EXHIBIT 10.3

 

NOTE:                CERTAIN PORTIONS OF THIS LICENSE AGREEMENT AND ITS
EXHIBITS, WHICH ARE IDENTIFIED BY THE SYMBOL
“[*                                *]”, HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT
REQUEST.

 

POZEN INC. / NYCOMED DANMARK APS

 

LICENSE AGREEMENT

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

               PAGE

--------------------------------------------------------------------------------

1.

   DEFINITIONS    1

2.

   MANAGEMENT OF COLLABORATION    6      2.1    Collaboration Management
Committee    6      2.2    Functions and Powers of the CMC    6      2.3   
Limitations of CMC Powers    7      2.4    CMC Actions    7      2.5    CMC
Meetings    7

3.

   PRODUCT DEVELOPMENT    7      3.1    Development Program    7      3.2   
Performance of Studies    7

4.

   REGULATORY MATTERS    8      4.1    Distribution of Tasks Regarding
Regulatory Approval of the Initial Product    8      4.2    Additional
Requirements for Marketing Approval    9      4.3    Distribution of Tasks for
Other Products    9      4.4    Maintenance of Marketing Approvals    9      4.5
   Meetings and Correspondence    10      4.6    Adverse Events Reporting    11
     4.7    [*                                         *]    11

5.

   MANUFACTURE AND SUPPLY    11

6.

   COMMERCIALIZATION    11      6.1    Principles of Commercialization    11  
   6.2    Marketing Plan    11      6.3    Branding; Trademarks; Trade Dress;
Logos    12      6.4    Establishment of Units and Minimum Royalties    13

7.

   DILIGENCE    13      7.1    General Diligence Obligations    13      7.2   
Minimum Launch Diligence Obligations    14      7.3    Minimum Commercialization
Diligence Obligations    14      7.4    Diligence Limitations    14

--------------------------------------------------------------------------------

TABLE OF CONTENTS

(CONTINUED)

 

               PAGE

--------------------------------------------------------------------------------

     7.5    Lack of Diligence    15      7.6   
[*                                         *]    15

8.

   LICENSES AND OTHER RIGHTS    15      8.1    License Grants to Licensee    15
     8.2    Negative Covenants    16      8.3    License Grants to POZEN    16

9.

   COMPENSATION    17      9.1    License Fees    17      9.2    Milestones   
17      9.3    Royalties    17      9.4    Reports; Payment Method; Currency   
18      9.5    Blocked Currency    18      9.6    Taxes    18      9.7    Audit
Rights; Adjustments    19

10.

   INTELLECTUAL PROPERTY    19      10.1    Licensee’s Obligation to Inform   
19      10.2    POZEN’s Obligation to Inform    19      10.3    Ownership    20
     10.4    Patent Filing, Prosecution and Maintenance    20      10.5   
Enforcement Rights    21      10.6    Defense and Settlement of Third Party
Claims    22      10.7    Indemnification    23

11.

   REPRESENTATIONS AND WARRANTIES    23      11.1    Mutual Representations and
Warranties    23      11.2    POZEN Representations and Warranties    24     
11.3    Limitation of Warranty    24      11.4    Performance by Affiliates   
24

12.

   INDEMNIFICATION    25      12.1    Indemnification by Licensee    25     
12.2    Indemnification by POZEN    25

--------------------------------------------------------------------------------

TABLE OF CONTENTS

(CONTINUED)

 

              PAGE

--------------------------------------------------------------------------------

   

12.3

   Indemnification Procedures    25    

12.4

   Insurance    26

13.

  LIMITATION OF LIABILITY    26

14.

  CONFIDENTIALITY, PUBLICATIONS, PUBLICITY    26    

14.1

   Confidential Information    26    

14.2

   Treatment of Confidential Information    26    

14.3

   Access    27    

14.4

   Permitted Disclosures    27    

14.5

   Return of Confidential Information    27    

14.6

   Confidentiality of the Agreement Terms    27    

14.7

   Publications    27    

14.8

   Publicity    28

15.

  TERM AND TERMINATION    28    

15.1

   Term of the Agreement    28    

15.2

   Termination for Material Breach    28    

15.3

   Termination for MAA Failure    28    

15.4

   Termination for MAA Withdrawal    29    

15.5

   Termination for Bankruptcy    29    

15.6

   Termination of Supply Agreement    29

16.

  CONSEQUENCES OF TERMINATION    29    

16.1

   General    29    

16.2

   Termination Prior to Expiration by POZEN    30    

16.3

   Licenses Upon Expiration    30    

16.4

   Survival    30

17.

  DISPUTE RESOLUTION    30

18.

  MISCELLANEOUS    31

--------------------------------------------------------------------------------

LICENSE AGREEMENT

 

THIS LICENSE AGREEMENT (the “Agreement”) is made and entered into as of June 30,
2003 (the “Effective Date”), by and between POZEN INC., a Delaware corporation
(“POZEN”), with a business address of 1414 Raleigh Road, Suite 400, Chapel Hill,
NC 27517, and NYCOMED DANMARK APS, a Danish corporation (“Licensee” or
“Nycomed”), located at Langebjerg 1, DK-4000 Roskilde, Denmark. POZEN and
Licensee are referred to in this Agreement individually as a “Party” and
collectively as “Parties.”

 

RECITALS

 

A. Licensee is a pharmaceutical company possessing substantial expertise in the
development and marketing of pharmaceutical products;

 

B. POZEN is a pharmaceutical development company currently specializing in the
development of products for migraine therapy;

 

C. POZEN and Licensee desire to collaborate on the development of POZEN’s MT
100TM product, and to have Licensee market, promote, sell and distribute such
product within Denmark, Norway, Sweden and Finland so as to maximize its
commercial potential.

 

AGREEMENT

 

In consideration of the mutual covenants contained in this Agreement and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties agree as follows:

 

1. DEFINITIONS

 

The capitalized terms used in this Agreement will have the meanings given to
them in this Section 1 and throughout this Agreement.

 

1.1 “Affiliate” means a corporation or other business entity which, directly or
indirectly, through one or more intermediaries, controls, is controlled by or is
under common control with a Party. For purposes of this definition only,
“control” and, with corresponding meanings, the terms “controlled by” and “under
common control with” means (a) the possession, directly or indirectly, of the
power to direct the management or policies of a legal entity, whether

--------------------------------------------------------------------------------

through the ownership of voting securities or by contract relating to voting
rights or corporate governance, or (b) the ownership, directly or indirectly, of
more than 50% of the voting securities or other ownership interest of a legal
entity; provided, however, that if local law restricts foreign ownership,
control will be established by direct or indirect ownership of the maximum
ownership percentage that may, under such local law, be owned by foreign
interests.

 

1.2 “CMC” has the meaning set forth in Section 2.1 of this Agreement.

 

1.3 “Competing Product” means any generic pharmaceutical product containing all
and only the same active ingredients as a Product.

 

1.4 “Confidential Information” has the meaning set forth in Section 14.1 of this
Agreement.

 

1.5 “Control” means, with respect to a Party and any Patent, Know-How, other
intellectual property right, or Regulatory Approval, (a) that such Party owns or
has a license to use such Patent, Know-How, intellectual property right or
Regulatory Approval, and (b) has the ability to grant the other Party access, a
license or a sublicense (as applicable) or right to use such Patent, Know-How,
or intellectual property right, or the right to reference such Regulatory
Approval during the Term without violating the rights of any Third Party and
without obligation to make any payments to a Third Party as a result of such
grant of access, license or sublicense, or right of reference, or the exercise
thereof by the other Party.

 

1.6 “Cost of Manufacture” means, with respect to any product, the actual fully
allocated cost of manufacturing such product determined in accordance with U.S.
generally accepted and consistently applied accounting principles, which
consists of the direct and indirect cost of any raw materials, packaging
materials and labor (including benefits) utilized in such manufacturing
(including formulation, filling, finishing, quality control and stability
testing, labeling and packaging, as applicable).

 

1.7 “Development Program” has the meaning set forth in Section 3.1 of this
Agreement.

 

1.8 “DMF” means a drug master file to be maintained with the applicable
regulatory authorities in each country of the Territory.

 

1.9 “DSM” means DSM Pharmaceuticals Inc., formerly known as Catalytica
Pharmaceuticals, Inc.

 

1.10 “DSM Agreement” means the agreement by and between POZEN and DSM dated
January 17, 2001.

 

1.11 “[*            *]” means an [*                    *].

 

1.12 “Field” means the treatment of human diseases or conditions by means of a
prescription pharmaceutical product.

 

2

--------------------------------------------------------------------------------

1.13 “Improvement” means any invention, discovery or Know-How, whether or not
patentable, relating to the Product and developed solely or jointly by POZEN,
Licensee, their Affiliates or their Third Party contractors after the Effective
Date in the course of performing a Development Program or commercializing a
Product. [*                                                 
                                                      *].

 

1.14 “Initial Indication” means the [*        *] 

 

1.15 “Initial Product” means an oral formulation of Product
containing [*        *] naproxen sodium and [*        *] metoclopramide
hydrochloride developed by POZEN as of the Effective Date under the POZEN MAA
for the Initial Indication, that conforms to the specifications set forth on
Exhibit 2 of the Supply Agreement.

 

1.16 “Know-How” means information, results and data of any type whatsoever, in
any tangible or intangible form whatsoever, including databases, practices,
methods, techniques, specifications, formulations, formulae, knowledge,
know-how, skill, experience, test data including pharmacological, medicinal
chemistry, biological, chemical, biochemical, toxicological and clinical test
data, analytical and quality control data, stability data, studies and
procedures, and manufacturing process and development information, results and
data.

 

1.17 “Licensed Technology” means the POZEN Know-How, POZEN Patents, and any
Improvements.

 

1.18 “Licensee Trademarks” means any trademarks or trade names used or
registered by Licensee to identify the company as of the Effective Date or
during the Term.

 

1.19 “MAA” means a Marketing Authorization Application submitted to the
appropriate regulatory body in a European country (including Norway) for the
purposes of obtaining approval for the marketing of a prescription
pharmaceutical product in such country.

 

1.20 “Marketing Approval” means approval of an MAA in a country of the
Territory.

 

1.21 “Marketing Plan” has the meaning set forth in subsection 6.2.1 of this
Agreement.

 

1.22 “MCA” means the United Kingdom Medicines Control Agency, or any successor
agency thereof.

 

1.23 “Minimum Royalty Amount” has the meaning set forth in Exhibit F attached to
this Agreement and hereby incorporated in this Agreement by reference.

 

1.24 “MRP” means the Mutual Recognition Procedure for obtaining approval of MAAs
in each country of the Territory.

 

1.25 “Net Sales” means the gross amount invoiced by Licensee or its Affiliates
for sale or other commercial disposition of a Product to a Third Party, less the
following deductions:

 

3

--------------------------------------------------------------------------------

  (a)   [*                                                             *] and
[*                                                                             
     *];

 

  (b)   [*                                                             *], and
other [*                                                         *] in any event
[*                                                         *];

 

  (c)   [*                                                             *] and
other [*                                        *] to the extent
[*                                        *];

 

  (d)   [*                                     
                                        
                                                    *];

 

  (e)   The [*                                        
                                                             *];

 

  (f)   [*                                                             *],
including, but not limited to, [*                                        
                    *];

 

  (g)   Any [*                                        
                                        *] and any
[*                                        
                                    *]; and

 

  (h)   Any [*                                        
                                        
                                                                         *].

 

Notwithstanding the foregoing, if: (i) a
[*                                        
                                    *] unless such
[*                                        
                                    *] is the
[*                                        
                                    *], (ii) the
[*                                        
                                    *], or (iii) a
[*                                        
                                    *], in any manner other than
[*                                        
                                    *], then, in each case the
[*                                        
                                    *] in any such
[*                                        
                                    *] will be
[*                                        
                                    *] described in the preceding clauses
(i)-(iii) [*                                        
                                    *] made in
[*                                        
                                    *] to such
[*                                        
                                    *] or, if the
[*                                        
                                    *].

 

In the event that Products are sold [*                                        
                                    *] and are
[*                                        
                                    *] sold or
[*                                        
                                    *], then
[*                                        
                                    *]. “Net Sales” excludes (a) the
[*                                        
                                    *], (b) the
[*                                        
                                    *], other than
[*                                        
                                    *], and (c) the
[*                                        
                                    *] to any
[*                                        
                                    *] in connection with
[*                                        
                                    *].

 

1.26 “Patent” means patents, letters patent, applications for patents,
provisional applications for patents, and any patents issuing therefrom
(including any divisions, continuations, continued prosecution applications and
continuations-in-part thereof), reexamination certificates, reissue patents,
patent extensions, patent term restorations, supplementary protection
certificates, and any equivalents, substitutions, confirmations, registrations,
revalidations, additions, continuations in part and divisions thereof.

 

4

--------------------------------------------------------------------------------

1.27 “POZEN Know-How” means (a) any non-public or confidential sections of the
POZEN MAA, and (b) any other non-public or confidential Know-How Controlled by
POZEN during the Term that is necessary for the performance of pre-clinical or
clinical development, for the filing of Regulatory Approvals in the Territory,
or the commercialization, marketing or manufacture of a Product.

 

1.28 “POZEN MAA” means MAA [*                        *] submitted to the MCA on
October 8, 2002, or [*                        *], to obtain approval for the
marketing of the Initial Product in the Initial Indication in the United
Kingdom.

 

1.29 “POZEN Patents” means [*                        *], any Patents issuing
therefrom, and any other Patents Controlled by POZEN during the Term that would
be infringed, in the absence of a license, by the manufacture, use, sale, offer
for sale or importation of a Product in the Territory.

 

1.30 “POZEN Trademarks” means any trademarks or trade names used or registered
by POZEN to identify the company as of the Effective Date or during the Term.

 

1.31 “Product” means [*                                        
                                    *] a formulation combining naproxen sodium
and metoclopramide hydrochloride [*                                        
                                    *].

 

1.32 “Product Promotional Materials” means all sales representative training
materials and all written, printed, graphic, electronic, audio or video matter,
including but not limited to journal advertisements, sales visual aids,
leave-behind items, formulary binders, reprints, direct mail, direct-to-consumer
advertising, internet postings, media broadcast advertisements, and sales
reminder aids (for example, note pads, pens and other such items) intended for
use or used by a Party in connection with any promotion of a Product.

 

1.33 “Product Trademarks” means any trademarks, trade dress, logos, slogans, and
designs, whether or not registered in the Territory, used to identify or promote
a Product in the Territory, but excluding any Licensee Trademarks or POZEN
Trademarks.

 

1.34 “Regulatory Approval” means any approvals (including price reimbursement
approvals) and any master files, DMFs, establishment licenses, registrations or
authorizations of any national or local regulatory agency, department, bureau or
other governmental entity, necessary for the manufacture, use, storage,
importation, export, transport, distribution or sale of a Product in the Field
(including the approval of an MAA).

 

1.35 “Supply Agreement” has the meaning set forth in Section 5 of this
Agreement.

 

1.36 “Supply Price” means [*                                        
                                    *], as well as the
[*                                        
                                    *].

 

1.37 “Term” has the meaning set forth in Section 15.1 of this Agreement.

 

1.38 “Territory” means Denmark, Norway, Sweden and Finland.

 

5

--------------------------------------------------------------------------------

1.39 “Third Party” means any individual or entity other than POZEN, Licensee and
their respective Affiliates.

 

1.40 “[*                                             *]” means
[*                                             *].

 

1.41 “Unit” means, with respect to the Initial Product, a single tablet of the
Initial Product, and, with respect to other Products, such unit as the Parties
establish pursuant to Section 6.4 of this Agreement.

 

1.42 “Valid Claim” means any claim of a Patent
[*                                             *] (a)
[*                                             *], (b)
[*                                             *], (c)
[*                                             *] and/or (d)
[*                                             *].

 

1.43 “Withdraw” means, with respect to an MAA, to permanently remove such MAA
from consideration by the regulatory authorities in a country without
undertaking remedial measures to address deficiencies in such MAA raised by such
regulatory authorities.

 

2. MANAGEMENT OF COLLABORATION

 

2.1 Collaboration Management Committee. The Parties will manage the
commercialization and development of Products by Licensee through a
collaboration management committee (the “CMC”). Prior to the first meeting of
the CMC, each Party will designate an equal number of representatives, but no
fewer than two of its employees as its representatives on the CMC. Each Party
will designate at least one representative with expertise in the technical,
regulatory and scientific aspects of pharmaceutical product development and at
least one representative with expertise in the commercial aspects of
pharmaceutical product sales and marketing. Each Party will select one of the
representatives to the CMC as such Party’s primary contact person for
communication between the Parties relating to any aspects of this Agreement
(each such representative, a “Collaboration Manager”). An alternate member
designated by a Party may serve on the CMC temporarily in the absence of a
permanent member, and may replace such permanent member on a permanent basis, if
necessary. Each Party will bear its own costs of participation in the CMC.

 

2.2 Functions and Powers of the CMC. The CMC will perform the following
functions: (a) monitor the progress of, and provide input to, POZEN’s efforts in
seeking approval of the POZEN MAA and in the preparation and filing of
Regulatory Approvals in the countries of the Territory through the MRP, (b)
review and comment on each initial and updated Marketing Plan; (c) oversee and
monitor the clinical development of a Product in the Territory pursuant to any
Development Program; (d) oversee and monitor the development and scale-up of the
manufacturing process for a Product pursuant to any Development Program; (e)
oversee and provide input to Licensee’s efforts in the preparation and filing of
Regulatory Approvals and other matters pertaining to regulatory affairs relating
to a Product; (f) [*                                        
                                                 *] the activities performed
pursuant to each Marketing Plan and Development Program; and (g) address and
attempt to resolve conflicts or disputes that may arise during the course of
performing this Agreement.

 

6

--------------------------------------------------------------------------------

2.3 Limitations of CMC Powers. The CMC will have only such powers as are
specifically delegated to it in this Agreement, and will have no power to amend
this Agreement or waive a Party’s rights or obligations under this Agreement.
Delegation of powers to the CMC will not relieve either Party from its
obligations under this Agreement.

 

2.4 CMC Actions. No business will be transacted at any meeting of the CMC unless
at least one member from each Party is present. Actions by the CMC will be taken
only with the unanimous approval of all representatives of both Parties. If the
CMC is unable to reach unanimity on any matter within 15 days of the first vote
at which no unanimous decision was reached on such matter, then each Party may
refer such matter to the Chief Executive Officers of the Parties for resolution.
If a matter is so referred, then such Chief Executive Officers (or a member of
the senior management designated by the Chief Executive Officer who is not a
member of the CMC) will, within 15 days of referral, discuss such matter in good
faith. If such discussions do not result in a mutually acceptable resolution
within 10 days of such meeting, then [*                                        
    *] pursuant to Section [*                                             *] of
this Agreement, to the extent the [*                                        
    *].

 

2.5 CMC Meetings. The CMC will hold meetings at such times and places as will be
determined by the Collaboration Managers, but in no event will such meetings be
held in person or by teleconference or video conference less frequently than:
(a) [*                                             *] during the period
commencing on the Effective Date and ending upon the
[*                                             *] of receipt of Marketing
Approval for a Product in the last country in the Territory; (b) after such
period, [*                                             *] during the following
[*                                             *] period; and (c) after such
[*                                             *] period, as
[*                                             *] for the duration of the term
of the Agreement. The first meeting of the CMC will take place within
[*                                             *] days after the Effective Date.
The Collaboration Managers will establish an agenda for each such meeting and
will designate representatives of the Parties who will have management
responsibility for the issues on the agenda for such meeting.

 

3. PRODUCT DEVELOPMENT

 

3.1 Development Program. Licensee will
[*                                             *] undertake a program to: (1)
develop [*                                             *], in the Territory, (2)
develop Products for indications other than the Initial Indication, and (3)
conduct post-approval studies with Products (each such program, a “Development
Program”). Any Development Program, including study designs or protocols
included in such Development Program, will be subject to review and approval by
POZEN [*                                             *].

 

3.2 Performance of Studies. If Licensee desires to use a Third Party to perform
a study in connection with a Development Program, Licensee will notify POZEN of
such desire and will accompany such notice with a description of the study
objectives and a binding estimate and associated proposal provided to Licensee
by a reputable Third Party contract research organization of the cost of
performing such study. POZEN will have
[*                                             *] following receipt of such
notice to reply with a binding offer to perform such study and to provide

 

7

--------------------------------------------------------------------------------

reasonable evidence to Licensee that POZEN has appropriate experience developing
pharmaceutical products in the Territory (whether directly or indirectly through
its contractors). If POZEN provides such an offer during such
[*                        *] period, then: (a)
[*                                             *], then Nycomed will engage
POZEN for the performance of the applicable study, or (b)
[*                                             *], then Nycomed will be free to
engage the Third Party that provided the applicable estimate to perform such
study. In any event, if POZEN does not provide an offer within the
[*                        *] period described in this Section 3.2, then Nycomed
will be free to engage any Third Party to perform the applicable study.

 

4. REGULATORY MATTERS

 

4.1 Distribution of Tasks Regarding Regulatory Approval of the Initial Product.

 

4.1.1 POZEN will: (a) furnish Licensee with a copy of the POZEN MAA (excluding
any portion thereof that POZEN is not entitled to disclose to Licensee) promptly
after the Effective Date, and other documentation to the extent reasonably
available to POZEN, that POZEN deems reasonably necessary for the MRP for the
Initial Product in each country of the Territory; (b) prepare the MRP for the
Initial Product together with the regulatory authorities in the United Kingdom
(including without limitation scheduling the MRP with each of the countries in
the Territory), and file an MAA for the Initial Product in all countries of the
Territory; (c) provide supplementary documentation relating to the Initial
Product if so requested by the regulatory authorities in the United Kingdom and
each country in the Territory, to the extent reasonably available to POZEN as of
the date of request; (d) answer any questions relating to the Initial Product
from the regulatory authorities in the United Kingdom and each country in the
Territory; (e) transfer to Licensee any Marketing Approvals for the Initial
Product obtained in the Territory; and (f) submit to the MCA any post-Marketing
Approval changes prepared by Licensee pursuant to clause (c) of subsection 4.1.2
below.

 

4.1.2 Licensee will: (a) make translations of the MAAs and other documentation,
if so requested by the regulatory authorities in the Territory; (b) after the
transfer of the respective Marketing Approval, be the first point of contact
with the regulatory authorities in each country in the Territory and will use
commercially reasonable efforts to maintain such Marketing Approval during the
Term; (c) provide to POZEN documentation for post-Marketing Approval changes for
submission to the MCA where necessary, including but not limited to new
formulations, line extensions, new packaging, new dosage strengths, and new
indications; and (d) subject to the diligence requirements set forth in Section
7 of this Agreement, perform the actions required to obtain pricing or
reimbursement approval of a Product in each country of the Territory. For the
avoidance of doubt, but subject to the diligence requirements set forth in
Section 7 of this Agreement, Nycomed grants no warranties for the obtainment of
reimbursement. Licensee further agrees that it will not amend any Marketing
Approval in the Territory without POZEN’s prior written consent. Each Party
shall cooperate in good faith with the other Party’s efforts to obtain
supplementary protection certificates for the Product in Europe. In the case of
Licensee, such cooperation will include, without limitation, promptly providing
POZEN with a complete copy of each MAA filed, and Marketing Approval obtained,
in the

 

8

--------------------------------------------------------------------------------

Territory (to the extent POZEN does not already possess a complete copy of such
MAA or Marketing Approval).

 

4.1.3 Licensee will bear all costs and expenses incurred by the Parties in
connection with performing their obligations pursuant to this Section 4.1,
excluding any costs and expenses incurred by POZEN in connection with securing
Marketing Approval for the Initial Product in the United Kingdom; provided,
however, that in relation to maintenance of the Marketing Approval described in
clause (c) of subsection 4.1.2, the provisions regarding the distribution of
costs set out in Section 4.4 will apply.

 

4.2 Additional Requirements for Marketing Approval.

 

4.2.1 If the regulatory authorities in the United Kingdom or any country in the
Territory require additional data or information to be submitted by POZEN as a
condition to approving the POZEN MAA or granting Marketing Approval for the
Initial Product in the Territory, POZEN will inform Licensee thereof without
delay. Subject to subsection [*                
                                        
                                        
                                                             *].

 

4.2.2 If, in POZEN’s judgment, either (a)
[*                                        
                                                 *] by a regulatory authority in
the United Kingdom or any country in the Territory as a condition to granting
Marketing Approval for the Initial Product in such country, or (b) the
[*                                        
                                                 *] by any such regulatory
authority, [*                                        
                                                 *], POZEN may Withdraw the
applicable MAA or other filing and will inform Licensee of such decision without
delay. In such event, POZEN will [*                        *] set forth in
Section [*                        *], and this Agreement will terminate in whole
or in part as set forth in Section 15.4.

 

4.3 Distribution of Tasks for Other Products.

 

4.3.1 With respect to Products to be developed pursuant to a Development
Program, the Parties will establish in such Development Program the distribution
of tasks with respect to Regulatory Approvals of such Products in the Territory.
Licensee shall at its discretion decide on the level of expenses of the
Development Program. Licensee will bear all costs and expenses incurred by the
Parties in connection with performing each Development Program.

 

4.3.2 With respect to Products developed by POZEN and covered by the rights and
licenses granted to Licensee under this Agreement, the Parties will establish
the distribution of tasks with respect to Regulatory Approvals of such Products
in the Territory. Licensee will bear all costs and expenses incurred by the
Parties in connection with obtaining Regulatory Approvals of such Products in
the Territory.

 

4.4 Maintenance of Marketing Approvals. POZEN will, throughout the Term, provide
reasonable technical and scientific support to enable Licensee to maintain
Marketing Approvals in the Territory. Licensee will reimburse POZEN for any
internal costs (at then-standard FTE rates) only for services outside the
ordinary maintenance of the Marketing Approvals. Licensee will reimburse POZEN
for out-of-pocket expenses incurred by POZEN in

 

9

--------------------------------------------------------------------------------

connection with such provision of support under the terms set forth in this
Section 4.4 (such FTE rates and costs to be agreed upon in writing by the
Parties prior to initiation of any such support). Under this provision the
“ordinary maintenance” shall mean provision of information already available
with POZEN and updates caused by changes in legislation and guidelines
applicable also for European countries outside the Territory.

 

4.4.1 If (a) the regulatory authorities in one or more countries in the
Territory require changes or additions to data, specifications, or other
information set forth in an approved MAA in order to maintain Marketing Approval
for a Product in such country or countries (including, by way of example,
changes to the specifications of a Product or to the process or facilities used
to manufacture a Product, additional clinical trials relating to a Product, or
other changes to the labeling, handling, or manufacture of a Product), and (b)
no regulatory authority in a European country outside the Territory in which
POZEN or its licensee has obtained Marketing Approval requires such changes or
additions from POZEN or POZEN’s licensee in order to maintain such Marketing
Approval, then, provided such changes or additions are commercially reasonable,
Licensee will implement such changes or additions at its own cost and expense in
the Territory upon POZEN’s prior written approval to do so, or will reimburse
POZEN for all costs and expenses incurred by POZEN to effect such changes in the
United Kingdom if necessary and in each country in the Territory requiring such
changes. If such changes or additions are not commercially reasonable and
Nycomed does not wish to implement such changes, POZEN has the right to
terminate the agreement for the country of which such change has been requested.
If one or more regulatory authorities in a European country outside the
Territory in which POZEN or its licensees have obtained Marketing Approval of
the Product require such changes or additions
[*                                        
                                        *] set out in clause
[*                            *] below shall
[*                                *], as applicable.

 

4.4.2 If (a) the regulatory authorities in one or more countries in the
Territory require changes or additions to data, specifications, or other
information set forth in an approved MAA in order to maintain Marketing Approval
for a Product in such country or countries (including, by way of example,
changes to the specifications of a Product or to the process or facilities used
to manufacture a Product, additional clinical trials relating to a Product, or
other changes to the labeling, handling, or manufacture of a Product), and (b)
the regulatory authorities in one or more European countries outside the
Territory in which POZEN or its licensee has obtained Marketing Approval require
such changes or additions in order to maintain such Marketing Approval, then
Licensee will reimburse POZEN for a percentage of all costs and expenses
incurred by POZEN to effect such changes, which percentage will be calculated by
[*                                        
                                        
                                                                         *].

 

4.5 Meetings and Correspondence.

 

4.5.1 To the extent either Party receives any written or oral communications
relating to a Product from any regulatory authority in the Territory, such Party
will promptly inform the other Party thereof (including by providing a copy of
any written communication or a written account of any oral communication), but
in no event later than 5 business days after receipt of such communication.

 

10

--------------------------------------------------------------------------------

4.5.2 Each Party will promptly notify the other Party, and provide such other
Party with a copy, of any correspondence or other reports or complaints
submitted to or received by the first Party from any regulatory authority in the
Territory or from any other Third Party claiming that any Product Promotional
Materials are inconsistent with a Product’s labeling or are otherwise in
violation of applicable law or regulation.

 

4.5.3 Each Party will provide the other Party with a copy of any documents or
reports filed with any regulatory authority in the Territory during the Term
with respect to a Product.

 

4.6 Adverse Events Reporting. Nycomed will provide POZEN with prompt written
notice of any serious adverse drug event or reaction reports received by Nycomed
with respect to Products in the Territory, including copies of any such written
reports where available. POZEN will provide Nycomed with prompt written notice
of any serious adverse drug event or reaction reports received by POZEN with
respect to Products in any jurisdiction outside the Territory where POZEN is, at
such time, developing or marketing Products, including copies of any such
written reports where available. Nycomed will be responsible for complying with
adverse drug event reporting requirements in the Territory with respect to
Products and will copy POZEN on all correspondence with regulatory authorities
in the Territory regarding the same. POZEN will be responsible for complying
with adverse drug event reporting requirements in jurisdictions outside the
Territory where POZEN is, at such time, developing or marketing Products and
will copy Nycomed on all correspondence between POZEN and the regulatory
authorities in such jurisdictions regarding serious adverse drug events or
reactions. POZEN will have the right to redact such correspondence to remove
information proprietary to POZEN as applicable.

 

4.7 [*                                        *] . Subject to the terms and
conditions set forth in this Agreement,
[*                                        
                                    *] of Products in one or more countries in
the Territory.

 

5. MANUFACTURE AND SUPPLY

 

As of the Effective Date, Licensee and POZEN have entered into an agreement (the
“Supply Agreement”) regarding the manufacture and supply of the Initial Product
by POZEN to Licensee, a copy of which is attached as Exhibit G to this
Agreement.

 

6. COMMERCIALIZATION

 

6.1 Principles of Commercialization. Licensee will be solely responsible for the
commercialization of the Products in the Field in all countries of the Territory
during the Term as set forth in the applicable Marketing Plan. Licensee will
bear all expenses incurred in connection with the preparation and execution of
the Marketing Plan.

 

6.2 Marketing Plan.

 

6.2.1 Licensee will commercialize each Product in the Territory under this
Agreement pursuant to a rolling multi-year plan and budget (the “Marketing
Plan”). Licensee will prepare each Marketing Plan according to Licensee’s
marketing planning process, and will

 

11

--------------------------------------------------------------------------------

include in each Marketing Plan comprehensive education, market development,
marketing, sales and supply strategies, including an overall budget for
anticipated marketing, promotion and sales efforts in the period covered by such
Marketing Plan. Each Marketing Plan will identify commercial milestones and the
criteria by which the Parties will evaluate achievement of these milestones.
Each Marketing Plan will describe the Product’s positioning and specify toward
which target populations and distribution channels Licensee will devote its
promotional efforts, the personnel and other resources to be devoted by Licensee
to such efforts, as well as market and sales forecasts and related operating
expenses, for the applicable Product in the Territory, and budgets for projected
commercialization expenses and sales and marketing expenses. Each Marketing Plan
will include the general strategy and operating guidelines for the
commercialization of the applicable Product.

 

6.2.2 The initial Marketing Plan for each Product, including the Initial
Product, will be prepared by Licensee in accordance with its procedures and in
due time before commercial launch of such Product. A preliminary Marketing Plan
of each Product will be prepared no later than 12 months prior to the expected
date of receipt of Marketing Approval for such Product in any country in the
Territory. Such preliminary Marketing Plan may be adjusted in good faith and in
a commercially reasonable manner during Licensee’s regular budget process.
Licensee will update each Marketing Plan at least once every year.

 

6.2.3 Licensee will submit the final draft of each initial and updated Marketing
Plan to the CMC [*                            *] in accordance with Licensee’s
corporate planning cycle. The CMC will have 30 working days
[*                            *] on such draft to Licensee, and Licensee will
[*                                        *] prior to finalization and
implementation of such plan.

 

6.3 Branding; Trademarks; Trade Dress; Logos.

 

6.3.1 At the request of POZEN, Licensee will, to the extent permitted by law and
customary to local trade and practice, include one or more POZEN Trademarks
designated by POZEN in relevant information disclosed publicly by Licensee
relating to this Agreement or a Product, in the form of press releases,
technical publications, regulatory filings, pharmaceutical product packaging,
and seminar and conference posters regarding this Agreement or a Product.

 

6.3.2 [*                        *] will select all Product Trademarks for use on
or in connection with the Products, subject to [*                            *]
prior approval. POZEN will be the sole owner of the Product Trademarks. POZEN
will be responsible for the filing, prosecution, maintenance and defense of all
registrations of the Product Trademarks, and will be responsible for the payment
of any costs relating to filing, prosecution, maintenance and defense of the
Product Trademarks in the Territory. Upon expiry of this Agreement in a country
in the Territory, POZEN will grant to Licensee an exclusive license unlimited in
time to the Product Trademarks in such country, for which Licensee will pay to
POZEN a royalty of [*            *] of Net Sales in such country.

 

6.3.3 Subject to the provisions of subsection 6.3.1 above and the use of
Licensee Trademarks as required by applicable laws and regulations, Licensee
will market, promote, sell

 

12

--------------------------------------------------------------------------------

and distribute the Products under the Product Trademarks only, unless the
Parties agree otherwise in writing.

 

6.3.4 POZEN will have the right to review and approve any Product Promotional
Materials and any labels or packaging materials prepared by or for Licensee that
bear one or more Product Trademarks or POZEN Trademarks in order to confirm that
such trademarks are being used correctly and in accordance with the terms of
this Agreement. In addition, at the request of POZEN, Licensee will not use any
claims in any Product Promotional Materials that, in POZEN’s reasonable
discretion, are inconsistent with the label approved in the applicable country
in the Territory or that, if used, would materially impair the development,
sale, promotion, or other commercialization efforts of POZEN or its other
licensees outside the Territory with respect to the applicable Product. If POZEN
receives a draft of Product Promotional Materials, labels or packaging under
this subsection 6.3.4, then POZEN will use commercially reasonably efforts to
acknowledge such receipt within 5 business days and will, in any event, provide
comments to Licensee within 10 business days from receipt of such draft. If
POZEN does not provide Licensee with any comments within such 10-day period,
then any such draft Product Promotional Materials submitted for review will be
deemed approved by POZEN. If POZEN provides Licensee with substantive comments
to any such draft after such 10-day period has expired that are necessary to
ensure that the Product Trademarks or POZEN Trademarks are used properly or that
the claims in such materials are consistent with the label approved in the
applicable country in the Territory, then Licensee will incorporate such
comments in the relevant Product Promotional Materials.

 

6.3.5 Licensee acknowledges POZEN’s exclusive right, title and interest in and
to the Product Trademarks and POZEN Trademarks and acknowledges that nothing in
this Agreement will be construed to accord to Licensee any rights in the Product
Trademarks or POZEN Trademarks except as expressly provided in this Agreement
(including, without limitation, the license upon expiry granted under subsection
6.3.2). Licensee further acknowledges that its use of the Product Trademarks or
POZEN Trademarks will not create in Licensee any right, title or interest in
such trademarks, except as a licensee, and that all use of such trademarks and
the goodwill generated thereby will inure solely to the benefit of POZEN.

 

6.4 Establishment of Units and Minimum Royalties. Prior to the commercial launch
of any Product other than the Initial Product, the Parties will agree on the
applicable definitions for a “Unit” of such Product and the “Per Unit Minimum”
(as set forth in the table on Exhibit F) for such Product.

 

7. DILIGENCE

 

7.1 General Diligence Obligations. Licensee will use commercially reasonable
efforts to perform the activities set forth under each Marketing Plan. Licensee
will promote, market, sell and distribute the Products in the Field in each
country of the Territory continuously during the term of this Agreement by
applying efforts and resources as reasonably required to maximize sales of the
Products throughout the Territory and at least equal to the efforts and
resources normally used by Licensee for a product owned by it which has a
similar market potential and is at a similar stage in its product life cycle as
the applicable Product. All efforts of

 

13

--------------------------------------------------------------------------------

Licensee’s Affiliates will be considered efforts of Licensee for the purpose of
determining Licensee’s compliance with its obligations under this Section 7.1.

 

7.2 Minimum Launch Diligence Obligations. Without limiting the diligence
obligations of Section 7.1 above, Licensee will launch the commercial sale of
each Product in each country in the Territory as soon as reasonably possible
after receipt of Regulatory Approval for such Product in such country, but in no
event later than [*                        *] after such receipt; provided,
however, that such [*                    *] period will be
[*                                                                         *].
Notwithstanding the foregoing, if Licensee submits packaging artwork for the
Initial Product pursuant to Section 4.3 of the Supply Agreement promptly after
Regulatory Approval for the Initial Product and
[*                                                     *] pursuant to the
[*                        *] due to the
[*                                                                         *],
then [*                                                     *] for purposes of
the foregoing sentence.

 

7.3 Minimum Commercialization Diligence Obligations. Without limiting the
diligence obligations of Section 7.1 above, during the
[*                                                     *] of a Product in a
country in the Territory, Licensee will: (a) subject to pre-booked meetings in
which Licensee has arranged to promote other products, promote such Product in
the first detailing position with a full sales force in such country, covering
both primary care physicians and relevant specialists, (b) allocate to the
promotion of such Product sales efforts greater than or equal to the sales
efforts allocated by Licensee to any other prescription product of comparable
market potential and stage of product life cycle promoted by Licensee in the
Territory during such period, and (c) use best efforts to pre-book meetings with
physicians in such country for the promotion of such Product.

 

7.4 Diligence Limitations.

 

7.4.1 If [*                                        
                                *], then [*                            *]. If
[*                                                     *] under this Agreement,
then [*                                                     *]. If Licensee
determines at any time that the manufacture, use or sale of a Product in a
country in the Territory would infringe the intellectual property rights of any
Third Party, then Licensee will provide POZEN with written notice of such
determination.

 

7.4.2 In each event described in subsection 7.4.1, the Parties will discuss
whether Licensee should launch or sell the applicable Product in the applicable
country. If the Parties agree that Licensee should not launch or sell such
Product in such country, then Licensee will be under no obligation under this
Agreement to launch or sell such Product in such country; provided, however,
that Licensee provides POZEN with an annual update, in writing, on the reasons
for delaying or foregoing the launch or sale of such Product in such country
and, in each case, POZEN agrees that such launch or sale should not be
undertaken.

 

7.4.3 If (a) pursuant to subsection 7.4.2, the Parties have discussed whether
Licensee should launch or sell the applicable Product in the applicable country,
(b) Licensee has determined that it should not launch or sell such Product in
such country, (c) POZEN disagrees with such determination, and (d) such
disagreement is not resolved on or before the date 60 days

 

14

--------------------------------------------------------------------------------

after the initial discussion between the Parties pursuant to subsection 7.4.2,
then this Agreement will terminate with respect to such Product in such country
at the end of such 60-day period. In such case, all of Licensee’s rights and
obligations under this Agreement with respect to the commercialization of such
Product in such country, including without limitation the rights and licenses
granted by POZEN to Licensee under Section 8.1 of this Agreement with respect to
such Product in such country, will terminate immediately. Any such termination
will have no effect on Licensee’s rights and obligations under this Agreement to
commercialize other Products in such country and to commercialize such Product
in other countries of the Territory.

 

7.5 Lack of Diligence. To the extent POZEN or any supplier of the Product
appointed by POZEN fulfills its Product supply obligations hereunder and under
any supply agreement entered into (or, in the case of a supplier appointed by
Licensee, to the extent Licensee has used commercially reasonable efforts to
obtain Product from such supplier and is in compliance with its obligations
under its supply agreement with such supplier), and subject to Section 18.9 and
any other event outside Licensee’s reasonable control, any failure by Licensee
to fulfill a diligence obligation set forth in Sections 7.2 and 7.3(a) of this
Agreement will be deemed a material breach of this Agreement. Licensee’s
fulfillment of the diligence obligations set forth in Sections 7.2 and 7.3 of
this Agreement will be taken into account when determining whether Licensee has
fulfilled its obligations set forth in Section 7.1 of this Agreement, but will
not be considered conclusive proof that such obligations have also been
fulfilled.

 

7.6 [*                                                         *] . In the event
Licensee receives notice from a Third Party alleging that the manufacture, use
or sale of the Product in the Territory infringes such Third Party’s
intellectual property rights, Licensee shall provide POZEN with prompt written
notice thereof and the Parties shall consult with each other in good faith
regarding such allegation. Licensee shall consider POZEN’s suggestions and
comments regarding such alleged infringement;
[*                                             
                                        
                                        *] set out in this Agreement, and shall,
[*                                                             
                                                                 *] set out in
this Agreement.

 

8. LICENSES AND OTHER RIGHTS

 

8.1 License Grants to Licensee.

 

8.1.1 Subject to the terms and conditions set forth in this Agreement, POZEN
hereby grants to Licensee an exclusive, royalty-bearing license under the
Licensed Technology to market, sell, offer to sell and distribute for sale
Products in the Field within the Territory.

 

8.1.2 Subject to the terms and conditions set forth in this Agreement and upon
termination of the Supply Agreement executed between the Parties, POZEN will
grant to Licensee solely for Licensee’s exclusive sale and distribution for sale
within the Field within the Territory a non-exclusive, royalty-free license
under the Licensed Technology to use, make, have made, import and export
Products in the Field within the Territory.

 

8.1.3 Subject to the terms and conditions set forth in this Agreement (including
subsection 6.3.2 above), POZEN hereby grants to Licensee an exclusive,
royalty-free license to

 

15

--------------------------------------------------------------------------------

use the Product Trademarks and POZEN Trademarks in connection with the sale and
distribution of Products in the Field within the Territory.

 

8.1.4 Licensee has the right to grant sublicenses under the licenses granted in
this Section 8.1 only to Affiliates; provided, however, that each such
sublicense grant is subject to the terms of this Agreement. Any act or omission
by a sublicensee of Licensee that would, if committed by Licensee, constitute a
breach of this Agreement by Licensee, will be deemed a breach of this Agreement
by Licensee.

 

8.2 Negative Covenants.

 

8.2.1 Licensee hereby covenants and agrees that it shall not undertake, nor
authorize any Affiliate of Licensee to undertake, any of the following
activities: (a) conducting clinical trials or other development of a Product
outside the Field or the Territory; (b) filing for Marketing Approval of any
Product outside the Field or the Territory; (c) using or practicing any Licensed
Technology or Product Trademarks outside the Territory; (d) granting a
sublicense to any Third Party of any rights or licenses granted to Licensee
under this Agreement; (e) developing, distributing or commercializing any
Product for non-prescription sale with or without use or practice of the
Licensed Technology or Product Trademarks; (f) applying for any Regulatory
Approval that would allow the over-the-counter sale of any Product in the
Territory; (g) directly or indirectly marketing and selling any Product to
patients without a prescription for the Product; (h)
[*                                        
                                                     *]; or (i)
[*                                        
                                                 
                                                  *]. For purposes of
clarification, the [*                                        
                                                     *] shall not be construed
to limit Nycomed’s non-use and non-disclosure obligations with respect to
POZEN’s Confidential Information under Section 14 throughout the world. This
negative covenant is subject to any rights that may have been granted to
Licensee, or that Licensee may otherwise have,
[*                                        
                                                     *]. POZEN hereby
exclusively reserves all rights with respect to the Product outside the
Territory.

 

8.2.2 POZEN will not, during the Term, grant any right to any Third Party
relating to the Licensed Technology in the Field in the Territory which would
conflict with the rights granted to Nycomed hereunder.

 

8.2.3 POZEN shall not, during the Term, on its own part or through its
Affiliates or Third Parties market, distribute or sell any Competing Product in
the Territory.

 

8.3 License Grants to POZEN. Licensee hereby grants to POZEN a fully paid,
exclusive right and license, with the right to grant sublicenses, under any
Patents or Know-How Controlled by Licensee or any of its Affiliates, (a) to use
outside the Territory any clinical and non-clinical data generated by or on
behalf of Licensee in the course of developing Products, (b) to reference any
Marketing Approvals obtained for Products in the Territory, for the purpose of
developing and pursuing Marketing Approvals for Products outside the Territory,
and (c) to use and reference any clinical and non-clinical data and Marketing
Approvals obtained for Products in the Territory, for the purpose of developing
and pursuing Marketing Approvals for other products or for Products outside the
Territory.

 

16

--------------------------------------------------------------------------------

9. COMPENSATION

 

9.1 License Fees. As partial consideration for the rights and licenses granted
under this Agreement with respect to the Products, Licensee will pay to POZEN a
non-refundable, non-creditable license fee (the “Initial License Fee”) of
US$500,000 within 5 days after the Effective Date.

 

9.2 Milestones.

 

9.2.1 If the POZEN MAA receives approval in the United Kingdom
[*                                        
                                    *], then Licensee will make the
non-refundable, non-creditable milestone payments set forth in Exhibit B to this
Agreement.

 

9.2.2 If the POZEN MAA receives approval in the United Kingdom
[*                                        
                                    *], then Licensee will make the
non-refundable, non-creditable milestone payments set forth in Exhibit C to this
Agreement.

 

9.2.3 If the POZEN MAA receives approval in the United Kingdom
[*                                        
                                                     *], then Licensee will make
the non-refundable, non-creditable milestone payments set forth in Exhibit D to
this Agreement.

 

9.2.4 In any event, Licensee will pay to POZEN a non-refundable, non-creditable
milestone payment in the amount of [*                                        
                    *] for which a Product receives Marketing Approval anywhere
in the Territory, within 15 days from receipt by Licensee of evidence of the
receipt of such Marketing Approval.

 

9.3 Royalties.

 

9.3.1 Royalty Amount. Subject to the adjustments provided for in this Section
9.3, Licensee will pay to POZEN a royalty equal to the greater of: (a)
[*                                                             *] of Net Sales
of any Product by Licensee or its Affiliates in any country in the Territory,
and (b) the Minimum Royalty Amount for such Product in such country.
[*                                        
                                        
                                        
                                                             *].

 

9.3.2 Royalty Term. Royalties due under the preceding subsection 9.3.1 will be
payable on a country-by-country and Product-by-Product basis until
[*                                        
                                        
                                        
                                                             *] (the “Royalty
Term”).

 

9.3.3 [*                                                             *].

 

(a) Notwithstanding the provisions of subsection 9.3.1, if a Product is
[*                                             *] in a particular country in the
Territory [*                                        
                                    *], then the royalty amounts described in
subsection 9.3.1 of this Agreement [*                                        
    *] with respect to such Product in such country,
[*                                        
                                        
                                        
                                                             *] in such country,
and:

 

17

--------------------------------------------------------------------------------

(i) such [*                                                             *], in
the [*                                        
                                        *], of the total unit sales of
wholesalers to pharmacies of [*                                        
                    *] (as evidenced by a report from a data source accepted in
the pharmaceutical industry, [* *]), in which case the royalty payable pursuant
to subsection 9.3.1 on such Product in such country
[*                                                             *]; or

 

(ii) such [*                                                             *] of
the total unit sales of wholesalers to pharmacies of
[*                                                                         *]
(as evidenced by a report from a data source accepted in the pharmaceutical
industry, [*                                    *]), in which case the royalty
payable pursuant to subsection 9.3.1 on such Product in such country
[*                                                             *].

 

(b) Notwithstanding the provisions of subsection 9.3.1, during such time as
POZEN is providing Nycomed under the Supply Agreement with Initial Product
[*                                        *], the royalty payable pursuant to
subsection 9.3.1 on sales of Initial Product
[*                                    *]. The royalty
[*                                    *] set forth in this subsection 9.3.3(b)
will automatically expire upon the later of: (i) [* *], and (ii) the [* *].

 

9.4 Reports; Payment Method; Currency. Licensee will provide POZEN within 25
days after the end of each calendar quarter with a report stating the Unit
volume of Products sold or otherwise disposed of in each country of the
Territory and providing the calculations for the Net Sales, Minimum Royalty
Amount, and royalties due. Within 30 days after the end of each calendar
quarter, Licensee will transfer, by wire, the amount of royalties due to such
bank account as POZEN may indicate from time to time. Payment of all royalties
due hereunder will be made in the currency in which Net Sales accrued. Any
payments or portions thereof due hereunder that are not paid on the date such
payments are due under this Agreement will bear interest at a per annum rate
equal to the lesser of (a) the prime rate as published in The Wall Street
Journal, Eastern Edition, on the first day of each calendar quarter in which
such payments are overdue, plus 2 percentage points, and (b) the maximum rate
permitted by law, calculated on the number of days such payment is delinquent,
compounded monthly.

 

9.5 Blocked Currency. In each country where the local currency is blocked and
cannot be removed from the country, royalties accrued in that country will be
paid by Licensee in the country in local currency by deposit in a local bank
designated by POZEN, unless the Parties otherwise agree in writing.

 

9.6 Taxes. Licensee will have the right to withhold taxes in the event that
authorities in any country require the withholding of taxes on amounts paid
hereunder to POZEN. Such taxes will be deducted by Licensee from such payment
and will be paid by Licensee to the proper taxing authority on behalf of POZEN.
Licensee will promptly secure and send to POZEN proof evidencing payment of such
taxes withheld and paid by Licensee for the benefit of POZEN. Licensee will
assist POZEN in claiming exemption from such deductions or

 

18

--------------------------------------------------------------------------------

withholdings under any applicable income tax treaty by providing such
documentation as may be reasonably required by POZEN to claim such exemption.

 

9.7 Audit Rights; Adjustments.

 

9.7.1 Licensee will permit an independent certified public accountant designated
by POZEN and reasonably acceptable to Licensee (the “Auditor”), to have access
to Licensee’s records and books during regular business hours for the sole
purpose of determining the accuracy of the amounts reported and actually paid or
otherwise payable to POZEN under the terms of this Agreement (the “Audit”). Any
Audit will cover a period not to exceed 3 years immediately preceding such
audit. POZEN will bear all costs and expenses in connection with the Audit;
provided, however, that if any Audit reveals an understatement of Net Sales
greater than 5% of the stated amount, then Licensee will bear all costs and
expenses in connection with such Audit. Any such Audit will be performed upon at
least 30 calendar days’ prior written notice during regular business hours, and
not more than once in each calendar year during the term of this Agreement and
during each calendar year in the 3-year period following expiration or
termination of this Agreement.

 

9.7.2 The Auditor will execute a written confidentiality agreement with Licensee
and will disclose to POZEN only the amount and accuracy of payments reported and
actually paid or otherwise payable under this Agreement. The Auditor will send a
copy of the report to Licensee at the same time it is sent to POZEN. The report
sent to Licensee will also include the methodology and calculations used to
determine the results.

 

9.7.3 If the Audit results in a determination that Net Sales have been
overstated, then POZEN will repay the amount of any resulting overpayment within
30 days after receipt of the Auditor’s report with interest from the date
originally due, calculated at a per annum rate equal to the prime rate as
published in The Wall Street Journal, Eastern Edition, on the first day of each
calendar quarter in which such payments are overdue, plus 2 percentage points.

 

9.7.4 If the Audit results in a determination that Net Sales have been
understated, then any resulting underpayment will be paid to POZEN within 30
days after receipt of the Auditor’s report with interest from the date
originally due, calculated at a per annum rate equal to the prime rate as
published in The Wall Street Journal, Eastern Edition, on the first day of each
calendar quarter in which such payments are overdue, plus 2 percentage points.

 

10. INTELLECTUAL PROPERTY

 

10.1 Licensee’s Obligation to Inform. Licensee will promptly disclose to POZEN
all Improvements made solely by Licensee, its Affiliates or their Third Party
contractors, or jointly by Licensee, its Affiliates or their Third Party
contractors. Information provided by Licensee to POZEN with respect to such
Improvements will be in reasonable detail but in no circumstance less than would
be sufficient to permit an understanding of the nature of the Improvements by a
practitioner reasonably skilled in the relevant technical or scientific area.

 

10.2 POZEN’s Obligation to Inform. As of the Effective Date, POZEN has disclosed
to Nycomed the complete text of all pending patent applications included in the

 

19

--------------------------------------------------------------------------------

POZEN Patents as of the Effective Date, as well as copies of all correspondence
concerning the prosecution thereof made or received by or on behalf of POZEN to
or from patent offices and any information or correspondence received by or on
behalf of POZEN from patent offices concerning the institution of any
interference, opposition, re-examination, reissue, revocation, nullification or
any official proceeding involving any POZEN Patents, in each case to the extent
in existence as of the Effective Date. In addition, during the Term, POZEN will
disclose to Nycomed the complete text of all patent applications included in the
POZEN Patents that are filed after the Effective Date, as well as copies of all
correspondence concerning the prosecution thereof made or received by or on
behalf of POZEN to or from patent offices and any information or correspondence
received by or on behalf of POZEN from patent offices concerning the institution
of any interference, opposition, re-examination, reissue, revocation,
nullification or any official proceeding involving any POZEN Patents after the
Effective Date, and if possible transmit such information electronically to
Nycomed or ship such materials DDU (ICC INCOTERMS 2000) to a place of
destination to be named by Nycomed within 10 days after the Effective Date.
POZEN shall promptly inform Nycomed of the issuance of any POZEN Patents.

 

10.3 Ownership.

 

10.3.1 Licensed Technology. All right, title and interest in and to the Licensed
Technology will remain exclusively with POZEN, subject only to the licenses
granted to Licensee under this Agreement.

 

10.3.2 Improvements. POZEN will own all right, title and interest in and to the
Improvements, including any intellectual property rights appurtenant thereto,
subject only to the licenses granted to Licensee under this Agreement. Licensee
agrees to assign and hereby assigns to POZEN all of its rights, title and
interest in Improvements, and will ensure that any agreements with Affiliates
and/or Third Party contractors include the assignment of such Improvements to
Licensee or directly to POZEN. Licensee will cooperate with POZEN with respect
to patent filing, prosecution and enforcement of such Improvements, and POZEN
will reimburse Licensee for any internal costs (at then-standard FTE rates) and
for out-of-pocket expenses incurred by Nycomed in connection with such
cooperation (such costs to be agreed upon in writing by the Parties prior to
initiation of any such support). For the avoidance of doubt, any such
Improvement assigned to POZEN is part of the Licensed Technology licensed to
Licensee pursuant to this Agreement, and no royalties in addition to those set
forth in Section 9.3 of this Agreement will be due in connection with the
licenses granted to Licensee to such Improvements under this Agreement.

 

10.4 Patent Filing, Prosecution and Maintenance. Subject to the terms and
conditions set forth in this Section 10.4, POZEN has the exclusive right to
file, prosecute and maintain all POZEN Patents or Patents claiming or covering
Improvements. Subject to the terms and conditions set forth in this Section
10.4, POZEN will use commercially reasonable efforts to obtain and maintain
during the Term POZEN Patents and any Patents claiming or covering Improvements;
provided, however, that POZEN will not be required to undertake or defend any
legal action or challenge to such Patents.

 

20

--------------------------------------------------------------------------------

10.4.1 With respect to POZEN Patents as of the Effective Date, POZEN will have
the obligation to prosecute and, for issued Patents, maintain such Patents
during the Term.

 

10.4.2 POZEN shall consent to and execute the necessary documents in order to
have Licensee registered as licensee of the Products with the local patent and
trademark departments in the Territory.

 

10.4.3 POZEN will apply for patent protection in all countries of the Territory
for any Improvement that in POZEN’s reasonable opinion is patentable. If POZEN
elects not to file a patent application claiming or covering an Improvement in a
particular country, then POZEN will give prompt written notice to Licensee of
such decision, but in any event within 30 days before the time limit, if any,
set forth in the appropriate laws and regulations for the filing of such
application. In such case, Licensee may elect at its sole discretion to
undertake the preparation, filing, prosecution or maintenance of a patent
application claiming or covering such Improvement in such country at its sole
expense. Notwithstanding anything in this Agreement, Licensee will own any such
patent application and patents issuing therefrom and will be solely responsible
for all associated costs,. POZEN will execute such documents and perform such
acts as may be reasonably necessary for Licensee to commence such prosecution.

 

10.4.4 Licensee hereby covenants and agrees not to enforce against POZEN, its
Affiliates or licensees of Product any Patent Controlled by Licensee that claims
or covers one or more Improvements obtained under this Section 10.4.

 

10.5 Enforcement Rights.

 

10.5.1 Notification of Infringement. If either Party learns of any
misappropriation of any proprietary Product information such as trade secrets,
copyrights or Licensee Trademarks, POZEN Trademarks or Product Trademarks (the
“Product Rights”) or any infringement or threatened infringement by a Third
Party of the Licensed Technology or any Patent covering an Improvement, in each
case, in the Field and in the Territory, such Party will promptly notify the
other Party and will provide such other Party with all available evidence of
such misappropriation or infringement.

 

10.5.2 Enforcement of Patents and Product Rights in the Territory.

 

(a) Licensee will have the first right, but not the obligation, to institute,
prosecute and control any action or proceeding with respect to infringement in
the Field and in the Territory of the Licensed Technology or any Patent covering
an Improvement, or any misappropriation of Product Rights in the Field and in
the Territory, by counsel of its own choice, and will consult with POZEN on any
actions that Licensee proposes to take in such action or proceeding. The costs
of such defense will be equally shared between the parties in accordance with
subsection 10.5.4. Notwithstanding subsection 10.5.4, POZEN will have the right,
at its own expense, to be represented in any such action by counsel of its own
choice; provided, however, that this shall not relieve POZEN from its obligation
to share the costs incurred by the common legal counsel.

 

21

--------------------------------------------------------------------------------

(b) If Licensee fails to bring an action or proceeding or otherwise take
appropriate action in Licensee’s discretion to abate such infringement or
misappropriation in the Field and in the Territory within a period of 90 days of
written notice by POZEN to Licensee requesting such action, POZEN will have the
right, but not the obligation, to bring and control, by counsel of its own
choice, any such infringement or misappropriation action or proceeding. Licensee
will cooperate with POZEN in any such action or proceeding brought by POZEN
against a Third Party, and will have the right to consult with POZEN and to
participate in and be represented by independent counsel in such litigation at
its own expense.

 

(c) If a Party brings any action or proceeding under this subsection 10.5.2, the
other Party agrees, at the request of the first Party, to be joined as a party
plaintiff if necessary to prosecute the action or proceeding and to give the
first Party reasonable assistance and authority to file and prosecute the suit,
including without limitation providing commercial, clinical or manufacturing
data available to the Parties, executing necessary documents, and providing
expert support.

 

10.5.3 Settlement with a Third Party. The Party that controls the prosecution of
a given action under this Section 10.5 will also have the right to control
settlement of such action; provided, however, that no settlement will be entered
into which would limit the scope or enforceability of any POZEN Patents or a
Patent covering Improvements without the written consent of POZEN, such consent
not to be unreasonably withheld.

 

10.5.4 Enforcement Costs and Awards. Any costs incurred in connection with an
action or proceeding brought by a Party pursuant to subsection 10.5.2 of this
Agreement will be shared equally between the Parties. Any damage award resulting
from any such action, after reimbursement of each Party’s expenses, will be
deemed Net Sales of Licensee in the applicable country or countries, and will be
subject to the royalties set forth in Section 9.3 of this Agreement. If a Party
does not want to bear an equal share of the costs of such an action, such Party
may opt out of such costs by providing the other Party with adequate notice,
which shall be given before the initiation of the trial, of its intention not to
participate in the costs of the enforcement action. In such event, the Party
opting out of the enforcement costs will continue to cooperate with the
enforcing Party at the enforcing Party’s expense, and the enforcing Party will
retain the full amount of any damage awards resulting from such enforcement
action.

 

10.5.5 Decision Not to Pursue. POZEN will have the right to prevent Licensee
from undertaking an enforcement action under subsection 10.5.2 of this Agreement
for strategic reasons (including, without limitation, protection in other
jurisdictions of Patents in the Licensed Technology); provided, however, that if
a Third Party is commercializing a Competing Product that infringes a Patent in
the Licensed Technology in a country in the Territory, the royalty reduction
mechanism set forth in subsection 9.3.3(a) of this Agreement will apply with
respect to any Product in such country with which such Third Party’s product is
a Competing Product.

 

10.6 Defense and Settlement of Third Party Claims.

 

10.6.1 Defense. If a Third Party asserts that a patent, trade secret, or other
intangible right owned or exclusively licensed by it is infringed or
misappropriated by the manufacture, use, sale, or offer for sale of a Product in
the Field in the Territory, the Parties will

 

22

--------------------------------------------------------------------------------

establish a plan for a common defense and Licensee will manage such common
defense plan, subject to subsection 10.6.2 below. The costs of any such defense
to such action incurred by one or both of the Parties pursuant to such plan
(including the costs of any judgment, award, decree or settlement) will be
shared equally between the parties.

 

10.6.2 Settlement with a Third Party. Either Party will also have the right to
control settlement of a claim described in subsection 10.6.1 above; provided,
however, that no settlement will be entered into without the written consent of
the other Party. If there is no agreement between the Parties as to any proposed
settlement, then the dispute will be decided pursuant to Section 17 of this
Agreement.

 

10.7 Indemnification. Indemnification of any loss resulting from the
infringement of any third party rights by the use or practice of the Licensed
Technology or the commercialization of any Product will be governed exclusively
by Section 12 of this Agreement.

 

11. REPRESENTATIONS AND WARRANTIES

 

11.1 Mutual Representations and Warranties. Each of the Parties hereby
represents and warrants to the other Party that:

 

11.1.1 such Party is a corporation duly organized, validly existing and in good
standing under the laws of the state in which it is incorporated;

 

11.1.2 this Agreement is a legal and valid obligation binding upon such Party
and enforceable against such Party in accordance with its terms;

 

11.1.3 the execution, delivery and performance of this Agreement by such Party
does not conflict with any agreement, instrument or understanding, oral or
written, to which it is a Party or by which it is bound;

 

11.1.4 to the best of such Party’s knowledge, the execution, delivery and
performance of this Agreement by such Party does not violate any law or
regulation of any court, governmental body or administrative or other agency
having jurisdiction over such Party;

 

11.1.5 such Party has the full power and authority to enter into this Agreement
and to carry out the obligations contemplated hereby;

 

11.1.6 such Party has not, and during the Term will not, grant any right to any
Third Party relating to its respective Patents and Know-How which would conflict
with the rights granted to the other Party hereunder;

 

11.1.7 to the best of such Party’s knowledge, neither it, nor any of its
employees, officers, subcontractors or consultants who will perform any
Development Program (i) has been debarred or convicted of a crime for which an
entity or person could be debarred under 21 U.S.C. Section 335a, or (ii) is
under indictment for a crime for which a person or entity could be debarred
under 21 U.S.C. Section 335a; and

 

23

--------------------------------------------------------------------------------

11.1.8 such Party has taken all necessary corporate action on its part to
authorize the execution and delivery of this Agreement.

 

11.2 POZEN Representations and Warranties. POZEN hereby represents and warrants
to Licensee that:

 

11.2.1 to the best of POZEN’s knowledge as of the Effective Date, there
[*                                                                             
                                              *] pursuant to this Agreement;

 

11.2.2 POZEN has [*                                        
                             *];

 

11.2.3 as of the Effective Date, POZEN has
[*                                                                      *], and
POZEN has [*                                             
                                                                  *];

 

11.2.4 as of the Effective Date, POZEN has [*                                
                                        
                                                                          *];
and

 

11.2.5 to the best of POZEN’s knowledge as of the Effective Date,
[*                                        
                                                                  *] in the
preceding clause, the [*                                        
                                 *] the terms set out in this Agreement
[*                                                             
                                     *].

 

11.2.6 POZEN has [*                                        
                                                              *], and such
[*                                                                      *].

 

11.3 Limitation of Warranty. EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT,
NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY, AND EACH PARTY EXPRESSLY
DISCLAIMS ALL IMPLIED WARRANTIES, INCLUDING WARRANTIES OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT, WITH RESPECT TO ANY
MATERIALS, INFORMATION, SERVICES, OR LICENSES PROVIDED TO THE OTHER PARTY
PURSUANT TO THIS AGREEMENT.

 

11.4 Performance by Affiliates. The Parties recognize that each Party may
perform some or all of its obligations under this Agreement through Affiliates;
provided, however, that each Party will remain responsible for the performance
by its Affiliates and will cause its Affiliates to comply with the provisions of
this Agreement in connection with such performance and any act or omission
committed by an Affiliate shall be deemed to have been conducted by the Party
itself. Each Party hereby expressly waives any requirement that the other Party
exhaust any right, power or remedy, or proceeds against an Affiliate, for any
obligation or performance hereunder prior to proceeding directly against such
Party.

 

24

--------------------------------------------------------------------------------

12. INDEMNIFICATION

 

12.1 Indemnification by Licensee. Licensee will indemnify, defend and hold POZEN
and its directors, officers, employees, agents and Affiliates harmless from and
against any liabilities, damages, costs or expenses, including reasonable
attorneys’ fees (collectively, “Losses”), which arise out of, relate to or
result from: (a) the [*                                              *]; or (b)
[*                                                          *]. Notwithstanding
the foregoing, Licensee will not indemnify POZEN for
[*                                                              *] under Section
[*                                                              *] of this
Agreement.

 

12.2 Indemnification by POZEN. POZEN will indemnify, defend and hold Licensee
and its directors, officers, employees, agents and Affiliates harmless from and
against any Losses which arise from any claim, lawsuit or other action to the
extent such Losses arise out of, relate to or result from: (a)
[*                                                                      *]; or
(b) [*                                                     
                         *]. Notwithstanding the foregoing, POZEN will not
indemnify Licensee for [*                    
                                                                  *] under
Section [*                                                      *] of this
Agreement.

 

12.3 Indemnification Procedures. A Party which intends to claim indemnification
under Section 12.1 or 12.2 of this Agreement (the “Indemnitee”) will promptly
notify the other Party (the “Indemnitor”) in writing of any claim, lawsuit or
other action in respect of which the Indemnitee or any of its directors,
officers, employees, and Affiliates intend to claim such indemnification within
a reasonable period of time after the assertion of such claim; provided,
however, that the failure to provide written notice of such claim within a
reasonable period of time will not relieve the Indemnitor of any of its
obligations hereunder, except to the extent that the Indemnitor is prejudiced by
such failure to provide prompt notice. The Indemnitor will have the right to
assume the complete control of the defense, compromise or settlement of any such
claim without the prior written consent of such Indemnitee, which such consent
will not be unreasonably withheld; provided, however, that Indemnitee will have
the right to withhold such consent in its sole discretion if such defense,
compromise or settlement includes any admission of wrongdoing on the part of an
Indemnitee, or limits the scope of any claims in or enforceability of any
Patents owned by or licensed to the Indemnitee). The Indemnitor may at its own
expense, employ legal counsel to defend the claim at issue. At any time after
Indemnitor has assumed defense of a claim, the Indemnitor may exercise, on
behalf of the Indemnitee, any rights which may mitigate the extent or amount of
such claim; provided, however, the Indemnitee: (a) may, in its sole discretion
and at its own expense, employ legal counsel to represent it (in addition to the
legal counsel employed by the Indemnitor) in any such matter, and in such event
legal counsel selected by the Indemnitee will be required to confer and
cooperate with such counsel of the Indemnitor in such defense, compromise or
settlement for the purpose of informing and sharing information with the
Indemnitor; (b) will, at its own expense, make available to Indemnitor those
employees, officers and directors or Indemnitee whose assistance, testimony or
presence is necessary, useful or appropriate to assist the Indemnitor in
evaluating and in defending any such claim; provided, however, that any such
access will be conducted in such a manner as not to interfere unreasonably with
the operations of the businesses of Indemnitee; and (c) will otherwise fully
cooperate with the Indemnitor and its legal counsel in the investigation and

 

25

--------------------------------------------------------------------------------

defense of such claim. The rights and remedies provided pursuant to this Section
12 are the sole and exclusive remedies of the Parties hereto with respect to
Losses.

 

12.4 Insurance. Each Party will maintain commercially reasonable insurance
coverage commensurate with its obligations under this Agreement. Such
commercially reasonable insurance coverage will include
[*                                                                     
                                                      *].

 

13. LIMITATION OF LIABILITY

 

IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR INCIDENTAL,
SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGES, INCLUDING, BUT NOT LIMITED TO, ANY
CLAIM FOR DAMAGES BASED UPON LOST PROFITS, BUT EXCLUDING ANY CLAIMS BASED UPON
THE OBLIGATIONS SET FORTH IN SECTIONS 12 AND 14 OF THIS AGREEMENT.

 

14. CONFIDENTIALITY, PUBLICATIONS, PUBLICITY

 

14.1 Confidential Information. Any information or materials communicated by one
Party to the other Party pursuant to this Agreement or the Confidential
Disclosure Agreement between the Parties dated
[*                                                  *] will be deemed
“Confidential Information” of the disclosing Party if marked “confidential” or
with a similar legend, or if disclosed orally or visually, if identified as
being confidential at the time of such oral or visual disclosure, and thereafter
reduced to writing, marked “confidential” or with a similar legend, and sent to
the other Party within 30 days of such oral or visual disclosure, or which
information or materials would, due to the nature thereof or the circumstances
surrounding disclosure, appear to a reasonable person to be confidential or
proprietary. Notwithstanding the preceding sentence, “Confidential Information”
will not be deemed to include information that the receiving Party can
demonstrate, by competent written proof:

 

14.1.1 At the time of disclosure is published or is publicly known or otherwise
in the public domain, other than through any act or omission by the receiving
Party;

 

14.1.2 Was already known to the receiving Party, other than under an obligation
of confidentiality or non-use, prior to the time of disclosure;

 

14.1.3 Is disclosed to the receiving Party in good faith, without an obligation
of confidentiality, by a Third Party not under any obligation of confidence with
respect to such information; or

 

14.1.4 Is independently developed by the receiving Party without use of or
reference to the disclosing Party’s Confidential Information.

 

14.2 Treatment of Confidential Information. The Parties agree that during the
term of this Agreement and for 7 years after its expiration or termination for
any reason whatsoever, a Party receiving Confidential Information of the other
Party will: (a) treat any such Confidential Information disclosed to it by the
other Party as strictly confidential; (b) except as necessary in

 

26

--------------------------------------------------------------------------------

the performance of this Agreement, not disclose such Confidential Information to
Third Parties without the prior written consent of the other Party, other than
to its Affiliates, Sublicensees, collaborators or any consultants, provided that
such disclosure be under confidentiality agreements with provisions comparable
to those contained in this Agreement; (c) not use such Confidential Information
for purposes other than those authorized expressly herein; and (d) use
reasonable efforts to prevent inadvertent disclosure of such Confidential
Information.

 

14.3 Access. Access to Confidential Information will be limited to those
employees or consultants of the Party receiving such information or of such
Party’s Affiliates who reasonably require such information in order to carry out
activities authorized pursuant to this Agreement. Such employees or consultants
will be advised of the confidential nature of the Confidential Information and
the related confidentiality undertaking.

 

14.4 Permitted Disclosures. Notwithstanding any other provision in this
Agreement, a receiving Party may disclose Confidential Information of the
disclosing Party to the extent such disclosure is required by law or court
order, provided that the receiving Party gives the disclosing Party prompt
written notice of the requirement to disclose and reasonably cooperates with the
disclosing Party to seek a protective order or other restrictions on the
disclosure of such Confidential Information of the disclosing Party. Any such
required disclosure will be limited only to that Confidential Information that
is required to be disclosed and such disclosed Confidential Information will
remain Confidential Information hereunder despite the required disclosure.

 

14.5 Return of Confidential Information. Upon termination or expiration of this
Agreement, each Party hereto and its Affiliates will return all Confidential
Information of the other Party in their possession to the other Party; provided,
however, that each Party may retain: (a) a single archival copy of the
Confidential Information of the other Party solely for the purpose of
determining the extent of disclosure of Confidential Information hereunder and
assuring compliance with the surviving provisions of this Agreement; (b) any
portion of the Confidential Information of the other Party which is contained in
laboratory notebooks; and (c) any portion of the Confidential Information of the
other Party which a Party is required by mandatory applicable law to retain.

 

14.6 Confidentiality of the Agreement Terms. Neither Party will disclose the
terms of this Agreement to any Third Party without the prior written consent of
the other Party; provided, however, that either Party may disclose the terms of
this Agreement to actual or prospective investors and corporate partners
(including Sublicensees), to a Party’s accountants, attorneys and other
professional advisors, and as required by applicable laws and regulations of the
U.S. Securities and Exchange Commission and any stock exchange on which a
Party’s stock is traded.

 

14.7 Publications. Neither Party may present or publish research results arising
from this Agreement, including, without limitation, research results which
relate to the use of the Licensed Technology in the Field, in a thesis,
scientific publication, or conference, without the prior written consent of the
other Party. The presentations or publications will be presented in writing in
the English language, will be presented to the other Party for review and
comment at

 

27

--------------------------------------------------------------------------------

least 30 days prior to the time which the presentation or publication is
proposed for submission to any Third Party. Within 30 days after its receipt of
such presentation or publication and at least 5 business days prior to the time
which the presentation or publication is proposed for submission to any Third
Party, the other Party will provide notice whether it has any comments or
objection to the proposed presentation or publication. The submitting Party will
consider in good faith all comments by the reviewing Party. If a reasonable
objection is raised, including for example because the contents of the
presentation or publication contain patentable subject matter for which patent
protection should be sought, or because the presentation or publication
discloses Confidential Information of the other Party which constitutes
proprietary trade secrets or Know-How, then submission of the presentation or
publication will be delayed, unless and until such time as consent to submission
of the presentation or publication is given, such consent not to be unreasonably
withheld. Each Party may be acknowledged on any publication or presentation by
the other Party in accordance with generally accepted rules of authorship.

 

14.8 Publicity. Neither Party will make any public announcement concerning the
existence of or the terms of this Agreement, without the prior written approval
of the other Party with regard to the form, content and precise timing of such
announcement, except such as may be required to be made by either Party in order
to comply with applicable law, regulations, court order, or tax or securities
filings. Such consent will not be unreasonably withheld or delayed by such other
Party. Prior to any such public announcement, the Party wishing to make the
announcement will submit a draft of the proposed announcement to the other Party
not less than 72 hours in advance to enable the other Party to consider and
comment thereon. Notwithstanding anything to the contrary in this Agreement,
nothing in this Section 14.8 is intended to prohibit either Party from
republishing or restating information relating to this Agreement that has
already been approved by the other Party for use in a prior press release or
public announcement.

 

15. TERM AND TERMINATION

 

15.1 Term of the Agreement. The term of this Agreement (the “Term”) will
commence on the Effective Date and, unless terminated earlier pursuant to this
Section 15, will expire on a country-by-country basis upon the later of (a) the
date of expiration of all royalty obligations in a given country in the
Territory pursuant to subsection 9.3.2 of this Agreement, and (b) the date 15
years after the date of first commercial sale of a Product in such country under
this Agreement.

 

15.2 Termination for Material Breach. In the event of a material breach of this
Agreement by either Party, which is not cured within 60 days following receipt
of written notice of the such breach from the non-breaching Party, the
non-breaching Party will have the right to terminate this Agreement by written
notification to the other Party, effective immediately upon receipt.

 

15.3 Termination for MAA Failure. If the POZEN MAA is not approved by
[*                                                     
                                                      *], then Licensee may in
its sole discretion terminate this Agreement upon written notice to POZEN.

 

28

--------------------------------------------------------------------------------

15.4 Termination for MAA Withdrawal.

 

15.4.1 If, pursuant to subsection 4.2.2 of this Agreement, POZEN elects to
Withdraw the POZEN MAA, then this Agreement will terminate 30 days after the
effective date of such Withdrawal.

 

15.4.2 If, pursuant to subsection 4.2.2 of this Agreement, POZEN elects to
Withdraw any MAA filed in any country of the Territory, then this Agreement will
terminate with respect to such country 30 days after the effective date of such
Withdrawal. In such case, the definition of “Territory” set forth in Section 1
of this Agreement will be deemed amended to exclude such country, and this
Agreement, including all the rights and licenses granted by POZEN to Licensee
under Section 8.1 of this Agreement will terminate immediately with respect to
such country.

 

15.4.3 If, pursuant to subsection 4.2.2 of this Agreement, POZEN elects to
Withdraw the POZEN MAA or any MAA filed in any country of the Territory, then
[*                                        
                                        
                                                                  *].

 

15.4.4 If, pursuant to Section 4.2 of the Supply Agreement, Nycomed terminates
this Agreement prior to approval of the POZEN MAA, then
[*                                        
                                        
                                        
                                                  *] of such termination.

 

15.5 Termination for Bankruptcy. Either Party may immediately terminate this
Agreement upon the occurrence of either of the following: (a) the entry of a
decree or order for relief by a court having jurisdiction in the premises in
respect of the other Party in an involuntary case under any applicable national,
federal, or state insolvency or other similar law, and the continuance of any
such decree or order unstayed and in effect for a period of sixty (60)
consecutive days; or (b) the filing by the other Party of a petition for relief
under any applicable national, federal, or state insolvency or other similar
law. All rights and licenses granted under or pursuant to this Agreement,
including amendments hereto, by each Party to the other Party are, for all
purposes of 11 U.S.C. Section 365(n), licenses of rights to intellectual
property as defined in Title 11.

 

15.6 Termination of Supply Agreement. If the Supply Agreement is terminated by
POZEN for a breach of such agreement by Licensee, under the terms and conditions
set forth therein, then POZEN will have the right to terminate this Agreement by
written notification to Licensee, effective immediately upon receipt.

 

16. CONSEQUENCES OF TERMINATION

 

16.1 General. No termination of this Agreement will relieve any Party hereto
from any liability which, at the time of such termination, has already accrued
to the other Party or which is attributable to a period prior to such
termination, nor preclude either Party from pursuing any rights and remedies it
may have under this Agreement or at law or in equity which accrued or are based
upon any event occurring prior to such termination.

 

29

--------------------------------------------------------------------------------

16.2 Termination Prior to Expiration by POZEN. If this Agreement is terminated
pursuant to Sections 15.2, 15.3, 15.4.1, 15.5 or 15.6, then (i) the rights and
licenses granted by POZEN to Licensee under Section 8.1 of this Agreement will
terminate immediately; (ii) all rights in the Products, trademarks, and
Marketing Approvals as are necessary or useful to make, use, offer to sell,
sell, or import a Product, will revert or be assigned to POZEN, and Licensee
will promptly take all actions and execute such documents as requested by POZEN
to affect such transfer of Product rights to POZEN; (iii) Licensee will return
all of POZEN’s Confidential Information within 60 days of such termination; (iv)
Licensee will use reasonable efforts to transfer all remaining Product to POZEN
within 90 days of such termination and POZEN will pay to Licensee an amount
equivalent to the Supply Price of such Product, provided such Product has at
least 24 months of shelf life at the time of receipt by POZEN; (v) if Licensee
has a source other than POZEN for commercial supply of Product and POZEN does
not have such a source, then subject to Licensee’s agreement with its
manufacturer, Licensee will transfer or cause its manufacturer to transfer to
POZEN or its designated manufacturer the complete manufacturing process and
associated documentation, including analytical methods, master batch records,
and any Know-How pertaining to the manufacturing process; (vi) if Licensee
manufactures its own commercial supply of Product and POZEN does not have an
independent source commercial supply of Product, then, in addition to the
transfer of the manufacturing process described in the preceding clause (v),
upon request of POZEN, Licensee will supply POZEN with POZEN’s requirements of
Product [*                                                         *] for a
period of up to 3 years until POZEN, using commercially reasonable efforts, has
established an independent source of commercial supply of Product; (vii)
Licensee will hand over (implying no transfer of rights in any Licensee
Trademarks) and cause its Affiliates and agents to transfer to POZEN a full set
of Product Promotional Materials; (viii) the rights granted by Licensee to POZEN
under Section 8.3 of this Agreement will thereafter include all countries in the
Territory; and (ix) POZEN will have the exclusive right to develop, make, have
made, use, offer to sell, sell, and import a Product in the Territory alone or
with or through a Third Party.

 

16.3 Licenses Upon Expiration. Upon expiration of this Agreement pursuant to
Section 15.1 of this Agreement with respect to a country in the Territory,
Licensee will have a non-exclusive, fully paid, perpetual, royalty-free right
and license under the Licensed Technology to develop, make, have made, use,
offer to sell, sell, and import Products in such country.

 

16.4 Survival. In the event of expiration or termination of this Agreement
pursuant to Section 15 of this Agreement, the following sections will survive,
together with the definitions of any defined terms used therein: Sections 6.3,
8.3, 9.4, 9.5, 9.6, 9.7, 10.3, 10.7, 11.3, 12, 13, 14, 16, 17 and 18. All other
provisions, including all rights and obligations thereunder, will terminate and
be of no further force and effect.

 

17. DISPUTE RESOLUTION

 

17.1 The Parties will try to settle their differences amicably between
themselves. Subject to Section 2.4 of this Agreement, in the event of any
controversy or claim arising out of or relating to any provision of this
Agreement or the performance or alleged non-performance of a Party of its
obligations under this Agreement (“Dispute”), a Party may notify the other Party
in

 

30

--------------------------------------------------------------------------------

writing of such Dispute. If the Parties are unable to resolve the Dispute within
20 days of receipt of the written notice by the other Party, such dispute will
be referred to the Chief Executive Officers of each of the Parties (or their
respective designees) who will use their good faith efforts to resolve the
Dispute within 15 days after it was referred to the Chief Executive Officers.

 

17.2 Subject to Section 16.1 of this Agreement, any Dispute that is not resolved
as provided in the preceding Section 17.1, whether before or after termination
of this Agreement, will be resolved by in the courts of law located in Raleigh,
North Carolina, USA, and each Party hereby irrevocably submits to the
jurisdiction and venue of each such court.

 

18. MISCELLANEOUS

 

18.1 Patents and Trademarks. Any dispute, controversy or claim between the
Parties relating to the scope, validity, enforceability or infringement of any
Patent licensed under this Agreement or of any trademark rights related to a
Product will be submitted to a court of competent jurisdiction in the territory
in which such Patent or trademark rights were granted or arose.

 

18.2 Further Assurances. At any time during the term of this Agreement, Licensee
and POZEN each will, at the request of the other Party, use reasonable efforts
to (a) deliver to the other Party such records, data or other documents
consistent with the provisions of this Agreement, (b) execute, and deliver or
cause to be delivered, all such assignments, consents, documents or further
instruments of transfer or license, and (c) take or cause to be taken all such
other actions, as a Party may reasonably deem necessary or desirable in order
for such Party to obtain the full benefits of this Agreement and the
transactions contemplated hereby.

 

18.3 Assignment. Neither Party will assign its rights or obligations under this
Agreement to any Third Party without the prior written consent of the other
Party; except that either Party may assign such rights and obligations to the
surviving entity pursuant to a merger, acquisition or consolidation, or to a
Third Party acquiring all or substantially all assets of a Party. All permitted
assignments by either Party of any of its rights under this Agreement will be
subject to all of the terms and conditions of this Agreement. All successors,
permitted assignees of either Party will be subject to, and will be bound by,
all the terms and conditions of this Agreement. Any purported assignment not
permitted under the terms of this Agreement will be null, void, and of no
effect.

 

18.4 Independent Contractors. The Parties hereto are independent contractors.
Nothing contained herein will constitute either Party the agent of the other
Party for any purpose whatsoever, or constitute the Parties as partners or joint
venturers. Employees of each Party remain employees of said Party and will be
considered at no time agents of or owing a fiduciary duty to the other Party.
Neither Party hereto will have any implied right or authority to assume or
create any obligations on behalf of or in the name of the other Party or to bind
the other Party to any other contract, agreement or undertaking with any Third
Party.

 

18.5 Waiver. The failure of either Party to enforce any provision of this
Agreement at any time will not be construed as a present or future waiver of
such or any other provision of this Agreement. The express waiver by either
Party of any provision or requirement hereunder will

 

31

--------------------------------------------------------------------------------

not operate as a future waiver of such or any other provision or requirement and
will be effective only if set forth in a written instrument signed by a duly
authorized representative of the Party waiving such provision or requirement.

 

18.6 Amendment. The Parties hereto may amend, modify or alter any of the
provisions of this Agreement, but such amendment, modification or alteration
will be valid and binding on either Party only if made by a written instrument
that explicitly refers to this Agreement and that is signed by a duly authorized
representative of each Party.

 

18.7 Severability. In the event that any provision in this Agreement is held to
be unlawful or invalid in any jurisdiction, the meaning of such provision will
be construed to the greatest extent possible so as to render it enforceable. If
no such construction can render such provision enforceable, it will be severed.
The remainder of this Agreement will remain in full force and effect, and the
Parties will negotiate in good faith a reasonable substitute provision that is
valid and enforceable in such jurisdiction. If the Parties are unable to agree
on a substitute provision, and if the unlawful or invalid provision was an
essential element of this Agreement without which one of the Parties would not
have entered into this Agreement, as evidenced by this Agreement as a whole,
then such Party may terminate this Agreement by written notice to the other
Party effective upon receipt.

 

18.8 Notice. All notices hereunder must be given in writing and will be deemed
given if delivered personally or by facsimile transmission (receipt confirmed),
mailed by registered or certified mail (return receipt requested) with postage
prepaid, or sent by express courier service (FedEx or other reputable,
internationally recognized courier service), to the Parties at the following
addresses (or at such other address for a Party as will be specified by like
notice; provided that notices of a change of address will be effective only upon
receipt thereof).

 

If to POZEN:

  

POZEN Inc.

    

1414 Raleigh Road

    

Suite 400

    

Chapel Hill, NC 27517

    

Attention: President

    

Telephone: (919) 913 1030

    

Facsimile: (919) 913 1039

 

With copies to:

  

Cooley Godward LLP

    

One Freedom Square

    

Reston Town Center

    

11951 Freedom Drive

    

Reston, VA 20190-5656

    

Attention: Matthias Alder

    

Facsimile: (703) 456-8100

 

32

--------------------------------------------------------------------------------

If to Licensee:

  

Nycomed Danmark ApS

    

Langebjerg 1

    

DK-4000 Roskilde

    

Denmark

    

Attention: Managing Director Bent Kjærsgård

    

Facsimile: +4546756968

 

With copies to:

  

Nycomed Danmark ApS

    

Langebjerg 1

    

DK-4000 Roskilde

    

Denmark

    

Attention: General Counsel Theresa Comiskey Olsen

    

Facsimile: +4766763513

 

18.9 Force Majeure. Neither Party will be deemed to be in breach of this
Agreement as a result of default, delay or failure to perform by such Party
which is due to any cause beyond the reasonable control of such Party, including
without limitation, fire, earthquake, acts of God, severe weather, acts of war,
strikes, lockouts or other labor disputes, riots, civil disturbances, actions or
inactions of governmental authorities (except actions in response to a breach of
applicable laws by such Party), or epidemics. In the event of any such force
majeure, the Party affected will promptly notify the other Party, will use
commercially reasonable efforts to overcome such force majeure, and will keep
the other Party informed with respect thereto. If such force majeure continues
for a period of more than 180 days, the Party not subject to such force majeure
may terminate this Agreement by written notice to the other Party.

 

18.10 Counterparts. This Agreement may be executed by the Parties in one or more
identical counterparts, all of which together will constitute this Agreement. If
this Agreement is executed in counterparts, no signatory hereto will be bound
until both Parties have duly executed a counterpart of this Agreement.

 

18.11 Governing Law. This Agreement will be governed by, and construed an
interpreted in accordance with, the laws of the State of North Carolina without
giving effect to any choice of law rule that would cause the application of the
laws of any jurisdiction other than the internal laws of the State of North
Carolina to the right and duties of the Parties.

 

18.12 Construction. Unless used in combination with the word “either,” the word
“or” is used throughout this Agreement in the inclusive sense (and/or). The
captions of this Agreement are for convenience of reference only and in no way
define, describe, extend or limit the scope or intent of this Agreement or the
intent of any provision contained in this Agreement. The term “including” as
used herein will mean including, without limiting the generality of any
description preceding such term. No rule of strict construction will be applied
against either Party hereto. Unless expressly provided herein to the contrary,
all time limits, notice periods, deadlines or the like described herein will be
governed by the follow parameters: (i) for all time periods that are 5 days in
length or less, such periods will be deemed to be business days, and (ii) for
all time periods greater than 5 days in length will be deemed to be calendar
days.

 

33

--------------------------------------------------------------------------------

18.13 English Language. This Agreement has been written and executed in the
English language. Any translation into any other language will not be an
official version of this Agreement, and in the event of any conflict in
interpretation between the English version and such translation, the English
version will control.

 

18.14 Entire Agreement. This Agreement, including any Exhibits attached hereto,
constitutes the entire agreement of the Parties with respect to the subject
matter hereof, and supersedes all prior and contemporaneous agreements,
understandings and negotiations, whether oral or written, with respect to such
subject matter, including, without limitation, the Confidential Disclosure
Agreement between the Parties dated [*                                        
             *]; provided, however, that no agreement between the Parties
executed contemporaneously with this Agreement (including the Supply Agreement)
will be so superseded by this Agreement.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK. SIGNATURE PAGE FOLLOWS.]

 

34

--------------------------------------------------------------------------------

The Parties have caused this Agreement to be executed as of the Effective Date
by signature of their duly authorized representatives.

 

POZEN INC.

 

--------------------------------------------------------------------------------

John R. Plachetka

President and Chief Executive Officer

NYCOMED DANMARK APS

 

--------------------------------------------------------------------------------

Håkan Björklund

Chief Executive Officer, Nycomed Group

--------------------------------------------------------------------------------

Bent Kjærsgård

Managing Director, Nycomed Danmark ApS

 

[SIGNATURE PAGE TO THE LICENSE AGREEMENT]

--------------------------------------------------------------------------------

EXHIBIT A

 

[* 1 ENTIRE PAGE HAS BEEN OMITTED PURSUANT TO A CONFIDENTIAL

TREATMENT REQUEST*]

 

1

--------------------------------------------------------------------------------

EXHIBIT B

 

ADDITIONAL MILESTONES UPON RECEIPT OF

MARKETING APPROVAL IN UK [*                                         *]

 

If the POZEN MAA receives approval in the United Kingdom on or before the
[*                                                      *], then Licensee will
make the following payments to POZEN in the amounts set forth below within 15
days of the occurrence of the following events:

 

MILESTONE EVENT

--------------------------------------------------------------------------------

  

MILESTONE PAYMENT

--------------------------------------------------------------------------------

(1) Approval of the POZEN MAA in the United Kingdom    [*                     *]
(2) Receipt of Marketing Approval for a Product in Norway pursuant to the MRP,
unless such receipt (a) occurs [*                     *], and (b) was delayed in
substantial part by one or more [*                     *] raised by the
regulatory authorities of such country    [*                     *] (3) Receipt
of Marketing Approval for a Product in Finland pursuant to the MRP, unless such
receipt (a) occurs [*                     *], and (b) was delayed in substantial
part by one or more [*                     *] raised by the regulatory
authorities of such country    [*                     *] (4) Receipt of
Marketing Approval for a Product in Denmark pursuant to the MRP, unless such
receipt (a) [*                     *], and (b) was delayed in substantial part
by one or more [*             *] raised by the regulatory authorities of such
country    [*                     *] (5) Receipt of Marketing Approval for a
Product in Sweden pursuant to the MRP, unless such receipt (a) occurs
[*                     *], and (b) was delayed in substantial part by one or
more [*                     *] raised by the regulatory authorities of such
country    [*                     *]

 

1

--------------------------------------------------------------------------------

EXHIBIT C

 

ADDITIONAL MILESTONES UPON RECEIPT OF MARKETING APPROVAL IN UK

[*                     *] OTHER THAN FOR [*                     *]

 

If the POZEN MAA receives approval in the United Kingdom [*                    
*] and such approval was not delayed in substantial part by one or more
[*                     *] raised by the MCA, then Licensee will make the
following payments to POZEN in the amounts set forth below within 15 days of the
occurrence of the following events:

 

MILESTONE EVENT

--------------------------------------------------------------------------------

  

MILESTONE PAYMENT

--------------------------------------------------------------------------------

(1) Approval of the POZEN MAA in the United Kingdom    [*                     *]
(2) Receipt of Marketing Approval for a Product in Norway pursuant to the MRP,
unless such receipt (a) occurs after the later of (i) [*                     *],
and (ii) [*                     *] after the date of approval of the POZEN MAA
in the United Kingdom; and (b) was delayed in substantial part by one or more
[*                     *] raised by the regulatory authorities of such country
   [*                     *] (3) Receipt of Marketing Approval for a Product in
Finland pursuant to the MRP, unless such receipt (a) occurs after the later of
(i) [*                     *], and (ii) [*                     *] after the date
of approval of the POZEN MAA in the United Kingdom; and (b) was delayed in
substantial part by one or more [*                     *] raised by the
regulatory authorities of such country    [*                     *] (4) Receipt
of Marketing Approval for a Product in Denmark pursuant to the MRP, unless such
receipt (a) occurs after the later of (i) [*                     *], and (ii)
[*                     *] after the date of approval of the POZEN MAA in the
United Kingdom; and (b) was delayed in substantial part by one or more
[*                    *] raised by the regulatory authorities of such country   
[*                     *] (5) Receipt of Marketing Approval for a Product in
Sweden pursuant to the MRP, unless such receipt (a) occurs after the later of
(i) [*                     *], and (ii) [*                     *] after the date
of approval of the POZEN MAA in the United Kingdom; and (b) was delayed in
substantial part by one or more [*                     *] raised by the
regulatory authorities of such country    [*                     *]

 

1

--------------------------------------------------------------------------------

EXHIBIT D

 

ADDITIONAL MILESTONES UPON RECEIPT OF MARKETING APPROVAL IN UK

[*                     *] FOR [*                     *]

 

If the POZEN MAA receives approval in the United Kingdom [*                    
*], and such approval was delayed in substantial part by one or more
[*                     *] raised by the MCA, then Licensee will make the
following payments to POZEN in the amounts set forth below within 15 days of the
occurrence of the following events:

 

MILESTONE EVENT

--------------------------------------------------------------------------------

  

MILESTONE PAYMENT

--------------------------------------------------------------------------------

(1) Approval of the POZEN MAA in the United Kingdom    [*                     *]
(2) Receipt of Marketing Approval for a Product in Norway pursuant to the MRP,
unless such receipt (a) occurs [*                     *], and (b) was delayed in
substantial part by one or more [*                     *] raised by the
regulatory authorities of such country    [*                     *] (3) Receipt
of Marketing Approval for a Product in Finland pursuant to the MRP, unless such
receipt (a) occurs [*                     *], and (b) was delayed in substantial
part by one or more [*                     *] raised by the regulatory
authorities of such country    [*                     *] (4) Receipt of
Marketing Approval for a Product in Denmark pursuant to the MRP, unless such
receipt (a) occurs [*                     *], and (b) was delayed in substantial
part by one or more [*                     *] raised by the regulatory
authorities of such country    [*                     *] (5) Receipt of
Marketing Approval for a Product in Sweden pursuant to the MRP, unless such
receipt (a) occurs [*                     *], and (b) was delayed in substantial
part by one or more [*                     *] raised by the regulatory
authorities of such country    [*                     *]

 

 

1

--------------------------------------------------------------------------------

EXHIBIT E

 

[*                                                                          *]

 

POZEN will [*                                         *] under the circumstances
described in subsection 15.4.3 of this Agreement:

 

[*THE REMAINDER OF THIS PAGE HAS BEEN OMITTED PURSUANT TO A

CONFIDENTIAL TREATMENT REQUEST*]

 

1

--------------------------------------------------------------------------------

EXHIBIT F

 

CALCULATION OF MINIMUM ROYALTY AMOUNTS

 

For each Product and each country in the Territory, the “Minimum Royalty Amount”
is equal to the product obtained by multiplying (i) the number of Units of such
Product included in the calculation of Net Sales for such Product in such
country, and (ii) the amount set forth on the following table corresponding to
such Product and such country:

 

PRODUCT

--------------------------------------------------------------------------------

  

COUNTRY

--------------------------------------------------------------------------------

  

PER UNIT MINIMUM

--------------------------------------------------------------------------------

Initial Product

   All countries of the Territory    [*                     *]

 

Notwithstanding the foregoing, during such time as (a)
[*                                 *]; or (b) [*            
                                                                          *];
then there will be no Minimum Royalty Amount with respect to sales of such
Product in such country; provided, however, that the continuation of one or more
of the preceding conditions with respect to such Product in such country will be
reasonably demonstrated by Licensee and reviewed by POZEN.

 

For making the comparison described in subsection 9.3.1 of this Agreement, each
Per Unit Minimum set forth in the preceding table will be converted into the
currency in which Net Sales accrued in such country, according to the applicable
exchange rate as published in The Wall Street Journal, Eastern Edition, on the
last business day of the applicable calendar quarter.

 

1

--------------------------------------------------------------------------------

EXHIBIT G

 

SUPPLY AGREEMENT

--------------------------------------------------------------------------------

NOTE:                 CERTAIN PORTIONS OF THIS SUPPLY AGREEMENT AND ITS
EXHIBITS, WHICH ARE IDENTIFIED BY THE SYMBOL “[*                            
*]”, HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.

 

POZEN INC. / NYCOMED DANMARK APS

 

SUPPLY AGREEMENT

--------------------------------------------------------------------------------

ARTICLE 1

  

        DEFINITIONS

   1

ARTICLE 2

  

        COORDINATORS

   3

ARTICLE 3

  

        SALE AND PURCHASE OF PRODUCT

   3

ARTICLE 4

  

        EQUIPMENT; ARTWORK

   3

4.1    

  

Specialized Equipment

   4

4.2    

  

Other Equipment

   4

4.3    

  

Artwork

   5

ARTICLE 5

  

        WARRANTIES; SPECIFICATIONS; QUALITY AGREEMENT

   5

5.1    

  

Warranties by POZEN

   5

5.2    

  

Disclaimer

   6

5.3    

  

Changes to Specifications

   6

5.4    

  

Quality Agreement

   6

5.5    

  

Warranty by Nycomed

   7

ARTICLE 6

  

        FORECASTS; ORDERS

   7

6.1    

  

Forecast Schedules

   7

6.2    

  

Forecast Variances

   7

ARTICLE 7

  

        PURCHASE OF PRODUCT; DELIVERIES

   7

7.1    

  

Purchase Orders

   7

7.2    

  

Purchase Quantities

   8

7.3    

  

Delivery Terms

   8

7.4    

  

Export Compliance

   8

ARTICLE 8

  

        PRICE; PRICE INCREASES; ADDITIONAL PAYMENTS

   8

8.1    

  

Price

   8

8.2    

  

Price Increases

   8

8.3    

  

Taxes

   9

8.4    

  

Method of Payment

   9

ARTICLE 9

  

        MANUFACTURING AUDITS; CORRESPONDENCE; COMPLAINTS; RECORDS; INSPECTIONS

   9

9.1    

  

Manufacturing Audits

   9

9.2    

  

Correspondence

   10

9.3    

  

Complaints

   10

9.4    

  

Documentation

   10

9.5    

  

Inspections

   10

--------------------------------------------------------------------------------

ARTICLE 10

  

        RECALLS

   11

ARTICLE 11

  

        REGULATORY

   11

ARTICLE 12

  

        SECOND SOURCE

   11

ARTICLE 13

  

        TERM; TERMINATION

   12

13.1    

  

Term

   12

13.2    

  

Termination by Mutual Agreement

   12

13.3    

  

Termination for Default

   12

13.4    

  

Bankruptcy; Insolvency

   13

13.5    

  

Termination of Other Agreements

   13

13.6    

  

Expiration; Termination; Consequences

   13

ARTICLE 14

  

        CLAIMS

   14

14.1    

  

Claims

   14

14.2    

  

Disposition of Nonconforming Product

   14

14.3    

  

Product Holds/Rejects

   14

ARTICLE 15

  

        INDEMNIFICATION

   15

15.1    

  

Indemnification by Nycomed

   15

15.2    

  

Indemnification by POZEN

   15

15.3    

  

Indemnification Procedures

   15

15.4    

  

Limitation of Liability and Claims

   16

15.5    

  

Insurance

   16

ARTICLE 16

  

        CONFIDENTIALITY

   16

16.1    

  

Confidential Information

   16

16.2    

  

Treatment of Confidential Information

   17

16.3    

  

Access

   17

16.4    

  

Permitted Disclosures

   17

16.5    

  

Return of Confidential Information

   17

16.6    

  

Confidentiality of the Agreement Terms

   17

ARTICLE 17

  

        INTELLECTUAL PROPERTY

   18

ARTICLE 18

  

        FORCE MAJEURE

   18

18.1    

  

Effects of Force Majeure

   18

18.2    

  

Notice of Force Majeure Event

   19

ARTICLE 19

  

        LEGAL COMPLIANCE; AUTHORIZATION

   19

19.1    

  

Legal Compliance

   19

--------------------------------------------------------------------------------

19.2    

  

Authorization

   19

ARTICLE 20

  

        DISPUTE RESOLUTION; VENUE

   19

20.1    

  

Exclusions

   19

20.2    

  

Dispute Resolution

   19

20.3    

  

Venue

   20

ARTICLE 21

  

        MISCELLANEOUS

   20

--------------------------------------------------------------------------------

SUPPLY AGREEMENT

 

THIS SUPPLY AGREEMENT is made effective as of this 30th day of June, 2003 (the
“Effective Date”), by and between POZEN INC. (“POZEN”), a corporation organized
under the laws of the State of Delaware and having a place of business at 1414
Raleigh Road, Suite 400, Chapel Hill, NC 27517 and NYCOMED DANMARK APS
(“Nycomed”), a corporation organized under the laws of Denmark and having a
place of business at Langebjerg 1, DK-4000 Roskilde, Denmark (each individually
a “Party” and collectively the “Parties”).

 

RECITALS

 

A. The Parties have entered into that certain License Agreement dated as of the
Effective Date (the “License Agreement”) regarding POZEN’s MT 100 drug product,
under which agreement Nycomed receives certain rights to market and sell, itself
or through its Affiliates, such product in finished dosage form for human use;

 

B. POZEN has entered into that certain Supply Agreement dated as of January 17,
2001 (the “DSM Supply Agreement”) with DSM Pharmaceuticals (“DSM”), formerly
known as Catalytica Pharmaceuticals, Inc., under which DSM provides POZEN with
certain manufacturing, packaging, analytical testing and quality assurance
services for the manufacturing, labeling and packaging of MT100 for commercial
sale; and

 

C. Nycomed desires for POZEN to obtain and sell such product to Nycomed, and
POZEN desires to obtain and sell such product to Nycomed, all on the terms and
conditions set forth in this Agreement;

 

NOW, THEREFORE, in consideration of the mutual covenants and promises set forth
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties agree as follows:

 

ARTICLE 1

 

DEFINITIONS

 

The following terms, whether used in the singular or plural, shall have the
meanings assigned to them below for purposes of this Agreement:

 

1.1 “Affiliate” shall mean a corporation or other business entity that, directly
or indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with a Party. For purposes of this definition only,
“control” and, with corresponding meanings, the terms “controlled by” and “under
common control with” means (a) the possession, directly or indirectly, of the
power to direct the management or policies of a legal entity, whether through
the ownership of voting securities or by contract relating to voting rights or
corporate governance, or (b) the ownership, directly or indirectly, of more than
50% of the voting securities or other ownership interest of a legal entity;
provided, however, that if local law restricts foreign ownership, control shall
be established by direct or indirect ownership of the maximum ownership
percentage that may, under such local law, be owned by foreign interests.

 

1

--------------------------------------------------------------------------------

1.2 “Batch” shall mean [*                         *] Units of Product, or such
other number of Units of Product as may be agreed upon by the Parties and DSM.

 

1.3 “Confidential Information” shall have the meaning set forth in Section 16.1.

 

1.4 “Contract Year” shall mean the period of twelve (12) successive calendar
months commencing on the first day of the month of the first Delivery Date, and
each successive twelve (12) month period thereafter. Nycomed shall confirm in
writing to POZEN the commencement of the first Contract Year promptly after the
occurrence thereof.

 

1.5 “Delivery Date” shall mean a date for which delivery of Product is stated in
a purchase order submitted by Nycomed to POZEN hereunder.

 

1.6 “FD&C Act” shall mean the United States Federal Food, Drug and Cosmetic Act,
as amended.

 

1.7 “FDA” shall mean the United States Food and Drug Administration, or any
successor entity.

 

1.8 “License Agreement” shall mean that certain License Agreement between POZEN
and Nycomed dated as of the Effective Date.

 

1.9 “MAA” shall mean a Marketing Authorization Application submitted to the
appropriate regulatory body in a European country (including Norway) for the
purposes of obtaining approval for the marketing of a prescription
pharmaceutical product in such country.

 

1.10 “POZEN MAA” shall mean MAA [*                        *] submitted to the
United Kingdom Medicines Control Agency on October 8, 2002, or
[*                                        *], to obtain approval for the
marketing of the Product in the United Kingdom.

 

1.11 “Product” shall mean an oral formulation of POZEN’s MT 100 drug product
containing [*            *] naproxen sodium and [*            *] metoclopramide
hydrochloride in tablet form, conforming to the Specifications.

 

1.12 “Product Approval” shall mean approval of an MAA for the Product in a
country of the Territory.

 

1.13 “Product Price” shall mean the [*                                        
                                 *]. The initial Product Price for each Unit of
Product is set forth in Exhibit 1 attached hereto and made a part hereof, as
such exhibit may be amended from time to time during the Term in accordance with
the terms of this Agreement.

 

1.14 “Quality Agreement” shall have the meaning set forth in Section 5.4.

 

1.15 “Specifications” shall mean the specifications for the Product attached
hereto as Exhibit 2 and made a part hereof, as determined in accordance with the
analytical methodology set forth therein, as such specifications may be amended
from time to time by mutual agreement

 

2

--------------------------------------------------------------------------------

of the Parties, including without limitation such amendments as may be required
to obtain Product Approval.

 

1.16 “Term” shall have the meaning set forth in Section 13.1 hereof.

 

1.17 “Territory” shall mean Denmark, Finland, Norway, and Sweden.

 

1.18 “Third Party” shall mean any individual or entity other than Nycomed, POZEN
and their respective Affiliates.

 

1.19 “Unit” shall mean a single tablet of Product.

 

ARTICLE 2

 

COORDINATORS

 

Within ten (10) days after the date hereof, Nycomed and POZEN shall each appoint
an authorized representative and a backup representative for the exchange of all
communications, other than legal notices, related to the manufacturing of the
Product. Each Party shall provide notice to the other Party as to the name and
title of the individuals so appointed. Each Party may replace its
representatives at any time for any reason by providing written notice to the
other Party in accordance with Section 21.9 hereof.

 

ARTICLE 3

 

SALE AND PURCHASE OF PRODUCT

 

During each Contract Year throughout the Term, and subject to the provisions
herein, POZEN agrees to sell to Nycomed and Nycomed agrees to purchase from
POZEN, Nycomed’s and its Affiliates’ [*
                                        *] for sale in the Territory.
Notwithstanding the provision above, Nycomed will be entitled during the Term to
[*                                        
                                         *]; provided, however, that, except as
expressly provided in this Agreement, Nycomed will have
[*                                        
                                                  *]. However, notwithstanding
anything to the contrary in this provision, during the
[*                                 *] immediately preceding the [*
                                                 *], Nycomed shall have the
right to [*                                         
                                    *].

 

Nycomed understands and agrees that, [*                                         
                                                 *] under this Agreement
[*                                             *], either (a)
[*                                                  *], or (b)
[*                                                  *].
[*                                                                          *]
under this Agreement [*                                         
                        *].

 

ARTICLE 4

 

EQUIPMENT; ARTWORK

 

4.1 Specialized Equipment.

 

3

--------------------------------------------------------------------------------

(a) Acquisition. [*        *] shall [*        *] for all [*        *] and
[*        *] associated with the [*                *] and [*        *] by
[*        *] of any [*                *] or [*        *] that is required by
[*        *] for the sole purpose of [*                    *] for sale in the
Territory and the [*                *] of which is approved in writing by
[*        *] prior to [*                    *] (collectively, the “Specialized
Equipment”) within [*                                *] therefor. Prior to
requesting [*                *] of the [*                *] of Specialized
Equipment, POZEN [*                                         
                                        
                                        
                                        
                                                                      *]. Any
[*                *] related to [*                *] shall be handled in a
similar manner as outlined in this Section 4.1.

 

(b) Maintenance. [*                                 *] shall be responsible for
the [*                *] and the [*        *] of [*                *] and
[*                *] of the Specialized Equipment during the Term.
[*                                         *] shall be responsible for
[*                                      *] of the Specialized Equipment
(including, by way of example, any [*                                    *]
shall notify [*                *] prior to the [*                *] of any such
[*                        *], and [*                *] shall
[*                        *] for any such [*                *] or
[*                                        *] has authorized to be
[*                *].

 

(c) Transfer. Upon any expiration or termination of this Agreement
[*                                        
                                         *], at Nycomed’s option: (i) the
Parties shall promptly agree on a procedure whereby Nycomed shall obtain
possession of the Specialized Equipment with
[*                                        
                                                      *], or (ii) with POZEN’s
approval, [*                                                          *] of such
Specialized Equipment.

 

4.2 Other Equipment.

 

(a) Notice. As between the Parties, POZEN will be responsible for coordinating
the acquisition and maintenance by DSM of any equipment that is required for
obtaining or maintaining approval of the POZEN MAA in the United Kingdom and
that is acquired after the Effective Date. POZEN will give Nycomed
[*                                        
                                                          *] written notice in
the event that DSM and POZEN agree that such acquisition or maintenance is
required (each such notice, an “Equipment Notice”). POZEN will set forth in each
Equipment Notice a description of [*                                        
                                                              *].

 

(b) Consent by [*                *]. Upon [*                *] written consent,
not to be unreasonably withheld [*                                         *],
[*                *] will be responsible for the [*
                                                                     *];
provided, however, that [*                                        
                                                          *], as defined below.
For the purposes of this Section 4.2 only, [*                                 *]
means a [*                                        
                                                      *].

 

(c) Disputes. If [*                *] does not give its consent pursuant to the
foregoing Section 4.2(b) to [*                    
                                                                          *],
then the Parties

 

4

--------------------------------------------------------------------------------

will meet to discuss the issue. If the Parties are not able to agree upon a
resolution of such issue, including an inability to reach agreement by the
designated officers pursuant to Section 20.2 despite good faith efforts by the
Parties, then [*                                         
                                 *]. If
[*                                        
                                                      *]. If
[*                                                                     
             *].

 

4.3 Artwork. At least [*                                              *] prior
to (a) the first Delivery Date or (b) any modification to the artwork for the
Product, as applicable, and from time to time thereafter with respect to the
Product, as needed, Nycomed shall provide
[*                                                          *] to POZEN, in a
format acceptable to both Parties and in a timely manner, digital artwork for
all packaging components to be used in the manufacture of the Product, which
artwork shall meet the applicable Specifications
[*                                        
                                                                  *].

 

ARTICLE 5

 

WARRANTIES; SPECIFICATIONS; QUALITY AGREEMENT

 

5.1 Warranties by POZEN. POZEN warrants to Nycomed that Product, on delivery,
(a) shall conform to the Specifications, as then in effect; (b) shall have been
manufactured in accordance with (i) [*                                        
                                     *], and (ii) the
[*                                                                          *];
and (c) shall not be adulterated or misbranded within the meaning of the FD&C
Act, or an article that may not be introduced into interstate commerce under the
provisions of Sections 404 or 505 of the FD&C Act.

 

5.2 Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN SECTION 5.1 ABOVE OR
IN THE LICENSE AGREEMENT, POZEN MAKES NO WARRANTY THAT THE PRODUCT (i)
[*                                                                  *], (ii)
[*                                         *], OR (iii)
[*                                                                  *]; NOR DOES
POZEN MAKE ANY OTHER WARRANTIES WITH RESPECT TO THE PRODUCT, EXPRESS OR IMPLIED,
EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT OR IN THE LICENSE AGREEMENT.

 

5.3 Changes to Specifications. In the event Nycomed desires to change the
Specifications or the manufacturing process for Product (including without
limitation to achieve compliance with regulatory requirements from authorities
in the Territory), Nycomed shall promptly advise POZEN in writing of such
desired changes, and [*                                        
                     *] such changes. POZEN shall promptly advise Nycomed as to
any [*                                        
                                                                             
*]. Prior to implementation of such changes, POZEN shall inform Nycomed of (a)
[*                                         *], and (b)
[*                                     *]. If the Parties are not able to agree
upon [*                                 *] due to a change in Specifications,
including an inability to reach agreement by the designated officers pursuant to
Section 20.2 despite good faith efforts by the Parties, then POZEN shall
[*                                                                  *]. If [*

 

5

--------------------------------------------------------------------------------

                                                                         *]. If
[*                                        
                                                  *]. If, during the Term,
Nycomed amends or is required by law to amend the Specifications so as to render
certain materials or components for the Product obsolete,
[*                                        
                                        
                                                                      *] as the
result of the obsolescence of any Product-specific inventory of materials,
packaging components, or Product reasonably [*                                
*] to satisfy existing purchase orders or forecasted requirements, to the extent
that the relevant items are not sold to Third Parties or are not used in
[*                                                                             
*].

 

5.4 Quality Agreement. Within three (3) months following the Effective Date, the
Parties will enter into an agreement describing the quality assurance
obligations and responsibilities of the Parties with respect to the manufacture
and supply of Product under this Agreement (the “Quality Agreement”). Under the
Quality Agreement, Nycomed will undertake, at a minimum, the [*    
                                        
                                                                      *].
Notwithstanding anything to the contrary in this Agreement or in any other
document or agreement, in the event of a conflict between this Agreement and the
Quality Agreement, this Agreement shall govern and control.

 

5.5 Warranty by Nycomed. Subject to Section 5.1, Nycomed hereby represents and
warrants to POZEN that it will comply fully with all export administration and
control laws and regulations as may be applicable to the export, resale or other
disposition of any Product purchased by Nycomed hereunder.

 

ARTICLE 6

 

FORECASTS; ORDERS

 

6.1 Forecast Schedules.

 

(a) Long-Term Forecast Schedule. [*                             *] prior to
estimated Product Approval, Nycomed shall deliver to POZEN a forecast of
Nycomed’s Unit requirements for Product for each calendar year during the Term.
Such forecast shall thereafter be updated as required by Nycomed, but at least
[*                                 *] during the Term.

 

(b) Detailed Forecast Schedule. At least [*                             *] prior
to the first anticipated Delivery Date, Nycomed shall deliver to POZEN a
detailed forecast of Nycomed’s Unit requirements for Product for each month
during the first Contract Year. Such detailed forecast shall thereafter be
updated [*                                              *], so that
[*                                                  *], POZEN shall have been
provided with a rolling detailed forecast for each
[*                                        
                                                              *] after the date
on which such forecast is submitted. The forecast for the first
[*                                                  *] contained in each such
detailed forecast shall be firm and binding on Nycomed and POZEN. Subsequent
purchase orders shall be accepted by POZEN provided that the forecast for each
of the [*                                              *] has varied from the
relevant forecast submitted in the previous
[*                                         *] pursuant to this subsection 6.1(b)
by no more than [*                                         *]. Notwithstanding
the preceding sentence, POZEN shall accept purchase orders for a quantity of
Product during the [*                                                  *] of the
first

 

6

--------------------------------------------------------------------------------

Contract Year which vary from the applicable and otherwise binding forecast by
up to [*                                                                  *].

 

6.2 Forecast Variances. In addition to the obligation to supply Nycomed within
the [*                                                          *] set forth in
Section [*                                        
                                        
                                                          *].

 

ARTICLE 7

 

PURCHASE OF PRODUCT; DELIVERIES

 

7.1 Purchase Orders. Except to the extent the Parties may otherwise agree with
respect to a particular shipment, Product shall be ordered by Nycomed pursuant
to written purchase orders, which shall be sent to POZEN with [*                
                                                                          *]
prior to the Delivery Dates specified in such purchase orders. Upon receipt of
each purchase order by POZEN hereunder, POZEN shall
[*                                             
                                        
                                        
                                                              *].

 

7.2 Purchase Quantities. Nycomed shall order Product hereunder in Batch sizes or
whole multiples thereof. Each purchase order submitted by Nycomed hereunder
shall specify the quantity of Units of Product being ordered. Notwithstanding
anything in this Agreement to the contrary,
[*                                        
                                        
                                        
                                         *]; provided, however, Nycomed shall
only be [*                                        
                                                      *]; and provided, further,
that POZEN shall [*                                        
                                                      *].

 

7.3 Delivery Terms. The terms of delivery for the Product shall be
[*                                                                      *].
Title and risk of loss and/or damage to Product shall pass to Nycomed upon
delivery of such Product [*                        
                                                      *].

 

7.4 Export Compliance. [*                                        
                                        
                                                              *]. Nycomed
represents and warrants that it shall comply with all import and export laws and
regulations applicable to its purchase of Product hereunder.

 

ARTICLE 8

 

PRICE; PRICE INCREASES; ADDITIONAL PAYMENTS

 

8.1 Price. For all Product delivered to Nycomed pursuant to this Agreement,
Nycomed shall pay to POZEN: (a) [*                                        
                                                                             
*], and (b) [*                                                     
                         *], in each case subject to adjustment as set forth in
Sections 5.3 and 8.2 hereof.

 

8.2 Price Increases.

 

(a) Nycomed understands and agrees that,
[*                                         *]: (i) the
[*                                                                             
*], (ii)

 

7

--------------------------------------------------------------------------------

[*                                      
                                        
                                        
                                        
                                                *], and (iii)
[*                                        
                                        
                                                              *]. POZEN hereby
represents and warrants that, as of the Effective Date,
[*                                                                             
*]. POZEN shall inform Nycomed if POZEN
[*                                                      *].

 

(b) Notwithstanding the prices set forth in Section 8.1 above, the
[*                                                                             
                                     *] pursuant to this Agreement
[*                                        
                                         *] upon the later of: (i)
[*                                                                      *], and
(ii) [*                                        
                                         *].

 

8.3 Taxes. The Product Price set forth in Exhibit 1 does not include
[*                                                                         
                                         *]. POZEN shall add the amount of such
taxes, if any, to the purchase price of Product in effect at the time of
shipment thereof and include such amount in the invoices submitted to Nycomed by
POZEN hereunder. Nycomed shall pay the amount of such taxes to POZEN in
accordance with the payment provisions of this Agreement.

 

8.4 Method of Payment. At the time of each shipment of Product hereunder, POZEN
shall invoice Nycomed, and Nycomed shall pay for such Product
[*                                        
                                                                      *] of
receipt of each such invoice. All payments due hereunder to POZEN shall be sent
to POZEN at the times set forth herein by wire transfer of funds to such account
of POZEN as POZEN may designate to Nycomed in writing from time to time in
accordance with Section 21.9 hereof. Nycomed shall notify such person as POZEN
may designate to Nycomed from time to time in accordance with Section 21.9
hereof as to the making of all payments hereunder. All amounts not paid when due
shall bear interest from the due date at the rate of
[*                                        
                                         *] per month (or such other percentage,
if lower, as shall not exceed the maximum rate permitted by law). In addition to
any other rights POZEN may have, if any undisputed amount remains outstanding
for more than [*                                        
                                        
                                         *].

 

ARTICLE 9

 

MANUFACTURING AUDITS; CORRESPONDENCE;

COMPLAINTS; RECORDS; INSPECTIONS

 

9.1 Manufacturing Audits.

 

(a) Scheduled Audit. Upon request by Nycomed, POZEN will
[*                                                                             
                                        
                                                                  *].

 

(b) Triggered Audits. Nycomed shall be entitled to request that
[*                                        
                                              *] in the event of: (i)
[*                                                                      *], (ii)
[*                                                          *], or (iii)
[*                         *]. In the event of such a request, POZEN will use
commercially reasonable efforts to [*

 

8

--------------------------------------------------------------------------------

                                                                                
             *]. As promptly as practicable following [*                        
                                                      *]. Nycomed shall
[*                                                                      *].

 

9.2 Correspondence. Each Party shall promptly notify the other Party of, and
shall provide such other Party with copies of, any correspondence and other
documentation received or prepared by the notifying Party in connection with any
of the following events: (a) [*                                        
                                                                             
*]; (b) [*                                                                     
                         *]; and (c) [*                                        
                                                  *]. Furthermore, Nycomed shall
promptly provide POZEN with a copy of any
[*                                                                          *].
POZEN will use commercially reasonable efforts to
[*                                        
                                                                  *].

 

9.3 Complaints. Nycomed and POZEN shall each maintain complaint files with
respect to the Product in accordance with cGMPs. Each Party shall provide the
other Party with copies of all complaints received by it
[*                                                                     
                                 *] with respect to the Product within the time
periods specified in the Quality Agreement, as well as copies of any responses
to complaints relating to the manufacture of the Product. As between the
Parties, [*                                        
                                     *], including, but not limited to,
complaints relating to the manufacture of the Product as well as adverse drug
events (ADE) reports. As between the Parties,
[*                                                              *], including,
but not limited to, complaints relating to the manufacture of the Product as
well as adverse drug events (ADE) reports. POZEN will use commercially
reasonable efforts to [*                                        
                                        
                                                              *].

 

9.4 Documentation. POZEN shall furnish to Nycomed with each invoice for Product
ordered by Nycomed hereunder a copy of DSM’s certificate of analysis reflecting
that such Product meets the Specifications, [*                            
                                        
                                                      *].

 

9.5 Inspections. Should POZEN receive notice from
[*                                        
                                                              *]. In the event
POZEN receives notice from [*                                        
                                 *], including, but not limited to,
[*                                                             
                                         *].

 

ARTICLE 10

 

RECALLS

 

POZEN and Nycomed each shall notify the other promptly if any shipment of
Product is alleged or proven to be the subject of a recall, market withdrawal or
correction, and the Parties shall cooperate in the handling and disposition of
such recall, market withdrawal or correction; provided, however, in the event of
a disagreement as to any matters related to such recall, market withdrawal or
correction, [*                                        
                                        
                                                      *] as set forth in the
immediately following sentence, [*                                        
                                                          *].
[*                                                  *]

 

9

--------------------------------------------------------------------------------

shall [*                                         *] of all recalls, market
withdrawals or corrections of Product within the Territory except to the extent
such recall, market withdrawal or correction shall have been the result of
[*                                                                         
                                                          *] of administering
such recall, market withdrawal or correction and substantiation; provided,
however, in no event shall [*                                        
                                                      *] under this Article 10
[*                                        
                                        
                                         *] of administering such recall, market
withdrawal or correction and substantiation (if applicable) for the Product
subject to such recall, including but not limited to, [*                    
                             *]. Nycomed shall maintain records of all sales of
Product and customers sufficient to adequately administer a recall, market
withdrawal or correction for a period of
[*                                                          *] after termination
or expiration of this Agreement. Nycomed, with the reasonable cooperation of
POZEN, shall in all events be responsible for conducting any recalls, market
withdrawals or corrections with respect to the Product within the Territory.

 

ARTICLE 11

 

REGULATORY

 

The responsibilities of the Parties with respect to maintaining the Product
Approvals are set forth in the License Agreement.

 

ARTICLE 12

 

SECOND SOURCE

 

Nycomed shall, reasonably in advance of any anticipated termination or
expiration of this Agreement, establish an independent source of supply or
engage a third party supplier to provide commercial quantities of Product
commencing upon the effective date of such termination or expiration. Upon
request by Nycomed, POZEN shall (a) [*                                        
             *], (b) [*                                         *],
(c) [*                                                  *], and (d)
[*                                                                              
*]. Reasonably in advance of entering into any commitment for such independent
source, Nycomed will [*                                        
                                                                             *].

 

ARTICLE 13

 

TERM; TERMINATION

 

13.1 Term. Unless sooner terminated pursuant to the terms hereof, the term of
this Agreement (the “Term”) shall commence on the Effective Date and shall
continue until [*                                        
                                                                      *]. POZEN
shall provide Nycomed with prompt written notice of
[*                                        
                                        
                                                  *].

 

13.2 Termination by Mutual Agreement. This Agreement may be terminated at any
time upon mutual written agreement between the Parties.

 

 

10

--------------------------------------------------------------------------------

13.3 Termination for Default. This Agreement may be terminated by either Party
in the event of the material breach or default by the other Party of the terms
and conditions hereof; provided, however, the other Party shall first give to
the defaulting Party written notice of the proposed termination or cancellation
of this Agreement, specifying the grounds therefor. Upon receipt of such notice,
the defaulting Party shall have [*                                        
         *] to respond by curing such default (or
[*                                              *] with respect to a failure by
Nycomed to pay any amounts hereunder when due) or by delivering to the other
Party a certificate that such breach is not capable of being cured within such
[*                         *] and that the breaching Party is working diligently
to cure such breach, but in no event shall the time period for curing such
breach exceed an additional [*                                     *], unless
otherwise mutually agreed by the Parties. If the breaching Party does not so
respond or fails to work diligently and to cure such breach within the
additional time set forth above, then the other Party may either suspend the
Agreement indefinitely or terminate the Agreement. Notwithstanding the
foregoing, if Nycomed [*                                      
                           *] then Nycomed
shall [*                                      
                                                    *] if POZEN
[*                                                                              
*] (i) [*                                        
                                         *] or (ii)
[*                                              *]; provided, however, that
Nycomed will [*                                                              *]
(a) Nycomed is [*                                        
                                     *], or (b) such
[*                                                          *], or (c) such
[*                                                                       *] .
Termination of this Agreement pursuant to this Section 13.3 shall not affect any
other rights or remedies which may be available to the nondefaulting Party.

 

13.4 Bankruptcy; Insolvency. Either Party may immediately terminate this
Agreement upon the occurrence of either of the following:

 

(a) The entry of a decree or order for relief by a court having jurisdiction in
the premises in respect of the other Party in an involuntary case under any
applicable national, federal, or state insolvency or other similar law and the
continuance of any such decree or order unstayed and in effect for a period of
sixty (60) consecutive days; or

 

(b) The filing by the other Party of a petition for relief under any applicable
national, federal, or state insolvency or other similar law.

 

13.5 Termination of Other Agreements. This Agreement shall terminate
automatically upon any expiration or termination of the License Agreement or DSM
Supply Agreement.

 

13.6 Expiration; Termination; Consequences.

 

(a) Upon expiration or termination of this Agreement, whichever is sooner,
[*                                     *], POZEN shall use commercially
reasonable efforts to [*                                     *], and Nycomed
shall purchase in accordance with the provisions hereof, any and all amounts of
Product ordered by Nycomed hereunder prior to the date on which such notice is
given.

 

11

--------------------------------------------------------------------------------

(b) Upon termination of this Agreement due to the expiration or termination of
the DSM Supply Agreement, Nycomed shall reimburse POZEN for
[*                                        
                                        
                                                                  *] any amounts
payable by POZEN to DSM due to obligations under the DSM Supply Agreement for:
(i) [*                                         *], (ii) [*
                                *], (iii) [*                        
                                              *], and (iv) other reasonable
commitments. All costs listed under the foregoing (i) through (iv) are payable
only to the extent that they are reasonably made
[*                                        
                                                                          *].

 

(c) Upon any expiration or termination of this Agreement, other than termination
by Nycomed pursuant to Section 13.3 or 13.4 hereof or termination due to the
expiration or termination of the Supply Agreement, Nycomed shall reimburse POZEN
for any amounts paid by POZEN to DSM under the Supply Agreement for: (i)
[*                                        
                                        
                                                          *], (ii)
[*                                        
                                                              *], (iii) [*
                                        
                                                             *], (iv) all other
reasonable commitments that cannot be cancelled and that were made
[*                                        
                                                              *], and (v) any
and all [*                                        
                                     *].

 

(d) Upon any expiration or termination of this Agreement, the obligations set
forth in the following provisions of this Agreement shall survive, together with
any definitions used or Exhibits referenced therein: Sections 4.3, 5.1, 5.2, and
13.6, and Articles 12, 15, 16, 20 and 21.

 

ARTICLE 14

 

CLAIMS

 

14.1 Claims. In the event that any of the Product delivered to Nycomed’s
designated carrier by POZEN shall fail to conform with any warranty set forth
herein relating to quality and/or the Specifications, Nycomed may reject such
Product by giving written notice to both POZEN and DSM within the earlier to
occur of (i) [*                                     *] of delivery of such
Product to Nycomed [*                             *], or (ii)
[*                                     *] after receipt of such Product at
Nycomed’s designated facility; any Product not rejected in accordance with the
foregoing shall be deemed accepted by Nycomed and conforming, provided that
appropriate certification documentation is included with shipment. Any notice
given hereunder shall specify the manner in which the Product fails to meet such
warranty or the Specifications. If it is determined by agreement of the Parties
(or in the absence of agreement of the Parties by a mutually acceptable
independent laboratory or consultant whose fees shall be paid by the
non-prevailing Party) that the nonconformity is due to damage to the Product (i)
caused by Nycomed or its agents or (ii) which occurs subsequent to delivery of
such Product to [*                                        
                                         *], POZEN shall have no liability to
Nycomed with respect thereto. If the nonconformity in rejected Product is not
caused by Nycomed and occurs prior to the delivery to Nycomed or is otherwise
caused by negligent acts or omissions or willful misconduct (including, without
limitation, failure to verify that materials supplied by a third party supplier
conform to the specifications for such materials) by DSM, POZEN, or their
respective Affiliates, then POZEN shall credit Nycomed’s account for the price
invoiced for such nonconforming Product.

 

12

--------------------------------------------------------------------------------

If payment therefor has previously been made by Nycomed, POZEN shall, at
Nycomed’s sole option, (x) pay Nycomed the amount of such credit, (y) offset the
amount thereof against other amounts then due POZEN hereunder or (z) use
commercially reasonable efforts to cause DSM to replace such nonconforming
Product with conforming Product at no additional cost to Nycomed. Except as set
forth in Section 15.2, the foregoing remedy constitutes the exclusive remedy
against POZEN, and the entire liability of POZEN, in connection with any
rejected Product.

 

14.2 Disposition of Nonconforming Product. In any case where Nycomed expects to
make a claim against POZEN with respect to damaged or otherwise nonconforming
Product, Nycomed shall not dispose of such Product without written authorization
and instructions of POZEN either to dispose of the Product or to return the
Product to POZEN. If the Product is returned to POZEN, all risk of loss and/or
damage to such Product shall pass to POZEN upon delivery of the Product to
POZEN’s designated carrier at Nycomed’s designated facility.

 

14.3 Product Holds/Rejects. POZEN shall notify Nycomed promptly of Product holds
and/or rejects that have, or are expected to have, an impact on the
manufacturing process for Product and that shall require, or are expected to
require, Nycomed approval prior to resolution.

 

ARTICLE 15

 

INDEMNIFICATION

 

15.1 Indemnification by Nycomed. Nycomed shall indemnify, defend and hold POZEN,
its Affiliates and their respective directors, officers, employees, agents,
successors and assigns harmless from and against any damages, judgments, claims,
suits, actions, liabilities, costs and expenses (including, but not limited to,
reasonable attorneys’ fees) to the extent arising out of or connected
with (a) [*                                                             *]; (b)
[*                                                          *]; or (c)
[*                                     *].

 

15.2 Indemnification by POZEN. Except as otherwise provided in Section 15.1
above, POZEN shall indemnify, defend and hold Nycomed, its Affiliates and their
respective directors, officers, employees, agents, successors and assigns
harmless from and against any damages, judgments, claims, suits, actions,
liabilities, costs and expenses (including, but not limited to, reasonable
attorneys’ fees) to the extent arising out of or connected
with: (a) [*                                     
                                        *];
(b) [*                                                  *];
(c) [*                                                              *]; or (d)
[*                                         
                                        
                                        *].

 

15.3 Indemnification Procedures. A Party (the “Indemnitee”) which intends to
claim indemnification under this Article 15 shall promptly notify the other
Party (the “Indemnitor”) in writing of any action, claim or other matter in
respect of which the Indemnitee or any of its Affiliates, or any of their
respective directors, officers, employees or agents intend to claim such
indemnification; provided, however, the failure to provide such notice within a
reasonable period of time shall not relieve the Indemnitor of any of its
obligations hereunder

 

13

--------------------------------------------------------------------------------

except to the extent the Indemnitor is prejudiced by such failure. The
Indemnitee, its Affiliates, and their respective directors, officers, employees
and agents shall cooperate fully with the Indemnitor and its legal
representatives in the investigation, negotiation, compromise, settlement and
defense of any action, claim or other matter covered by this indemnification.
The Indemnitor shall be in charge of and control of any such investigation,
negotiation, compromise, settlement and defense and shall have the right to
select counsel with respect thereto, provided that the Indemnitor shall promptly
notify the Indemnitee of all developments in the matter. In no event shall the
Indemnitor or Indemnitee compromise or settle any such matter without the prior
written consent of the other Party, which shall not be bound by any such
compromise or settlement absent its prior consent, which shall not be
unreasonably withheld or delayed. The Indemnitee shall have the right, but not
the obligation, to be represented by counsel of its own selection and at its own
expense.

 

15.4 Limitation of Liability and Claims. In no event shall either Party be
liable to the other Party for incidental, special, consequential or punitive
damages, including, but not limited to, any claim for damages based upon lost
profits. In addition, in no event shall the collective, aggregate liability of
POZEN and its Affiliates and its and their respective directors, officers,
employees and agents under this Agreement exceed
[*                                                                             
*]per annum.

 

15.5 Insurance. Upon request, Nycomed and POZEN shall provide each other with
documentation evidencing the maintenance of product liability and/or general
liability insurance coverage in an appropriate amount, but in any event not less
than [*                             *] insurance coverage by POZEN and not less
than [*                                        
                                     *] insurance coverage by Nycomed.

 

ARTICLE 16

 

CONFIDENTIALITY

 

16.1 Confidential Information. Any information or materials communicated by one
Party to the other Party pursuant to this Agreement shall be deemed
“Confidential Information” of the disclosing Party, if such information: (a) is
marked “confidential” or with a similar legend, (b) if disclosed orally or
visually, is identified as being confidential at the time of such oral or visual
disclosure and is thereafter reduced to writing, marked “confidential” or with a
similar legend, and sent to the other Party within 30 days of such oral or
visual disclosure, or (c) would, due to the nature thereof or the circumstances
surrounding disclosure, appear to a reasonable person to be confidential or
proprietary. Notwithstanding the preceding sentence, “Confidential Information”
shall not be deemed to include information that the receiving Party can
demonstrate, by competent written proof:

 

(a) At the time of disclosure is published or is publicly known or otherwise in
the public domain, other than through any act or omission by the receiving
Party;

 

(b) Was already known to the receiving Party, other than under an obligation of
confidentiality or non-use, prior to the time of disclosure;

 

14

--------------------------------------------------------------------------------

(c) Is disclosed to the receiving Party in good faith, without an obligation of
confidentiality, by a Third Party not under any obligation of confidence with
respect to such information; or

 

(d) Is independently developed by the receiving Party without use of or
reference to the disclosing Party’s Confidential Information.

 

16.2 Treatment of Confidential Information. The Parties agree that during the
Term and for 7 years after its expiration or termination for any reason
whatsoever, a Party receiving Confidential Information of the other Party shall:
(a) treat any such Confidential Information disclosed to it by the other Party
as strictly confidential; (b) except as necessary in the performance of this
Agreement, not disclose such Confidential Information to Third Parties without
the prior written consent of the other Party, other than to its Affiliates,
licensees, collaborators or any consultants, provided that such disclosure be
under confidentiality agreements with provisions comparable to those contained
in this Agreement; (c) not use such Confidential Information for purposes other
than those authorized expressly herein; and (d) use reasonable efforts to
prevent inadvertent disclosure of such Confidential Information.

 

16.3 Access. Access to Confidential Information shall be limited to those
employees of the Party receiving such information or of such Party’s Affiliates
who reasonably require such information in order to carry out activities
authorized pursuant to this Agreement. Such employees shall be advised of the
confidential nature of the Confidential Information and the related
confidentiality undertaking.

 

16.4 Permitted Disclosures. Notwithstanding any other provision in this
Agreement, a receiving Party may disclose Confidential Information of the
disclosing Party to the extent such disclosure is required by law or court
order, provided that the receiving Party gives the disclosing Party prompt
written notice of the requirement to disclose and reasonably cooperates with the
disclosing Party to seek a protective order or other restrictions on the
disclosure of such Confidential Information of the disclosing Party. Any such
required disclosure will be limited only to that Confidential Information that
is required to be disclosed and such disclosed Confidential Information shall
remain Confidential Information hereunder despite the required disclosure.
Furthermore, Nycomed or its Affiliates may disclose Confidential Information of
POZEN to government or other regulatory authorities to the extent that such
disclosure is legally necessary to obtain authorizations to conduct clinical
trials with and to commercialize the Product. Upon POZEN’s request (made no more
frequently than once each calendar year), Nycomed shall, as promptly as
reasonably practicable, advise POZEN of the Confidential Information of POZEN
provided by Nycomed to such government or other regulatory authorities since
POZEN’s last such request, and the identities of the particular authorities to
which Nycomed or its Affiliates have provided such Confidential Information.

 

16.5 Return of Confidential Information. Upon termination or expiration of this
Agreement, each Party hereto and its Affiliates shall return all Confidential
Information of the other Party in their possession to the other Party; provided,
however, that each Party may retain: (a) a single archival copy of the
Confidential Information of the other Party solely for the purpose of
determining the extent of disclosure of Confidential Information hereunder and
assuring compliance with the surviving provisions of this Agreement; (b) any
portion of the

 

15

--------------------------------------------------------------------------------

Confidential Information of the other Party which is contained in laboratory
notebooks; and (c) any portion of the Confidential Information of the other
Party which a Party is required by mandatory applicable law to retain.

 

16.6 Confidentiality of the Agreement Terms. Neither Party shall disclose the
terms of this Agreement to any Third Party without the prior written consent of
the other Party; provided, however, that either Party may disclose the terms of
this Agreement to actual or prospective investors and corporate partners, to a
Party’s accountants, attorneys and other professional advisors, and as required
by applicable laws and regulations of the U.S. Securities and Exchange
Commission and any stock exchange on which a Party’s stock is traded.

 

ARTICLE 17

 

INTELLECTUAL PROPERTY

 

Nycomed acknowledges [*                                        
                                                             
                                        
                                                      *] (collectively “Reserved
Property”). Nycomed understands and agrees that all right, title and interest in
and to the Reserved Property will be owned by
[*                                                             *]. Nycomed
understands and agrees that any Reserved Property that has been developed or
discovered by [*                                                         *] as
described in Article [*                                             
                 *]. Nycomed and POZEN agree that the Product or improvements
thereto which are used, improved, modified or developed by POZEN prior to or
during the Term and any data directly and specifically relating to the Product
generated during the performance of this Agreement are the sole and exclusive
property of POZEN and will be transferred to Nycomed under the terms and
conditions set forth in Article 12 above. In no event will the provisions of
this Article 17 be construed to limit the rights and licenses granted by POZEN
to Nycomed pursuant to the License Agreement.

 

ARTICLE 18

 

FORCE MAJEURE

 

18.1 Effects of Force Majeure. Neither Party shall be held liable or responsible
for failure or delay in fulfilling or performing any of its obligations under
this Agreement in case such failure or delay is due to any condition beyond the
reasonable control of the affected Party including, without limitation, Acts of
God, strikes or other labor disputes, war, riot, earthquake, fire, civil
disorder, explosion, accident, flood, sabotage, lack of or inability to obtain
adequate fuel, power, materials, labor, containers, transportation, supplies or
equipment, compliance with governmental requests, laws, rules, regulations,
orders or actions, national defense requirements, or supplier strike, lockout or
injunction (a “Force Majeure Event”). Such excuse shall continue as long as the
Force Majeure Event continues, except that Nycomed shall have the right to (i)
terminate the Agreement without further obligation in the event that POZEN is
not able to supply Nycomed with Product for a continuous period of six (6)
months and (ii) seek an alternate supplier of the Product during the
continuation of, and only during the continuation of, such a Force Majeure Event
unless Nycomed can only secure an alternate supplier for a time period in excess
of the Force Majeure Event period, in which case Nycomed shall resume its
exclusive

 

16

--------------------------------------------------------------------------------

supply relationship with POZEN at the end of such period and extend the Term by
a maximum of six (6) months. A breakage or failure of machinery not arising as a
result of DSM’s failure to properly maintain such equipment in accordance with
this Agreement shall also be considered a Force Majeure Event; however, in such
case, the six (6) month period heretofore applied in this Section 18.1 shall be
sixty (60) days. If no such termination by Nycomed occurs, upon cessation of
such Force Majeure Event, the Parties shall promptly resume performance
hereunder.

 

18.2 Notice of Force Majeure Event. In the event either Party is delayed or
rendered unable to perform due to a Force Majeure Event, the affected Party
shall give notice of the same and its expected duration to the other Party
promptly after the occurrence of the cause relied upon, and upon the giving of
such notice the obligations of the Party giving the notice shall be suspended
during the continuance of the Force Majeure Event; provided, however, such Party
shall take commercially reasonable steps to remedy the Force Majeure Event with
all reasonable dispatch. The requirement that Force Majeure Event be remedied
with all reasonable dispatch shall not require the settlement of strikes or
labor controversies by acceding to the demands of the opposing party.

 

ARTICLE 19

 

LEGAL COMPLIANCE; AUTHORIZATION

 

19.1 Legal Compliance. Each Party shall comply in all material respects with all
federal and state laws and regulations applicable to the conduct of its business
pursuant to this Agreement, including, but not limited to, the FD&C Act.

 

19.2 Authorization.

 

(a) POZEN hereby represents and warrants to Nycomed that all corporate action on
the part of POZEN and its officers and directors necessary for the
authorization, execution and delivery of this Agreement and the performance of
all obligations of POZEN hereunder has been taken.

 

(b) Nycomed hereby represents and warrants to POZEN that all requisite action on
the part of Nycomed and its officers and directors necessary for the
authorization, execution and delivery of this Agreement and the performance of
all obligations of Nycomed hereunder has been taken.

 

ARTICLE 20

 

DISPUTE RESOLUTION; VENUE

 

20.1 Exclusions. Section 20.2 below shall not apply to any disputes arising
under Article 15 or Article 16 hereof.

 

20.2 Dispute Resolution. The Parties recognize that a bona fide dispute as to
certain matters may from time to time arise during the Term which relates to
either Party’s rights and/or obligations hereunder. In the event of the
occurrence of such a dispute, either Party may, by notice to the other Party,
have such dispute referred to their respective officers designated below,

 

17

--------------------------------------------------------------------------------

or their successors, for attempted resolution by good faith negotiations within
thirty (30) days after such notice is received. Such designated officers are as
follows:

 

For Nycomed—Chief Executive Officer

 

For POZEN—President, Chief Executive Officer

 

In the event the designated officers are not able to resolve such dispute within
such thirty (30) day period, or such other period of time as the Parties may
mutually agree in writing, each Party shall have the right to pursue any and all
remedies available at law or in equity.

 

20.3 Venue. Any court proceeding initiated by one Party against the other Party
with respect to this Agreement shall be commenced in the courts of law located
in Raleigh, North Carolina; provided, however, if the court proceeding is
brought as a third party action as part of a pending proceeding in a different
venue, either Party may initiate such third party action against the other Party
in such other venue.

 

ARTICLE 21

 

MISCELLANEOUS

 

21.1 Independent Contractors. The relationship between Nycomed and POZEN is that
of independent contractors and nothing herein shall be deemed to constitute the
relationship of partners, joint venturers, nor of principal and agent between
Nycomed and POZEN. Neither Party shall have any express or implied right or
authority to assume or create any obligations on behalf of or in the name of the
other Party or to bind the other Party to any contract, agreement or undertaking
with any Third Party.

 

21.2 Responsibilities and Assistance. To assist the Parties in their performance
of this Agreement, each Party shall provide the other Party, in a timely
fashion, with all relevant information, documentation and data that is necessary
or appropriate for each Party’s performance hereunder. Nycomed shall ensure that
any and all materials supplied to DSM by or on behalf of Nycomed, whether or not
through POZEN, (a) are suitable for use under this Agreement, comply with all
applicable laws and regulations (including without limitation those relating to
the import of such materials), and (b) have received all required governmental
and regulatory approvals; provided, however, that in no event will this sentence
be construed to modify the distribution of responsibilities of the Parties with
respect to obtaining regulatory approval for the Product in the Territory as set
forth in the License Agreement. If a Party requests support or information from
the other Party, the replying Party shall provide such support or information
(or an explanation of the legitimate reason for any delay and a projected date
by which such support or information shall be provided) within five (5) business
days of such request. In the event either Party is to review or approve any
information, documentation, data or samples prepared or supplied by or on behalf
of the other Party, the replying Party shall complete such review and approval
process within five (5) business days. Each Party shall cooperate with the other
Party in the performance of this Agreement and shall deal honestly and in good
faith with the other Party.

 

18

--------------------------------------------------------------------------------

21.3 Assignment; Subcontractors. This Agreement may not be assigned or
transferred by either Party without the prior written consent of the other
Party, which consent shall not be unreasonably withheld; provided, however,
either Party may, without such consent, assign this Agreement (a)
[*                                        
                                                 *], (b)
[*                                                                             
             *], or (c) [*                                        
                                        *]. Any purported assignment in
violation of the above shall be void. Any permitted assignee shall assume all
obligations of its assignor under this Agreement; provided, however, that in the
event of [*                                        
                                        *] by the foregoing clause (b)
[*                                                                         *].
No assignment shall relieve either Party of responsibility for the performance
of any obligation which accrued prior to the effective date of such assignment.
At its option, POZEN may use subcontractors to perform any part of this
Agreement; provided, however, that POZEN requires such subcontractors to enter a
confidentiality agreement with POZEN and to be subject to all quality and all
other standards and obligations as may be imposed on POZEN under this Agreement;
and provided, further, that POZEN [*                                        
                                    *]. In no event will the foregoing sentence
be construed to limit POZEN’s obligations under this Agreement to
[*                                        *].

 

21.4 Continuing Obligations. Termination, assignment or expiration of this
Agreement shall not relieve either Party from full performance of any
obligations incurred prior thereto.

 

21.5 Waiver. Neither Party’s waiver of any breach or failure to enforce any of
the terms and conditions of this Agreement, at any time, shall in any way
affect, limit or waive such Party’s right thereafter to enforce and compel
strict compliance with every term and condition of this Agreement.

 

21.6 Severability. Each Party hereby expressly agrees that it has no intention
to violate any public policy, statutory or common laws, rules, regulations,
treaty or decision of any government agency or executive body thereof of any
country or community or association of countries; that if any word, sentence,
paragraph, clause or combination thereof in this Agreement is found by a court
or executive body with judicial powers having jurisdiction over this Agreement
or either Party hereto, in a final unappealed order, to be in violation of any
such provisions in any country or community or association of countries, such
words, sentences, paragraphs, clauses or combination shall be inoperative in
such country or community or association of countries and the remainder of this
Agreement shall remain binding upon the Parties, so long as enforcement of the
remainder does not violate the Parties’ overall intentions in this transaction.

 

21.7 Headings. The headings in this Agreement are for convenience of reference
only and shall not affect its interpretation.

 

21.8 Exhibits, Schedules and Attachments. Any and all exhibits, schedules and
attachments referred to herein form an integral part of this Agreement and are
incorporated into this Agreement by such reference.

 

19

--------------------------------------------------------------------------------

21.9 Notices. All notices and other communications required or permitted to be
given under this Agreement shall be in writing and shall be delivered personally
or sent by (a) registered or certified mail, return receipt requested, (b) a
nationally-recognized courier service guaranteeing next-day delivery, charges
prepaid or (c) facsimile (with the original promptly sent by any of the
foregoing manners), and shall be deemed to have been given upon mailing or upon
transmission by facsimile, as the case may be. Any such notices shall be
addressed to the receiving Party at such Party’s address set forth below, or at
such other address as may from time to time be furnished by similar notice by
either Party:

 

If to POZEN:           POZEN, Inc.

    1414 Raleigh Road

    Suite 400

    Chapel Hill, NC 27517

    Attention: President and Chief Executive Officer

    Telephone: (919) 913 1030

    Facsimile: (919) 913 1039

 

With copies of legal notices to:

 

    Cooley Godward LLP

    One Freedom Square

    Reston Town Center

    11951 Freedom Drive

    Reston, VA 20190-5656

    Attention: Matthias Alder

    Facsimile: (703) 456-8100

 

If to Nycomed:        Nycomed Danmark ApS

    Langebjerg 1

    DK-4000 Roskilde

    Denmark

    Attention: Managing Director Bent Kjærsgård

    Facsimile: +4546756968

 

With copies to:        Nycomed Danmark ApS

    Langebjerg 1

    DK-4000 Roskilde

    Denmark

    Attention: General Counsel Theresa Comiskey Olsen

    Facsimile: +4766763513

 

21.10 Counterparts. This Agreement and any amendment or supplement hereto may be
executed in any number of counterparts and any Party hereto may execute any such
counterpart, each of which when executed and delivered shall be deemed to be an
original and all of which counterparts taken together shall constitute but one
and the same instrument. The

 

20

--------------------------------------------------------------------------------

execution of this Agreement and any such amendment or supplement by any Party
hereto shall not become effective until counterparts hereof have been executed
by both Parties hereto.

 

21.11 Governing Law; Entire Agreement. The validity, interpretation and
performance of this Agreement shall be governed and construed in accordance with
the laws of the State of North Carolina without regard to the conflicts of laws
provisions thereof that would cause the application of the laws of a different
jurisdiction. This document constitutes the full understanding of the Parties
and a complete and exclusive statement of the terms of their agreement regarding
the subject matter hereof. This Agreement shall not replace or supersede the
License Agreement, but shall exist as a separate and additional agreement
between the Parties; notwithstanding the foregoing or anything to the contrary
in this Agreement or in any other document or agreement, in the event of a
conflict between this Agreement and the License Agreement, the License Agreement
shall govern and control. No terms, conditions, understanding, or agreement
purporting to modify or vary the terms of this Agreement shall be binding unless
hereafter made in writing and signed by the Party to be bound. No modification
to this Agreement shall be effected by the acknowledgment or acceptance of any
purchase order or shipping instruction forms or similar documents containing
terms or conditions at variance with or in addition to those set forth herein.

 

21.12 Construction. This Agreement was originally drafted by POZEN and
subsequently has been jointly prepared on the basis of the mutual understanding
of the Parties and shall not be construed against either Party by reason of such
Party’s being the drafter hereof or thereof.

 

[Remainder of page intentionally left blank. Signature page follows.]

 

21

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their respective duly authorized representatives as of the day and year first
above written.

 

POZEN INC.

 

--------------------------------------------------------------------------------

John R. Plachetka

President and Chief Executive Officer

 

NYCOMED DANMARK APS

 

--------------------------------------------------------------------------------

Håkan Björklund

Chief Executive Officer, Nycomed Group

 

 

--------------------------------------------------------------------------------

Bent Kjærsgård

Managing Director, Nycomed Danmark ApS

 

[SIGNATURE PAGE TO THE SUPPLY AGREEMENT]

--------------------------------------------------------------------------------

EXHIBIT 1

 

PRODUCT PRICE

 

Product

  Unit Price   Volumes (tablets)

                    [*

      *]

                    [*

      *]

 

--------------------------------------------------------------------------------

EXHIBIT 2

 

SPECIFICATIONS

 

[* THE FOLLOWING 10 PAGES HAVE BEEN OMITTED PURSUANT TO A

CONFIDENTIAL TREATMENT REQUEST*]

 

1