due execution and delivery of
this Agreement.

Section 11.09. Interpretation. The article and section headings contained
in this Agreement are for convenience of reference only and shall not affect the
meaning or interpretation of this Agreement. As used in this Agreement, any
reference to the masculine, feminine or neuter gender shall include all genders,
the plural shall include the singular, and singular shall include the plural.
Unless the context otherwise requires, the term "party" when used herein means a
party hereto. References herein to a party or other Person include their
respective successors and assigns. The words "include," "includes" and
"including" when used herein shall be deemed to be followed by the phrase
"without limitation" unless such phrase otherwise appears. Unless the context
otherwise requires, references herein to Articles, Sections, Exhibits and
Schedules shall be deemed references to Articles and Sections of, and Exhibits
and Schedules to, this Agreement. Unless the context otherwise requires, the
words "hereof," "hereby" and "herein" and words of similar meaning when used in
this Agreement refer to this Agreement in its entirety and not to any particular
Article, Section or provision hereof. With regard to each and every term and
condition of this Agreement, the parties understand and agree that the same have
or has been mutually negotiated, prepared and drafted, and that if at any time

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the parties desire or are required to interpret or construe any such term or
condition or any agreement or instrument subject thereto, no consideration shall
be given to the issue of which party actually prepared, drafted or requested any
term or condition of this Agreement.

Section 11.10. Governing Law. This Agreement and any claims, disputes or
causes of action relating to or arising out of this Agreement shall be construed
in accordance with and governed by the substantive laws of the State of
Delaware, without giving effect to the conflict of laws principles thereof.

Section 11.11. Unenforceability. If any provisions of this Agreement are
determined to be invalid or unenforceable in any jurisdiction, such provisions
shall be ineffective to the extent of such invalidity or unenforceability in
such jurisdiction, without rendering invalid or unenforceable the remaining
provisions hereof or affecting the validity or enforceability of any of such
provisions of this Agreement in any other jurisdiction. The parties will use
their best efforts to substitute the invalid or unenforceable provision with a
valid and enforceable one which conforms, as nearly as possible, with the
original intent of the parties.

Section 11.12. Entire Agreement.

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

(b) THE PARTIES HERETO ACKNOWLEDGE AND AGREE THAT NO REPRESENTATION,
WARRANTY, PROMISE, INDUCEMENT, UNDERSTANDING, COVENANT OR AGREEMENT HAS BEEN
MADE OR RELIED UPON BY ANY PARTY HERETO OTHER THAN THOSE EXPRESSLY SET FORTH IN
THE TRANSACTION DOCUMENTS. WITHOUT LIMITING THE GENERALITY OF THE DISCLAIMER SET
FORTH IN THE PRECEDING SENTENCE, (I) NEITHER MANUFACTURER NOR ANY OF ITS
AFFILIATES HAS MADE OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATIONS OR
WARRANTIES, IN ANY PRESENTATION OR WRITTEN INFORMATION RELATING TO THE BUSINESS
OR THE PRODUCT GIVEN OR TO BE GIVEN IN CONNECTION WITH THE CONTEMPLATED
TRANSACTIONS, IN ANY FILING MADE OR TO BE MADE BY OR ON BEHALF OF MANUFACTURER
OR ANY OF ITS AFFILIATES WITH ANY GOVERNMENTAL AUTHORITY, AND NO STATEMENT MADE
IN ANY SUCH PRESENTATION OR WRITTEN MATERIALS, MADE IN ANY SUCH FILING OR
CONTAINED IN ANY SUCH OTHER INFORMATION SHALL BE DEEMED A REPRESENTATION OR
WARRANTY HEREUNDER OR OTHERWISE, AND (II) MANUFACTURER EXPRESSLY DISCLAIMS ANY
IMPLIED WARRANTIES, INCLUDING WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE AND

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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

WARRANTIES OF MERCHANTABILITY. PRINCIPAL ACKNOWLEDGES THAT MANUFACTURER HAS
INFORMED IT THAT NO PERSON HAS BEEN AUTHORIZED BY MANUFACTURER OR ANY OF ITS
AFFILIATES TO MAKE ANY REPRESENTATION OR WARRANTY IN RESPECT OF THE BUSINESS OR
THE PRODUCT OR IN CONNECTION WITH THE CONTEMPLATED TRANSACTIONS, UNLESS IN
WRITING AND CONTAINED IN THIS AGREEMENT OR IN ANY OF THE TRANSACTION DOCUMENTS
TO WHICH THEY ARE A PARTY.

Section 11.13. Expenses. Except as expressly set forth herein, each party
hereto shall bear all fees and expenses incurred by such party in connection
with, relating to or arising out of the execution, delivery and performance of
this Agreement and the consummation of the Contemplated Transactions, including
attorneys', accountants' and other professional fees and expenses.

Section 11.14. Force Majeure. If the performance of this Agreement or any
obligation hereunder (except the payment of money) by any party is prevented or
hindered, by reason of any cause beyond the reasonable control of the affected
party, including fire, flood, riot, war, explosions, acts of God (including
hurricanes and tropical storms), acts of a public enemy, labor disturbances, any
governmental action (a "Force Majeure Event") or the inability of Manufacturer
to obtain sufficient Materials to perform under this Agreement by reason of an
Excused Vendor Default, the party so affected, upon notice to the other parties,
shall be excused from such performance, provided that the party so affected
shall use diligent effort to avoid or remove such cause or causes of
non-performance and shall continue to perform hereunder with the utmost dispatch
whenever such cause or causes are removed.

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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

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

NOVEN PHARMACEUTICALS, INC.

By:
--------------------------
Name:
Title:

SHIRE PHARMACEUTICALS IRELAND
LIMITED

By:
--------------------------
Name:
Title:

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EXHIBIT 10.25 TRANSACTION AGREEMENT DATED AS OF FEBRUARY 26, 2003

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