Exhibit 10.1


    EXHIBIT
      10.1

     

    Execution
      Copy

     

    


     

    


     

    


     

    


     

    COLLABORATION
      AND LICENSE AGREEMENT

     

    


     

    by
      and
      between 

     

    


     

    POZEN
      INC.

     

    and

     

    ASTRAZENECA
      AB

     

    


     

    


     

    August
      1,
      2006

     


     

    
      
        
        

      

      
        
          

        

      

      
        
        

      

    

    TABLE
      OF
      CONTENTS

     

    
      	
              1.

            	
              DEFINITIONS

            	 


    

    
      	
              2.

            	
              COLLABORATION
                GOVERNANCE

            	 


    

    
      	 	
              2.1

            	
              Establishment.

            	 


    

    
      	 	
              2.2

            	
              Membership
                and Procedures.

            	 


    

    
      	 	
              2.3

            	
              Decision-Making.

            	 


    

    
      	
              3.

            	
              PRODUCT
                DEVELOPMENT

            	 


    

    
      	 	
              3.1

            	
              Development
                Plans.

            	 


    

    
      	 	
              3.2

            	
              Core
                Development Activities.

            	 


    

    
      	 	
              3.3

            	
              Additional
                Development Activities.

            	 


    

    
      	 	
              3.4

            	
              Development
                of Products by AstraZeneca.

            	 


    

    
      	 	
              3.5

            	
              Oversight
                of Proof of Concept Studies

            	 


    

    
      	 	
              3.6

            	
              Exchange
                of Know-How

            	 


    

    
      	 	
              3.7

            	
              Audits
                and Inspections.

            	 


    

    
      	
              4.

            	
              REGULATORY
                MATTERS

            	 


    

    
      	 	
              4.1

            	
              Responsibilities;
                Diligence.

            	 


    

    
      	 	
              4.2

            	
              Access
                to Filings

            	 


    

    
      	 	
              4.3

            	
              Interactions
                with Regulatory Authorities.

            	 


    

    
      	 	
              4.4

            	
              Information
                Sharing

            	 


    

    
      	 	
              4.5

            	
              Regulatory
                Audits

            	 


    

    
      	 	
              4.6

            	
              Adverse
                Event Reporting

            	 


    

    
      	
              5.

            	
              COMMERCIALIZATION

            	 


    

    
      	 	
              5.1

            	
              Commercialization

            	 


    

    
      	 	
              5.2

            	
              Regulatory
                Obligations during Commercialization

            	 


    

    
      	 	
              5.3

            	
              Performance;
                Diligence.

            	 


    

    
      	 	
              5.4

            	
              Commercialization
                Plan.

            	 


    

    
      	 	
              5.5

            	
              Threatened
                Removal

            	 


    

    
      	 	
              5.6

            	
              Compliance

            	 


    

    
      	 	
              5.7

            	
              Branding;
                Trademarks; Domain Names; Trade Dress; Logos.

            	 


    


    
      
        
        

      

      
        
          

        

      

      
        
        

      

    

    6. MANUFACTURE
      OF POZEN PRODUCTS

    
      	 	
              6.1

            	
              Manufacturing
                Development.

            	 


    

    
      	 	
              6.2

            	
              Process
                Transfer

            	 


    

    
      	 	
              6.3

            	
              Terms
                for Clinical Supply.

            	 


    

    
      	 	
              6.4

            	
              Commercial
                Supply

            	 


    

    
      	 	
              6.5

            	
              Audits
                and Inspections.

            	 


    

    
      	 	
              6.6

            	
              Reference
                Rights; Support

            	 


    

    
      	
              7.

            	
              LICENSES

            	 


    

    
      	 	
              7.1

            	
              Licensed
                Technology

            	 


    

    
      	 	
              7.2

            	
              Trademarks

            	 


    

    
      	 	
              7.3

            	
              Sublicenses

            	 


    

    
      	 	
              7.4

            	
              Reservation
                of Rights; No Implied Licenses

            	 


    

    
      	 	
              7.5

            	
              Restrictive
                Covenant

            	 


    

    
      	 	
              7.6

            	
              Japan
                Option

            	 


    

    
      	
              8.

            	
              FINANCIAL
                TERMS

            	 


    

    
      	 	
              8.1

            	
              Upfront
                Fee

            	 


    

    
      	 	
              8.2

            	
              Development
                Milestone Payments

            	 


    

    
      	 	
              8.3

            	
              Sales
                Milestone Payments

            	 


    

    
      	 	
              8.4

            	
              Royalties.

            	 


    

    
      	 	
              8.5

            	
              Payments
                and Sales Reporting.

            	 


    

    
      	 	
              8.6

            	
              Records;
                Audit

            	 


    

    
      	 	
              8.7

            	
              Taxes.

            	 


    

    
      	
              9.

            	
              INTELLECTUAL
                PROPERTY

            	 


    

    
      	 	
              9.1

            	
              Prosecution
                and Maintenance of Licensed Patents

            	 


    

    
      	 	
              9.2

            	
              Prosecution
                and Maintenance of Joint Patents

            	 


    

    
      	 	
              9.3

            	
              Ownership
                of Inventions

            	 


    

    
      	 	
              9.4

            	
              Disclosure

            	 


    

    
      	 	
              9.5

            	
              Cooperation

            	 


    

    
      	 	
              9.6

            	
              Enforcement
                of Licensed Patents.

            	 


    

    
      	 	
              9.7

            	
              Defense
                of Infringement Claims

            	 


    

    
      	 	
              9.8

            	
              Patent
                Term Extension and Supplementary Protection Certificate

            	 


    


    
      
        
        

      

      
        
          

        

      

      
        
        

      

    

     

    
      	 	
              9.9

            	
              Consequence
                of Patent Challenge

            	 


    

    
      	 	
              9.10

            	
              Patent
                Certifications.

            	 


    

    
      	 	
              9.11

            	
              Patent
                Marking

            	 


    

    
      	
              10.

            	
              REPRESENTATIONS,
                WARRANTIES; COVENANTS

            	 


    

    
      	 	
              10.1

            	
              POZEN
                Representations and Warranties

            	 


    

    
      	 	
              10.2

            	
              Notice
                of Developments

            	 


    

    
      	 	
              10.3

            	
              AstraZeneca
                Warranties

            	 


    

    
      	 	
              10.4

            	
              Reciprocal
                Representations and Warranties

            	 


    

    
      	 	
              10.5

            	
              DISCLAIMER
                OF WARRANTY

            	 


    

    
      	 	
              10.6

            	
              POZEN
                Non-Compete

            	 


    

    
      	 	
              10.7

            	
              POZEN
                Subcontractors

            	 


    

    
      	 	
              10.8

            	
              ******

            	 


    

    
      	 	
              10.9

            	
              Other
                Covenants.

            	 


    

    
      	
              11.

            	
              CONFIDENTIALITY.

            	 


    

    
      	 	
              11.1

            	
              Definition

            	 


    

    
      	 	
              11.2

            	
              Exclusions

            	 


    

    
      	 	
              11.3

            	
              Disclosure
                and Use Restriction

            	 


    

    
      	 	
              11.4

            	
              Authorized
                Disclosure

            	 


    

    
      	 	
              11.5

            	
              Use
                of Name

            	 


    

    
      	 	
              11.6

            	
              Press
                Releases.

            	 


    

    
      	 	
              11.7

            	
              Terms
                of Agreement to be Maintained in Confidence

            	 


    

    
      	
              12.

            	
              TERM
                AND TERMINATION

            	 


    

    
      	 	
              12.1

            	
              HSR
                Act

            	 


    

    
      	 	
              12.2

            	
              Term

            	 


    

    
      	 	
              12.3

            	
              Termination
                for Material Breach

            	 


    

    
      	 	
              12.4

            	
              Termination
                for Cause.

            	 


    

    
      	 	
              12.5

            	
              Termination
                at Will

            	 


    

    
      	 	
              12.6

            	
              Consequences
                of Expiration and Termination.

            	 


    

    
      	 	
              12.7

            	
              Termination
                for Insolvency

            	 


    

    
      	 	
              12.8

            	
              Effect
                of Bankruptcy

            	 


    

    
      	 	
              12.9

            	
              Post
                Termination Royalties

            	 


    


    
      
        
        

      

      
        
          

        

      

      
        
        

      

    

     

    
      	 	
              12.10

            	
              Formulation
                Technology

            	 


    

    
      	 	
              12.11

            	
              Survival

            	 


    

    
      	
              13.

            	
              INDEMNIFICATION
                AND INSURANCE

            	 


    

    
      	 	
              13.1

            	
              Indemnification
                by POZEN

            	 


    

    
      	 	
              13.2

            	
              Indemnification
                by AstraZeneca

            	 


    

    
      	 	
              13.3

            	
              Indemnification
                Procedure.

            	 


    

    
      	 	
              13.4

            	
              Expenses

            	 


    

    
      	 	
              13.5

            	
              Insurance

            	 


    

    
      	
              14.

            	
              LIMITATION
                OF LIABILITY

            	 


    

    
      	
              15.

            	
              MISCELLANEOUS

            	 


    

    
      	 	
              15.1

            	
              Assignment

            	 


    

    
      	 	
              15.2

            	
              Termination
                of Certain Rights Upon POZEN Change of Corporate Control

            	 


    

    
      	 	
              15.3

            	
              Severability

            	 


    

    
      	 	
              15.4

            	
              Governing
                Law; Dispute Resolution.

            	 


    

    
      	 	
              15.5

            	
              Notices

            	 


    

    
      	 	
              15.6

            	
              Entire
                Agreement; Modifications

            	 


    

    
      	 	
              15.7

            	
              Relationship
                of the Parties

            	 


    

    
      	 	
              15.8

            	
              Waiver

            	 


    

    
      	 	
              15.9

            	
              Counterparts

            	 


    

    
      	 	
              15.10

            	
              No
                Benefit to Third Parties

            	 


    

    
      	 	
              15.11

            	
              Further
                Assurance

            	 


    

    
      	 	
              15.12

            	
              No
                Drafting Party

            	 


    

    
      	 	
              15.13

            	
              Construction

            	 


    

     

    
      
        
        

      

      
        
          

        

      

      
        
        

      

    



    EXHIBITS
      AND SCHEDULES

     

    


     

    Exhibit
      A
      - Formulation Budget

     

    Exhibit
      B
      - Initial U.S. Development Plan

     

    Exhibit
      C
      -U.S. Development Timeline

     

    Exhibit
      D
      - Initial ROW Development Plan

     

    Exhibit
      E
      - ROW Development Timeline

     

    Exhibit
      F
      - TPP Studies

     

    Schedule
      1.58 - Licensed Patents

     

    Schedule
      4.1.2 - IMS MAT Data

     

    Schedule
      6.1 - Initial POZEN Product Specifications

     

    Schedule
      8.4.1 - Segregated Royalty Example

     

    Schedule
      8.4.3 - Market Reduction Example

     

    Schedule
      10.1 - Disclosure Schedule

     

    Schedule
      10.7 - POZEN Subcontractors

     


    
      
        
        

      

      
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    COLLABORATION
      AND LICENSE AGREEMENT

     

    THIS COLLABORATION
      AND LICENSE AGREEMENT
      (“Agreement”)
      is made
      and entered into effective as of August 1, 2006 (the “Execution
      Date”),
      by and
      between POZEN
      INC.,
      a
      Delaware corporation having offices at 1414 Raleigh Road, Suite 400, Chapel
      Hill, North Carolina (“POZEN”),
      and
      ASTRAZENECA AB, a Swedish corporation having an office at SE-431 83, Mölndal,
      Sweden (“AstraZeneca”).
      POZEN
      and AstraZeneca each may be referred to herein individually as a “Party,”
      or
      collectively as the “Parties.”

     

    RECITALS

     

    A. POZEN
      controls certain patents and other intellectual property pertaining to
      pharmaceutical products having gastroprotective agents in single fixed
      combination oral solid dosage form with non-steroidal anti-inflammatory
      drugs.

     

    B. AstraZeneca
      desires to obtain a license to POZEN’s intellectual property and to enter into a
      collaboration with POZEN for the purpose of developing and commercializing
      certain pharmaceutical products.

     

    C. POZEN
      desires to grant AstraZeneca such a license and to enter into such a
      collaboration on the terms and conditions set forth in this
      Agreement.

     

    In
      consideration of the foregoing premises, the mutual promises and covenants
      set
      forth in this Agreement, and other good and valuable consideration, the receipt
      and sufficiency of which are hereby acknowledged, POZEN and AstraZeneca hereby
      agree as follows:

     

    AGREEMENT

     

    
      	1.  	
              DEFINITIONS

            


    

     

    When
      used
      in this Agreement, capitalized terms will have the meanings as defined below
      and
      throughout the Agreement. All financial and accounting terms not otherwise
      defined in this Agreement, whether capitalized or not, shall have the meanings
      assigned to them in accordance with generally accepted accounting principles
      based on International Accounting Standards/International Financial Reporting
      Standards as in effect from time to time (“IFRS”).

     

    1.1  “ADA
      Budget”
      has the
      meaning set forth in Section 3.3.3
      (Expenses).

     

    1.2  “Additional
      Development Activities”
      means
      any activities related to the Development of the Initial POZEN Product that
      are
      not Core Development Activities. Additional Development Activities agreed upon
      as of the Execution Date are included in the Initial U.S. Development Plan
      and
      Initial ROW Development Plan.

     

    
      
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    1.3  “Adverse
      Event”
      means
      any adverse medical occurrence in a patient or clinical investigation subject
      that is administered a pharmaceutical product, as designated under 21 CFR §
312.32 and any other Applicable Law in the Territory.

     

    1.4  “Affiliate”
      means a
      legal entity that, directly or indirectly, through one or more intermediaries,
      controls, is controlled by, or is under common control with an entity. For
      purposes of this definition only, “control” and, with correlative 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, 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.

     

    1.5  “Applicable
      Law”
      means
      the laws, rules, and regulations, including any statutes, rules, regulations,
      guidelines, or other requirements that may be in effect from time to time and
      apply to the activities contemplated by this Agreement in the
      Territory.

     

    1.6  “AstraZeneca
      House Marks”
      means
      any trademarks, trade names, domain names, or other names or marks used or
      registered by AstraZeneca or its Affiliates at any time during the Term to
      identify itself.

     

    1.7  “AstraZeneca
      Invention”
      means
      any Invention that is conceived solely by one or more employees, agents, or
      independent contractors of AstraZeneca or its Affiliate(s).

     

    1.8  “Blocking
      Patent”
      means a
      Patent owned or controlled by a Third Party, one or more Valid Claims of which,
      in the absence of a license thereunder, would be infringed by the making, use,
      sale, offering for sale, or importation of a POZEN Product.

     

    1.9  “Budgeted
      Development Activities”
      means
      the Additional Development Activities described in the first ADA Budget approved
      by the GPT pursuant to Section 3.3.3
      (Expenses) and the first U.S. Development Plan and first ROW Development Plan
      approved by the GPT pursuant to Section 3.1 (Development Plans), in each case
      consistent with the Initial U.S. Development Plan and Initial ROW Development
      Plan.

     

    1.10  “Business
      Combination”
      means
      any merger, consolidation, sale of stock, sale or transfer of all or
      substantially all of the assets, or other similar transaction to which POZEN
      is
      a party, other than any merger, consolidation, or similar transaction following
      which the individuals and entities who were the beneficial owners of the
      outstanding voting securities of POZEN immediately prior to such transaction
      still beneficially own, directly or indirectly, more than fifty percent (50%)
      of
      the voting power of the surviving entity immediately after such
      transaction.

     

    1.11  “Business
      Day”
      means
      any day other than (i) Saturday or Sunday or (ii) any other day on which banks
      in New York, New York, United States, the United Kingdom or Sweden are permitted
      or required to be closed.

     

    
      
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    1.12  “Calendar
      Quarter”
      means
      the respective periods of three (3) consecutive calendar months ending on March
      31, June 30, September 30 and December 31.

     

    1.13  “cGCP”
      means
      current good clinical practices as defined in U.S. Regulations 21 CFR §§ 50, 54,
      56, 312 and 314, (or in the case of foreign jurisdictions, comparable regulatory
      standards), the International Conference of Harmonization (ICH) E6 “Good
      Clinical Practice: Consolidated Guidance,” and in any successor regulation or
      any official guidance documents issued by an applicable Regulatory
      Authority.

     

    1.14  “cGLP”
      means
      current good laboratory practice standards as defined by the FDA pursuant to
      21
      CFR Part 58 (or in the case of foreign jurisdictions, comparable regulatory
      standards), and in any successor regulation or any official guidance documents
      issued by a Regulatory Authority.

     

    1.15  “cGMP”
      means
      current good manufacturing practices as contained in 21 CFR Parts 210 and 211
      as
      amended from time to time and any equivalents contained in regulations in
      countries outside the U.S.

     

    1.16  “Change
      of Corporate Control”
      means
      the occurrence of either of the following:

     

    (a)  a
      Business Combination involving POZEN; or

     

    (b)  the
      acquisition (whether in a single transaction or series of related transactions)
      after the Effective Date by a Third Party or Group of beneficial ownership
      of
      ****** percent (******%) or more of POZEN’s voting securities.

     

    1.17  “Clinical
      Trial Materials”
      means
      the Initial POZEN Product formulated in accordance with the specifications
      of
      Schedule 6.1, matching placebo and matching individual ingredients and
      comparators, each packaged and labeled for use in the applicable clinical
      trial.

     

    1.18  “Combination
      Product”
      means a
      Product that includes one or more pharmaceutically active ingredients (in
      addition to a single Gastroprotective Agent and a single NSAID) and is sold
      in
      final form either in a single fixed combination oral solid dosage or as separate
      doses in a single package and priced as one item.

     

    1.19  “Commercial
      Launch”
      means
      the nationwide commercial sale, promotion and distribution of POZEN Product
      in a
      particular country of the Territory following receipt of Marketing Approval
      in
      such country.

     

    
      
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    1.20  “Commercialization”
      means
      all activities relating to the manufacture, marketing, promotion, advertising,
      selling and distribution of Product in any country of the Territory, including
      pre-Commercial Launch market development activities conducted in anticipation
      of
      Marketing Approval of Product, including, without limitation, seeking pricing
      and reimbursement approvals for Product, preparing advertising and promotional
      materials, sales force training, and all interactions and activities
      (e.g.,
      dossier
      preparations and filings) associated with Regulatory Authorities regarding
      the
      commercialization of Product and the maintenance of Marketing Approvals. The
      term “Commercialize” has a correlative meaning.

     

    1.21  “Commercialization
      Plan” has
      the
      meaning set forth in Section 5.4.1.

     

    1.22  “Commercialized
      POZEN Product”
      has the
      meaning set forth in Section 12.6.4(b)(ii).

     

    1.23  “Competing
      Product”
      means,
      with respect to a particular Product being Commercialized by AstraZeneca or
      any
      of its Affiliates or Sublicensees in any country of the Territory, a product
      being marketed by or on behalf of a Third Party (other than a Sublicensee)
      in
      the same country containing at least ****** that are ****** those in the
      ******and are ******.

     

    1.24  “Controlled”
      means,
      with respect to any Know-How, Patent, or other intellectual property right,
      the
      possession of the right, whether directly or indirectly, and whether by
      ownership, license or otherwise, to assign, or grant a license, sublicense
      or
      other right to or under, such Know-How, Patent or right as provided for herein
      without violating the terms of any agreement or other arrangements with any
      Third Party.

     

    1.25  “Core
      Development Activities”
      means
      any activities identified on Exhibit
      B
      as being
      paid for by POZEN.

     

    1.26  “DDMAC”
      means
      the FDA’s Division of Drug Marketing, Advertising, and
      Communications.

     

    1.27  “Develop”
      or “Development”
      means
      all activities relating to pre-clinical and clinical development of a Product
      and all development activities relating to the preparation and filing of NDAs
      and obtaining of Marketing Approvals, price and reimbursement approvals,
      including, without limitation, preparing and conducting pre-clinical testing,
      toxicology testing, human clinical studies, regulatory affairs.

     

    1.28  “Development
      Program”
      means
      the program of Development described in the U.S. Development Plan and ROW
      Development Plan, each as amended from time to time. 

     

    
      
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    1.29  “Diligent
      Efforts”
      means,
      (A) with respect to the Development, Manufacture or Commercialization by
      AstraZeneca of a product, at any given time as the case may be, efforts and
      resources reasonably used by AstraZeneca or its Affiliates (giving due
      consideration to relevant industry standards) for AstraZeneca’s own products
      (including internally developed, acquired and in-licensed products) with similar
      commercial potential at a similar stage in their lifecycle (assuming continuing
      development of such product), taking into consideration their safety,
      tolerability and efficacy, the profitability (taking into account any payments
      payable under this Agreement), the extent of market exclusivity, patent
      protection, cost to develop the product, promotable claims, and health economic
      claims, and (B) with respect to the Development by POZEN of a product, at any
      given time as the case may be, efforts and resources reasonably used by an
      entity in the pharmaceutical industry of similar resources and expertise as
      POZEN, for such similar entity’s own products (including internally developed,
      acquired and in-licensed products) with similar commercial potential at a
      similar stage in their lifecycle (assuming continuing development of such
      product), taking into consideration their safety, tolerability and efficacy,
      the
      profitability (taking into account any payments payable under this Agreement),
      the extent of market exclusivity, patent protection, cost to develop the
      product, promotable claims, and health economic claims.

     

    1.30  “Direct
      Costs”
      means
      all amounts which POZEN disburses to vendors for services rendered or product
      supplied in conducting studies pursuant to this Agreement. For clarification,
      no
      POZEN employee compensation, internally consumed supplies, utility charges,
      recoverable Indirect Taxes or other indirect costs will be included in Direct
      Costs.

     

    1.31  “Effective
      Date”
      has the
      meaning as defined in Section 12.1
      (HSR
      Act).

     

    1.32  “EMEA”
means
      the European Medicines Agency, or any successor agency thereto.

     

    1.33  “Esomeprazole”
      means
      that certain pharmaceutical compound with the name
      (5-methoxy-2-{(S)-[(4-methoxy-3,5-dimethylpyridin-2-yl)methyl]sulfinyl}-1H-benzimidazole),
      including any ******.

     

    1.34  “FDA”
      means
      the United States Food and Drug Administration, or any successor agency
      thereto.

     

    1.35  “Field
      of Use”
      means
      the treatment of human diseases and conditions by means of a pharmaceutical
      product.

     

    1.36  “First
      Commercial Sale”
      means,
      with respect to a Product and on a country-by-country basis, the date on which
      AstraZeneca or its Affiliate or Sublicensee first sells the Product intended
      for
      commercial distribution to any Third Party after receipt of NDA Approval of
      such
      Product in such country (including, without limitation, sale in an individual
      state, province or similar sub-national political subdivision in which Marketing
      Approval may be received). Sale of a Product for clinical studies, compassionate
      use, named patient programs, under a treatment IND, test marketing, any clinical
      studies, or any similar instance where the Product is supplied with or without
      charge will not constitute a First Commercial Sale.

     

    
      
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    1.37  “Formulation
      Budget”
      has the
      meaning set forth in Section 6.1.4
      (Expenses).

     

    1.38  “Formulation
      Development Activities”
      has the
      meaning set forth in Section 6.1.4
      (Expenses).

     

    1.39  “Formulation
      Technology”
      means
      any Know-How Controlled by AstraZeneca in the AstraZeneca Inventions that are
      used by AstraZeneca in the manufacture, use, sale or import of the formulation
      of a Commercialized POZEN Product, and any Patents Controlled by AstraZeneca
      claiming such AstraZeneca Inventions; provided, that Formulation Technology
      will
      not include any Patents or Know-How to the extent directed to a Gastroprotective
      Agent, non-steroidal anti-inflammatory, or other drug or chemical agent, or
      any
      methods of manufacture or use thereof.

     

    1.40  “FTE
      Costs”
      means an
      amount equal to $****** multiplied by the total number of hours spent by POZEN
      development personnel ****** conducting Additional Development Activities for
      the Development of Initial POZEN Products pursuant to this Agreement in
      accordance with a Development plan and budget approved by the GPT.

     

    1.41  “Gastroprotective
      Agent”
      means
      proton pump inhibitors and H2 receptor antagonists for the treatment, prevention
      or amelioration of injury to the gastrointestinal tract.

     

    1.42  “GPT”
      means
      AstraZeneca’s global product team operating pursuant to AstraZeneca’s
      instructions for global product teams for the Initial POZEN Product with
      representatives of AstraZeneca having expertise in the areas of research &
development, marketing, regulatory, intellectual property, finance, toxicology,
      and other areas.

     

    1.43  “GPT
      Chair”
      will
      have the meaning set forth in Section 2.2.1
      (GPT)
      .

     

    1.44  “Group”
      means a
      group of related persons or entities deemed a “person” for purposes of Section
      13(d) of the Securities Exchange Act of 1934, as amended.

     

    1.45  “IND”
      means an
      Investigational New Drug Application filed with the FDA pursuant to 21 CFR
      § 312.20, or the corresponding filing in any country or regulatory
      jurisdiction other than the United States required for the clinical testing
      in
      humans of a pharmaceutical product.

     

    1.46  “Indirect
      Tax”
      means
      value added taxes, sales taxes, consumption taxes and other similar
      taxes.

     

    1.47   “Initial
      POZEN Product”
      means
      the POZEN Product containing non-enteric coated Esomeprazole and enteric-coated
      Naproxen that is the subject of the Initial U.S. Development Plan and Initial
      ROW Development Plan, subject to substitution (either throughout the Territory
      or in any one or more countries of the Territory) in accordance with Section
      3.4.2 (Substitution) hereof.

     

    1.48  “Initial
      ROW Development Plan”
      means
      the outline for the ROW Development Plan, as set forth in Exhibit
      D
      as of
      the Effective Date.

     

    
      
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    1.49  “Initial
      ROW Development Plan Timeline”
      means
      the ROW Development Plan Timeline attached to this Agreement as Exhibit
      E
      as of
      the Effective Date.

     

    1.50  “Initial
      U.S. Development Plan”
      means
      the outline for the U.S. Development Plan, as set forth in Exhibit
      B
      as of
      the Effective Date.

     

    1.51  “Initial
      U.S. Development Plan Timeline”
      means
      the U.S. Development Plan Timeline attached to this Agreement as Exhibit
      C
      as of
      the Effective Date.

     

    1.52  “Invention”
      means
      any invention, discovery or Know-How that is conceived during the Term in the
      performance of activities undertaken pursuant to this Agreement by employees,
      agents, or independent contractors of either Party, its Affiliates or
      Sublicensees and is Controlled by such Party, Affiliates or
      Sublicensees.

     

    1.53  “Joint
      Invention”
      means
      any Invention that is conceived jointly by one or more employees, agents, or
      independent contractors of AstraZeneca or its Affiliate(s) and one or more
      employees, agents, or independent contractors of POZEN or its
      Affiliate(s).

     

    1.54  “Joint
      Patent”
      means a
      Patent claiming a Joint Invention.

     

    1.55  “JSC”
      has the
      meaning set forth in Section 2.1.2
      (Joint
      Steering Committee).

     

    1.56  “Know-How”
      means
      any non-public, documented or otherwise recorded or memorialized knowledge,
      experience, know-how, technology, information, and data, including formulas
      and
      formulations, processes, techniques, unpatented inventions, discoveries, ideas,
      and developments, test procedures, and results, together with all documents
      and
      files embodying the foregoing.

     

    1.57  “Licensed
      Know-How”
      means
      any Know-How that is necessary or useful for the Development, Manufacture or
      Commercialization of Product in the Field of Use and that is Controlled by
      POZEN
      or any of its Affiliates as of the Effective Date or during the
      Term.

     

    1.58  “Licensed
      Patents”
      means:
      (a) the Patents set forth on Schedule 1.58, and any substitutions, divisions,
      continuations, continuations-in-part, reissues, renewals, registrations,
      confirmations, re-examinations, or extensions of such Patents, (b) any Patents
      Controlled by POZEN or any of its Affiliates as of the Effective Date or during
      the Term that claim Inventions (including without limitation POZEN’s interest in
      Joint Inventions), (c) all other Patents Controlled by POZEN or any of its
      Affiliates as of the Effective Date or during the Term that are necessary or
      useful for the Development, Manufacture or Commercialization of a Product;
      and
      any foreign counterparts of any of the foregoing.

     

    1.59  “Licensed
      Technology”
      means
      the Licensed Patents and the Licensed Know-How.

     

    1.60  “Major
      Ex-U.S. Market”
      means
      the following countries: ******, or any country substituted for one of the
      foregoing countries pursuant to Section 4.1.2.
      (Outside
      the U.S.).

     

    
      
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    1.61  “Manufacture”
      means
      all activities related to the manufacturing of a Product, or any ingredient
      thereof, including but not limited to formulation development and process
      development for the manufacture of a Product, manufacturing supplies for
      Development, manufacturing for commercial sale, packaging, in-process and
      finished product testing, release of product or any component or ingredient
      thereof, quality assurance activities related to manufacturing and release
      of
      product, ongoing stability tests and regulatory activities related to any of
      the
      foregoing. “Manufacture” shall not include any of the above activities with
      respect to Esomeprazole as an active ingredient.

     

    1.62  “Market
      Reduction”
      has the
      meaning set forth in Section 8.4.3
      (Rate
      Step Down for Competing Product Entrants).

     

    1.63  “Marketing
      Approval”
      means
      all approvals (including NDA Approvals and, where available under Applicable
      Law, pricing and reimbursement approvals in accordance with Applicable Law)
      of
      any Regulatory Authority in a country, that are necessary or useful to be
      obtained prior to the manufacture or Commercialization of a Product in that
      country. For purposes of clarification, “Marketing Approval” in the U.S. shall
      have the same meaning as NDA Approval in the U.S. 

     

    1.64  “Milestone
      Events”
      means
      the events listed under the heading “Milestone Events” in the table in Section
8.2
      (Development Milestone Payments).

     

    1.65  “Naproxen”
      means
      that certain pharmaceutical compound with the chemical name
      (S)-6-methoxy-(alpha)-methyl-2-naphthaleneacetic acid, including any
      ******. 

     

    1.66  “NDA”
      means a
      New Drug Application filed with the FDA as described in 21 CFR § 314, or
      any corresponding application for Regulatory Authority approval (not including
      pricing and reimbursement approval) in any country or regulatory jurisdiction
      other than the U.S.

     

    1.67  “NDA
      Approval”
      means
      receipt of a letter from the FDA, or equivalent Regulatory Authority in
      jurisdictions outside the U.S., approving an NDA.

     

    1.68  “Net
      Sales”
      means
      with respect to any Product, the gross amounts recognized by AstraZeneca, its
      Sublicensees or its Affiliates from Third Party customers for sales of a Product
      in the Territory, less the following deductions made by AstraZeneca (to the
      extent not already taken by AstraZeneca in the Product invoice or in amounts
      recognized), its Sublicensees or its Affiliates in arriving at net sales as
      reported in the AstraZeneca statutory accounts prepared in accordance with
      IFRS:

     

    (a)  actual
      credited allowances to such Third Party customers for spoiled, damaged,
      rejected, recalled, outdated and returned Product and for retroactive price
      reductions;

     

    (b)  the
      amounts of trade and cash discounts actually granted to Third Party customers,
      to the extent such trade and cash discounts are specifically allowed on account
      of the purchase of such Product;

     

    
      
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    (c)  

     

    sales
      taxes, excise taxes and import/export duties actually due or incurred in
      connection with the sales of a Product to any Third Party customer;

     

    (d)  allowances,
      adjustments, reimbursements, discounts, chargebacks and rebates actually granted
      to Third Party customers (not in excess of the selling price per unit of such
      Product);

     

    (e)  other
      deductions from gross sales made in arriving at net sales as reported in the
      AstraZeneca statutory accounts; and

     

    (f)  allowance
      for transportation costs, distribution expenses, special packaging and related
      insurance charges in the amount of ****** percent (******%) of the Net Sales
      calculated after applying the deductions of items (a)-(e) above.

     

    Net
      Sales
      shall be calculated using AstraZeneca’s internal audited systems used to report
      such sales as adjusted for any of items (a)-(f) above not taken into account
      in
      such systems. Notwithstanding the foregoing, if Product is sold as a Combination
      Product, the Net Sales used for the calculation of the royalties under Section
      8.4
      (Royalties) shall be determined as follows:

     


    
      
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              A

            	
               

               X

               

            	
               

              Net
                Sales of the Combination Product, where:

               

            
	
              A+B

            
	
              A
                =

               

            	
              Standard
                Sales Price of the ready-for-sale form of the Product if sold separately
                from the Combination Product in question, in the given
                country.

               

            
	
              B
                =

               

            	
              Standard
                Sales Price of the ready-for-sale form of a product containing the
                same
                amount of the other therapeutically active ingredient(s) that is
                contained
                in the Combination Product in question, in the given country.

               

            


    

     

    If,
      in a
      specific country, (a) the other therapeutically active ingredient(s) in such
      Combination Product are not sold separately in such country, Net Sales shall
      be
      adjusted by multiplying actual Net Sales of such Combination Product by the
      fraction A/C, where C is the Standard Sales Price in such country of such
      Combination Product, and (b) if a Product contained in the Combination Product
      is not sold separately, Net Sales shall be calculated by multiplying actual
      Net
      Sales of such Combination Product by the fraction (C-B)/C, where B is the
      Standard Sales Price in such country of the other therapeutically active
      ingredient(s) in the Combination Product and C is the Standard Sales Price
      in
      such country of the Combination Product. If, in a specific country, both a
      Product in a Combination Product and a product containing the other active
      ingredients in such Combination Product are not sold separately, a market price
      for such Product and such other active ingredients shall be negotiated by the
      Parties in good faith based upon the market price of products that are
      comparable to such Product or such other active ingredients, as applicable.
      In
      each country where the Product in the Combination Product is marketed, the
      Standard Sales Price of the Product in such Combination Product for purposes
      of
      calculating the royalty payable to POZEN will be no less than ****** percent
      (******%) of the Standard Sales Price of the Product sold outside of such
      Combination Product in such country.

     

    In
      addition, and notwithstanding the foregoing, if a Product is sold together
      with
      other goods with or without a separate price for such Product (such group of
      products including the Product a “Product
      Set”),
      then
      the Net Sales applicable to the quantity of such Product included in any such
      transaction will be calculated as follows:

     

    
      	
               

              A

            	
               

               X

               

            	
               

              Net
                Sales of the Product Set, where:

               

            
	
              A+B

               

            
	
              A
                =

               

            	
              Standard
                Sales Price of the Product if sold separately from the Product set
                in
                question, in the given country.

               

            
	
              B
                =

               

            	
              The
                total of the Standard Sales Prices of all products in the Product
                Set
                other than the Product, in the given country.

               

            


    

    


     


    
      
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        1.69  “Nexium”
      means
      AstraZeneca’s products containing Esomeprazole as the sole active ingredient in
      any presentation form.

     

    1.70  “Nexium
      Business”
      means
      AstraZeneca’s development and commercialization activities pertaining to
      Esomeprazole and Esomeprazole based products.

     

    1.71  “NSAID”
      means
      any non-steroidal anti-inflammatory drug, the primary mechanism of action of
      which is inhibition of cyclooxygenase, but excluding acetyl salicylic acid
      (including salts and derivatives thereof).

     

    1.72  “Patent
      Challenge”
      has the
      meaning set forth in Section 9.9.

     

    1.73  “Patents”
      means
      (a) all patents and patent applications in any country or supranational
      jurisdiction, and (b) any substitutions, divisions, continuations,
      continuations-in-part, reissues, renewals, registrations, confirmations,
      re-examinations, extensions, supplementary protection certificates and the
      like,
      and any provisional applications, of any such patents or patent
      applications.

     

    1.74  “******”
      has the
      meaning set forth in Section 6.1.3.

     

    1.75  “PDUFA
      Date”
      means
      the date identified in an official communication from the FDA as the target
      date
      by which the FDA expects to issue an action letter, as required under the
      Prescription Drug User Free Act of 1992 (P.L. 102-571), as amended and in effect
      from time to time.

     

    1.76  “******
      Study”
      means
      the ****** study described in the Initial U.S. Development Plan.

     

    1.77  “******
      Studies”
means
      the ****** studies described in the U.S. Development Plan.

     

    1.78  “Post-Approval
      Failure”
      means:
      (a) a mandatory withdrawal or recall of a Product by a Regulatory Authority
      in
      any country in the Territory, or (b) any voluntary withdrawal or recall of
      a
      Product in the U.S. or a Major Ex-U.S. Market country that arises from risks
      associated with a serious adverse health consequence or death reported to a
      Regulatory Authority anywhere in the world. Notwithstanding the foregoing,
      any
      such recall that results primarily from AstraZeneca’s or its Affiliate’s or
      Sublicensee’s gross negligence, willful misconduct, or failure to comply with
      Applicable Law in the Development, Manufacture or Commercialization of a Product
      shall not be considered a Post-Approval Failure for purposes of this
      Agreement.

     

    1.79  “POZEN
      House Marks”
      means
      any trademarks, trade names, domain names, or other names or marks used or
      registered by POZEN or its Affiliates at any time during the Term to identify
      itself.

     

    1.80  “POZEN
      Invention”
      means
      any Invention that is conceived solely by one or more employees, agents, or
      independent contractors of POZEN or its Affiliate(s).

     

    
      
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    1.81  “POZEN
      Product”
      means
      any product that combines a Gastroprotective Agent and any NSAID in a single
      fixed combination dosage form, that would, if made, used, sold, offered for
      sale, had made, imported or exported without a license from POZEN of the
      Licensed Patents, infringe one or more Valid Claims of the Licensed
      Patents.

     

    1.82  “Pre-Approval
      Failure”
      means
      any of the following:

     

    (a)  POZEN’s
      failure to deliver the formulation, manufacturing process, data and materials
      for the Initial POZEN Product in accordance with the terms of Section
6.1.1
      (Initial
      POZEN Product) or Section 6.1.2
      (ROW
      POZEN Products);

     

    (b)  the
      receipt of notice from the FDA, EMEA or other Regulatory Authority in the EU
      that successful completion of the Budgeted Development Activities and Core
      Development Activities would be insufficient to achieve NDA Approval of the
      Initial POZEN Product without the performance of Additional Development
      Activities that are not included in the Budgeted Development Activities and
      that
      would be reasonably expected, in the aggregate, to either (i) delay the
      anticipated date of NDA Approval of the Initial POZEN Product by more than
      ****** past the dates set forth in the Initial U.S. Development Plan Timeline
      or
      for any country of the EU set forth in the Initial ROW Development Plan
      Timeline, or (ii) require AstraZeneca to spend more than an aggregate of $******
      to perform; provided that, the cost of any such Additional Development
      Activities conducted pursuant to the ****** and ****** Studies shall not be
      counted toward such $****** limit;

     

    (c)  either
      (i) the failure of the ****** Study described in the Initial U.S. Development
      Plan to satisfy its primary endpoint for all doses of the Initial POZEN Product,
      or (ii) the failure of the ****** of the ****** Study described in the Initial
      U.S. Development Plan to satisfy its primary endpoint, ******;

     

    (d)  receipt
      of results of a clinical trial of the Initial POZEN Product that show that
      such
      Initial POZEN Product is unsafe;

     

    (e)  TPP
      Failure;

     

    (f)  the
      receipt of notice from the FDA, the EMEA or a Regulatory Authority in a country
      in the Major Ex-U.S. Market that the NDA for the Initial POZEN Product in such
      country is not approvable; 

     

    (g)  after
      the
      submission of an NDA for the Initial POZEN Product, receipt of notice from
      the
      FDA, EMEA or other Regulatory Authority in the EU that such NDA will not be
      approved without the performance of Additional Development Activities that
      would
      be reasonably expected, in the aggregate, to either (i) delay the anticipated
      date of NDA Approval of the Initial POZEN Product by more than ****** past
      the
      date set forth in the Initial U.S. Development Plan Timeline or for any country
      of the EU set forth in the Initial ROW Development Plan Timeline, or (ii)
      require AstraZeneca to spend more than an aggregate of $****** to perform;
      or

     

    
      
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    (h)  subject
      to the terms of Sections 2.3.5
      (Interim
      Results of ******) and 4.3.3
      (Label
      Negotiations and Approval), delay in Development activities not caused by
      AstraZeneca’s failure to comply with its obligations under this Agreement that,
      in the aggregate, will delay NDA Approval for the Initial POZEN Product in
      either the U.S. or the EU at least ****** beyond the date for such NDA Approval
      set forth in the Initial U.S. Development Plan Timeline and the Initial ROW
      Development Plan Timeline.

     

    1.83  “Product”
      means:
      (a) any POZEN Product, and (b) any other product that combines a
      Gastroprotective Agent and any NSAID in a single fixed combination oral solid
      dosage form (with or without one or more additional therapeutically active
      agents), which product is developed or commercialized by or for, invented or
      acquired by, or comes under the Control of AstraZeneca or its Affiliates during
      the Term. For the avoidance of doubt, “Product” does not include any product
      containing acetyl salicylic acid (including salts and derivatives
      thereof).

     

    1.84  “Product
      Labeling”
      means
      (a) the full prescribing information for a POZEN Product approved by the
      applicable Regulatory Authority, and (b) all labels and other written, printed
      or graphic information included in or placed upon any container, wrapper or
      package insert used with or for the POZEN Product.

     

    1.85  “Product
      Trademarks”
      means
      any trademarks, trade dress (including packaging design), logos, slogans, domain
      names and designs, whether or not registered in a country or territory, selected
      and owned by AstraZeneca and used to identify or promote a POZEN Product, but
      excluding any POZEN House Marks and AstraZeneca House Marks.

     

    1.86  “Promotional
      Materials”
      means
      all sales representative training materials and all written, printed, graphic,
      electronic, audio or video presentations of information, including, without
      limitation, journal advertisements, sales visual aids, formulary binders,
      reprints, direct mail, direct-to-consumer advertising, internet postings,
      broadcast advertisements and sales reminder aides (for example, note pads,
      pens
      and other such items) intended for use or used by AstraZeneca or its Affiliates
      in connection with any promotion of the Initial POZEN Product hereunder, but
      excluding Product Labeling.

     

    1.87  “Proof
      of Concept Study”
      means
      the ****** Study and ****** Study described in the Initial U.S. Development
      Plan.

     

    1.88  “Regulatory
      Authority”
      means,
      in a particular country or jurisdiction, any applicable government regulatory
      authorities involved in granting approval to market or sell a Product, including
      any pricing and reimbursement approvals, in such country or jurisdiction,
      including, (a) in the United States, the FDA, and any successor government
      authority having substantially the same function, (b) any non-United States
      equivalent thereof, and (c) in the EU, the EMEA and any national regulatory
      authority in any EU country.

     

    
      
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    1.89  “Regulatory
      Materials” means
      regulatory applications, submissions, notifications, registrations, Marketing
      Approvals or other submissions made to or with a Regulatory Authority that
      are
      necessary or reasonably desirable in order to develop, manufacture, market,
      sell
      or otherwise Commercialize the Initial POZEN Product in a particular country,
      territory or possession. Regulatory Materials include, without limitation,
      INDs
      and NDAs, and amendments and supplements for any of the foregoing, and
      applications for pricing and reimbursement approvals.

     

    1.90  “ROW
      Development Plan”
      means
      the plan for the Development of the Initial POZEN Product for Marketing Approval
      in the Territory outside the U.S. as may be updated and amended from time to
      time by the GPT in accordance with this Agreement. 

     

    1.91  “ROW
      Development Plan Timeline”
      means
      the estimated timeline for completion of the ROW Development Plan, as may be
      updated and amended from time to time by the GPT in accordance with this
      Agreement.

     

    1.92  “Royalty
      Term” has
      the
      meaning set forth in Section 8.4.2
      (Royalty
      Term).

     

    1.93  “Specifications”
      has the
      meaning set forth in Section 6.1.1
      (Manufacturing Development; Initial POZEN Product).

     

    1.94  “Standard
      Sales Price”
      means,
      as reported by IMS (or ACNielsen in the case of over-the-counter products)
      in
      the relevant country, the average sales price for the preceding Calendar Quarter
      for the Product or, in the case of a Combination Product, the average sales
      price for the applicable presentation and dosage strength of all marketed brands
      of the other therapeutically active ingredient(s). As used herein,
“presentation” means the method of administration of a pharmaceutical substance
      into the human body, including, but not limited to, solid oral (including
      tablets, capsules, gelcaps, sachets and caplets), other oral (including
      suspension and solution), parenteral (including intramuscular, subcutaneous
      and
      intravenous), transdermal, suppository and intranasal.

     

    1.95  “Sublicense
      Agreement”
      means
      any agreement under which AstraZeneca grants a Third Party a sublicense, option
      or other right under the Licensed Technology to make, use, have made, sell,
      offer for sale, import and export Products in the Field of Use in the
      Territory.

     

    1.96  “Sublicensee”
      means
      any Third Party that has entered into a Sublicense Agreement.

     

    1.97  “Term”
      has the
      meaning assigned to it in Section 12.2
      (Term).

     

    1.98  “Territory”
      means
      all countries of the world, excluding Japan, unless and until AstraZeneca
      exercises the option under Section 7.6
      (Japan
      Option), whereupon the Territory shall be all countries of the
      world.

     

    1.99  “Third
      Party”
      means
      any entity other than POZEN, AstraZeneca, or any of their respective
      Affiliates.

     

    
      
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    1.100  “Third
      Party Royalties”
      means
      upfront, commercialization milestone, royalty and any other similar payments
      paid by AstraZeneca or any AstraZeneca Affiliate to any Third Party in
      consideration for a license to a Blocking Patent for the Development or
      Commercialization of POZEN Products.

     

    1.101  “TPP”
      shall
      mean the target product profile of the Initial POZEN Product as described in
      Exhibit
      F.

     

    1.102  “TPP
      Endpoints”
      means
      the endpoints of the TPP Studies as described in Exhibit
      F.

     

    1.103  “TPP
      Failure”
      means
      the failure of any TPP Study to achieve TPP Endpoint Success, as defined in
      Exhibit
      F.

     

    1.104  “TPP
      Studies”
      means
      the studies entitled ****** in the Initial U.S. Development Plan.

     

    1.105  “U.S.”
      means
      the United States of America and its possessions and territories.

     

    1.106  “U.S.
      Development Plan”
      means
      the plan for the Development of the Initial POZEN Product for Marketing Approval
      in the U.S. as may be updated and amended from time to time by the GPT in
      accordance with this Agreement.

     

    1.107  “U.S.
      Development Plan Timeline”
      means
      the estimated timeline for completion of the U.S. Development Plan, as may
      be
      updated and amended from time to time by the GPT in accordance with this
      Agreement.

     

    1.108  “Valid
      Claim”
      means
      any claim of any issued and unexpired patent or a patent application that has
      not been disclaimed or held invalid or unenforceable by judgment or decree
      entered in any judicial proceeding that is not further reviewable through the
      exhaustion of all permissible applications for rehearing or review by a superior
      tribunal, or through the expiration of the time permitted for such applications;
      provided, that any claim in a pending Patent application that does not issue
      as
      a patent claim within ****** (******) years after the earliest priority date
      of
      such application will not be a “Valid Claim” until such claim issues as a patent
      claim.

     

    
      
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      	2.  	
              COLLABORATION
                GOVERNANCE

            


    

     

    2.1  Establishment.

     

    2.1.1  Global
      Product Team.
      Within
      twenty (20) days after the Effective Date, the Parties will appoint
      representatives to the GPT in accordance with the terms of this
      Section 2.1
      and
      convene the first GPT meeting. The GPT will coordinate and oversee the
      Development and Commercialization of the Initial POZEN Product hereunder. The
      purposes of the GPT will be, with respect to the Initial POZEN Product only,
      (a)
      to coordinate the management and implementation of the Parties’ Development
      activities hereunder, (b) to update the U.S. Development Plan in a manner
      consistent with the Initial U.S. Development Plan by providing additional detail
      regarding the activities described therein and to amend the U.S. Development
      Plan from time to time, (c) to update the ROW Development Plan in a manner
      consistent with the Initial ROW Development Plan by providing additional detail
      regarding the activities described therein and to amend the ROW Development
      Plan
      from time to time, (d) to propose, approve, amend and allocate responsibility
      for performing any Additional Development Activities, and (e) to develop
      AstraZeneca’s Commercial Launch and marketing plans for the Initial POZEN
      Product. The GPT will have the membership and will operate by the procedures
      set
      forth in Section 2.2
      (Membership and Procedures).

     

    2.1.2  Joint
      Steering Committee
      Promptly
      following the Effective Date, the Parties will create a joint steering committee
      (the “JSC”)
      to
      provide strategic guidance to the GPT in decisions pertaining to the Initial
      POZEN Product. The purposes of the JSC will be (a) to review and make
      recommendations to the GPT regarding the U.S. Development Plan, and (b) to
      resolve disputes of the GPT. The JSC will have the membership and will operate
      by the procedures set forth in Section 2.2
      (Membership and Procedures).

     

    2.2  Membership
      and Procedures.

     

    2.2.1  GPT.

     

    (a)  Membership.
      In
      addition to members designated by AstraZeneca, the GPT shall have up to three
      (3) representatives designated by POZEN, attending, observing and participating
      in meetings of the GPT at POZEN’s expense, such representatives having the
      relevant experience and skill appropriate for service on such team. Such
      representatives shall be regular working members of the GPT. AstraZeneca shall
      be entitled to have as many representatives serve as members of the GPT as
      it
      desires. POZEN may replace its representatives on the GPT at any time upon
      written notice to AstraZeneca. AstraZeneca shall provide POZEN office space
      at
      its facilities for such representatives to facilitate such participation;
      provided, that such representatives shall comply with all policies and
      reasonable restrictions imposed by AstraZeneca and provided to POZEN in writing.
      Upon prior written consent of AstraZeneca, which consent will not be
      unreasonably withheld, a reasonable number of employees, consultants,
      representatives or advisors of POZEN who are not POZEN’s GPT representatives may
      attend GPT meetings as observers; provided, that such persons shall comply
      with
      all policies and reasonable restrictions imposed by AstraZeneca and provided
      to
      POZEN in writing.

     

    
      
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    (b)  Chairpersons.
      The
      global product director for the Initial POZEN Product designated by AstraZeneca
      will chair the GPT (“GPT
      Chair”).

     

    (c)  Meetings.
      The GPT
      will hold meetings when called by the GPT Chair but, in any event, at least
      once
      every Calendar Quarter. Meetings may be held in person at AstraZeneca’s
      facilities or by means of telecommunication (telephone, video, or web
      conferences). Following any GPT meeting, the GPT Chair will be responsible
      for
      preparing and issuing minutes of such meeting within fifteen (15) Business
      Days
      thereafter. Such minutes will not be finalized until a representative of the
      GPT
      designated by each Party has reviewed and confirmed the accuracy of such minutes
      in writing. If a disagreement regarding the accuracy of such minutes cannot
      be
      resolved, the minutes will reflect such disagreement.

     

    2.2.2  JSC.

     

    (a)  Membership.
      Each
      Party will designate an equal number of representatives, but in no event less
      than three (3) each, with appropriate expertise to serve as members of the
      JSC.
      Each Party may replace its representatives on the JSC at any time upon written
      notice to the other Party.

     

    (b)  Co-Chairpersons.
      One of
      each Party’s representatives to the JSC will be designated as a co-chairperson.
      The co-chairpersons will be responsible for calling meetings and preparing
      and
      circulating an agenda in advance of each meeting, and preparing minutes of
      each
      meeting.

     

    (c)  Meetings.
      The JSC
      will hold meetings at least once every Calendar Quarter, or more frequently
      as
      the Parties may agree with at least two meetings held in person annually.
      Subject to the preceding sentence, meetings may be held in person at locations
      to be determined by the mutual agreement of the Parties (a majority of which
      must be outside the United States) or by means of telecommunication (telephone,
      video, or web conferences). Following any JSC meeting, the co-chairpersons
      will
      be responsible for preparing and issuing minutes of such meeting within fifteen
      (15) Business Days thereafter. Such minutes will not be finalized until a
      representative of each Party has reviewed and confirmed the accuracy of such
      minutes in writing. If a disagreement regarding the accuracy of such minutes
      cannot be resolved, the minutes will reflect such disagreement.

     

    2.2.3  Limitations
      of Powers.
      The GPT
      and JSC will have only such powers as are specifically delegated to them
      hereunder and will not be a substitute for the rights of the Parties. Without
      limiting the generality of the foregoing, the GPT and JSC will not have any
      power to amend this Agreement (except amendments to the U.S. Development Plan
      or
      ROW Development Plan). Any amendment to the terms and conditions of this
      Agreement may only be implemented pursuant to Section 15.6
      (Entire
      Agreement; Modifications) below.

     

    2.2.4  Expenses.
      Each
      Party will be responsible for all of its own expenses of participating in the
      GPT and JSC.

     

    
      
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    2.3  Decision-Making.

     

    2.3.1  GPT
      Decisions.
      Subject
      to the terms of this Section 2.3
      (Decision-Making), the GPT will act by decision of the GPT Chair. If a POZEN
      representative objects to any decision, then such dispute will be referred
      to
      the JSC.

     

    2.3.2  JSC
      Decisions.
      Subject
      to the terms of this Section 2.3
      (Decision-Making), the JSC will take action by unanimous vote with each Party
      having a single vote, irrespective of the number of representatives actually
      in
      attendance at a meeting, or by a written resolution signed by the designated
      representatives of each of the Parties. If the JSC fails to reach unanimous
      consent on a particular matter within ****** (******) Business Days of POZEN
      having requested a formal vote on such matter (or any earlier period mutually
      agreed to by the Parties if a delay may reasonably be anticipated to have an
      adverse effect on the Development or Commercialization of the Initial POZEN
      Product), then such dispute will be subject to the resolution procedures
      described in Section 2.3.3
      (Dispute
      Resolution) below.

     

    2.3.3  Dispute
      Resolution.
      In the
      event of any dispute in the JSC that is not resolved pursuant to the terms
      of
      Section 2.3.2
      (JSC
      Decisions), either Party may provide written notice of such failure (a
“Notice
      of Disagreement”)
      to the
      Chief Executive Officer of the other Party (or his or her designee). The Chief
      Executive Officers or designees of each of the Parties will meet at least once
      in person or by means of live telecommunication (telephone, video, or web
      conferences) to discuss the matter on which the JSC failed to reach unanimous
      consent and use their good faith efforts to resolve the matter within ******
      (******) Business Days after receipt of the Notice of Disagreement by the
      applicable Chief Executive Officer of a Party. If any such disagreement is
      not
      resolved by the Chief Executive Officers or designees within such ******
      (******) day period, then (A) the Chief Executive Officer or designee of POZEN
      will have the final decision-making authority with respect to any such
      disagreement arising out of either (i) Core Development Activities (other than
      ****** or the ******) or (ii) subject to Section 3.3.3
      (Expenses), Additional Development Activities but only to the extent that such
      activities are required by the FDA to obtain NDA Approval in the U.S. of the
      Initial POZEN Product, and (B) the Chief Executive Officer or designee of
      AstraZeneca will have the final decision-making authority with respect to
      disagreement relating to all other matters. Notwithstanding anything to the
      contrary in this Section 2.3.3
      (Dispute
      Resolution):

     

    (a)  POZEN’S
      Chief Executive Officer or designee will not make a final determination that
      would ****** without AstraZeneca’s prior written consent;

     

    (b)  POZEN’S
      Chief Executive Officer or designee will not make a final determination ******
      without the prior written consent of AstraZeneca; provided, that AstraZeneca
      will not unreasonably withhold, condition or delay its consent;

     

    (c)  Neither
      Party’s Chief Executive Officer or designee ******;

     

    
      
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    (d)  Neither
      Party’s Chief Executive Officer or designee may make any decision without the
      prior written consent of the other Party that would ****** for the ******from
      the ****** by the Parties through the ******will not be ******; provided, that
      the foregoing will not ******set forth in this Agreement ****** ****** ******in
      this Agreement; 

     

    (e)  AstraZeneca’s
      Chief Executive Officer or designee will not, without POZEN’s prior written
      consent, ******.

     

    2.3.4  Extension
      of Pre-Approval Failure Time Limits.
      ******,
      if AstraZeneca proposes to change either the U.S. Development Plan or the ROW
      Development Plan so as to add Development activities that are reasonably
      expected to delay the NDA Approval of the Initial POZEN Product in the U.S.
      or
      any Major Ex-U.S. Market country (other than in a manner required by a
      Regulatory Authority to obtain NDA Approval in the U.S. or any Major Ex-U.S.
      Market country) beyond the dates for NDA Approval set forth in the Initial
      U.S.
      Development Plan Timeline and the Initial ROW Development Plan Timeline, then
      if
      the plan is so amended, the Parties will determine in good faith negotiations
      whether to adjust the periods referred to in paragraphs ****** of the definition
      of Pre-Approval Failure in Section 1.81
      (Pre-Approval Failure) to take account of such delay; provided, that in no
      event
      will either period be extended longer than ******.

     

    2.3.5  Interim
      Results of ******. If
      the
      interim results of the ****** ****** described in the Initial U.S. Development
      Plan lead either Party to reasonably believe that there is a substantial
      likelihood that the ****** will not ******, then such Party will provide written
      notice to the other Party of such determination and the Parties will discuss
      in
      good faith, through the GPT, whether to postpone commencement of some or all
      of
      the future Core Development Activities or Additional Development Activities
      pending the receipt of ****** (it being understood that ongoing activities
      will
      continue). 

     

    (a)  If,
      following such GPT discussion, AstraZeneca elects to postpone commencement
      of
      some or all new Additional Development Activities, then POZEN shall not commence
      such new Additional Development Activities. If AstraZeneca elects to postpone
      commencement of new Additional Development Activities in a way that would be
      reasonably likely to delay Development of the Initial POZEN Product, POZEN
      may
      postpone commencement of some or all of the new Core Development Activities
      for
      the same period that AstraZeneca postpones commencement of such new Additional
      Development Activities, subject to POZEN’s using Diligent Efforts to commence
      such new Core Development Activities as soon as reasonably practicable at the
      end of such suspension period. Notwithstanding anything to the contrary herein,
      any delays in obtaining NDA Approval of the Initial POZEN Product resulting
      from
      such postponement of Additional Development Activities or Core Development
      Activities shall not be counted in determining whether the time period in
      paragraph (******) of Section 1.81
      (Pre-Approval Failure) has been exceeded

     

    (b)  If,
      following such GPT discussion, AstraZeneca desires to postpone commencement
      of
      new Additional Development Activities and POZEN does not agree to such
      postponement, then POZEN in its sole discretion may continue performing the
      applicable Additional Development Activities at its own expense. 

     

    
      
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    (c)  In
      any
      event, if ****** ****** indicates that ******, then unless AstraZeneca
      terminates this Agreement on account of a Pre-Approval Failure described in
      Section 1.81(c),
      (i) the
      Parties will commence the performance of the postponed Additional Development
      Activities and Core Development Activities in accordance with the applicable
      development plans, and (ii) with respect to any Additional Development
      Activities performed by POZEN pursuant to the preceding clause (b) during the
      interim period, AstraZeneca will reimburse POZEN for all costs of performing
      such activities under the terms of Section 3.3.3
      (Expenses). In any event, AstraZeneca will reimburse POZEN for any reasonable
      cancellation or suspension fees paid by POZEN in connection with the
      postponement of Additional Development Activities contemplated by this
      Section 2.3.5.

     

    2.3.6  Limitation.
      Notwithstanding this Section 2.3
      (Decision-Making), any dispute regarding the interpretation of this Agreement,
      the performance or alleged nonperformance of a Party’s obligations under this
      Agreement, or any alleged breach of this Agreement will be resolved in
      accordance with the terms of Section 15.4
      (Governing Law; Dispute Resolution).

     

    
      	3.  	
              PRODUCT
                DEVELOPMENT

            


    

     

    3.1  Development
      Plans.

     

    3.1.1  U.S.
      Development Plan.
      The
      Development of Initial POZEN Product under this Agreement for U.S. Marketing
      Approval will be governed by the U.S. Development Plan and the U.S. Development
      Plan Timeline. As promptly as practicable following the Effective Date, the
      GPT
      will update the U.S. Development Plan in a manner that is consistent with the
      Initial U.S. Development Plan and the Initial U.S. Development Plan Timeline.
      Subject to Section 2.3.3
      (Dispute
      Resolution), from time to time during the Term, the GPT will update the U.S.
      Development Plan as it deems necessary and appropriate. The U.S. Development
      Plan will be part of this Agreement and incorporated herein by
      reference. 

     

    3.1.2  ROW
      Development Plan.
      The
      Development of Initial POZEN Product under this Agreement for Marketing Approval
      outside the U.S. will be governed by the ROW Development Plan and the ROW
      Development Plan Timeline. As promptly as practicable following the Effective
      Date, the GPT will update the ROW Development Plan in a manner that is
      consistent with the Initial ROW Development Plan and the Initial ROW Development
      Plan Timeline. The ROW Development Plan will be part of this Agreement and
      incorporated herein by reference. Subject to Section 2.3.3
      (Dispute
      Resolution), from time to time during the Term, the GPT will update the ROW
      Development Plan as it deems necessary and appropriate.

     

    
      
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    3.1.3  TPP
      Endpoints.
      The
      Parties acknowledge that a primary goal of Development efforts under this
      Agreement is to generate data that will enable AstraZeneca to promote the
      Initial POZEN Product on the basis of the TPP Endpoints. Accordingly, the
      Parties agree, subject to Section 3.3
      (Additional Development Activities), to use Diligent Efforts to conduct
      Additional Development Activities directed to achievement of the TPP Endpoints,
      to include the data from the TPP Studies in the NDA (subject to the terms of
      Section 4.1.1
      (In the
      U.S.)), and to obtain approval of such Product Labeling as may be necessary
      for
      the promotion of the Initial POZEN Product in the U.S. on the basis of the
      TPP
      Endpoints (subject to the terms of Section 4.3.3
      (Label
      Negotiations and Approval)).

     

    3.2  Core
      Development Activities.

     

    3.2.1  Performance.
      POZEN
      will use Diligent Efforts to perform the Core Development
      Activities.

     

    3.2.2  Records
      and Reports.
      POZEN
      will retain all records required by Applicable Law to be maintained in
      connection with its obligations under Section 3.2.1
      (Performance) pursuant to the U.S. Development Plan. POZEN will provide written
      reports to the GPT on its activities in conjunction with regularly scheduled
      meetings of the GPT, at a level of detail reasonably sufficient to enable
      AstraZeneca to monitor POZEN’s compliance with its obligation pursuant to this
      Agreement. Moreover, AstraZeneca shall have the right to audit the facility
      and
      records of POZEN and each contract research organization and other vendors
      employed by POZEN to conduct Development of the Initial POZEN Product in
      accordance with the terms of Section 3.7
      (Audits
      and Inspections).

     

    3.2.3  Expenses.
      POZEN
      will bear the expenses for the Core Development Activities.

     

    3.2.4  Diligence.
      POZEN
      will use Diligent Efforts to conduct all Development activities under this
      Section 3.2
      (Core
      Development Activities) in a good scientific manner and in compliance in all
      material respects with all Applicable Laws (including cGCP, cGLP and cGMP)
      and
      to adhere to the Initial Development Plan Timeline. All efforts of POZEN’s
      Affiliates, Third Party contractors and sublicensees will be considered efforts
      of POZEN for the purpose of determining compliance with its obligations under
      this Section 3.2.4
      (Diligence).

     

    3.3  Additional
      Development Activities.

     

    3.3.1  Performance.
      POZEN
      shall perform all Additional Development Activities that are identified in
      Exhibit
      B
      and
Exhibit
      D
      as being
      POZEN’s responsibility and all Additional Development Activities required to
      obtain NDA Approval of the Initial POZEN Product in the U.S. and EU, at
      AstraZeneca’s expense, subject to Section 3.3.3
      (Expenses) below. The GPT will allocate between the Parties the responsibility
      for the performance of other Additional Development Activities; provided, that
      each Party will have the right to consent to such activities as may be allocated
      to it. Each Party hereby agrees to perform such Additional Development
      Activities as may be allocated to such Party by the GPT.

     

    
      
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    3.3.2  Records
      and Reports.
      Each
      Party will retain all records required by Applicable Law to be maintained in
      connection with such Party’s performance of Development Activities. Each Party
      will provide written reports to the GPT on such activities with the Initial
      POZEN Product, in conjunction with regularly scheduled meetings of the GPT,
      at a
      level of detail reasonably sufficient to enable the other Party to determine
      the
      reporting Party’s compliance with its obligations pursuant to this Agreement,
      including Section 3.3.1
      (Performance) and 3.3.4
      (Diligence).

     

    3.3.3  Expenses.
      Within
      ****** (******) days after the Effective Date, POZEN shall develop a schedule
      of
      expected activities and related costs for Additional Development Activities
      to
      be conducted by POZEN. This schedule will describe in reasonable detail the
      expected activities to be performed and will contain sufficient detail on both
      Direct Costs to be incurred with Third Parties and FTE Costs to be incurred
      by
      POZEN, as well as estimated timings of such costs. The GPT will review this
      schedule and approve a budget for the Additional Development Activities
      conducted by POZEN after the Execution Date (the “ADA
      Budget”).
      By
      ****** of each calendar year, beginning 2007, POZEN shall provide the GPT with
      an update of the ADA Budget for the subsequent calendar year for the review
      and
      approval of the GPT, such update to take effect once approved, beginning ******
      of such subsequent year. The GPT will reasonably consider each such proposed
      ADA
      Budget and may withhold its approval of any proposed ADA Budget (including
      all
      updates thereof) only if the budget is not reasonable in light of prevalent
      market conditions for similar work or is not consistent with POZEN’s
      expenditures on Core Development Activities to the extent the activities are
      comparable. In addition to this annual process, the GPT may also periodically
      review and amend the ADA Budget as appropriate in light of approved changes
      to
      the Additional Development Activities allocated to POZEN (including upon
      finalization of the scope of the ******) consistent with the above principles.
      POZEN will calculate and maintain records of all Direct Costs and FTE Costs
      incurred by POZEN in performing Additional Development Activities, in accordance
      with POZEN’s internal accounting policies. Within ****** (******) days after the
      end of each calendar month during which POZEN incurs Direct Costs or FTE Costs
      in performing the Additional Development Activities, POZEN will submit to
      AstraZeneca a written invoice setting forth in reasonable detail the Direct
      Costs and FTE Costs it has incurred in performing the Additional Development
      Activities. AstraZeneca will pay POZEN within ****** (******) days following
      the
      receipt of the invoice for Direct Costs and FTE Costs that do not exceed the
      then-current ADA Budget by more than ****** percent (******%); provided, that
      the GPT will approve variances above ******% if and to the extent the variances
      are (a) reasonable in light of prevalent market conditions for similar work
      and
      consistent with POZEN’s expenditures on Core Development Activities to the
      extent the activities are comparable, or (b) beyond POZEN’s reasonable control.
      Any payments made pursuant to this Section 3.3.3
      (Expenses) will be subject to the general payment procedures set forth in
      Sections 8.5
      through
8.7,
      inclusive. POZEN will inform the GPT at least ****** (******) days prior to
      incurring any Direct Costs or FTE Costs that exceed the then-current ADA Budget
      by more than ****** percent (******%). AstraZeneca shall not be held responsible
      for any expenditure relating to the Additional Development Activities incurred
      by POZEN that exceeds the then-current ADA Budget by more than ****** percent
      (******%), unless such expenditure has been specifically approved by the GPT
      as
      an exception to the ADA Budget in accordance with this Section 3.3.3
      (Expenses).
      For
      clarity, the terms of this Section 3.3.3 will apply with respect to any
      Additional Development Activities commenced by POZEN after the Execution
      Date.

     

    
      
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    3.3.4  Diligence.
      Each
      Party will use Diligent Efforts to conduct the Additional Development Activities
      allocated to it in a good scientific manner and in compliance in all material
      respects with all Applicable Laws (including cGCP, cGLP and cGMP) and to adhere
      to the Initial U.S. Development Plan Timeline. All efforts of a Party’s
      Affiliates and Third Party contractors will be considered efforts of such Party
      for the purpose of determining compliance with its obligations under this
      Section 3.3.4
      (Diligence). Without limiting the foregoing general obligation, each Party
      will
      use Diligent Efforts to perform the Additional Development Activities in
      accordance with the U.S. Development Plan Timeline and the ROW Development
      Plan
      Timeline.

     

    3.4  Development
      of Products by AstraZeneca. 

     

    3.4.1  General
      Principles.
      In
      addition to the Development of the Initial POZEN Product pursuant to Section
      3.3
      (Additional Development Activities) above, AstraZeneca will have the right
      to
      Develop and Commercialize other Products during the Term in each country of
      the
      Territory, for so long as AstraZeneca is using Diligent Efforts to Develop
      and
      Commercialize at least one POZEN Product in accordance with the terms and
      conditions of this Agreement, it being understood that the Parties intend for
      AstraZeneca to focus its initial efforts on the Development and
      Commercialization of the Initial POZEN Product. 

     

    3.4.2  Substitution. 

     

    (a)  Upon
      Certain Pre-Approval Failures.
      If a
      Pre-Approval Failure of the Initial POZEN Product described in paragraph ******
      of Section 1.81
      (Pre-Approval Failure) occurs in the U.S. (it being understood that the failure
      described in paragraph ****** will not be deemed to have occurred until
      expiration of the ****** period described in Section ******) and AstraZeneca
      provides POZEN with a written notice of its election to discontinue the
      Development of such product and to substitute another POZEN Product, without
      prejudicing AstraZeneca’s right to terminate this Agreement under Section
12.4.1,
      then
      AstraZeneca will have the option, in its sole discretion, to identify a POZEN
      Product as a replacement for the Initial POZEN Product within ****** (******)
      days of the occurrence of such Pre-Approval Failure. If AstraZeneca elects
      to
      make such a replacement, then AstraZeneca will consult in good faith with POZEN
      regarding the identification of such substitute POZEN Product and shall
      designate such substitute in writing to POZEN; provided, that as of the time
      of
      such election, ****** of such ******must be ****** in the ******and at
      ******must be ******. Such substitution shall be effective immediately upon
      AstraZeneca’s designation of the replacement POZEN Product. 

     

    
      
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    (b)  Otherwise.
      If
      circumstances occur which ****** to ****** the ****** ****** and AstraZeneca
      wishes to discontinue the Development of the Initial POZEN Product, then
      AstraZeneca may identify a different POZEN Product to replace the Initial POZEN
      Product, either throughout the Territory or in one or more countries of the
      Territory, by written notice to POZEN of such election; provided, that as of
      the
      time of such election, ******of such ******must be ******in the ******must
      be
      ******. AstraZeneca will consult in good faith with POZEN regarding the
      identification of such proposed substitute POZEN Product, and POZEN shall either
      approve or disapprove the identification of such proposed substitute Initial
      POZEN Product within ****** (******) days of AstraZeneca’s providing POZEN with
      such notice, such approval not to be unreasonably withheld, conditioned or
      delayed. If POZEN approves the identification of the substitute Initial POZEN
      Product, then the Parties shall negotiate to agree upon the applicable
      development plan for such proposed substitute Initial POZEN Product in
      accordance with Section 3.4.2(c)
      (Effects
      of Election), and such substitution shall not become effective until the Parties
      have agreed upon such revised development plan pursuant to Section 3.4.2(c).

     

    (c)  Effects
      of Election. In
      the
      event of any proposed Product substitution pursuant to this
      Section 3.4.2,
      AstraZeneca will prepare and submit to POZEN a new U.S. Development Plan and
      ROW
      Development Plan, as applicable, for the applicable replacement Initial POZEN
      Product within ****** (******) days following the election of such replacement,
      and the Parties will use good faith efforts to agree upon such plan. 

     

    (i)  If
      the
      Parties, despite the use of good faith efforts, fail to agree upon a new U.S.
      Development Plan and/or ROW Development Plan, as applicable, for a substitute
      Initial POZEN Product, then (1) if such substitution was made pursuant to
      Section 3.4.2(a) above, then such failure will be subject to the applicable
      dispute resolution procedures set forth in this Agreement, or (2) if such
      substitution was made pursuant to Section 3.4.2(b) above, then, notwithstanding
      anything to the contrary herein, the proposed substitution shall not be
      effective and AstraZeneca may not proceed with the Development of the substitute
      Initial POZEN Product.

     

    (ii)  If
      the
      Parties agree upon a new U.S. Development Plan and/or ROW Development Plan,
      as
      applicable, for a substitute Initial POZEN Product, any such development plan
      must provide for a proof of concept study with mutually agreed endpoints.
      Furthermore, any such U.S. Development Plan and/or ROW Development Plan shall
      provide that if such proof of concept study fails to meet its mutually agreed
      endpoints, then AstraZeneca shall have the right, at its option, to terminate
      this Agreement without penalty either in its entirety or with respect to the
      territory of such substitute Initial POZEN Product; provided, that written
      notice of termination must be delivered to POZEN within ****** (******) days
      following the receipt of the final clinical study report for such proof of
      concept study. For the purposes of this Section 3.4.2(c)(ii), a “proof of
      concept” study is a study that provides clinical confirmation that the
      substitute Initial POZEN Product possesses a desired pharmacological effect
      in
      patients, and is typically a positive placebo-controlled study or dose-response
      study using a validated surrogate variable or the final clinical outcome
      variable.

     

    
      
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    (d)  Effects
      of Substitution.
      Upon the
      effectiveness of a substitution pursuant to this Section 3.4.2, the applicable
      replacement POZEN Product shall be deemed the “Initial POZEN Product” in the
      Territory or such country(ies), as applicable, for all purposes under this
      Agreement; provided, however if the market opportunity and timing of NDA
      Approval for the POZEN Product that is substituted for the original Initial
      POZEN Product is not substantially equivalent, the Parties shall meet and
      negotiate in good faith to adjust milestone payments that would be due with
      respect to such replacement Initial POZEN Product under Section 8.2
      (Development Milestone Payments) in a manner that reflects the commercial
      opportunity for such replacement Initial POZEN Product and the Parties’ relative
      contribution to the Development of the replacement POZEN Product. 

     

    3.5  Oversight
      of Proof of Concept Studies.
      Without
      limiting the generality of POZEN’s obligations with respect to Additional
      Development Activities generally, POZEN shall conduct the Proof of Concept
      Studies, including design, execution and analysis to AstraZeneca’s reasonable
      satisfaction. Without limiting the foregoing, POZEN will consult with
      AstraZeneca with respect to the foregoing activities and will give reasonable
      consideration to and use Diligent Efforts to give effect to AstraZeneca’s
      comments with respect thereto. POZEN will provide AstraZeneca with copies of
      all
      data from the Proof of Concept Studies and all draft reports for such studies
      as
      the data and draft reports become available. The clinical study reports for
      the
      Proof of Concept Studies are subject to review and comment by AstraZeneca;
      provided, that ****** such study reports will not affect either Party’s rights
      under this Agreement. AstraZeneca shall be permitted to reasonably participate
      in POZEN’s study team meetings and receive communications from the POZEN study
      team as reasonably necessary to keep AstraZeneca informed regarding the conduct
      of the Proof of Concept Studies.

     

    3.6  Exchange
      of Know-How.
      In
      addition to the periodic reports provided to the other Party pursuant to Section
      3.2.2
      (Records
      and Reports), each Party will provide to the other Party copies of any Know-How
      in its possession relating to the Initial POZEN Product, including, without
      limitation, procedures, formulations, manufacturing reports, pre-clinical and
      clinical protocols and data, regulatory filings, and toxicology reports with
      respect to the Initial POZEN Product, including any final versions of any study
      reports and any drafts then-outstanding of any study reports, all to the extent
      reasonably required for the requesting Party to perform its obligations under
      this Agreement.

     

    3.7  Audits
      and Inspections.

     

    3.7.1  Audits.
      At all
      times that POZEN is participating in the Development of the Initial POZEN
      Product, a delegation consisting of a reasonable number of representatives
      of
      AstraZeneca (or its Third Party contractors reasonably acceptable to POZEN)
      will
      have the right to inspect and audit any POZEN facility and the facilities of
      Third Party contractors and Affiliates of POZEN where the Development is being
      conducted and the documentation generated in connection with the Development
      of
      the Initial POZEN Product. Such inspections will take place no more than ******
      per site during any calendar year, and will be conducted during regular business
      hours and after at least ****** (******) days prior notice to POZEN. However,
      any such inspections that are made for cause in response to a failure or
      deficiency at the applicable site will not count toward such annual limit.
      AstraZeneca will discuss the results of any inspection with POZEN. Any
      inspection by or on behalf of AstraZeneca, if it occurs, does
      not
      relieve POZEN of its obligation to comply with all Applicable Laws and does
      not
      constitute a waiver of any right otherwise available to
      AstraZeneca.

     

    
      
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    3.7.2  Inspections.
      POZEN
      will notify AstraZeneca promptly following notice from the FDA or any Regulatory
      Authority of a visit to any POZEN facility and the facilities of Third Party
      contractors and Affiliates of POZEN wherein the Development of the Initial
      POZEN
      Product is conducted. A representative of AstraZeneca (or its Third Party
      contractor reasonably acceptable to POZEN) will have the right to be present
      as
      a silent observer at any announced visits to POZEN’s facility and the facilities
      of Third Party contractors (to the extent POZEN is entitled to attend such
      visits) and Affiliates of POZEN by any Regulatory Authority relating to the
      Development of the Initial POZEN Product. Furthermore, POZEN will inform
      AstraZeneca of the results of any inspection by a Regulatory Authority that
      does
      or could reasonably be expected to affect the Development of the Initial POZEN
      Product. POZEN will promptly provide AstraZeneca with copies of notifications
      from any Regulatory Authority (including, without limitation, any Form No.
      483
      notification, Enforcement Inspection Reports, Notice of Adverse Finding, etc.).
      AstraZeneca will treat all information subject to review under this
      Section 3.7.2 (Inspections)
      in accordance with the provisions of Section 11
      (Confidentiality) and will cause any Third Party auditor retained by AstraZeneca
      (and reasonably acceptable to POZEN) to enter into a reasonably acceptable
      confidentiality agreement with POZEN obligating such auditor to maintain all
      such information in confidence pursuant to such confidentiality
      agreement.

     

    
      	4.  	
              REGULATORY
                MATTERS

            


    

     

    4.1  Responsibilities;
      Diligence.

     

    4.1.1  In
      the U.S.
      Subject
      to Section 2.3.3
      (Dispute
      Resolution), POZEN will be responsible, at its sole expense, for preparing
      and
      filing the NDA and seeking NDA Approval for the Initial POZEN Product as
      outlined in the U.S. Development Plan, including preparing all reports and
      other
      documents necessary as part of any IND or NDA; provided, that each Party will
      be
      responsible for preparing reports for studies or activities for which it has
      responsibility in accordance with Articles 3 and 6. The initial NDA submission
      for the Initial POZEN Product shall include ******, and POZEN shall not, without
      AstraZeneca’s prior written consent (but subject in any event to Applicable
      Law), submit the initial NDA for the Initial POZEN Product ******. Such NDA
      will
      be filed in the name of POZEN. POZEN will provide all filings (including the
      NDA) to AstraZeneca for review and comment prior to their submission to the
      FDA.
      Each Party will conduct the Development activities in accordance with the agreed
      U.S. Development Plan. Subject to Section 2.3.3
      (Dispute
      Resolution), each Party will use Diligent Efforts to obtain NDA Approval of
      the
      Initial POZEN Product in the U.S. AstraZeneca shall have the right at its own
      expense to seek any Marketing Approval in the U.S. for claims not obtained
      in
      the initial U.S. NDA Approval for POZEN Products. Within ****** (******) days
      following receipt of NDA Approval for the Initial POZEN Product in the United
      States and POZEN’s receipt of the milestone payment set forth in item 4 of the
      table in Section 8.2,
      POZEN
      will transfer and assign, without additional compensation, corresponding
      Regulatory Materials (including the relevant NDA) to AstraZeneca. During the
      period between ******. As owner of the NDA, AstraZeneca will be the sole owner
      of all data exclusivity protection related to the Initial POZEN Product as
      provided by Applicable Law.
      The GPT
      will allocate responsibility for preparing the “Chemistry and Manufacturing
      Controls” (“CMC”) section for the NDA for the Initial POZEN Product, as
      commercially reasonable. POZEN’s Direct Costs and FTE Costs of preparing
      the CMC section of such NDA shall be included in the Formulation Budget
      established pursuant to Section 6.1.4
      (Expenses).

     

    
      
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    4.1.2  Outside
      the U.S.
      AstraZeneca will be responsible at AstraZeneca’s expense, but other than as set
      forth in this Agreement, shall not be obligated to, prepare and file INDs and
      NDAs and seek NDA Approvals for the Initial POZEN Product in all countries
      in
      the Territory other than the U.S., including preparing all reports necessary
      as
      part of any such IND or NDA. All such INDs and NDAs will be filed in the name
      of
      AstraZeneca. AstraZeneca will use Diligent Efforts to obtain Marketing Approval
      of the Initial POZEN Product in each Major Ex-U.S. Market country. However,
      AstraZeneca shall not be required to Develop or Commercialize a POZEN Product
      in
      a particular Major Ex-U.S. Market country if it is not commercially reasonable
      to do so consistent with the exercise of Diligent Efforts and, upon POZEN’s
      request, will provide POZEN data supporting such determination. AstraZeneca
      will
      have the right in its sole discretion, at any time upon ****** (******) Business
      Days prior written notice to POZEN, to replace any country in the Major Ex-U.S.
      Market with any other country or group of countries having a market potential
      of
      at least ****** percent (******%) of the market potential of the relevant Major
      Ex-U.S. Market country based on the then-current IMS MAT (Moving Annual Total)
      Data for sales of ****** drugs in such Major Ex-U.S. Market country as compared
      to sales of ****** drugs in such other country or group of countries, and
      AstraZeneca’s diligence requirements hereunder shall accordingly transfer from
      such initial Major Ex-U.S. Market country to the replacement country or
      countries. Schedule 4.1.2 sets forth IMS MAT Data that is current as of December
      2005. Based on such data, by way of example, if AstraZeneca desired to elect
      one
      or more countries to replace ****** as a Major Ex-U.S. Market country (having
      $****** in sales), any of the following countries or combinations of countries
      would be acceptable substitutes: (i) ******, with $****** in sales (approx.
      ******% in sales), (ii) ******, with $****** in sales (approx. ******% in
      sales), or (iii) ****** combined (approx. ******% in sales).

     

    4.1.3  Core
      Development Activities Failure. Without
      limiting any right or remedy that AstraZeneca may have under this Agreement
      or
      otherwise, if a dispute arises regarding POZEN’s cessation of Core Development
      Activities and pursuant to the dispute resolution procedures described in
      Section 15.4 a court of competent jurisdiction makes a determination (whether
      in
      a preliminary or final order) that POZEN has materially breached its obligation
      to perform the Core Development Activities and that such material breach has
      not
      been cured within ****** (******) days of POZEN receiving notice of such breach,
      then, if requested by AstraZeneca in writing, POZEN shall do the
      following:

     

    (a)  to
      the
      extent permitted by Applicable Law, transfer and assign to AstraZeneca all
      Regulatory Materials, including any IND or NDA, for any POZEN Product that
      are
      Controlled by POZEN;

     

    (b)  transfer
      to AstraZeneca or its designee the management and continued performance of
      any
      clinical trials for any POZEN Product ongoing as of the effective date of such
      request, which clinical trials will be conducted at AstraZeneca’s expense after
      such transfer; and

     

    
      
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    (c)  for
      a
      reasonable period of time, provide such assistance, at AstraZeneca’s cost, to
      transfer or transition to AstraZeneca all then-existing Third Party contracts
      (to the extent transferable in accordance with the terms and conditions thereof)
      as may be reasonably necessary or useful for AstraZeneca to conduct the Core
      Development Activities and Additional Development Activities, to the extent
      POZEN is then performing or having performed such activities (including without
      limitation transferring, upon request of AstraZeneca, any relevant agreements
      with Third Party contractors, to the extent such agreements are transferable
      in
      accordance with their terms and conditions). POZEN shall use Diligent Efforts
      to
      cause all contracts that it enters into after the Execution Date related to
      the
      Development of the Initial POZEN Product to be assignable to AstraZeneca as
      contemplated by this paragraph.

     

    4.2  Access
      to Filings.
      Each
      Party will permit the other Party access to, and the right to reference and
      use
      (including by providing a letter of authorization to the applicable Regulatory
      Authorities), all data, regulatory filings and regulatory communications
      associated with any submissions for NDA Approval of the Initial POZEN Product
      for the purpose of seeking NDA Approval of the Initial POZEN Product, in
      accordance with Section 4.1
      (Responsibilities; Diligence). AstraZeneca and its Affiliates will have the
      right of cross-reference to all NDAs or other filings made by or on behalf
      of
      POZEN for the purpose of prosecuting Marketing Approval applications for
      Products, and POZEN and its Affiliates will, or will use reasonable efforts
      to
      cause their licensees to, take all such reasonable actions to allow such
      cross-reference. 

     

    4.3  Interactions
      with Regulatory Authorities.

     

    4.3.1  Consultation.
      Each
      Party will consult with the other Party regarding (and provide copies of
      materials prior to any submission to a Regulatory Authority and materials after
      receipt from a Regulatory Authority), and keep such other Party reasonably
      and
      regularly informed of, the status of the preparation of all Regulatory
      Materials, review of such materials by the relevant Regulatory Authority, and
      Marketing Approvals received for the Initial POZEN Product.

     

    4.3.2  Communications.
      Except
      as may be required by Applicable Law and subject to Section 2.3.3
      (Dispute
      Resolution), only the Party responsible for the preparation of Regulatory
      Materials in a particular country or territory will communicate regarding the
      Initial POZEN Product with any Regulatory Authority having jurisdiction in
      such
      country or territory; provided, that if POZEN is required by Applicable Law
      to
      provide to a Regulatory Authority any communication that relates to ******;
      provided, that this sentence shall not be construed to obligate POZEN to take
      any action or make any omission in violation of Applicable Law. If POZEN is
      required to make such a communication by a Regulatory Authority, then POZEN
      will
      ******. During the period which the Regulatory Materials for the Initial POZEN
      Product are under POZEN’s name, AstraZeneca will provide copies of all ex-US
      correspondence regarding such Initial POZEN Product with Regulatory Authorities
      to POZEN, and POZEN will provide copies of all U.S. correspondence regarding
      such Initial POZEN Product to AstraZeneca. In addition, during such period,
      POZEN shall not submit any substantive correspondence or communication to the
      FDA that is material to the NDA of the Initial POZEN Product without prior
      review by and consultation with AstraZeneca, and POZEN shall provide AstraZeneca
      with copies of all other correspondence.

     

    
      
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    4.3.3  Label
      Negotiations and Approval.
      Notwithstanding anything in this Agreement to the contrary, POZEN shall not
      submit to the FDA any draft label, revised draft label, or correspondence
      regarding the label of the Initial POZEN Product without AstraZeneca’s prior
      written review and consent, which shall not be unreasonably withheld,
      conditioned or delayed. AstraZeneca will review and provide POZEN with a
      response on all draft labels and revised draft labels proposed for submission
      to
      the FDA, and on draft correspondence with the FDA, as promptly as reasonably
      practicable and in any event will use Diligent Efforts to approve labeling
      proposed by the FDA for the Initial POZEN Product within ****** (******) days
      after the ******. In the event that the U.S. label for the Initial POZEN Product
      is not approved by AstraZeneca within ****** (******) days after the ******,
      then any time period after such ****** (******) day period shall not be counted
      in determining whether the time period in paragraph ****** of Section
1.81
      (the
      definition of Pre-Approval Failure) has been exceeded. 

     

    4.3.4  Meetings.
      Prior to
      the first NDA Approval, each Party responsible for the preparation of Regulatory
      Materials for the Initial POZEN Product in a particular country will request
      the
      applicable Regulatory Authority in such country to allow a reasonable number
      of
      the other Party’s representatives to attend and, to the extent permitted under
      Applicable Law, participate in all meetings and telephone conferences between
      the responsible Party and such Regulatory Authority in respect of any Regulatory
      Materials. The responsible Party shall inform the other Party of any such
      meetings and telephone conferences scheduled with any such Regulatory Authority
      in respect of any Regulatory Materials as soon as practically possible. Each
      Party will bear its own expenses in attending or otherwise participating in
      any
      meetings and conferences pursuant to this Section.

     

    4.4  Information
      Sharing.
      Each
      Party will provide the other Party, in a timely manner, with copies of, and
      all
      information received by it pertaining to, notices, questions, actions and
      requests from or by Regulatory Authorities with respect to the Initial POZEN
      Product, or the testing, Manufacture, packaging, distribution or facilities
      in
      relation thereto, including any notices of non-compliance with laws in
      connection with the Initial POZEN Product (e.g.,
      warning
      letters or other notices of alleged non-compliance), audit notices, notices
      of
      initiation by Regulatory Authorities of investigations, inspections, detentions,
      seizures or injunctions concerning the Initial POZEN Product (or its
      manufacture, distribution, or facilities connected thereto), notice of violation
      letters (i.e.,
      an
      untitled letter), warning letters, service of process or other inquiries. Except
      as otherwise set forth in this Agreement or as reasonably necessary for POZEN
      to
      perform its Development obligations hereunder or to comply with Applicable
      Law,
      ******. 

     

    
      
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    4.5  Regulatory
      Audits.
      If a
      Regulatory Authority desires to conduct an inspection or audit of a Party’s
      facility, or a facility under contract with a Party, with regard to a POZEN
      Product, then such Party will promptly notify the other Party and permit and
      cooperate with such inspection or audit, and will cause the contract facility
      to
      permit and cooperate with such Regulatory Authority and such other Party during
      such inspection or audit. Such other Party will have the right upon request
      (which request shall not be unreasonably withheld) to have a representative
      observe such inspection or audit; provided, that POZEN’S rights of observance
      under this Section will end upon the transfer of the U.S. NDA for the Initial
      POZEN Product to AstraZeneca. Following receipt of the inspection or audit
      observations of such Regulatory Authority (a copy of which the audited Party
      will immediately provide to the other Party), the audited Party will prepare
      the
      response to any such observations, and will provide a copy of such response
      to
      the other Party. The audited Party agrees to conform its activities under this
      Agreement to any commitments made in such a response, except to the extent
      it
      believes in good faith that such commitments violate Applicable
      Laws.

     

    4.6  Adverse
      Event Reporting.
      Within
      ****** (******) days after the Effective Date, the Parties will enter into
      an
      Adverse Event Reporting Agreement, which upon such execution will be attached
      as
      an exhibit hereto and hereby incorporated into this Agreement by reference
      (the
“AE
      Agreement”),
      governing the Parties’ respective adverse event reporting and global safety
      database maintenance obligations. Without limiting the generality of the AE
      Agreement, the Parties hereby agree as follows:

     

    4.6.1  Until
      POZEN transfers the approved US NDA to AstraZeneca, POZEN will be solely
      responsible for reporting all Adverse Events (AEs) and Serious Adverse Events
      (SAEs) associated with the Initial POZEN Product from any source (including
      AEs
      and SAEs from AstraZeneca sponsored studies) to the FDA and any other Regulatory
      Authority outside the U.S. as required by Applicable Laws. In addition, prior
      to
      such transfer of the U.S. NDA, POZEN shall report to AstraZeneca all AEs and
      SAEs of which POZEN becomes aware within the timelines specified in the AE
      Agreement to the extent necessary to enable AstraZeneca to comply with its
      reporting obligations outside the U.S., and AstraZeneca shall report to POZEN
      all AEs and SAEs of which AstraZeneca becomes aware within the timelines
      specified in the AE Agreement to the extent necessary to enable POZEN to comply
      with its reporting obligations in the U.S., each as more fully described in
      the
      AE Agreement. Notwithstanding the foregoing, if ******to make any ******in
      an
      ******and follow ****** ******of such ******as they ****** ******; ******,
      that
      this ******to take any ******.

     

    4.6.2  All
      AE
      and SAE reports will be exchanged using either approved study forms, electronic,
      or computer generated reports agreed upon by both parties (e.g.,
      CIOMS I form).

     

    4.6.3  Subject
      to Section 4.6.1,
      AstraZeneca will maintain and will be the recognized holder of a global safety
      database for AE and SAE reports related to POZEN Products received by either
      Party. Direct access to this database will not be granted to POZEN. Upon
      request, all reasonable assistance will be provided by either Party in
      responding to safety inquiries.

     

    
      
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    4.6.4  Each
      Party shall keep the other Party informed of notification of any action by,
      or
      notification or other information which it receives (directly or indirectly)
      from any Regulatory Authority which: (i) raises any material concerns regarding
      the safety or efficacy of the Initial POZEN Product; (ii) indicates or suggests
      a potential material liability for either Party to Third Parties arising in
      connection with the Initial POZEN Product; (iii) is reasonably likely to lead
      to
      a “Dear Doctor” letter, recall or market withdrawal of the Initial POZEN
      Product; (iv) relates to the Initial POZEN Product, Regulatory Materials,
      Promotional Materials, samples, package inserts, the indications, labeling,
      expedited and periodic Adverse Event Reports, medical inquiries, Initial POZEN
      Product complaints, this Agreement, or (v) is otherwise important to the
      Development and/or Commercialization of the Initial POZEN Product.

     

    
      	5.  	
              COMMERCIALIZATION

            


    

     

    5.1  Commercialization.
      As
      between the Parties, AstraZeneca will be solely responsible for the
      Commercialization of POZEN Products during the Term.

     

    5.2  Regulatory
      Obligations during Commercialization.
      On a
      country-by-country basis, AstraZeneca will own and maintain all regulatory
      filings and Marketing Approvals for POZEN Products developed pursuant to this
      Agreement, including all INDs and NDAs for the Initial POZEN Product following
      POZEN’s transfer of such filings and approvals subsequent to NDA Approval of the
      Initial POZEN Product in the U.S. As between the Parties, but subject to ******,
      AstraZeneca will be solely responsible for all activities in connection with
      maintaining Marketing Approvals required for the Commercialization and
      manufacture of POZEN Products, including communicating and preparing and filing
      all reports (including Adverse Event reports) with the applicable Regulatory
      Authorities.

     

    5.3  Performance;
      Diligence.

     

    5.3.1  Level
      of Efforts.
      Upon the
      grant of Marketing Approval for a POZEN Product in the U.S. or a country of
      the
      Major Ex-U.S. Market, AstraZeneca will use Diligent Efforts to Commercialize
      a
      POZEN Product in such country. The foregoing Diligent Efforts requirement will
      apply only to one POZEN Product in each of the U.S. and the Major Ex-U.S. Market
      countries, irrespective of the number of POZEN Products AstraZeneca elects
      to
      Develop and Commercialize, and AstraZeneca may elect to fulfill its Diligent
      Efforts obligation in such countries in respect to any POZEN Product of its
      choice in the exercise of its reasonable and good faith judgment. 

     

    5.3.2  Specific
      Timelines.
      AstraZeneca will use Diligent Efforts in the U.S. and in each country of the
      Major Ex-U.S. Market to achieve Commercial Launch within ****** (******) days
      after the date on which Marketing Approval is granted for such Initial POZEN
      Product in such country; provided, that for any country in which Marketing
      Approval is granted by Regulatory Authorities ******, then the obligations
      set
      forth in this Section 5.3.2
      will
      apply only to ******; and provided, further, that if AstraZeneca elects to
      launch the Initial POZEN Product in a particular country or territory following
      NDA Approval in such country or territory, but before or without obtaining
      pricing or reimbursement approval therein, then the ****** (******)-day period
      set forth in this Section 5.3.2 will commence as of the date of such NDA
      Approval.

     

    
      
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    5.4  Commercialization
      Plan.

     

    5.4.1  AstraZeneca
      shall prepare and update from time to time an initial commercialization plan
      summarizing the plan for Commercializing the Initial POZEN Product in the U.S.
      and the Major Ex-U.S. Markets (the “Commercialization
      Plan”)
      within
      ****** (******) days after U.S. NDA filing for the Initial POZEN Product and
      the
      first filing of a Marketing Approval application for the Initial POZEN Product
      in a country of the Major Ex-U.S. Markets, respectively. The Commercialization
      Plan as reviewed by the GPT shall describe the overall plan for Commercializing
      the Initial POZEN Product during the first three years after First Commercial
      Sale of the Initial POZEN Product in the U.S. and the Major Ex-U.S.
      Market.

     

    5.4.2  The
      Commercialization Plan will be in a format consistent with the format of similar
      plans prepared by AstraZeneca for its other products.

     

    5.5  Threatened
      Removal.
      In the
      event that any governmental authority threatens or initiates any action to
      remove any POZEN Product from the market in a country or territory, AstraZeneca
      will promptly notify POZEN of such communication. Any voluntary recall or
      withdrawal of any POZEN Product will be at AstraZeneca’s sole discretion and
      expense. Before AstraZeneca initiates a recall or withdrawal, the Parties will
      promptly and in good faith discuss the reasons therefor; provided, that such
      discussions do not delay the recall or withdrawal. In the event of any recall
      or
      withdrawal for any POZEN Product, AstraZeneca will implement any necessary
      action, with assistance from POZEN as reasonably requested by
      AstraZeneca.

     

    5.6  Compliance.
      Each
      Party will comply with all Applicable Laws relating to activities performed
      or
      to be performed by such Party (or its Affiliates or contractors) under or in
      relation to the Commercialization of the Initial POZEN Product pursuant to
      this
      Agreement. Each Party represents, warrants and covenants to the other Party
      that, as of the Effective Date and during the Term, such Party and its
      Affiliates have adequate policies and procedures in place: (i) to ensure their
      compliance with such laws; (ii) to bring any non-compliance therewith by any
      of
      the foregoing entities to its attention; and (iii) to promptly remedy any such
      non-compliance.

     

    5.7  Branding;
      Trademarks; Domain Names; Trade Dress; Logos.

     

    5.7.1  Responsibilities.
      AstraZeneca will select all Product Trademarks for use on or in connection
      with
      POZEN Products, will be the sole owner of the Product Trademarks, 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.

     

    5.7.2  Use.
      AstraZeneca will use the Product Trademarks in connection with the
      Commercialization of POZEN Products hereunder. The packaging, Promotional
      Materials and Product Labeling for POZEN Products will carry the POZEN House
      Marks only if and to the extent required by Applicable Law in a country or
      territory.

     

    
      
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    5.7.3  AstraZeneca
      Marks.
      AstraZeneca reserves all rights in the Product Trademarks and AstraZeneca House
      Marks. POZEN acknowledges AstraZeneca’s exclusive right, title and interest in
      and to such trademarks and acknowledges that nothing herein will be construed
      to
      accord to POZEN any rights in such trademarks. POZEN agrees not to use or file
      any application to register any trademark or trade name that is confusingly
      similar to any Product Trademarks or AstraZeneca House Mark.

     

    5.7.4  POZEN
      Marks.
      POZEN
      reserves all rights in the POZEN House Marks not expressly granted to
      AstraZeneca in this Agreement. AstraZeneca acknowledges POZEN’s exclusive right,
      title and interest in and to the POZEN House Marks and acknowledges that nothing
      herein will be construed to accord to AstraZeneca any rights in such trademarks
      except as expressly provided herein. AstraZeneca further acknowledges that
      its
      use of the POZEN House Marks will not create in AstraZeneca any right, title
      or
      interest in such trademarks, and that all use of such trademarks and the
      goodwill generated thereby will inure solely to the benefit of POZEN.
      AstraZeneca agrees not to use or file any application to register any trademark
      or trade name that is confusingly similar to any POZEN House Mark.

     

    5.7.5  Promotional
      Materials.
      AstraZeneca will own all right, title and interest in and to any Promotional
      Materials created by or on behalf of AstraZeneca (or its Affiliates) relating
      to
      POZEN Product, but excluding the POZEN House Marks. The GPT will approve a
      standard template for use of the POZEN House Marks in Promotional Materials,
      and
      AstraZeneca will use the POZEN House Marks in accordance with approved
      template.

     

    
      	6.  	
              MANUFACTURE
                OF POZEN PRODUCTS 

            


    

     

    6.1  Manufacturing
      Development. 

     

    6.1.1  Initial
      POZEN Product.
      POZEN
      has developed formulations for ****** and Manufacturing processes for bulk
      and
      finished supplies, itself and through one or more Third Party contract
      manufacturers. ****** (******) days after the Effective Date, AstraZeneca will
      provide the Esomeprazole Materials (as defined below) to POZEN. POZEN shall,
      no
      later than ****** after the date that POZEN receives the Esomeprazole Materials
      (as defined below), develop (itself and through one or more Third Party contract
      manufacturers) a formulation and a manufacturing process (and related testing
      procedures) for the Initial POZEN Product meeting the specifications set forth
      in Schedule 6.1 (the “Specifications”)
      and
      sufficient quantities of the Initial POZEN Product meeting the Specifications
      as
      reasonably necessary to conduct the ****** studies described in the Initial
      U.S.
      Development Plan. However, AstraZeneca will be responsible for supplying to
      POZEN or its designee ****** as a separate component that will be used for
      the
      ****** described in the Initial U.S. Development Plan, and POZEN will supply
      ****** for such study. As used herein, “Esomeprazole
      Materials”
      means
      sufficient quantities of Esomeprazole substance for POZEN to perform the
      activities described in Sections 6.1.1
      and 6.1.2
      as well
      as the ****** studies designated as ******, including a certificate of analysis,
      ID test method for esomeprazole, reference standard for esomeprazole, cleaning
      method for esomeprazole, current drug product methods for esomeprazole for
      assay, related substances and dissolution (i.e.,
      chromatographic conditions), and esomeprazole solubility data and associated
      technical information.

     

    
      
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    6.1.2  ROW
      POZEN Products.
      POZEN
      shall develop (itself and through one or more Third Party contract
      manufacturers) a formulation and a manufacturing process (and related testing
      procedures) for each Initial POZEN Product contemplated to be developed under
      the Initial ROW Development Plan meeting the Specifications and shall deliver
      to
      AstraZeneca sufficient quantities of such Initial POZEN Products as reasonably
      necessary to conduct the ****** described in the Initial ROW Development Plan
      within the timeline for such studies set forth in the Initial ROW Development
      Plan Timeline.

     

    6.1.3  Manufacturing,
      Cooperation, and Assistance.
      The
      manufacturing processes developed by POZEN shall be designed to be scalable
      for
      commercial manufacture of the Initial POZEN Product under the Initial U.S.
      Development Plan and Initial ROW Development Plan and to enable the manufacture
      of the Initial POZEN Product routinely and predictably in conformance with
      the
      Specification and in compliance with Applicable Law. POZEN will consult with
      AstraZeneca on a regular basis with respect to the development described in
      this
      Section 6.1
      (Manufacturing Development) and will give reasonable consideration to
      AstraZeneca’s suggestions. AstraZeneca will provide all reasonable assistance
      requested by POZEN. AstraZeneca hereby consents to POZEN’s using ****** to
      perform the process development activities described in this Section
6.1
      (Manufacturing Development). In furtherance of the forgoing, if POZEN does
      use
      ****** to perform such activities, POZEN shall enter into an agreement with
      ****** that, as between POZEN and ******, requires ****** to transfer to POZEN
      and gives POZEN ownership of all formulation and Manufacturing Know-How
      developed by ****** related to the Initial POZEN Product and all intellectual
      property rights therein.

     

    6.1.4  Expenses.
      Promptly
      following the Execution Date and not later than the Effective Date, the Parties
      will agree on a schedule of expected activities and related costs for activities
      to be conducted by or on behalf of POZEN pursuant to Sections 6.1
      and 6.2
      after the Execution Date (including the Direct Costs of any inventory used
      in
      connection with such activities whether or not purchased by POZEN prior to
      the
      Execution Date) (“Formulation
      Development Activities”)
      and a
      budget for the Formulation Development Activities including both Direct Costs
      to
      be incurred with Third Parties and FTE Costs to be incurred by POZEN, as well
      as
      estimated timings of such costs (the “Formulation
      Budget”),
      which
      will be attached to this Agreement as Exhibit
      A.
      POZEN
      will calculate and maintain records of all Direct Costs and FTE Costs incurred
      by POZEN in performing the Formulation Development Activities, in accordance
      with POZEN’s internal accounting policies. Within ****** (******) days after
      POZEN incurs Direct Costs or FTE Costs in performing the Formulation Development
      Activities, POZEN will submit to AstraZeneca a written invoice setting forth
      in
      reasonable detail the Direct Costs and FTE Costs it has incurred in performing
      the Formulation Development Activities. AstraZeneca will pay POZEN within ******
      (******) days following the receipt of the invoice for Direct Costs and FTE
      Costs that do not exceed the then-current Formulation Budget by more than ******
      percent (******%). Any payments made pursuant to this Section 6.1.4
      (Expenses) will be subject to the general payment procedures set forth in
      Section 8.5
      through
8.7,
      inclusive. POZEN will inform the GPT at least ****** (******) days prior to
      incurring any Direct Costs or FTE Costs that exceed the then-current Formulation
      Budget by more than ****** percent (******%) and the GPT will meet to consider
      the adjustment of such budget or approval of such variance; provided, that
      the
      GPT will approve variances above ******% if and to the extent the variances
      are
      (a) reasonable in light of prevalent market conditions
      for similar work, or (b) beyond POZEN’s reasonable control. AstraZeneca shall
      not be held responsible for any expenditure relating to the Formulation
      Development Activities incurred by POZEN that exceeds the then-current
      Formulation Budget by more than ****** percent (******%), unless such
      expenditure has been specifically approved by the GPT as an exception to the
      Formulation Budget. 

     

    
      
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    6.1.5  AstraZeneca
      Development of Formulation.
      If POZEN
      fails to perform its obligations under Section 6.1.1
      (Initial
      POZEN Product) or 6.1.2
      (ROW
      POZEN Products), within the time periods required thereby, without limiting
      any
      other rights and remedies available to AstraZeneca, unless AstraZeneca has
      selected a substitute Initial POZEN Product pursuant to Section 3.4.2
      (Substitution) or has terminated the Agreement, then AstraZeneca shall use
      Diligent Efforts to develop (itself and through one or more Third Party contract
      manufacturers) a formulation and a manufacturing process for the Initial POZEN
      Product meeting the Specifications and to deliver to POZEN sufficient quantities
      of the Initial POZEN Product meeting the Specifications within ****** after
      AstraZeneca receives from POZEN all formulation Know-How in POZEN’s possession.
      In such event, POZEN will provide all reasonable assistance requested by
      AstraZeneca in connection with such efforts. POZEN hereby consents to
      AstraZeneca’s using ****** to perform the activities described in this
      Section 6.1.5
      (AstraZeneca Development of Formulation) and consents to AstraZeneca’s granting
      to ****** a sublicense of rights under the Licensed Technology to the extent
      reasonably necessary for ****** to perform such work. 

     

    6.1.6  POZEN
      Warranties.
      POZEN
      hereby warrants that the Initial POZEN Product provided by POZEN (itself or
      through one or more Third Party contractors) for use in clinical studies
      pursuant to Sections 6.1.1
      or 6.1.2,
      at the
      time of delivery will have been manufactured and shipped in accordance with
      cGMP
      and cGLP, the IND for the Initial POZEN Product and other Applicable Law; and
      will not be adulterated or misbranded within the meaning of the United States
      Food, Drug and Cosmetic Act, as amended.

     

    6.2  Process
      Transfer.
      Following the completion of the activities described in Section 6.1.1,
      POZEN
      will transfer all formulation and Manufacturing Know-How necessary to establish
      the applicable Manufacturing processes at commercial scale at a site designated
      by AstraZeneca (including such formulation and Manufacturing Know-How possessed
      by its Third Party contractors), and will use Diligent Efforts to cause such
      Third Party manufacturers to allow AstraZeneca employees or agents to reasonably
      observe the Manufacture of the Initial POZEN Product at POZEN’s subcontractor’s
      or agent’s premises and subject to any reasonable rules imposed by such Third
      Party. Thereafter, (i) POZEN will continue to be reasonably available, and
      will
      use reasonable efforts to cause its subcontractors and agents to be reasonably
      available, to AstraZeneca and will provide all reasonable assistance requested
      by AstraZeneca in connection with the establishment and implementation of such
      Manufacturing process, and (ii) AstraZeneca will use Diligent Efforts to
      establish commercial-scale Manufacturing processes for bulk and finished
      supplies of the Initial POZEN Product.

     

    
      
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    6.3  Terms
      for Clinical Supply. 

     

    6.3.1  Responsibility.
      AstraZeneca will use Diligent Efforts to conclude a supply agreement for the
      Initial POZEN Product with a Third Party contract manufacturer ****** within
      ****** (******) days after the Effective Date, under which such Third Party
      contract manufacturer will supply AstraZeneca Initial POZEN Product in
      quantities for all clinical studies ******, Commercial Launch, and post-launch
      supply until such time as AstraZeneca has, itself or through its designated
      contract manufacturer, successfully manufactured at commercial scale a product
      that meets such specifications as may be required by Applicable Law and that
      is
      bioequivalent to the Initial POZEN Product Clinical Trial Material used in
      the
      Phase III clinical studies for such Initial POZEN Product. Once POZEN has
      established a qualified source of Initial POZEN Product supply for the ******
      studies contemplated by the Initial U.S. Development Plan and transferred the
      necessary formulation and Manufacturing Know-How pursuant to Section
6.2
      (Process
      Transfer)), AstraZeneca will Manufacture and supply the Parties’ entire
      requirements of Initial POZEN Product for the Development of the Initial POZEN
      Product under the U.S. Development Plan sufficient for the Parties to conduct
      the applicable clinical activities in accordance with the time periods set
      forth
      in U.S. Development Plan Timeline. Likewise, once POZEN has established a
      qualified source of the Initial POZEN Product for the ****** study contemplated
      by the ROW Development Plan and transferred the necessary formulation and
      manufacturing Know-How pursuant to Section 6.2
      (Process
      Transfer), AstraZeneca will Manufacture and supply (itself or through one or
      more Third Party contractors) the Parties’ entire requirements of Initial POZEN
      Product for the Development of the Initial POZEN Product under the ROW
      Development Plan sufficient for the Parties to conduct the applicable clinical
      activities in accordance with the time periods set forth in ROW Development
      Plan
      Timeline. ****** will bear all costs and expenses incurred for any such
      Manufacture and supply. POZEN hereby consents to AstraZeneca’s using ****** to
      Manufacture clinical supplies and commercial quantities of POZEN Products if
      AstraZeneca should so desire and consents to AstraZeneca's granting to ******
      a
      sublicense of rights under the Licensed Technology to the extent reasonably
      necessary for ****** to perform such work.

     

    6.3.2  Clinical
      Supply.
      Except
      as provided in Section 6.1
      (Manufacturing Development), AstraZeneca will supply POZEN ****** with Clinical
      Trial Materials in order for POZEN to perform clinical studies pursuant to
      Section 3.2
      (Core
      Development Activities) and 3.3
      (Additional Development Activities), as applicable, in accordance with a
      reasonable delivery schedule as the Parties may jointly agree in writing (which
      such schedule, in any event, will enable the completion of the applicable
      clinical trials in accordance with the timelines set forth in the applicable
      development plan).

     

    
      
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    6.3.3  Packaging,
      Shipping and Delivery.
      AstraZeneca will fill, release, package and label such Clinical Trial Materials
      to be used in clinical trials conducted by POZEN pursuant to this Agreement
      in
      final bottles or blisters (or such other dose per package as agreed by the
      GPT)
      using due care and in accordance with Applicable Laws and any specifications
      as
      the Parties may agree in writing. POZEN will be responsible for identification
      testing, randomization and clinical patient labeling of Clinical Trial Materials
      supplied to POZEN by AstraZeneca in the final packaging. POZEN ****** will
      complete such identification testing, randomization, and clinical patient
      labeling of Clinical Trial Materials as soon as practicable following receipt
      of
      the Clinical Trial Materials from AstraZeneca. AstraZeneca will ship the
      Clinical Trial Materials DDU (Incoterms 2000) to the facility in the U.S. as
      POZEN may designate to AstraZeneca by a common carrier designated by
      AstraZeneca. Each shipment will be made generally in accordance with an agreed
      timeline and under the terms and conditions set forth in this Section
6
      (Manufacture of POZEN Product) and the U.S. Development Plan or ROW Development
      Plan, as applicable. Each shipment will include a certificate of analysis and
      any other release data customarily transferred by AstraZeneca in accordance
      with
      its usual practice. There will be a remaining shelf life for Clinical Trial
      Materials upon delivery that is appropriate in light of the expected schedule
      and duration of the clinical trial(s) in which such Clinical Trial Materials
      are
      to be used. AstraZeneca will notify POZEN of the results of ongoing stability
      testing of the Clinical Trial Materials by AstraZeneca.

     

    6.3.4  Warranties.
      AstraZeneca hereby warrants that any Clinical Trial Materials provided by
      AstraZeneca to POZEN under this Agreement, at the time of delivery pursuant
      to
      Section 6.3.3
      (Packaging, Shipping and Delivery): (i) will conform to the specifications
      for
      such Clinical Trial Materials, within applicable regulatory requirements, as
      agreed by the Parties in writing; (ii) will have been manufactured and shipped
      to POZEN (or its designee) in accordance with cGMP, cGLP, the IND for POZEN
      Product and other Applicable Laws; and (iii) will not be adulterated or
      misbranded within the meaning of the United States Food, Drug and Cosmetic
      Act,
      as amended (collectively, the “CTM
      Warranties”).

     

    6.3.5  Remedies
      for Non-Conforming Clinical Trial Materials.
      In the
      event that a shipment of Clinical Trial Materials does not conform with the
      CTM
      Warranties, in whole or in part, then AstraZeneca will promptly produce (at
      its
      cost) for POZEN sufficient quantities of Clinical Trial Materials to replace
      the
      non-conforming portion of such shipment of Clinical Trial Materials, in
      accordance with the provisions of this Agreement. In the event that the Clinical
      Trial Materials are rendered non-conforming to the CTM Warranties by the action
      of POZEN or its agent following delivery as provided in
      Section 6.3.3
      (Packaging, Shipping and Delivery), then AstraZeneca will produce (at POZEN’s
      cost) for POZEN sufficient quantities of Clinical Trial Materials to replace
      the
      non-conforming portion of such shipment of Clinical Trial Materials, in
      accordance with the provisions of this Agreement.

     

    6.4  Commercial
      Supply.
      AstraZeneca will be solely responsible****** for the Manufacture and supply
      of
      AstraZeneca’s entire requirements of supplies of POZEN Product for
      Commercialization. 

     

    
      
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    6.5  Audits
      and Inspections.

     

    6.5.1  Audits.
      At all
      times that AstraZeneca is supplying Clinical Trial Material to POZEN, a
      delegation consisting of a reasonable number of representatives of POZEN (or
      its
      Third Party contractors reasonably acceptable to AstraZeneca), no more than
      ****** per site per calendar year, will have the right to inspect and audit
      any
      AstraZeneca facility where the Clinical Trial Material, including their active
      pharmaceutical ingredients ******, are Manufactured, and the documentation
      generated in connection with the Manufacture and testing of Initial POZEN
      Product. However, any such inspections that are made for cause in response
      to a
      failure or deficiency at the applicable site will not count toward such annual
      limit. Such inspections will take place during regular business hours and after
      at least ****** (******) days prior notice to AstraZeneca. POZEN will discuss
      the results of any inspection with AstraZeneca. Any inspection by or on behalf
      of POZEN, if it occurs, does not relieve AstraZeneca of its obligation to comply
      with all Applicable Laws and does not constitute a waiver of any right otherwise
      available to POZEN.

     

    6.5.2  Inspections.
      AstraZeneca will notify POZEN promptly following notice from the FDA or any
      other Regulatory Authority of a visit to any AstraZeneca facility where the
      Clinical Trial Material ****** is Manufactured. A representative of POZEN (or
      its Third Party contractor reasonably acceptable to AstraZeneca) may request
      to
      be present as a silent observer at any announced visits to AstraZeneca by any
      Regulatory Authority relating to the Manufacture of Clinical Trial Material,
      such request not to be unreasonably refused. Furthermore, AstraZeneca will
      inform POZEN of the results of any inspection by a Regulatory Authority that
      does or could reasonably be expected to affect the Manufacture of Clinical
      Trial
      Material ******. AstraZeneca will promptly provide POZEN with copies of
      notifications from any Regulatory Authority (including, without limitation,
      any
      Form No. 483 notification, Enforcement Inspection Reports, Notice of Adverse
      Finding, etc.). POZEN will treat all information subject to review under this
      Section 6.5.1
      (Audits
      and Inspections) in accordance with the provisions of Section 11
      (Confidentiality) and will cause any Third Party auditor retained by POZEN
      (and
      reasonably acceptable to AstraZeneca) to enter into a reasonably acceptable
      confidentiality agreement with AstraZeneca obligating such auditor to maintain
      all such information in confidence pursuant to such confidentiality
      agreement.

     

    6.6  Reference
      Rights; Support.
      In
      connection with any supply or transfer of Clinical Trial Materials under this
      Section 6
      (Manufacture of POZEN Product) and for so long as AstraZeneca supplies any
      of
      the foregoing to POZEN, or POZEN is using such Clinical Trial Materials pursuant
      to this Agreement, AstraZeneca will grant to POZEN rights of reference
      (including by providing a letter of authorization to the applicable Regulatory
      Authorities) to any AstraZeneca IND or NDA pertaining to Esomeprazole. Upon
      the
      expiration of such right, POZEN will send written notice to such effect to
      the
      applicable Regulatory Authority.

     

    
      
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      	7.  	
              LICENSES

            


    

     

    7.1  Licensed
      Technology.
      Subject
      to the terms and conditions of this Agreement, POZEN hereby grants to
      AstraZeneca an exclusive (including with regard to POZEN and its Affiliates),
      royalty-bearing license, with the right to grant sublicenses as described in
      Section 7.3
      (Sublicenses), under the Licensed Technology to make, use, have made, sell,
      offer for sale, import, and export Products in the Field of Use in the
      Territory. For the avoidance of doubt, AstraZeneca shall have no license or
      other right under the Licensed Technology to make, use, have made, sell, offer
      for sale, import, and export any product containing acetyl salicylic acid
      (including salts and derivatives thereof).

     

    7.2  Trademarks.
      Subject
      to the terms and conditions set forth in this Agreement, POZEN hereby grants
      to
      AstraZeneca a license to use the POZEN House Marks in connection with the
      Commercialization of POZEN Products in the Field of Use in the
      Territory.

     

    7.3  Sublicenses.
      AstraZeneca may grant a sublicense, option to sublicense, or any other right
      relating to any Licensed Technology to any of its Affiliates without the right
      to grant further sublicense rights to any Third Party. AstraZeneca may grant
      a
      sublicense, option to sublicense, or any other right relating to any Licensed
      Technology to any Third Party solely as provided in this Section 7.3
      (Sublicenses). AstraZeneca may enter into Sublicense Agreements only with
      POZEN’s prior consent. In order for rights under Licensed Technology to be
      validly granted to a Sublicensee, the Sublicense Agreement with such Sublicensee
      must be consistent with the following terms and conditions of this Agreement,
      and will include provisions for the benefit of POZEN corresponding to Section
      ******. AstraZeneca will use Diligent Efforts to (i) procure the performance
      by
      any Sublicensee of the terms of each such Sublicense Agreement, and (ii) ensure
      that any Sublicensee will comply with the applicable terms and conditions of
      this Agreement. AstraZeneca hereby guarantees the performance of its Affiliates
      and Sublicensees that are sublicensed as permitted herein, and the grant of
      any
      such sublicense will not relieve AstraZeneca of its obligations under this
      Agreement, except to the extent they are satisfactorily performed by such
      Affiliate or Sublicensee. Notwithstanding the foregoing, AstraZeneca will have
      the right to sell POZEN Products through any distributors or sub-distributors
      of
      its choice, without the need to obtain prior consent from POZEN, in carrying
      out
      its Commercialization activities under this Agreement.

     

    7.4  Reservation
      of Rights; No Implied Licenses.
      POZEN
      retains rights under the Licensed Technology to the extent necessary to perform
      its obligations under this Agreement. Except for the rights specifically granted
      in this Agreement, POZEN reserves all rights to the Licensed Technology. No
      implied licenses are granted under this Agreement. In particular POZEN is not
      by
      this Agreement, by implication or otherwise, granted any license or other right
      relating to Esomeprazole, Nexium or the Nexium Business or any Esomeprazole
      based products or any products containing acetyl salicylic acid (including
      salts
      and derivatives thereof) or any right in relation to any patent, trademark
      or
      other intellectual property right belonging to AstraZeneca or any of its
      Affiliates, and likewise AstraZeneca is not by this Agreement, by implication
      or
      otherwise, granted any license or other right under the Licensed Technology
      relating to any products containing acetyl salicylic acid (including salts
      and
      derivatives thereof) or any right in relation to any patent, trademark or other
      intellectual property right belonging to POZEN or any of its Affiliates, in
      each
      case, except as expressly set forth in this Agreement.

     

    
      
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    7.5  Restrictive
      Covenant.
      AstraZeneca hereby covenants and agrees not to use any Licensed Technology,
      nor
      grant any Third Party any license or right under any Licensed Technology, other
      than as expressly permitted in this Agreement. The Parties agree that nothing
      in
      this Agreement restricts or prohibits AstraZeneca from by itself or with Third
      Parties exploiting any products, including without limitation any products
      containing non-steroidal anti-inflammatory drugs (e.g.,
      acetyl
      salicylic acid and esters and derivatives thereof); provided, that AstraZeneca
      shall not use or practice Licensed Technology in connection with the
      development, manufacture or commercialization of any product that is not a
      Product, and nothing requires AstraZeneca to compensate POZEN if AstraZeneca
      so
      exploits such products.

     

    7.6  Japan
      Option.
      POZEN
      hereby grants AstraZeneca an option for a period of twenty-four (24) months
      (the
“Japan
      Option Period”)
      after
      the Effective Date to include Japan in the Territory at no additional cost
      to
      AstraZeneca. The option will be exclusive to AstraZeneca during ****** of the
      Japan Option Period, and during such exclusive period POZEN will not solicit
      or
      enter into discussions with any Third Party regarding the availability or
      exploitation of Licensed Know-How or Licensed Patents in Japan. Thereafter,
      the
      option will be non-exclusive, and POZEN may, prior to exercise of the option
      by
      AstraZeneca, grant rights in Japan to any Third Party. AstraZeneca may exercise
      the option at any time prior to the expiration of the Japan Option Period by
      providing written notice to POZEN and a Development plan for a Product
      AstraZeneca intends to Commercialize in Japan, whereupon Japan shall immediately
      be included in the Territory.

     

    
      	8.  	
              FINANCIAL
                TERMS

            


    

     

    8.1  Upfront
      Fee.
      Within
      ten (10) Business Days following the Effective Date, AstraZeneca will pay to
      POZEN a non-creditable, non-refundable upfront fee of $40,000,000.

     

    8.2  Development
      Milestone Payments.
      Subject
      to the terms and conditions of this Agreement, including without limitation
      the
      last paragraph of this Section 8.2
      (Development Milestone Payments), AstraZeneca will pay to POZEN the following
      one-time, non-creditable, non-refundable payments with respect to the first
      achievement of the corresponding events with a POZEN Product.

     


    
      
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              Milestone
                Event

               

            	
              Milestone
                Payment

               

            
	
               

              1. Receipt
                by the ******of the final written ****** for the ****** as described
                in
                the Initial U.S. Development Plan and the final written ****** for
                the
                ******Study as described in the Initial U.S. Development Plan, and
                either
                (a) the ****** of ****** for at least ****** of the ******, or (b)
                ******
                does not ****** pursuant to Section 12.4
                due to a ******described in ****** within ****** (******from receipt
                by
                the ****** of the final written ****** for the ******Study described
                in
                the Initial U.S. Development Plan. 

               

            	
               

              $******

               

            
	
               

              2. Notification
                by the FDA that it has accepted the first U.S. NDA submission for
                a POZEN
                Product in accordance with Section 4.1.1
                (Regulatory Responsibilities Inside the U.S.).

               

            	
               

              $******

               

            
	
               

              3. Submission
                of the first NDA in a Major Ex-U.S. Market country for a POZEN
                Product.

               

            	
               

              $******

               

            
	
               

              4. Receipt
                of the first NDA Approval for a POZEN Product in the U.S.

               

            	
               

              $******

               

            
	
               

              5. Receipt
                of the first NDA Approval for a POZEN Product in a Major Ex-U.S.
                Market
                country.

               

            	
               

              $******

               

            
	
               

              6. ******
                of the first ****** to ****** a ****** in a ****** that includes
                ******
                and/or ****** (if available) at an ******of the POZEN Product ******
                than
                the ****** (a) the ****** for a ****** in such ******, or (b)
                ******.

               

            	
               

              $******

               

            


    

    


     

    POZEN
      shall notify AstraZeneca in writing upon the achievement of Milestones Events
      2
      and 4 above, and shall provide AstraZeneca with reasonable evidence that such
      Milestone Events have been achieved. The payments due with respect to
      achievement of each Milestone Event shall be due and payable within ******
      (******) days after (i) AstraZeneca receives notification from POZEN of the
      achievement of Milestone Events #2 and 4, and (ii) the occurrence of the
      Milestone Events #1, 3, 5, and 6, it being understood that with respect to
      Milestone Event #1(b) the Milestone Event will not have occurred until the
      end
      of the ****** (******) day period referenced therein. The date on which any
      such
      milestone payment is due and payable in accordance with the preceding sentence
      is hereinafter referred to as the “Milestone
      Due Date.”

     


    
      
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    Each
      milestone payment identified in this Section 8.2
      (Development Milestone Payments) shall be payable one time only, irrespective
      of
      the number of POZEN Products that achieve the applicable Milestone Event.
      Notwithstanding the foregoing, if a Milestone Event for which a payment would
      be
      due under this Section 8.2
      (Development Milestone Payments) is achieved, but AstraZeneca provides notice
      to
      POZEN that it is exercising its right to terminate this Agreement pursuant
      to
      Section 12.3
      (Termination for Material Breach), 12.4
      (Termination for Cause) or 12.5
      (Termination at Will) prior to the applicable Milestone Due Date for such
      Milestone Event, then such milestone payment will not be payable; provided,
      that
      AstraZeneca complies with its obligations under Section 12.6.3(b)
      (Effect
      of Termination for Cause or Material Breach) or 12.6.4
      (Effect
      of Termination at Will) if applicable. 

     

    8.3  Sales
      Milestone Payments.
      Subject
      to the terms and conditions of this Agreement, AstraZeneca will pay to POZEN
      the
      following one-time, non-creditable, non-refundable payments within ******
      (******) days following the achievement of the corresponding events described
      in
      the table below.

     

    
      	
              Milestone
                Event

               

            	
              Milestone
                Payment

               

            
	
              1. End
                of first calendar year during which aggregate annual Net Sales of
                Products
                were at least $******

               

            	
              $******

               

            
	
              2. End
                of first calendar year during which aggregate annual Net Sales of
                Products
                were at least $******

               

            	
              $******

               

            
	
              3. End
                of first calendar year during which aggregate annual Net Sales of
                Products
                were at least $******

               

            	
              $******

               

            


    

    


     

    Each
      milestone payment identified in this Section 8.3
      (Sales
      Milestone Payments) shall be payable one time only, and not for each time that
      the “annual Net Sales” of Products exceeds a specified amount.

     

    8.4  Royalties.

     

    8.4.1  Royalty
      Rate.
      Subject
      to the terms and conditions of this Agreement, AstraZeneca will pay to POZEN
      royalties based on the aggregate annual Net Sales of Products sold by
      AstraZeneca, its Affiliates or Sublicensees, at the rates set forth
      below:

     

    (a)  For
      Net
      Sales ******:

     

    
      
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    (i)  ******%
      of the portion of aggregate Net Sales of Products during a calendar year that
      is
      equal to or less than $******;

     

    (ii)  ******%
      of the portion of aggregate Net Sales of Products during a calendar year that
      is
      greater than $****** but equal to or less than $******; and

     

    (iii)  ******%
      of the portion of aggregate Net Sales of Products during a calendar year that
      is
      greater than $******.

     

    (b)  For
      Net
      Sales ******:

     

    (i)  ******%
      of the portion of aggregate Net Sales of Products during a calendar year that
      is
      equal to or less than $******; and

     

    (ii)  ******%
      of the portion of aggregate Net Sales of Products during a calendar year that
      is
      greater than $******.

     

    (c)  Notwithstanding
      the foregoing provisions of this Section 8.4.1
      (Royalty
      Rate), if a ****** is sold in one or more countries where ******, the total
      royalties owed for Products shall be determined on a segregated basis, according
      to the following calculations:

     

    (i)  ******
      percent (******%) of the total Net Sales of the ****** ****** sold in any
      country shall be added to the total Net Sales of the ****** (the resulting
      amount being the “Segregated
      Net Sales”),
      and
      the applicable royalty rates set forth in Section 8.4.1(a)
      and
(b)
      shall be
      applied to the Segregated Product Net Sales (the resulting amount being the
      “Segregated
      Royalty Amount”);

     

    (ii)  the
      applicable royalty rates set forth in Section 8.4.1(a)
      and
(b)
      shall be
      applied to the remaining ****** percent (******%) of the total Net Sales of
      the
      ****** (the resulting amount being the “Remaining
      Royalty Amount”);
      and

     

    (iii)  the
      amount owed by AstraZeneca shall be equal to the Segregated Royalty Amount
      plus
      the Remaining Royalty Amount.

     

    (iv)  If
      ******
      are also sold in a country where there are at least ****** being sold, then
      the
      calculations above shall be applied similarly to each such additional Product,
      such that ****** percent (******%) of the Net Sales of each additional Product
      shall be added to the Segregated Royalty Amount, and the remaining ******
      percent (******%) of each additional Product shall be combined only with the
      remaining ****** percent (******%) of Net Sales of the other additional Products
      (i.e.,
      the
      ******) that are being sold in other countries. The example set forth in
      Schedule 8.4.1 illustrates the application of this 8.4.1(c).
      

     

    
      
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    8.4.2  Royalty
      Term.
      AstraZeneca acknowledges that it will continue to enjoy substantial benefit
      from
      its license under, and the transfer to AstraZeneca of certain elements of,
      the
      Licensed Technology pursuant to this Agreement (including the Licensed Know-How
      and the regulatory data to be provided to AstraZeneca pursuant to this
      Agreement) as well as from AstraZeneca’s own development of technology derived
      from the practice of such license and AstraZeneca’s use of such Licensed
      Technology, even after expiration of all Valid Claims of the Licensed Patents
      covering the composition of matter, manufacture, use or sale of POZEN Product
      in
      a country. Accordingly, subject to the terms of Section 8.4.3
      (Rate
      Step Down for Competing Product Entrants), AstraZeneca’s royalty payment
      obligations under this Section 8.4
      (Royalties) will commence upon First Commercial Sale of a Product in a
      particular country and will expire on a country-by-country basis upon the later
      of: (i) expiration of the last-to-expire Valid Claim of the Licensed Patents
      that, but for the licenses granted in this Agreement, would be infringed by
      the
      sale of such Product in such country, and (ii) ten (10) years after the First
      Commercial Sale of such Product in such country (such period ending at the
      later
      of the periods set forth in clause (i) and (ii) above, the “Royalty
      Term”).
      

     

    8.4.3  Rate
      Step Down For Competing Product Entrants. With
      respect to any particular Product and country, if in any Calendar Quarter there
      is a Market Reduction of such Product (based on prescription market data
      published by IMS Health, Scott-Levin, or such other industry standard source
      as
      the Parties may agree), then the royalty rates which would otherwise apply
      to
      Net Sales of such Product in such country during such Calendar Quarter will
      be
      reduced to ****** percent (******%) of the rates set forth in Section
8.4.1
      (Royalty
      Rate); provided, that in no event will ****** (resulting in ****** and ******
      for ******; and ****** and ******). Such reduced royalty rates will continue
      in
      effect, on a Product-by-Product and country-by-country basis, until expiration
      of the applicable Royalty Term. As used in this Section 8.4.3,
      the
      term “Market
      Reduction”
      of a
      Product in a Calendar Quarter occurs when (i) ****** by ****** for such ******
      by ****** in such ****** of the ****** in such ******of the ****** and ******of
      the ******in such ******to the ******in which the ******of a ******occurred.
      The
      example set forth in Schedule 8.4.3 illustrates the application of this Section
      8.4.3.

     

    8.4.4  Third
      Party Payments.
      If
      AstraZeneca determines that a license to certain Third Party technology is
      reasonably necessary for the successful Development, Manufacture or
      Commercialization of a Product, then AstraZeneca will notify POZEN in writing
      of
      such determination. The Parties will consult in good faith regarding the need
      for such Third Party technology and, subject to POZEN’s consent (not to be
      unreasonably withheld, conditioned or delayed), AstraZeneca will negotiate
      the
      terms on which such a Third Party license would be granted to AstraZeneca and
      will serve as the primary point of contact with the applicable Third Party
      licensor following the execution of the license agreement. The royalties
      required to be paid by AstraZeneca with respect to a Product in a particular
      country pursuant to Section 8.4
      (Royalties) shall be subject to a reduction by AstraZeneca in an amount equal
      to
      ******of the amount of ******that are ******under such ******in such ******for
      the ******of such ******during the ******provided, that (i) ******of the ******
      of such ******in such ******for such ******and (ii) if such ******is a******
      (i.e.,
      if the
      ******for such ****** ******). Notwithstanding anything to the contrary in
      this
      Agreement, AstraZeneca shall be solely responsible for any Third Party Payment
      obligations it may have to Merck & Co., Inc. or its affiliates, without any
      offset or deduction. Any amount of Third Party Royalties that may, pursuant
      to
      the preceding paragraph be used to reduce royalties due hereunder, in any
      Calendar Quarter,
      but are not so used as a result of the limitation described in clause (i) of
      this paragraph may be carried over and used for further reduction in any
      succeeding royalty payment due for such Product.

     

    
      
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    8.4.5  ******

     

    8.5  Payments
      and Sales Reporting.

     

    8.5.1  Sales
      Reporting.
      AstraZeneca will provide POZEN, within ****** days (******) of the end of each
      Calendar Quarter, with a report setting forth, on a country-by-country and
      Product-by-Product basis, the amount of gross sales of each Product in such
      country, a calculation of Net Sales, the currency conversion rate used and
      Dollar-equivalent of such Net Sales, and a calculation of the amount of royalty
      payment due on such Net Sales, provided that AstraZeneca shall use reasonable
      efforts to provide such report as soon as practicable to accommodate POZEN’s SEC
      filing requirements and to provide such reports in a shorter time period than
      the periods specified above if AstraZeneca has such reports available for its
      own internal purposes. If any payment reduction is claimed by AstraZeneca under
      this Agreement from the full royalty rates set forth in Section 8.4
      (Royalties), then the report will set forth in detail the claimed reduction
      and
      the related facts.

     

    8.5.2  Payment
      Timing.
      AstraZeneca will make royalty payments to POZEN within ****** (******) days
      of
      the last day of each Calendar Quarter for which such payments are due under
      Section 8.4
      (Royalties).

     

    8.5.3  Payment
      Method.
      All
      amounts due hereunder will be paid in United States Dollars by wire transfer
      in
      immediately available funds to the following account, or such other account
      as
      may be designated in writing by POZEN:

     

    
      	 Receiving bank name:	 ******	 	 
	 Receiving bank address:	 ****** 	 	
               ******

            
	 ABA routing number (1):	 ******	 (1) - required for domestic
              transfers	 
	 SWIFT BIC address (2):	 ******	 (2) - required for international
              transfers	 
	 For credit to the account of:	 POZEN Inc.	 	 
	 For credit to account number:	 ******	 	 


    

        

    8.5.4  Currency
      Conversion.
      All
      payments required under this Article 8 shall be made in U.S. Dollars. For the
      purpose of computing the Net Sales of Licensed Products sold in a currency
      other
      than U.S. Dollars, such currency shall be converted from local currency to
      U.S.
      Dollars by AstraZeneca in accordance with the rates of exchange for the relevant
      month for converting such other currency into U.S. Dollars used by AstraZeneca’s
      internal accounting systems, which are independently audited on an annual
      basis.

     

    8.5.5  Late
      Payments.
      If a
      Party does not receive payment of any sum due to it on or before the due date,
      simple interest will thereafter accrue on the sum due to such Party until the
      date of payment at the per annum rate of ****** percent (******%) over the
      then-current ****** quoted by Citibank in New York City, or the maximum rate
      allowable by Applicable Law, whichever is lower.

     

    
      
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    8.6  Records;
      Audit.
      AstraZeneca will maintain complete and accurate records in sufficient detail
      to
      permit POZEN to confirm the accuracy of the calculation of payments under this
      Agreement. Upon reasonable prior notice, such records will be available during
      regular business hours of AstraZeneca for a period of ****** (******) calendar
      years following the year in which such records were created, for examination
      at
      POZEN’s expense, and not more often than once each calendar year, by an
      independent certified public accountant selected by POZEN and reasonably
      acceptable to AstraZeneca, for the sole purpose of verifying the accuracy of
      the
      financial reports furnished by AstraZeneca pursuant to this Agreement. Any
      such
      auditor will not disclose AstraZeneca’s Confidential Information, except to the
      extent such disclosure is necessary to verify the accuracy of the financial
      reports furnished by AstraZeneca or the amount of payments due by AstraZeneca
      under this Agreement. Any amounts shown to be owed but unpaid will be paid
      within ****** (******) days from the accountant’s report, plus interest (as set
      forth in Section 8.5.5
      (Late
      Payments)) from the original due date. Any amounts determined to be overpaid
      will be refunded within ****** (******) days from the accountant’s report. POZEN
      will bear the full cost of such audit unless such audit discloses an
      underpayment of the amount actually owed during the applicable calendar year
      of
      more than ****** percent (******%), in which case AstraZeneca will bear the
      full
      cost of such audit.

     

    8.7  Taxes.

     

    8.7.1  General.
      The
      royalties, milestones and other amounts payable by one Party to the other Party
      pursuant to this Agreement (“Payments”)
      shall
      not be reduced on account of any taxes unless required by Applicable Law. The
      Party receiving any Payment shall be responsible for paying any and all taxes
      (other than withholding taxes or deduction of tax at source required by
      Applicable Law to be paid by the paying Party) levied on account of, or measured
      in whole or in part by reference to, any Payments it receives. The paying Party
      shall deduct or withhold from the Payments any taxes that it is required by
      Applicable Law to deduct or withhold. Notwithstanding the foregoing, if the
      Party receiving payment is entitled under any applicable tax treaty to a
      reduction of rate of, or the elimination of, applicable withholding tax, it
      may
      deliver to the paying Party or the appropriate governmental authority (with
      the
      assistance of the paying Party to the extent that this is reasonably required
      and is expressly requested in writing) the prescribed forms necessary to reduce
      the applicable rate of withholding tax or to relieve the paying Party of its
      obligation to withhold tax, and the paying Party shall apply the reduced rate
      of
      withholding tax, or dispense with withholding tax, as the case may be, provided
      that the paying Party has received evidence, in a form satisfactory to the
      paying Party, of the other Party’s delivery of all applicable forms (and, if
      necessary, its receipt of appropriate governmental authorization) at least
      ****** (******) days prior to the time that the Payments are due. If, in
      accordance with the foregoing, the paying Party withholds any amount, it shall
      pay to the other Party the balance when due, make timely payment to the proper
      taxing authority of the withheld amount, and send to the other Party proof
      of
      such payment within ****** (******) days following that payment.

     

    
      
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    8.7.2  Indirect
      Taxes.
      Notwithstanding anything contained in Section 8.7.1
      (General), this Section 8.7.2
      (Indirect Taxes) shall apply with respect to Indirect Taxes. All Payments are
      exclusive of Indirect Taxes. If any Indirect Taxes are chargeable in respect
      of
      any Payments, the paying Party shall pay the Indirect Taxes at the applicable
      rate in respect of any such Payments following the receipt of an Indirect Taxes
      invoice in the appropriate form issued by Party receiving Payments in respect
      of
      those Payments, such Indirect Taxes to be payable on the due date of the payment
      of the Payments to which such Indirect Taxes relate.

     

    
      	9.  	
              INTELLECTUAL
                PROPERTY

            


    

     

    9.1  Prosecution
      and Maintenance of Licensed Patents.
      POZEN
      will be responsible for the preparation, filing, prosecution and maintenance
      of
      the Licensed Patents (other than Joint Patents), at its own expense.
      Notwithstanding the foregoing, ******. POZEN will provide a copy of all proposed
      filings at least ****** (******) days in advance of the filing date and will
      consider in good faith the requests and suggestions of AstraZeneca with respect
      to filing and prosecuting the Licensed Patents and will keep AstraZeneca
      promptly informed of progress with regard to the preparation, filing,
      prosecution and maintenance of Licensed Patents. In the event that POZEN desires
      to abandon any Licensed Patent, POZEN will provide reasonable prior written
      notice to AstraZeneca of such intention to abandon (which notice will, in any
      event, be given no later than ****** (******) days prior to the next deadline
      for any action that may be taken with respect to such Licensed Patent with
      the
      U.S. Patent & Trademark Office or any foreign patent office), and
      AstraZeneca will have the right to assume responsibility for such Licensed
      Patent.

     

    9.2  Prosecution
      and Maintenance of Joint Patents.
      AstraZeneca will be responsible for the preparation, filing, prosecution and
      maintenance of Joint Patents, at its own expense. AstraZeneca will provide
      to
      POZEN a copy of all proposed filings at least ****** (******) days in advance
      of
      the filing date and will consider in good faith the requests and suggestions
      of
      POZEN with respect to filing and prosecuting the Joint Patents and will keep
      POZEN promptly informed of progress with regard to the preparation, filing,
      prosecution and maintenance of Joint Patents. In the event that AstraZeneca
      desires to abandon any Joint Patent, AstraZeneca will provide reasonable prior
      written notice to POZEN of such intention to abandon (which notice will, in
      any
      event, be given no later than ****** (******) days prior to the next deadline
      for any action that may be taken with respect to such Joint Patent with the
      U.S.
      Patent & Trademark Office or any foreign patent office), and POZEN will have
      the right to assume responsibility for such Joint Patent.

     

    
      
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    9.3  Ownership
      of Inventions.
      Inventorship of Inventions will be determined in accordance with the rules
      of
      inventorship under United States patent laws. Subject to the licenses granted
      under this Agreement, as between the Parties, AstraZeneca will own all
      AstraZeneca Inventions, POZEN will own all POZEN Inventions, and Joint
      Inventions will be owned jointly by AstraZeneca and POZEN; provided,
      however,
      that
      during the Term of this Agreement: (i) neither POZEN nor AstraZeneca shall
      ****** other than as expressly provided in this Agreement, including Section
      7.1
      (Licensed Technology), without the consent of the other Party, which consent
      shall not be unreasonably withheld, conditioned or delayed, and (ii) neither
      Party shall assign, pledge, encumber, license or otherwise transfer any of
      its
      rights in any Joint Invention or Joint Patent without the other Party’s prior
      written consent, which consent shall not be unreasonably withheld, conditioned
      or delayed. Upon any expiration or termination of this Agreement, each Party
      will have the right to exploit, license and grant rights to sublicense each
      such
      Joint Invention and Joint Patent, without any duty of accounting to the other
      Party, and each Party hereby consents, and agrees to consent, without payment
      of
      any further consideration or royalty, to the Joint Party’s exploitation and
      licensing of said Joint Party’s interest in such Joint Invention or Joint Patent
      to Third Parties; provided, that nothing in this Section 9.3
      gives
      either Party any right or license under any intellectual property rights
      Controlled by the other Party other than Joint Inventions and Joint Patents,
      regardless of whether such rights are necessary in order to exploit the Joint
      Inventions and Joint Patents pursuant to this Section 9.3.

     

    9.4  Disclosure.
      Each
      Party will promptly disclose to the other Party in writing, and will cause
      its
      Affiliates, agents, and independent contractors to so disclose to the other
      Party, the conception and reduction to practice of any Invention.

     

    9.5  Cooperation.
      Each
      Party acknowledges the importance of securing and maintaining effective patent
      protection for the Licensed Technology and Joint Patents throughout the
      Territory. Each Party agrees to cooperate fully in the preparation, filing,
      prosecution and maintenance of the Licensed Patents and Joint Patents and in
      the
      obtaining and maintenance of any patent extensions, supplementary protection
      certificates and the like with respect to the Licensed Patents and Joint
      Patents. Such cooperation includes, but is not limited to: (a) executing all
      papers and instruments, or requiring its employees or contractors, to execute
      such papers and instruments, so as to effectuate the ownership of Inventions
      set
      forth in Section 9.3
      (Ownership of Inventions), and Patents claiming or disclosing such Inventions,
      and to enable the other Party to apply for and to prosecute patent applications
      in any country; and (b) promptly informing the other Party of any matters coming
      to such Party’s attention that may affect the preparation, filing, prosecution
      or maintenance of any such patent applications.

     

    
      
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    9.6  Enforcement
      of Licensed Patents.

     

    9.6.1  Infringement
      by Third Parties.
      AstraZeneca and POZEN will each, within ****** (******) Business Days of
      learning of any alleged or threatened infringement of the Licensed Patents
      or
      Joint Patents, notify the other Party in writing. ****** will have the first
      right, but not the obligation, to prosecute any such infringement. If ******
      does not commence an infringement action against the alleged or threatened
      infringement (i) within ****** (******) days following the detection of the
      of
      alleged infringement, or (ii) ****** (******) Business Days before the time
      limit, if any, set forth in appropriate laws and regulations for filing of
      such
      actions, whichever comes first, then ****** will so notify ****** promptly,
      and
      ****** may commence litigation with respect to the alleged or threatened
      infringement at its own expense.

     

    9.6.2  Challenge
      by Third Parties.
      AstraZeneca and POZEN will each notify the other Party in writing within ******
      (******) Business Days of learning of any alleged or threatened opposition,
      reexamination request, action for declaratory judgment, nullity action,
      interference or other attack upon the validity, title or enforceability of
      the
      Licensed Patents or Joint Patents by a Third Party. ****** will have the first
      right, but not the obligation, to defend any such challenge. If ****** does
      not
      commence Diligent Efforts to defend against the alleged or threatened challenge
      (i) within ****** (******) days following the detection of the alleged
      challenge, or (ii) ****** (******) Business Days before the time limit, if
      any,
      set forth in appropriate laws and regulations for making a filing in defense
      of
      such a challenge, whichever comes first, then ****** will so notify ******
      promptly, and ****** may take action with respect to the alleged or threatened
      challenge at its own expense.

     

    9.6.3  Cooperation.
      In the
      event a Party brings an infringement action pursuant to Section 9.6.1
      (Infringement by Third Parties), the other Party will cooperate fully,
      including, if required to bring such action, the furnishing of a power of
      attorney or to join such action as a necessary party, executing all papers
      and
      instruments, or requiring its employees or contractor, to execute such papers
      and instruments, so as to successfully prosecute any such actions. Neither
      Party
      will have the right to settle any patent infringement litigation under this
      Section 9.6.3
      (Cooperation) in a manner that could be reasonably expected to diminish the
      rights or interest of the other Party, or adversely effect the validity or
      enforceability of such other Party’s Patents, without the express written
      consent of such other Party. The Party commencing the litigation will provide
      the other Party with copies of all pleadings and other documents filed with
      the
      court and will consider reasonable input from the other Party during the course
      of the proceedings.

     

    9.6.4  Recovery.
      Except
      as otherwise agreed by the Parties in connection with a cost sharing
      arrangement, any recovery realized as a result of such litigation described
      in
      Section 9.6.1
      (Infringement by Third Parties) (whether by way of settlement or otherwise)
      will
      be first allocated to reimbursement of unreimbursed legal fees and all
      litigation expenses incurred by the Party initiating the proceeding, then toward
      reimbursement of any of unreimbursed legal fees and all litigation expenses
      of
      the other Party, and then the remainder will be divided between the Parties
      as
      follows: (a) settlements, damages or other monetary awards recovered pursuant
      to
      a suit, action or proceeding brought by ****** will be ****** and subject to
      the
      ****** set forth in Section ******; and (b) settlements, damages or other
      monetary awards recovered pursuant to a suit, action or proceeding brought
      by
      ****** will be ******.

     

    
      
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    9.7  Defense
      of Infringement Claims.
      If the
      manufacture, sale or use of a POZEN Product pursuant to this Agreement results
      in any claim, suit, or proceeding by a Third Party alleging that such activities
      infringe a Third Party patent, or if a Third Party threatens such a claim,
      suit
      or proceeding, each Party will promptly notify the other Party thereof. ******
      (or its ******) will have the exclusive right to defend and control the defense
      of any such claim, suit or proceeding at its own expense, using counsel of
      its
      own choice; provided,
      that if
      any such proceedings involve matters relating to the validity or enforceability
      of the Licensed Patents or Joint Patents, then the provisions of Section
9.6.3
      (Cooperation) above shall apply. In any claim, suit or proceeding under this
      Section 9.7,
      ******
      will keep ****** reasonably informed of all material developments in connection
      with any such claim, suit, or proceeding; provided,
      that if
      ****** is named as a defendant in any such claim, suit or proceeding, that
      ****** shall have the right to participate in the defense using counsel of
      its
      choice at its own expense. In any claim, suit or proceeding under this
      Section 9.7,
      ******
      agrees to provide ****** with copies of all pleadings filed in such action
      and
      to allow ****** reasonable opportunity to participate in the defense of the
      claims.

     

    9.8  Patent
      Term Extension and Supplementary Protection Certificate.
      Upon
      receiving Marketing Approval for a POZEN Product, the Parties agree to
      coordinate the application for any patent term extension or supplementary
      protection certificates that may be available. The primary responsibility of
      applying for any extension or supplementary protection certificate will be
      the
      Party having the right to make the application under the Applicable Law. The
      Party responsible for filing the application will keep the other Party fully
      informed of its efforts to obtain such extension or supplementary protection
      certificate. Each Party will provide prompt and reasonable assistance, without
      additional compensation, to obtain such patent extension or supplementary
      protection certificate. The Party filing such request will pay all expenses
      in
      regard to obtaining the extension or supplementary protection
      certificate.

     

    9.9  Consequence
      of Patent Challenge.
      If
      AstraZeneca or its Affiliates challenge the validity or enforceability of any
      of
      the Licensed Patents by any opposition, reexamination request, action for
      declaratory judgment, nullity action, interference or other attack upon the
      validity, title or enforceability thereof before any governmental agency, court
      or other similar adjudicative forum (any such proceeding, a “Patent
      Challenge”),
      such
      Patent Challenge shall give POZEN the right to terminate this Agreement as
      provided in Section 12.3.
      (Termination for Material Breach) or to terminate all licenses granted under
      any
      of the Licensed Patents subject to such Patent Challenge; provided, that the
      foregoing provisions of this Section 9.9
      (Consequence of Patent Challenge) will not apply in the event that, prior to
      such Patent Challenge, POZEN or any of its licensees or assignees initiates
      or
      threatens litigation against, or makes claims or assertions against, AstraZeneca
      or its Affiliates, Sublicensees or Third Party contractors, that allege that
      any
      of such parties infringe a Licensed Patent.

     

    
      
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    9.10  Patent
      Certifications.

     

    9.10.1  Orange
      Book Listings.
      To the
      extent required or permitted by Applicable Law, after the completion of the
      assignment and transfer of the U.S. Regulatory Materials (including the NDA)
      for
      the Initial POZEN Product to AstraZeneca as required by Section 4.1.1
      (Regulatory Matters in the U.S.), AstraZeneca will use Diligent Efforts to
      promptly list and maintain with the applicable Regulatory Authorities during
      the
      Term correct and complete listings of applicable Licensed Patents for such
      POZEN
      Product, including all so called “Orange Book” listings required under the
      Hatch-Waxman Act. Prior to such assignment and transfer, to the extent required
      or permitted by Applicable Law, POZEN will use Diligent Efforts to promptly
      list
      and maintain with the applicable U.S. Regulatory Authorities correct and
      complete listings of the applicable Licensed Patents for such POZEN Product,
      including so-called Orange Book listings. Promptly after the Effective Date,
      POZEN and AstraZeneca will meet to discuss the Parties’ efforts under this
      Section 9.10.1
      (Patent
      Certification). ******

     

    9.10.2  Hatch-Waxman
      Act.
      Notwithstanding Section 9.6.1
      (Infringement by Third Parties) above, each Party will immediately give notice
      to the other Party of any notice it receives of certification filed under the
      Hatch-Waxman Act claiming that any of the Licensed Patents is invalid,
      unenforceable or that any infringement will not arise from the manufacture,
      use
      or sale of the POZEN Product by a Third Party. If ****** decides not to bring
      infringement proceedings against the entity making such a certification with
      respect to any such Licensed Patents, ****** will give notice to ****** of
      its
      decision not to bring suit within ****** (******) Business Days after receipt
      of
      notice of such certification (or, if the time period permitted by law is less
      than ****** (******) Business Days, within ****** of the time period permitted
      by law for ****** to commence such action). ****** may then, but is not required
      to, bring suit against the Third Party that filed the certification. Any suit
      by
      either Party may be in the name of either or both Parties, as may be required
      by
      law. For this purpose, the Party not bringing suit will execute such legal
      papers necessary for the prosecution of such suit as may be reasonably requested
      by the Party bringing suit.

     

    9.11  Patent
      Marking.
      Any
      POZEN Product marketed and sold by AstraZeneca under this Agreement will be
      marked with appropriate patent numbers or indicia as permitted or required
      by
      law. The Parties agree to cooperate to reach a decision on the marking
      requirements.

     

    
      	10.  	
              REPRESENTATIONS,
                WARRANTIES; COVENANTS 

            


    

     

    10.1  POZEN
      Representations and Warranties.
      POZEN
      hereby warrants and represents to AstraZeneca as of the Execution Date and
      the
      Effective Date that, except as set forth on Schedule 10.1
      to this
      Agreement (as such schedule may be updated by POZEN pursuant to Section
10.2
      (Notice
      of Developments)):

     

    10.1.1  POZEN
      is
      the sole and exclusive owner of the Licensed Patents and has the right to
      perform its obligations hereunder and to grant to AstraZeneca the rights and
      licenses set forth in this Agreement in and to the Licensed
      Technology;

     

    
      
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    10.1.2  Each
      person who has contributed to the conception of an invention claimed in the
      Licensed Patents has been identified to the United States Patent & Trademark
      Office and the applicable patent offices in all other countries where such
      Licensed Patent is filed, registered, nationalized or validated and is named
      on
      such Licensed Patent. ****** is the sole inventor of U.S. Patent ******. Each
      inventor of any invention claimed in any Licensed Patent has assigned all of
      that inventor’s right, title and interest in and to the Licensed Patent to
      POZEN, and such assignment has been recorded at the United States Patent &
Trademark Office and at the applicable patent offices in all other countries
      where such Licensed Patent is nationalized or validated;

     

    10.1.3  To
      the
      knowledge of POZEN, each person associated with the invention, filing or
      prosecution of any Licensed Patent has complied with the obligation under
      Applicable Law to disclose to the relevant patent authority, during the pendency
      of any patent application included in the Licensed Patents, information known
      by
      any such person to be material to the patentability of the pending claims in
      such application;

     

    10.1.4  To
      the
      knowledge of POZEN, none of the Licensed Patents existing on the Execution
      Date
      is involved in any action for declaratory judgment, nullity action,
      reexamination, interference proceeding, or other attack upon its validity,
      title
      or enforceability, and POZEN has not received any written request, demand or
      notice from any Third Party or governmental authority threatening or disclosing
      any such action, proceeding or attack with respect to any of the Licensed
      Patents;

     

    10.1.5  There
      is
      no action or proceeding pending or, to the knowledge of POZEN, threatened that
      relates to, affects or arises in connection with any Licensed Technology or
      POZEN Product; and POZEN is not subject to any order, ruling or judgment of
      any
      governmental or Regulatory Authority that could reasonably be expected to impair
      or delay the ability of POZEN to perform its obligations under this
      Agreement;

     

    10.1.6  The
      Licensed Patents are not subject to any encumbrance, lien, license rights
      (including any covenant not to sue in respect thereto) or claim of ownership
      by
      any Third Party;

     

    10.1.7  To
      the
      knowledge of POZEN, there are no activities by Third Parties that would
      constitute infringement of any Licensed Patents or misappropriation of Licensed
      Know-How existing on the Execution Date;

     

    10.1.8  To
      the
      knowledge of POZEN, there are no Patents or trade secret rights owned or
      controlled by a Third Party, that would be infringed or misappropriated by
      the
      Development, Manufacture or Commercialization of POZEN Product(s), and POZEN
      has
      received no written claims relating to any such infringement or
      misappropriation. To the knowledge of POZEN, AstraZeneca’s use and exploitation
      of the Regulatory Materials as contemplated by this Agreement will not
      misappropriate any confidential information or trade secret of any Third
      Party;

     

    
      
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    10.1.9  POZEN
      has
      made available to AstraZeneca all clinical study reports, formulation
      development study reports and Regulatory Materials in its possession or Control
      regarding or related to POZEN Products. All such clinical study reports,
      formulation development study reports and Regulatory Materials are true and
      complete as of the Execution Date;

     

    10.1.10  As
      of the
      Execution Date, POZEN has prepared, maintained and retained all Regulatory
      Materials required to be maintained or reported pursuant to and in accordance
      with cGCP, cGLP, and cGMP to the extent required, and all Applicable Law and,
      to
      POZEN’s knowledge, the Regulatory Materials do not contain any materially false
      and misleading statements; POZEN has conducted, and has caused its contractors
      and consultants to conduct, any and all formulation development and clinical
      studies related to the POZEN Product in accordance with cGCP, cGMP, and cGLP,
      to
      the extent required, and all other Applicable Law; 

     

    10.1.11  The
      Licensed Patents listed on Schedule 1.58 are all of the Patents Controlled
      by
      POZEN that are necessary for the Development, Manufacture, Commercialization,
      use, sale, offer for sale or importation of the POZEN Product in the Field
      of
      Use.

     

    10.1.12  POZEN
      has
      disclosed to AstraZeneca all information in its possession relating to any
      interaction with the FDA and other Regulatory Authorities regarding the Initial
      POZEN Product. POZEN has not received any communication from the FDA that leads
      it to believe that the studies set forth in Exhibit
      B
      may be
      insufficient to obtain NDA Approval of the Initial POZEN Product from the
      FDA;

     

    10.1.13  POZEN
      has
      obtained all necessary licenses, consents, approvals, permits and authorizations
      to enable it to carry on its research and business related to the Licensed
      Technology and POZEN Products and all such licenses, consents, approvals,
      permits and authorizations are in effect;

     

    10.1.14  True
      and
      complete copies of all of POZEN’s agreements relating to the Licensed Technology
      or to the Development or Commercialization (excluding marketing research) of
      POZEN Products have been made available to AstraZeneca and such agreements
      will
      be listed on an updated Schedule 10.1 to be agreed by the Parties before the
      Effective Date. Except as identified on such Schedule 10.1, each such agreement
      is in full force and effect. POZEN is not, and to its knowledge no other party
      to any such agreement is, in breach of or in default, in any material respect,
      under any such agreement; and to POZEN’s knowledge, no event or circumstance has
      occurred which constitutes, or after notice or lapse of time or both, would
      constitute a material breach or default thereunder on the part of POZEN or
      any
      other party thereto, or which would result in a right to accelerate or a loss
      of
      material rights under any such agreement that has not been cured or
      waived;

     

    10.1.15  Neither
      POZEN nor any Third Party engaged by it, in any capacity, has been debarred
      or
      is subject to debarment or has otherwise been disqualified or suspended from
      performing scientific or clinical investigations or otherwise subjected to
      any
      restrictions or sanctions by the FDA or any other governmental or regulatory
      authority or professional body with respect to the performance of scientific
      or
      clinical investigations;

     

    
      
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    10.1.16  True,
      complete and correct copies of all licenses and other agreements under which
      any
      Third Party has or grants to POZEN any right or license to the Licensed Patents,
      including any amendments to such agreements, have been made available to
      AstraZeneca;

     

    10.1.17  All
      applicable fees have been timely paid to file, prosecute and maintain the
      Licensed Patents. To the knowledge of POZEN without inquiry, (i) the Licensed
      Patents are subsisting, or pending, and are not invalid or unenforceable, and
      (ii) the conception, development and reduction to practice of the Licensed
      Patents have not constituted or involved the misappropriation of trade secrets
      or other rights or property of any Third Party;

     

    10.1.18  The
      development of the Licensed Technology has not been funded, in whole or in
      part,
      by the United States Government.

     

    10.1.19  The
      execution and delivery of this Agreement, the performance contemplated hereby,
      and the grant of rights and licenses hereunder will not (i) result in a breach
      of any judgment, decree, order or approval of any court of law or authority
      applicable to the Licensed Technology or POZEN Product; (ii) cause any
      acceleration or maturity of any contract or of any obligation relating to the
      Licensed Technology or POZEN Product; (iii) result in the creation or imposition
      of any encumbrance upon or give to any other person or entity any interest
      or
      right (including any right of termination or cancellation or change) in or
      with
      respect to the Licensed Technology or POZEN Product except as expressly
      permitted herein; or result in any termination of, or change in the terms of,
      or
      conditions of, or rights or obligations under, any permit or approval of any
      authority applicable to the Licensed Technology or POZEN Product; or (iv) result
      in a violation of, or be in material conflict with, or constitute a material
      default, under any agreement in existence as of the Execution Date between
      POZEN
      and Third Parties and that it is not party to any other agreements that limits
      AstraZeneca’s
      rights
      under this Agreement. 

     

    10.2  Notice
      of Developments.
      From
      the Execution Date until the Effective Date of this Agreement, POZEN will give
      AstraZeneca prompt written notice upon becoming aware of any development, event
      or circumstance that could reasonably be expected to result in a breach of
      or
      inaccuracy in any of POZEN’s representations and warranties in Section
10.1
      (POZEN
      Representations and Warranties).
      On the
      Effective Date, POZEN shall deliver to AstraZeneca an updated Schedule
10.1
      reflecting all exceptions to the representations and warranties made by POZEN
      as
      of the Effective Date.

     

    10.3  AstraZeneca
      Warranties.
      AstraZeneca hereby warrants and represents to POZEN as of the Execution Date
      and
      the Effective Date that AstraZeneca is not subject to any order, ruling or
      judgment of any governmental or Regulatory Authority that could reasonably
      be
      expected to impair or delay the ability of AstraZeneca to perform its
      obligations under this Agreement.

     

    
      
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    10.4  Reciprocal
      Representations and Warranties.
      Each
      Party represents and warrants to the other Party that: (a) this Agreement is
      a
      legal and valid obligation binding upon its execution and enforceable against
      it
      in accordance with its terms and conditions; and (b) the execution, delivery
      and
      performance of this Agreement by such Party has been duly authorized by all
      necessary corporate action, and the person executing this Agreement on behalf
      of
      such Party has been duly authorized to do so by all requisite corporate
      actions.

     

    10.5  DISCLAIMER
      OF WARRANTY.
      EXCEPT
      FOR THE EXPRESS REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTIONS
10.1
      (POZEN
      WARRANTIES) AND 10.3 (ASTRAZENECA WARRANTIES) AND 10.4
      (RECIPROCAL REPRESENTATIONS AND WARRANTIES), EACH PARTY MAKES NO REPRESENTATIONS
      AND GRANTS NO WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION
      OF
      LAW, BY STATUTE OR OTHERWISE, AND POZEN AND LICENSEE EACH SPECIFICALLY DISCLAIMS
      ANY OTHER WARRANTIES, WHETHER WRITTEN OR ORAL, OR EXPRESS OR IMPLIED, INCLUDING
      ANY WARRANTY OF QUALITY OR MERCHANTABILITY, OR ANY WARRANTY AS TO THE VALIDITY
      OR ENFORCEABILITY OF ANY PATENTS OR THE NON-INFRINGEMENT OF ANY INTELLECTUAL
      PROPERTY RIGHTS OF THIRD PARTIES.

     

    10.6  POZEN
      Non-Compete.
      POZEN
      covenants that it will not at any time prior to the expiration of the Royalty
      Term, and will ensure that its Affiliates do not, directly or indirectly,
      develop or commercialize or license any Third Party to develop or commercialize
      any product having a ******; provided, that after ****** (******) years
      following the Commercial Launch of a POZEN Product in the European Union, POZEN
      and its Affiliates shall be free, in the European Union only, to Develop,
      Commercialize or license a Third Party to Develop or Commercialize a product
      having a ****** in ****** with an ******. Without limiting AstraZeneca’s rights
      under this Agreement or otherwise, in case of any breach of this Section
10.6
      (POZEN
      Non-Compete), AstraZeneca will notify POZEN and, if such breach is not cured
      by
      POZEN within ****** (******) days after receipt of such notice,
      ******. 

     

    10.7  POZEN
      Subcontractors.
      POZEN
      will not, without AstraZeneca’s prior written consent (not to be unreasonably
      withheld), engage or use any Third Party contract research organizations or
      other contractors (other than individuals hired as consultants) involved in
      the
      conduct of Development activities under this Agreement. All subcontractors
      identified in Schedule 10.7 (which such schedule will be agreed upon by the
      Parties before the Effective Date) are hereby approved by AstraZeneca. Any
      subcontract between POZEN and a Third Party to perform POZEN’s responsibilities
      under this Agreement will be in writing and include provisions requiring the
      Third Party (i) to assign to POZEN all rights in any inventions relating to
      a
      Product and conceived by such Third Party in the course of performing such
      activities, along with all intellectual property rights therein, and (ii) to
      comply with confidentiality provisions at least as restrictive as those set
      forth in Section 11
      (Confidentiality) with respect to all materials and information received by
      such
      Third Party in connection with such activities.

     

    10.8  ******.

     

    
      
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    10.9  Other
      Covenants.

     

    10.9.1  POZEN
      will not enter into any agreement, whether written or oral with respect to,
      or
      otherwise assign, transfer, license, convey or otherwise encumber its rights,
      title or interest in the Licensed Technology (including by granting any covenant
      not to sue with respect thereto) to any Person in a manner that is inconsistent
      with the rights and licenses granted to AstraZeneca under this
      Agreement.

     

    10.9.2  Each
      Party will obtain from each of its Affiliates, sublicensees, employees and
      agents and from the employees and agents of its Affiliates, sublicensees and
      agents who are or will be involved in the Development of the POZEN Products
      or
      of the Licensed Technology, rights to any and all inventions, information,
      and
      intellectual property rights conceived in the course of performance of this
      Agreement, necessary to enable such Party to grant the licenses and other rights
      granted to the other Party under this Agreement.

     

    
      	11.  	
              CONFIDENTIALITY.

            


    

     

    11.1  Definition.
      During
      the Term and subject to the terms and conditions of this Agreement, a Party
      (a
“Disclosing
      Party”)
      may
      communicate to the other Party (a “Receiving
      Party”)
      information in connection with this Agreement or the performance of its
      obligations hereunder, including scientific and manufacturing information and
      plans, marketing and business plans, and financial and personnel matters
      relating to a Party or its present or future products, sales, suppliers,
      customers, employees, investors or business (collectively, “Confidential
      Information”).
      Without limiting the foregoing, “Confidential Information” is hereby deemed to
      include any information disclosed by one Party to the other Party pursuant
      to
      that certain confidentiality agreement between the Parties dated as of March
      27,
      2006 or that certain confidentiality agreement between the Parties dated as
      of
      June 15, 2006. Notwithstanding the foregoing or any other provision of this
      Agreement to the contrary, during the Term, the Licensed Know-How will be deemed
      to be the Confidential Information of both Parties.

     

    11.2  Exclusions.
      Notwithstanding the foregoing, information of a Disclosing Party will not be
      deemed Confidential Information with respect to a Receiving Party for purposes
      of this Agreement to the extent the Receiving Party can demonstrate by competent
      evidence that such information:

     

    11.2.1  was
      already known to the Receiving Party or its Affiliates, as evidenced by their
      written records, other than under an obligation of confidentiality or non-use,
      at the time of disclosure to the Receiving Party;

     

    11.2.2  was
      generally available or was otherwise part of the public domain at the time
      of
      its disclosure to the Receiving Party;

     

    11.2.3  became
      generally available or otherwise became part of the public domain after its
      disclosure to the Receiving Party, through no fault of or breach of its
      obligations under this Section 11
      (Confidentiality) by the Receiving Party;

     

    
      
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    11.2.4  was
      disclosed to the Receiving Party or any of its Affiliates, other than under
      an
      obligation of confidentiality or non-use, by a Third Party who had no obligation
      to the Party that controls such information and know-how not to disclose such
      information or know-how to others; or

     

    11.2.5  was
      independently discovered or developed by the Receiving Party or its Affiliates,
      as evidenced by their written records, without the use of, and by personnel
      who
      had no access to, Confidential Information belonging to the Party that controls
      such information and know-how.

     

    11.3  Disclosure
      and Use Restriction.
      Except
      to the extent expressly authorized by this Agreement or otherwise agreed in
      writing by the parties, the parties agree that, during the Term and for ******
      (******) years thereafter, the Receiving Party will keep confidential and will
      not publish or otherwise disclose and will not use for any purpose other than
      as
      expressly provided for in this Agreement any Confidential Information of the
      Disclosing Party. The Receiving Party may use such Confidential Information
      only
      to the extent required to accomplish the purposes of this Agreement or in
      connection with the exercise of its rights hereunder. The Receiving Party will
      use at least the same standard of care as it uses to protect proprietary or
      confidential information of its own to ensure that its employees, agents,
      consultants and other representatives do not disclose or make any unauthorized
      use of the Confidential Information. The Receiving Party will promptly notify
      the other upon discovery of any unauthorized use or disclosure of the
      Confidential Information.

     

    11.4  Authorized
      Disclosure. A
      Receiving Party may disclose Confidential Information of a Disclosing Party
      to
      the extent that such disclosure is:

     

    11.4.1  made
      in
      response to a valid order of a court of competent jurisdiction or other
      governmental or regulatory body of competent jurisdiction; provided,
      however,
      that
      such
      Receiving Party will have given notice to the Disclosing Party within ******
      (******) Business Days of receipt of such order and given the Disclosing Party
      a
      reasonable opportunity to quash such order and to obtain a protective order
      requiring that the Confidential Information and documents that are the subject
      of such order be held in confidence by such court or governmental or regulatory
      body or, if disclosed, be used only for the purposes for which the order was
      issued; and provided, further,
      that if
      a disclosure order is not quashed or a protective order is not obtained, the
      Confidential Information disclosed in response to such court or governmental
      order will be limited to that information which is legally required to be
      disclosed in response to such court or governmental order;

     

    11.4.2  otherwise
      required by law; provided,
      that the
      Disclosing Party will provide the Receiving Party with notice of such disclosure
      at least ****** (******) days in advance thereof to the extent practicable
      and
      take reasonable steps as requested by the Disclosing Party to protect the
      Disclosing Party’s rights; 

     

    
      
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    11.4.3  made
      by a
      Receiving Party, in connection with the performance of this Agreement, (a)
      to
      Affiliates, employees, consultants, representatives or agents, each of whom
      prior to disclosure must be bound by obligations of confidentiality and non-use
      at least equivalent in scope to those set forth in this Section 11
      (Confidentiality) or (b) to Regulatory Authorities (provided,
      that in
      the case of disclosures to Regulatory Authorities, the Receiving Party will,
      to
      the extent practicable, provide the Disclosing Party with notice of such
      disclosure at least ****** (******) days in advance thereof and will reasonably
      consider any comments received from the Disclosing Party); 

     

    11.4.4  made
      by a
      Receiving Party to existing or potential acquirers or merger candidates;
      potential sublicensees or collaborators (to the extent contemplated hereunder);
      investment bankers; existing or potential investors, venture capital firms
      or
      other financial institutions or investors for purposes of obtaining financing;
      or Affiliates, each of whom prior to disclosure must be bound by obligations
      of
      confidentiality and non-use at least equivalent in scope to those set forth
      in
      this Section 11
      (Confidentiality); or

     

    11.4.5  made
      by
      the Receiving Party with the prior written consent of the Disclosing
      Party.

     

    11.4.6  In
      addition to the foregoing, within ****** (******) days after the Effective
      Date,
      the Parties shall mutually agree in good faith on a written document specifying
      the statements regarding ****** are permitted to make in response to appropriate
      questions from ****** relating to POZEN Products, and the Parties shall update
      such document by mutual agreement as appropriate from time to time, such
      agreement not to be unreasonably withheld, conditioned or delayed. ****** shall
      not make any public statement ****** that is not consistent with such agreed
      written document.

     

    11.5  Use
      of Name.
      Neither
      Party may make public use of the other Party’s name except (a) in connection
      with announcements and other disclosures relating to this Agreement and the
      activities contemplated hereby as permitted in Section 11.6
      (Press
      Releases), (b) as required by Applicable Law, and (c) otherwise as agreed in
      writing by such other Party.

     

    11.6  Press
      Releases.

     

    11.6.1  On
      or
      after the Execution Date of this Agreement at a mutually agreed time, each
      Party
      will issue a mutually agreed press release announcing the existence of this
      Agreement each in the form and substance to be mutually agreed upon in advance.
      For subsequent press releases and other written public disclosures relating
      to
      this Agreement or the Parties’ relationship hereunder (each, a “Public
      Disclosure”),
      each
      Party will use reasonable efforts to submit to the other Party a draft of such
      Public Disclosures for review and comment by the other Party at least ******
      (******) Business Days prior to the date on which such Party plans to release
      such Public Disclosure, and in any event will submit such drafts at least ******
      prior to the release of such Public Disclosure, and will review and consider
      in
      good faith any comments provided in response. Notwithstanding the foregoing,
      subject to Section ******.

     

    
      
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    11.6.2  If
      a
      Party is unable to comply with the foregoing ****** notice requirement because
      of a legal obligation or stock exchange requirement to make more rapid
      disclosure, such Party will not be in breach of this Agreement but will in
      that
      case provide notice as promptly as practicable under the
      circumstances.

     

    11.6.3  A
      Party
      may publicly disclose, without regard to the preceding requirements of this
      Section 11.6
      (Press
      Releases), information that was previously disclosed in a Public Disclosure
      that
      was in compliance with such requirements.

     

    11.7  Terms
      of Agreement to be Maintained in Confidence.
      The
      Parties agree that the terms of this Agreement are confidential and will not
      be
      disclosed by either Party to any Third Party (except to a Party’s professional
      advisors, including without limitation accountants, financial advisors, and
      attorneys) without prior written permission of the other Party; provided,
      however,
      that (a)
      either Party may make any filings of this Agreement required by law or
      regulation in any country so long as such Party uses its reasonable efforts
      to
      obtain confidential treatment for portions of this Agreement as available,
      consults with the other Party, and permits the other Party to participate,
      to
      the greatest extent practicable, in seeking a protective order or other
      confidential treatment; (b) either Party may disclose this Agreement on a
      confidential basis to potential Third Party investors or acquirors or, in the
      case of AstraZeneca, to potential Sublicensees, in each case in connection
      with
      due diligence or similar investigations; and (c) a Party may publicly disclose,
      without regard to the preceding requirements of this Section 11.7,
      information that was previously disclosed in compliance with such
      requirements.

     

    
      	12.  	
              TERM
                AND TERMINATION

            


    

     

    12.1  HSR
      Act.
      To the
      extent required by the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
      as
      amended (“HSR
      Act”),
      each
      Party will (i) file or cause to be filed, as promptly as practicable after
      the
      date hereof, with the United States Federal Trade Commission (“FTC”)
      and the
      United States Department of Justice (“DOJ”),
      all
      reports and other documents required to be filed by such Party under the HSR
      Act
      concerning the transactions contemplated hereby and (ii) promptly comply with
      or
      cause to be complied with any requests by the FTC or DOJ for additional
      information concerning such transactions, in each case so that the waiting
      period applicable to this Agreement and the transactions contemplated hereby
      under the HSR Act will expire as soon as practicable after the date hereof.
      Each
      Party agrees to request, and to cooperate with the other Party in requesting,
      early termination of any applicable waiting period under the HSR Act. The filing
      fees payable in connection with the filings will be borne by AstraZeneca as
      the
      acquiring party under this Agreement. This Agreement is effective on the date
      after which the waiting period pursuant to the HSR Act has expired, or the
      date
      on which the transaction contemplated in this Agreement has been approved by
      the
      FTC and DOJ or, if the Parties agree that no filing is required under the HSR
      Act, the date first written above (“Effective
      Date”).

     

    12.2  Term.
      The
      term of this Agreement will commence as of the Effective Date and, unless
      earlier terminated in accordance with this Section 12
      (Term
      and Termination), will expire upon the expiration of the Royalty Term for all
      POZEN Products in all countries (the “Term”).

     

    
      
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    12.3  Termination
      for Material Breach.
      In the
      event that either Party (the “Breaching
      Party”)
      shall
      be in material default of any of its material obligations under this Agreement,
      in addition to any other right and remedy the other Party (the “Non-Breaching
      Party”)
      may
      have, the Non-Breaching Party may terminate this Agreement in its entirety
      or
      with respect to the country or countries to which such material default applies
      by ****** (******) days prior written notice (the “Notice
      Period”)
      to the
      Breaching Party, specifying the breach and its claim of right to terminate;
      provided, that the termination shall not become effective at the end of the
      Notice Period if the Breaching Party cures the breach complained about during
      the Notice Period (or, if such default cannot be cured within such Notice
      Period, if the Breaching Party commences actions to cure such default within
      the
      Notice Period and thereafter diligently continues such actions); provided,
      further,
      that in
      the event that AstraZeneca is the Party in material default and the default
      is
      with respect to AstraZeneca’s failure to use Diligent Efforts as required under
      this Agreement with respect to the Initial POZEN Products in the United States
      or in a particular Major Ex-U.S. Market Country, POZEN shall have the right
      to
      terminate this Agreement only with respect to such country and not in its
      entirety. It is understood that termination pursuant to this Section
      12.3.
      (Termination for Material Breach) shall be a remedy of last resort and may
      be
      invoked only in the case where the breach cannot be reasonably remedied by
      the
      payment of money damages or other remedy under applicable law. If either Party
      initiates a dispute resolution procedure as permitted under this Agreement
      prior
      to the end of the Notice Period to resolve the dispute for which termination
      is
      being sought and is diligently pursuing such procedure, including any litigation
      following therefrom, the termination shall become effective only if and when
      such dispute is finally resolved through such dispute resolution procedure.
      This
      Section 12.3.
      (Termination for Material Breach) defines exclusively the Parties’ right to
      terminate in case of any material breach of this Agreement.

     

    12.4  Termination
      for Cause.

     

    12.4.1  AstraZeneca
      Termination for Cause.
      AstraZeneca may terminate this Agreement to the extent set forth below without
      penalty upon written notice to POZEN, as follows: 

     

    (a)  Subject
      to Section 12.4.1(n),
      if a
      Pre-Approval Failure described in paragraph ****** of Section 1.81
      (Pre-Approval Failure) occurs with respect to ******, AstraZeneca may, at its
      option, terminate the Agreement either ******, or with respect to ******, or
      ****** with respect to any ****** where obtaining ****** is, according to common
      practice, ******or the ****** provided, that written notice of termination
      must
      be delivered to POZEN within ****** (******) days following such Pre-Approval
      Failure (or, if AstraZeneca has elected a substitute POZEN Product in accordance
      with Section 3.4.2 (a)
      or if
      POZEN has consented to AstraZeneca’s election of a substitute POZEN Product
      under Section 3.4.2
      (b)
      and,
      in either case, AstraZeneca has proposed an updated development plan for such
      substitute product as required by Section 3.4.2 (b),
      within ****** (******) days following the election of such product pursuant
      to
      such Section).

     

    
      
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    (b)  Subject
      to Section 12.4.1(n),
      if a
      Pre-Approval Failure described in paragraph ****** of Section 1.81
      (Pre-Approval Failure) occurs with respect to ******, AstraZeneca may, at its
      option, terminate this Agreement either with respect to ******, or ****** with
      respect to any ****** where obtaining ****** is, according to common practice,
      ****** for the ****** in which the ******; provided, that written notice of
      termination must be delivered to POZEN within ****** (******) days following
      such Pre-Approval Failure (or, if AstraZeneca has elected a substitute POZEN
      Product in accordance with Section 3.4.2 (a)
      or if
      POZEN has consented to AstraZeneca’s election of a substitute POZEN Product
      under Section 3.4.2(b)
      and,
      in either case, AstraZeneca has proposed an updated development plan for such
      substitute product as required by Section 3.4.2 (b),
      within ****** (******) days following the election of such product pursuant
      to
      such Section). 

     

    (c)  Subject
      to Section 12.4.1(n),
      if a
      Pre-Approval Failure described in paragraph ****** of Section 1.81
      (Pre-Approval Failure) occurs with respect to a ******, AstraZeneca may, at
      its
      option, terminate this Agreement either with respect to ******, or ****** with
      respect to any ****** where obtaining ****** is, according to common practice,
      ****** for the ****** in which the ******; provided, that written notice of
      termination must be delivered to POZEN within ****** (******) days following
      such Pre-Approval Failure(or, if AstraZeneca has elected a substitute POZEN
      Product in accordance with Section 3.4.2 (a)
      or if
      POZEN has consented to AstraZeneca’s election of a substitute POZEN Product
      under Section 3.4.2 (b)
      and
      AstraZeneca has proposed an updated development plan for such substitute product
      as required by Section 3.4.2 (b),
      within ****** (******) days following the election of such product pursuant
      to
      such Section)..

     

    (d)  If
      a
      Pre-Approval Failure described in paragraph ****** of Section 1.82
      (Pre-Approval Failure) occurs with respect to the ****** of the ****** and
      ****** for the ******, AstraZeneca may, at its option, terminate this Agreement
      either ****** or ******; provided, that written notice of termination must
      be
      delivered to POZEN within ****** (******) days following such Pre-Approval
      Failure (or, if AstraZeneca has elected a substitute POZEN Product in accordance
      with Section 3.4.2 (a)
      or if
      POZEN has consented to AstraZeneca’s election of a substitute POZEN Product
      under Section 3.4.2 (b)
      and,
      in either case, AstraZeneca has proposed an updated development plan for such
      substitute product as required by Section 3.4.2 (b),
      within ****** (******) days following the election of such product pursuant
      to
      such Section)..

     

    (e)  If
      a
      Pre-Approval Failure described in paragraph ****** of Section 1.81
      (Pre-Approval Failure) occurs with respect to the ****** of the ****** and
      ****** for the ****** AstraZeneca may, at its option, terminate this Agreement
      ****** with respect to ******; provided, that written notice of termination
      must
      be delivered to POZEN within ****** (******) days following such Pre-Approval
      Failure (or, if AstraZeneca has elected a substitute POZEN Product in accordance
      with Section 3.4.2 (a)
      or if
      POZEN has consented to AstraZeneca’s election of a substitute POZEN Product
      under Section 3.4.2 (b)
      and,
      in either case, AstraZeneca has proposed an updated development plan for such
      substitute product as required by Section 3.4.2 (b),
      within ****** (******) days following the election of such product pursuant
      to
      such Section)..

     

    
      
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    (f)  If,
      following a Pre-Approval Failure described in paragraph ****** of Section
1.81
      (Pre-Approval Failure), AstraZeneca fails to ****** and a ****** for the
      applicable ****** within the ****** described in ******, despite using ******,
      then AstraZeneca may, at its option, terminate this Agreement as follows: (i)
      if
      such Pre-Approval Failure related to the ****** and ****** as described in
      ******, then AstraZeneca may terminate this Agreement either ****** or ******
      with respect to ******, and (ii) if such Pre-Approval Failure related to the
      ****** and ****** as described in ******, then AstraZeneca may terminate this
      Agreement ****** with respect to ******; provided, in each case, that written
      notice of termination must be delivered to POZEN within ****** (******) days
      following the expiration of such ****** period.

     

    (g)  If
      the
      Regulatory Authority in a particular country or territory requires the
      development of a particular formulation of a POZEN Product (whether for use
      in
      clinical testing or otherwise) and the Parties fail to develop a formulation
      and
      a manufacturing process for the applicable POZEN Product despite using Diligent
      Efforts to do so, then AstraZeneca may, at its option, terminate this Agreement
      solely with respect to such country; provided, that written notice of
      termination must be delivered to POZEN within ****** (******) days following
      the
      permanent abandonment of the applicable formulation development
      program.

     

    (h)  If
      a
      Pre-Approval Failure described in paragraph ****** of Section 1.81
      (Pre-Approval Failure) occurs, AstraZeneca may, at its option, terminate this
      Agreement either ******, or ****** with respect to ******; provided, that
      written notice of termination must be delivered to POZEN within ****** (******)
      days following such Pre-Approval Failure (or, if AstraZeneca has elected a
      substitute POZEN Product in accordance with Section 3.4.2 (a)
      or if
      POZEN has consented to AstraZeneca’s election of a substitute POZEN Product
      under Section 3.4.2 (b)
      and,
      in either case, AstraZeneca has proposed an updated development plan for such
      substitute product as required by Section 3.4.2 (b),
      within ****** (******) days following the election of such product pursuant
      to
      such Section).

     

    (i)  If
      a
      Pre-Approval Failure described in paragraph ****** of Section 1.81
      (Pre-Approval Failure) occurs, AstraZeneca may, at its option, terminate this
      Agreement either ******, or ****** with respect to ******; provided, that
      written notice of termination must be delivered to POZEN not later than the
      date
      of NDA Approval of the Initial POZEN Product in the U.S. 

     

    (j)  If
      a
      Pre-Approval Failure described in paragraph ****** of Section 1.81
      (Pre-Approval Failure) occurs, AstraZeneca may, at its option, terminate this
      Agreement ****** if the Pre-Approval Failure occurs ******, or ****** with
      respect to ****** if the Pre-Approval Failure occurs ******.; provided, that
      written notice of termination must be delivered to POZEN within ****** (******)
      days following such Pre-Approval Failure (or, if AstraZeneca has elected a
      substitute POZEN Product in accordance with Section 3.4.2 (a)
      or if
      POZEN has consented to AstraZeneca’s election of a substitute POZEN Product
      under Section 3.4.2 (b)
      and,
      in either case, AstraZeneca has proposed an updated development plan for such
      substitute product as required by Section 3.4.2 (b),
      within ****** (******) days following the election of such product pursuant
      to
      such Section).

     

    
      
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    (k)  If
      a
      Post-Approval Failure occurs anywhere in the Territory, AstraZeneca may, at
      its
      option, terminate the Agreement either ******, or ******, or ****** with respect
      to ******; provided, that written notice of termination must be delivered to
      POZEN within ****** (******) days following such Post-Approval
      Failure.

     

    (l)  If,
      after
      AstraZeneca receives POZEN’s updated Schedule 10.1 pursuant to Section
10.1,
      AstraZeneca determines in its reasonable discretion that a change to Schedule
      10.1 either (i) materially adversely affects the value of rights granted to
      AstraZeneca under this Agreement, or (ii) materially adversely affects POZEN’s
      ability to perform its obligations under this Agreement, AstraZeneca may, at
      its
      option, terminate this Agreement in its entirety; provided, that written notice
      of termination must be delivered to POZEN within ****** (******) Business Days
      following AstraZeneca’s receipt of POZEN’s updated Schedule 10.1.

     

    (m)  AstraZeneca
      may, at its option, terminate this Agreement in its entirety to the extent
      provided in Section 3.4.2
      (Substitution).

     

    (n)  If
      a
      Pre-Approval Failure described in paragraph ****** of Section 1.81
      (Pre-Approval Failure) occurs because ****** that would be reasonably expected,
      in the aggregate, to require AstraZeneca to ****** Section 1.81(b)
      (Pre-Approval Failure), but (A) the ****** required for NDA Approval in the
      ****** (without aggregation with activities required in the ****** or in ******)
      would not be reasonably expected to require AstraZeneca to ******, and (B)
      the
      ****** required for NDA Approval outside the ****** (without aggregation with
      activities required in the ******) would not be reasonably expected to require
      AstraZeneca to ******, then POZEN may elect, at its option, to deem the
      Pre-Approval Failure described in paragraph (******) of Section 1.81
      (Pre-Approval Failure) to have occurred ******, as applicable, for the purposes
      of this Section 12.4.1.
      

     

    12.4.2  POZEN
      Termination for Cause.
      Subject
      to Section 12.6.3
      (Effect
      of Termination for Cause or for Material Breach), POZEN may terminate this
      Agreement to the extent set forth below without penalty upon written notice
      to
      AstraZeneca, which notice must be delivered to AstraZeneca within ******
      (******) days following the occurrence of the relevant event described in
      paragraphs (a), (b), (c) and (d) below: 

     

    (a)  with
      respect to ****** if despite using ******has not ****** or to ****** within
      ****** from the ****** for ****** set forth in the ******;

     

    (b)  ******
      if
      a Pre-Approval Failure described in paragraph ****** of Section 1.81
      occurs
      in ******of the ******because the ******has not: ******for the ******pursuant
      to
      ******within ****** (******from the date on which the Pre-Approval Failure
      of
      the ******occurred in ******for the ******within ******following such ******;
      

     

    (c)  ******
      if
      despite using ****** ****** of the ****** in accordance with ****** and ******
      has failed to ****** of the ****** pursuant to ****** that the Parties agree
      is
      ******with the ******by this Agreement (including, without limitation, ******
      as
      may be required by ******within ****** (******) ****** ******contemplated by
      ******; and

     

    
      
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    (d)  ******
      if
      despite using ****** of the ****** in accordance with ****** of the ******
      pursuant to ****** that the ******with the ******of the ******as contemplated
      by
      this Agreement (including, without limitation, ****** as may be ****** within
      ****** (******) ****** contemplated by ******.

     

    12.5  Termination
      at Will.
      AstraZeneca may terminate this Agreement in its entirety or with respect to
      all
      countries outside of the United States at any time at will upon ****** ******
      prior written notice to POZEN.

     

    12.6  Consequences
      of Expiration and Termination.

     

    12.6.1  Effect
      of Expiration.
      Upon
      expiration (but not earlier termination) of the Term pursuant to Section
12.2
      (Term),
      AstraZeneca will have a non exclusive, irrevocable, perpetual, worldwide,
      fully-paid license, with the right to sublicense, under the Licensed Technology
      to research, develop, make, use, sell, offer for sale, and import the POZEN
      Product in the Field of Use.

     

    12.6.2  Effect
      of Termination Generally.
      The use
      by either party hereto of a termination right provided for under this Agreement
      and in accordance with this Agreement shall not give rise to the payment of
      damages or any other form of compensation or relief to the other party with
      respect thereto. Subject to the preceding sentence, termination of this
      Agreement shall not preclude either party from claiming any other damages,
      compensation or relief that it may be entitled to upon such termination or
      for
      any breach of this Agreement.

     

    12.6.3  Effect
      of Termination for Cause or for Material Breach.

     

    (a)  If
      either
      Party terminates this Agreement pursuant to Section 12.3
      (Termination for Material Breach) in its entirety or with respect to a
      particular country, or if either Party terminates this Agreement pursuant to
      Section 12.4
      (Termination for Cause) in its entirety or with respect to a particular country
      or group of countries, all rights and licenses granted by POZEN to AstraZeneca
      and all obligations of AstraZeneca and POZEN under this Agreement will terminate
      immediately with respect to all countries in which this Agreement has been
      terminated.

     

    (b)  If
      AstraZeneca terminates this Agreement pursuant to Section 12.4.1
      (Termination for Cause) as a result of a TPP Failure but the ****** have ******
      (as described on Exhibit
      B)
      ******,
      then AstraZeneca will pay POZEN a termination fee of ****** (which termination
      fee shall be the sole and exclusive consideration owed to POZEN on account
      of
      such termination).

     

    12.6.4  Effect
      of Termination At Will.
      Upon
      termination of this Agreement pursuant to Section 12.5
      (Termination at Will), all rights and licenses granted by POZEN to AstraZeneca
      under this Agreement will terminate immediately. In addition, the following
      provisions will apply:

     

    
      
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    (a)  If
      the
      termination notice is given ****** of the ****** in the ******, AstraZeneca
      will
      pay POZEN a termination fee in an amount determined, as follows (which
      termination fee shall be the sole and exclusive consideration owed to POZEN
      on
      account of such termination):

     

    (i)  If
      the
      termination notice is given ******.

     

    (ii)  If
      the
      termination notice is given ******.

     

    (iii)  If
      the
      termination notice is given ******.

     

    (iv)  If
      the
      termination notice is given ******.

     

    (b)  If
      such
      termination becomes effective after ******, AstraZeneca shall, at its sole
      option, do one of the following (which, in either case, shall be the sole and
      exclusive consideration owed to POZEN on account of such
      termination): 

     

    (i)  pay
      POZEN
      an amount equal to (x) ****** if the Agreement is terminated ******, or (y)
      ****** if the Agreement is terminated ******; or 

     

    (ii)  only
      if
      AstraZeneca is able to convey to POZEN materially the same freedom to operate
      with respect to the Manufacture and Commercialization of any POZEN Product
      Commercialized by AstraZeneca at the time of such termination (the “Commercialized
      POZEN Product”)
      as
      AstraZeneca enjoyed immediately prior to such termination (x) worldwide (if
      the
      Agreement is terminated in its entirety), or (y) in all countries outside the
      United States (if the Agreement is terminated with respect to all countries
      outside the United States), perform the actions described in paragraphs (1)
      through (10) below:

     

    (1)  To
      the
      extent permitted by Applicable Law, AstraZeneca shall transfer and assign to
      POZEN all Regulatory Materials and Marketing Approvals that are Controlled
      by
      AstraZeneca for Commercialized POZEN Product either (x) worldwide (if the
      Agreement is terminated in its entirety), or (y) in all countries outside the
      United States (if the Agreement is terminated with respect to all countries
      outside the United States).

     

    (2)  In
      the
      case of termination of this Agreement in its entirety, AstraZeneca shall
      transfer to POZEN or its designee the management and continued performance
      of
      any clinical trials for the Commercialized POZEN Product ongoing as of the
      effective date of such termination, which clinical trials will be conducted
      at
      POZEN’s expense after such transfer.

     

    (3)  Upon
      POZEN’s request, AstraZeneca shall transfer to POZEN at AstraZeneca’s full
      manufacturing cost any stock of finished Commercialized POZEN Product held
      by
      AstraZeneca or its Affiliates for either (x) the entire Territory (if the
      Agreement is terminated in its entirety), or (y) in all countries outside the
      United States (if the Agreement is terminated with respect to all countries
      outside the United States). 

     

    
      
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    (4)  AstraZeneca
      shall for a reasonable period of time, provide such assistance, at no cost
      to
      POZEN, to transfer or transition to POZEN all other technology or know-how
      Controlled by AstraZeneca, or then-existing commercial arrangements (to the
      extent transferable in accordance with the terms and conditions of such
      arrangements) as may be reasonably necessary or useful for POZEN to commence
      or
      continue developing, manufacturing, or Commercializing the Commercialized POZEN
      Products, to the extent AstraZeneca is then performing or having performed
      such
      activities (including without limitation transferring, upon request of POZEN,
      any agreements or arrangements with Third Party suppliers or vendors to supply
      or sell the Commercialized POZEN Product, to the extent such agreements or
      arrangements are transferable in accordance with their terms and
      conditions).

     

    (5)  AstraZeneca
      shall transfer to POZEN or its designee any then-current manufacturing processes
      for the Commercialized POZEN Product. In addition, to the extent that
      AstraZeneca or its Affiliate is then manufacturing Commercialized POZEN Product,
      AstraZeneca will negotiate in good faith a supply agreement for the
      Commercialized POZEN Product on commercially reasonable terms under which
      AstraZeneca will continue to manufacture, and will supply to POZEN, at a cost
      that equals ****** percent (******%) of AstraZeneca’s actual manufacturing costs
      (calculated in accordance with AstraZeneca’s standard cost and accounting
      policies), POZEN’s requirements of POZEN Product, for a period of up to ******,
      in order to permit POZEN to establish sufficient manufacturing capacity for
      Commercialized POZEN Product; provided, however,
      that
      POZEN shall use commercially reasonable efforts to transition manufacture of
      the
      Commercialized POZEN Product to a Third Party as soon as reasonably practicable.
      

     

    (6)  The
      supply agreement entered into between POZEN and AstraZeneca as contemplated
      by
      paragraph (5) above shall provide that at all times that AstraZeneca is
      supplying POZEN Product under such agreement, allow a delegation consisting
      of a
      reasonable number of representatives of POZEN, no more than once per calendar
      year, to inspect and audit any AstraZeneca facility where such Commercialized
      POZEN Product, including its active pharmaceutical ingredients ******, is
      Manufactured, and the documentation generated in connection with the Manufacture
      and testing of such Commercialized POZEN Product for the purpose of verifying
      that the POZEN Product is being manufactured in accordance with applicable
      Laws.
      The supply agreement entered into between POZEN and AstraZeneca as contemplated
      by paragraph (5) above shall provide that such inspections will take place
      during regular business hours and after at least thirty (30) days prior notice
      to AstraZeneca. POZEN will discuss the results of any inspection with
      AstraZeneca. Any inspection by or on behalf of POZEN, if it occurs, does not
      relieve AstraZeneca of its obligation to comply with all Applicable Laws and
      does not constitute a waiver of any right otherwise available to POZEN. POZEN
      will treat all information subject to review under this paragraph in accordance
      with the provisions of Section 11
      (Confidentiality) and will cause any Third Party representative retained by
      POZEN (and reasonably acceptable to AstraZeneca) to enter into a reasonably
      acceptable confidentiality agreement with AstraZeneca obligating such auditor
      to
      maintain all such information in confidence pursuant to such confidentiality
      agreement.

     

    
      
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    (7)  The
      supply agreement entered into between POZEN and AstraZeneca as contemplated
      by
      paragraph (5) above shall provide that, during any period when AstraZeneca
      is
      supplying Commercialized POZEN Product under such agreement, AstraZeneca shall
      notify POZEN promptly following notice from the FDA or any Regulatory Authority
      of a visit to any AstraZeneca facility where such Commercialized POZEN Product
      is Manufactured. The supply agreement entered into between POZEN and AstraZeneca
      as contemplated by paragraph (5) above shall provide that AstraZeneca will
      inform POZEN of the results of any inspection by a Regulatory Authority that
      does or could reasonably be expected to affect the Manufacture of such
      Commercialized POZEN Product. AstraZeneca will promptly provide POZEN with
      copies of notifications from any Regulatory Authority (including, without
      limitation, any Form No. 483 notification, Enforcement Inspection Reports,
      Notice of Adverse Finding, etc.). POZEN will treat all information subject
      to
      review under this paragraph in accordance with the provisions of Section
11
      (Confidentiality) and will cause any Third Party auditor retained by POZEN
      (and
      reasonably acceptable to AstraZeneca) to enter into a reasonably acceptable
      confidentiality agreement with AstraZeneca obligating such auditor to maintain
      all such information in confidence pursuant to such confidentiality
      agreement.

     

    (8)  During
      any period when AstraZeneca is supplying POZEN Product under the supply
      agreement between POZEN and AstraZeneca contemplated by paragraph (5) above,
      or
      POZEN is using such Commercialized POZEN Product, AstraZeneca shall grant to
      POZEN rights of reference (including by providing a letter of authorization
      to
      the applicable Regulatory Authorities) to any AstraZeneca IND or NDA pertaining
      to Esomeprazole. Upon the expiration of such right, POZEN will send written
      notice to such effect to the applicable Regulatory Authority.

     

    (9)  AstraZeneca
      shall grant to POZEN an exclusive, royalty-bearing license, with the right
      upon
      prior written notice to AstraZeneca to sublicense through multiple tiers, under
      any Patents Controlled by AstraZeneca that would be infringed by the
      manufacture, use or sale of Commercialized POZEN Products, solely to make,
      have
      made, use, sell, offer for sale, have sold, import, and export such
      Commercialized POZEN Products in the Field of Use in the Territory (if the
      Agreement is terminated in the entirety) or outside the United States (if the
      Agreement is terminated with respect to all countries outside the United
      States). In consideration of the foregoing license, POZEN shall pay to
      AstraZeneca royalties on net sales of Commercialized POZEN Products at the
      rates
      specified in Section 8.4
      (Royalties). For purposes of the foregoing royalty obligations, the references
      to “AstraZeneca” in Section 8.3
      through
8.7
      inclusive, and in the related definitions shall be deemed to be, and shall
      be,
      references to “POZEN” for purposes of this paragraph. The royalties provided for
      under this paragraph shall be the sole payments due by POZEN to AstraZeneca
      in
      connection with the practice of such license, and AstraZeneca shall be solely
      responsible for any payment obligations it may have to Merck & Co., Inc. or
      its affiliates in connection therewith.

     

    
      
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    (10)  AstraZeneca
      shall grant to POZEN a worldwide, non-exclusive, perpetual, irrevocable license
      under the Product Trademarks to use such marks for the promotion and sale of
      Commercialized POZEN Products, including the Initial POZEN Product, in the
      Field
      of Use in the Territory (if the Agreement is terminated in the entirety) or
      outside the United States (if the Agreement is terminated with respect to all
      countries outside the United States).

     

    For
      the
      avoidance of doubt, in the event that, upon termination pursuant to Section
      12.5
      (Termination at Will) after First Commercial Sale of the Initial POZEN Product
      in the U.S., AstraZeneca is not able to convey to POZEN the same freedom to
      operate with respect to the Manufacture and Commercialization of Commercialized
      POZEN Products as AstraZeneca enjoyed immediately prior to such termination
      in
      all material respects, then AstraZeneca shall be obligated to make the
      applicable payment to POZEN specified in Section 12.6.4(b)(i)
      (Effect
      of Termination at Will).

     

    (c)  Any
      termination fee due pursuant to Section 12.6.4
      (a) or
      Section 12.6.4(b)
      (Effect
      of Termination at Will) above shall be due and payable as follows:

     

    (i)  if
      AstraZeneca exercises its termination right under Section 12.5
      (Termination At Will) after achievement of a Milestone Event for which a payment
      would be due under Section 8.2
      (Development Milestone Payments) but before the applicable Milestone Due Date
      for such Milestone Event, such termination fee shall be due on such Milestone
      Due Date in lieu of the milestone payment; and

     

    (ii)  in
      all
      cases other than those described in Section 12.6.4(c)(i)
      (Effect
      of Termination at Will) above, such termination fee shall be due within ******
      (******) days after AstraZeneca’s exercise of is termination right under Section
12.5
      (Termination at Will).

     

    12.7  Termination
      for Insolvency.
      This
      Agreement may be terminated by written notice by either Party at any time during
      the Term upon the declaration by a court of competent jurisdiction that the
      other Party is bankrupt and, pursuant to the U.S. Bankruptcy Code such other
      Party’s assets are to be liquidated; upon the filing or institution of
      bankruptcy, liquidation or receivership proceedings (other than reorganization
      proceedings under Chapter 11 of the U.S. Bankruptcy Code); or upon an assignment
      of a substantial portion of the assets for the benefit of creditors by the
      other
      Party; or in the event a receiver or custodian is appointed for such Party’s
      business; provided, however, that in the case of any involuntary proceeding,
      such right to terminate shall only become effective if the proceeding is not
      dismissed within 60 days after the filing thereof (each of the foregoing, a
      “Bankruptcy
      Event”).

     

    
      
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    12.8  Effect
      of Bankruptcy.
      All
      rights and licenses with respect to Patents and Know-How granted under or
      pursuant to this Agreement by one Party to the other Party are, for all purposes
      of Section 365(n) of Title 11 of the United States Code (“Title
      11”),
      licenses of rights to “intellectual property” as defined in Title 11. Each Party
      agrees that the other Party, as licensee of such rights under this Agreement
      shall retain and may fully exercise all of its rights and elections under Title
      11. POZEN******AstraZeneca******POZEN ******POZEN ******POZEN ******(i)
      ******(ii) ******(iii) ******(iv) ******(v) ******(vi) ******(vii) ******POZEN
      ******(viii) ******. POZEN agrees not to interfere with AstraZeneca and its
      Affiliates’ exercise of rights and licenses to intellectual property licensed
      hereunder and embodiments thereof in accordance with this Agreement and agrees
      to use commercially reasonable efforts to assist AstraZeneca and its Affiliates
      to obtain such intellectual property and embodiments thereof in the possession
      or control of Third Parties as reasonably necessary or desirable for AstraZeneca
      or its Affiliates to exercise such rights and licenses in accordance with this
      Agreement. Each party agrees and acknowledges that all payments by AstraZeneca
      to POZEN payable under this Agreement other than royalty payments pursuant
      to
      Section 8.4
      (Royalties) and commercialization milestone payments under Section 8.3
      (Sales
      Milestone Payments) do not constitute “royalties” within the meaning of Section
      365(n) of Title 11 or relate to licenses of intellectual property
      hereunder.

     

    12.9  Post
      Termination Royalties.
      Upon any
      termination of this Agreement pursuant to (i) Section 12.4.1
      (Termination for Cause) and ****** for the failure of the ****** described
      in
      the ****** to ******, or (ii) Sections 12.4.1
      and 1.82 (h),
      then,
      for a period of ****** (******) years following any such termination,
      AstraZeneca shall pay POZEN a royalty on Net Sales of Products sold by
      AstraZeneca, its Affiliates or Sublicensees in an amount equal to ****** percent
      (******%) of the royalty amount calculated according to Section 8.4.1
      (Royalty
      Rate), in accordance with the terms and conditions of Sections 8.4
      (Royalties) through 8.7
      (Taxes)
      of this Agreement.

     

    12.10  Formulation
      Technology.
      If
      AstraZeneca terminates this Agreement for any reason other than for material
      breach by POZEN under Section 12.3
      or as a
      result of POZEN’s insolvency under Section 12.7,
      then,
      subject to the terms and conditions of this Agreement, AstraZeneca agrees to
      grant to POZEN, and does hereby grant effective automatically upon such
      termination, a worldwide, perpetual, irrevocable, non-exclusive license under
      the Formulation Technology, with the right to grant sublicenses and authorize
      the grant of sublicenses to the extent provided in this Section 12.10,
      to
      make, have made, use, sell, offer for sale, and import POZEN Products; provided,
      that nothing herein gives POZEN any right or license under any other
      intellectual property rights Controlled by AstraZeneca, regardless of whether
      such rights are necessary in order to exploit the Formulation Technology
      pursuant to this Section 12.10.
      POZEN
      may grant sublicenses and the right to grant further sublicenses under the
      foregoing license only as follows: (i) for any sublicense relating to the
      development or commercialization of a Commercialized POZEN Product, POZEN may
      grant such sublicense upon notice to AstraZeneca, but without obtaining
      AstraZeneca’s consent, and (ii) for any sublicense relating to POZEN Products
      other than Commercialized POZEN Products, POZEN may grant such sublicense with
      AstraZeneca’s prior written consent (such consent not to be unreasonably
      withheld, conditioned or delayed). 

     

    
      
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    12.11  Survival.
      Expiration or termination of this Agreement will not relieve the Parties of
      any
      obligation accruing prior to such expiration or termination. The provisions
      of
      Sections 8.4 (Royalties), 8.5 (Payments and Sales Reporting), 8.6 (Records;
      Audits), 9.2 (Prosecution and Maintenance of Joint Patents), 9.3 (Ownership
      of
      Inventions), 10.5(Disclaimer of Warranty), 11 (Confidentiality), 12.6
      (Consequences of Expiration and Termination), 12.8 (Effect of Bankruptcy),
      12.9
      (Post Termination Royalties), 12.10 (Formulation Technology), 12.11 (Survival),
      13 (Indemnification and Insurance), 14 (Limitation of Liability), and 15
      (Miscellaneous) will survive any termination or expiration of this
      Agreement.

     

    
      	13.  	
              INDEMNIFICATION
                AND INSURANCE

            


    

     

    13.1  Indemnification
      by POZEN.
      POZEN
      hereby agrees to save, defend and hold AstraZeneca and its Affiliates and their
      respective directors, officers, employees and agents (each, a “AstraZeneca
      Indemnitee”)
      harmless from and against any and all claims, suits, actions, demands,
      liabilities, expenses and/or loss, including reasonable legal expense and
      attorneys’ fees (collectively, “Losses”),
      to
      which any AstraZeneca Indemnitee may become subject as a result of any claim,
      demand, action or other proceeding by any Third Party to the extent such Losses
      arise directly or indirectly out of: (i) the gross negligence or willful
      misconduct of any POZEN Indemnitee or (ii) the breach by POZEN of any warranty,
      representation, covenant or agreement made by POZEN in this Agreement; except,
      in each case, to the extent such Losses result from the gross negligence or
      willful misconduct of any AstraZeneca Indemnitee or the breach by AstraZeneca
      of
      any warranty, representation, covenant or agreement made by AstraZeneca in
      this
      Agreement.

     

    13.2  Indemnification
      by AstraZeneca.
      AstraZeneca hereby agrees to save, defend and hold POZEN and its Affiliates
      and
      their respective directors, officers, employees and agents (each, an
“POZEN
      Indemnitee”)
      harmless from and against any and all Losses to which any POZEN Indemnitee
      may
      become subject as a result of any claim, demand, action or other proceeding
      by
      any Third Party to the extent such Losses arise directly or indirectly out
      of:
      (i) the development, manufacture, use, handling, storage, sale or other
      disposition of any Product by AstraZeneca, its Affiliates or any of their
      respective Sublicensees, (ii) the gross negligence or willful misconduct of
      any
      AstraZeneca Indemnitee, or (iii) the breach by AstraZeneca of any warranty,
      representation, covenant or agreement made by AstraZeneca in this Agreement;
      except, in each case, to the extent such Losses result from the gross negligence
      or willful misconduct of any POZEN Indemnitee or the breach by POZEN of any
      warranty, representation, covenant or agreement made by POZEN in this
      Agreement.

     

    
      
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    13.3  Indemnification
      Procedure.

     

    13.3.1  Notice
      of Claim.
      The
      indemnified Party will give the indemnifying Party (the “Indemnifying
      Party”)
      prompt
      written notice (an “Indemnification
      Claim Notice”)
      of any
      Losses or discovery of fact upon which such Indemnified Party intends to base
      a
      request for indemnification under Section 13.1
      (Indemnification by POZEN) or Section 13.2
      (Indemnification by AstraZeneca); provided, however,
      that the
      failure to give such prompt written notice will not relieve Indemnifying Party
      of its indemnification obligation under this Agreement except and only to the
      extent that the Indemnifying Party is actually prejudiced as a result of such
      failure. In no event will the Indemnifying Party be liable for any Losses that
      result from any delay in providing such notice. Each Indemnification Claim
      Notice must contain a description of the claim and the nature and amount of
      such
      Loss (to the extent that the nature and amount of such Loss are known at such
      time). The indemnified Party will furnish promptly to the indemnifying Party
      copies of all papers and official documents received in respect of any Losses.
      All indemnification claims in respect of a Party, its Affiliates or their
      respective directors, officers, employees and agents (collectively, the
“Indemnitees”
      and each
      an “Indemnitee”)
      will be
      made solely by such Party to this Agreement (the “Indemnified
      Party”).

     

    13.3.2  Control
      of Defense.
      At its
      option, the Indemnifying Party may assume the defense of any claim for which
      indemnification is sought (a “Third
      Party Claim”)
      by
      giving written notice to the Indemnified Party within ****** (******) days
      after
      the Indemnifying Party’s receipt of an Indemnification Claim Notice. Upon
      assuming the defense of a Third Party Claim, the Indemnifying Party may appoint
      as lead counsel in the defense of the Third Party Claim any legal counsel
      selected by the Indemnifying Party. In the event the Indemnifying Party assumes
      the defense of a Third Party Claim, the Indemnified Party will immediately
      deliver to the Indemnifying Party all original notices and documents (including
      court papers) received by any Indemnitee in connection with the Third Party
      Claim. Should the Indemnifying Party assume the defense of a Third Party Claim,
      the Indemnifying Party will not be liable to the Indemnified Party or any other
      Indemnitee for any legal expenses subsequently incurred by such Indemnified
      Party or other Indemnitee in connection with the analysis, defense or settlement
      of the Third Party Claim.

     

    13.3.3  Right
      to Participate in Defense.
      Without
      limiting Section 13.3.2
      (Control
      of Defense) above, any Indemnitee will be entitled to participate in, but not
      control, the defense of such Third Party Claim and to employ counsel of its
      choice for such purpose; provided, however,
      that
      such employment will be at the Indemnitee’s own expense unless (i) the
      employment thereof has been specifically authorized by the Indemnifying Party
      in
      writing, or (ii) the Indemnifying Party has failed to assume the defense and
      employ counsel in accordance with Section 13.3.2
      (Control
      of Defense) (in which case the Indemnified Party will control the
      defense).

     

    
      
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    13.3.4  Settlement.
      With
      respect to any Losses relating solely to the payment of money damages in
      connection with a Third Party Claim and that will not result in the Indemnitee’s
      becoming subject to injunctive or other relief or otherwise adversely affect
      the
      business of the Indemnitee in any manner, and as to which the Indemnifying
      Party
      will have acknowledged in writing the obligation to indemnify the Indemnitee
      hereunder, the Indemnifying Party will have the sole right to consent to the
      entry of any judgment, enter into any settlement or otherwise dispose of such
      Loss, on such terms as the Indemnifying Party, in its sole discretion, will
      deem
      appropriate, and will transfer to the Indemnified Party all amounts which said
      Indemnified Party will be liable to pay prior to the time prior to the entry
      of
      judgment. With respect to all other Losses in connection with Third Party
      Claims, where the Indemnifying Party has assumed the defense of the Third Party
      Claim in accordance with Section 13.3.2
      (Control
      of Defense), the Indemnifying Party will have authority to consent to the entry
      of any judgment, enter into any settlement or otherwise dispose of such Loss
      provided it obtains the prior written consent of the Indemnified Party (which
      consent will be at the Indemnified Party’s sole and absolute discretion). The
      Indemnifying Party will not be liable for any settlement or other disposition
      of
      a Loss by an Indemnitee that is reached without the written consent of the
      Indemnifying Party. Regardless of whether the Indemnifying Party chooses to
      defend or prosecute any Third Party Claim, no Indemnitee will admit any
      liability with respect to, or settle, compromise or discharge, any Third Party
      Claim without the prior written consent of the Indemnifying Party.

     

    13.3.5  Cooperation.
      The
      Indemnified Party will, and will cause each other Indemnitee to, cooperate
      in
      the defense or prosecution thereof and will furnish such records, information
      and testimony, provide such witnesses and attend such conferences, discovery
      proceedings, hearings, trials and appeals as may be reasonably requested in
      connection with the defense or prosecution of any Third Party Claim. Such
      cooperation will include access during normal business hours afforded to the
      Indemnifying Party to, and reasonable retention by the Indemnified Party of,
      records and information that are reasonably relevant to such Third Party Claim,
      and making Indemnitees and other employees and agents available on a mutually
      convenient basis to provide additional information and explanation of any
      material provided hereunder, and the Indemnifying Party will reimburse the
      Indemnified Party for all its reasonable out-of-pocket expenses in connection
      therewith.

     

    13.4  Expenses.
      Except
      as provided above, the reasonable and verifiable costs and expenses, including
      fees and disbursements of counsel, incurred by the Indemnified Party in
      connection with any claim will be reimbursed on a Calendar Quarter basis by
      the
      Indemnifying Party, without prejudice to the Indemnifying Party’s right to
      contest the Indemnified Party’s right to indemnification and subject to refund
      in the event the Indemnifying Party is ultimately held not to be obligated
      to
      indemnify the Indemnified Party.

     

    13.5  Insurance.
      Each
      Party will have and maintain such types and amounts of liability insurance
      as is
      normal and customary in the industry generally for parties similarly situated,
      and will upon request provide the other Party with a copy of its policies of
      insurance in that regard, along with any amendments and revisions
      thereto.

     

    
      
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      	14.  	
              LIMITATION
                OF LIABILITY

            


    

     

    IN
      NO
      EVENT WILL EITHER PARTY BE LIABLE FOR LOST PROFITS, LOSS OF DATA, OR FOR ANY
      SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES, HOWEVER
      CAUSED, ON ANY THEORY OF LIABILITY AND WHETHER OR NOT SUCH PARTY HAS BEEN
      ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, ARISING UNDER ANY CAUSE OF ACTION
      AND ARISING IN ANY WAY OUT OF THIS AGREEMENT. THE FOREGOING LIMITATIONS WILL
      NOT
      APPLY TO AN AWARD OF ENHANCED DAMAGES AVAILABLE UNDER THE PATENT LAWS FOR
      WILLFUL PATENT INFRINGEMENT AND WILL NOT LIMIT EITHER PARTY’S LIABILITY TO THE
      OTHER PARTY UNDER SECTIONS 7.5
      (RESTRICTIVE COVENANT), 10.6
      (POZEN
      NON-COMPETE), 11
      (CONFIDENTIALITY), AND 13
      (INDEMNIFICATION AND INSURANCE) OF THIS AGREEMENT.

     

    
      	15.  	
              MISCELLANEOUS

            


    

     

    15.1  Assignment.
      Without
      the prior written consent of the other Party hereto (which may be granted at
      the
      other Party’s discretion), neither Party will sell, transfer, assign, delegate,
      pledge or otherwise dispose of, whether voluntarily, involuntarily, by operation
      of law or otherwise, this Agreement or any of its rights or duties hereunder;
      provided, however,
      that
      either Party hereto may assign or transfer this Agreement or any of its rights
      or obligations hereunder without the consent of the other Party (a) to any
      Affiliate of such Party; or (b) in connection with the transfer or sale of
      all
      or substantially all of the business of such party to which this Agreement
      relates to a Third Party, whether by merger, sale of stock, sale of assets
      or
      otherwise. The assigning Party (except if it is not the surviving entity) will
      remain jointly and severally liable with the relevant Affiliate or Third Party
      assignee under this Agreement, and the relevant Affiliate assignee, Third Party
      assignee or surviving entity will assume in writing all of the assigning Party’s
      obligations under this Agreement. Any purported assignment or transfer in
      violation of this Section 15.1
      (Assignment) will be void ab initio and of no force or effect.

     

    
      
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    15.2  Termination
      of Certain Rights Upon POZEN Change of Corporate Control. POZEN
      shall promptly notify AstraZeneca in writing following consummation of a Change
      of Corporate Control of POZEN. Notwithstanding anything else in this Agreement
      to the contrary, in the event of a Change of Corporate Control of POZEN, then
      AstraZeneca will have the right, exercisable by written notice to POZEN or
      its
      successor in interest given within ****** (******) days after AstraZeneca
      receives written notice from POZEN of the completion of such Change of Corporate
      Control: (a) to terminate ****** established pursuant to this Agreement; (b)
      to
      make all decisions under Section 2.3.3
      (Dispute
      Resolution), (c) to conduct ****** regarding POZEN Products, (d) to cause POZEN
      to****** pertaining to POZEN Products; and (e) to terminate its obligation
      to
      make ****** to POZEN pursuant to this Agreement other than ****** and as
      reasonably required to ******, except in the event of subsequent termination
      of
      this Agreement by AstraZeneca pursuant to Section 12.5
      (Termination at Will) and election by AstraZeneca of the option specified in
      Section 12.6.4(b)(ii)
      (Effect
      of Termination at Will); subject, in each case, to AstraZeneca’s continued
      compliance with all applicable provisions of this Agreement (including, without
      limitation, Articles 8, 9 and 11). POZEN shall cooperate in providing to
      AstraZeneca all information, assistance, assignments and other support
      reasonably requested to assist AstraZeneca in assuming such control. In
      addition, if POZEN has not completed the Development activities that are its
      responsibility under this Agreement, then AstraZeneca may assume all
      responsibility for, at its expense, all such Development activities, and POZEN
      shall provide to AstraZeneca all information, assistance, assignments and other
      support reasonably requested to assist AstraZeneca in assuming such
      responsibility in an efficient and orderly manner. For purposes of
      clarification, all Confidential Information of AstraZeneca in POZEN’s or its
      successor’s possession following AstraZeneca’s exercise of its rights under this
      Section 15.2
      shall
      continue to be subject to all applicable provisions of this Agreement
      (including, without limitation, Articles 7 and 11).

     

    15.3  Severability.
      If any
      provision of this Agreement is held to be illegal, invalid or unenforceable
      under any present or future law, and if the rights or obligations of either
      Party under this Agreement will not be materially and adversely affected
      thereby, (a) such provision will be fully severable, (b) this Agreement will
      be
      construed and enforced as if such illegal, invalid or unenforceable provision
      had never comprised a part hereof, (c) the remaining provisions of this
      Agreement will remain in full force and effect and will not be affected by
      the
      illegal, invalid or unenforceable provision or by its severance herefrom, and
      (d) in lieu of such illegal, invalid or unenforceable provision, there will
      be
      added automatically as a part of this Agreement a legal, valid and enforceable
      provision as similar in terms to such illegal, invalid or unenforceable
      provision as may be possible and reasonably acceptable to the Parties herein.
      To
      the fullest extent permitted by Applicable Law, each Party hereby waives any
      provision of law that would render any provision prohibited or unenforceable
      in
      any respect.

     

    
      
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    15.4  Governing
      Law; Dispute Resolution.

     

    15.4.1  This
      Agreement, and any disputes between the Parties related to or arising out of
      this Agreement, including the Parties’ relationship created hereby, the
      negotiations for and entry into this Agreement, its conclusion, binding effect,
      amendment, coverage, termination, or the performance or alleged non-performance
      of a Party of its obligations under this Agreement (each a “Dispute”),
      will
      be governed by the laws of the State of New York without reference to any choice
      of law principles thereof that would cause the application of the laws of a
      different jurisdiction.

     

    15.4.2  In
      the
      event of any Dispute, a Party may notify the other Party in writing of such
      Dispute, and the Parties will try to settle such Dispute amicably between
      themselves. If the Parties are unable to resolve the Dispute within ******
      Business 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 ****** Business Days after it was referred to the Chief Executive
      Officers.

     

    15.4.3  Any
      Dispute that is not resolved as provided in Section 15.4.2,
      whether
      before or after termination of this Agreement, will be resolved by litigation
      in
      the courts of competent jurisdiction located in New York, New York; provided,
      that, at its election, POZEN may submit a Dispute to arbitration in lieu of
      litigation as provided in Section 15.4.5 by providing written notice to
      AstraZeneca within the time period specified in Section 15.4.5, in which event
      the procedures of Section 15.4.5 shall govern resolution of the Dispute. Each
      Party hereby agrees to the exclusive jurisdiction of such courts and waives
      any
      objections as to the personal jurisdiction or venue of such courts.

     

    15.4.4  Notwithstanding
      the foregoing, nothing in this Section 15.4
      (Governing Law; Dispute Resolution) will limit either Party’s right to seek
      immediate temporary injunctive or other temporary equitable relief whenever
      the
      facts or circumstances would permit a Party to seek such relief in a court
      of
      competent jurisdiction.

     

    
      
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    15.4.5  In
      the
      event AstraZeneca terminates this Agreement for TPP Failure pursuant to Section
      12.4.1(i) (Termination for Cause) and POZEN disputes whether such a TPP Failure
      has occurred, then POZEN shall have the right, at its election, to submit such
      Dispute to binding arbitration in lieu of litigation by providing written notice
      of such election to AstraZeneca within ****** (******) days of receiving notice
      from AstraZeneca that it has terminated the Agreement for TPP Failure pursuant
      to Section 12.4.1. If POZEN wishes to submit such Dispute to arbitration, POZEN
      shall so notify AstraZeneca, and the arbitration shall be conducted before
      a
      single arbitrator (“Arbitrator”)
      selected from and administered by the New York, New York office of the American
      Arbitration Association (the “Administrator”)
      in
      accordance with its then existing comprehensive arbitration rules and
      procedures; however, upon the written demand of either Party, the arbitration
      shall be conducted by and submitted to three Arbitrators selected from and
      administered by the Administrator’s Rules & Procedures. The Arbitrator(s),
      whether selected by agreement or the Administrator, shall have knowledge of
      and
      experience with the process and standards used by the FDA to approve NDA
      applications for pharmaceutical products and DDMAC’s approval of promotion
      materials for pharmaceutical products. The arbitration hearing shall be held
      in
      New York, New York. The Arbitrator shall be authorized solely to determine
      whether there has been a TPP Failure as defined in Section 1.103 (TPP Failure).
      Each Party shall bear its own attorney’s fees, costs, and disbursements arising
      out of the arbitration, and shall pay an equal share of the fees and costs
      of
      the Administrator and the Arbitrator. The Arbitrator shall, within ******
      (******) calendar days after the conclusion of the arbitration hearing, issue
      a
      written statement of decision describing the material factual findings and
      conclusions on which the decision is based. Such decision shall be final and
      binding upon the Parties. If such decision finds that a TPP Failure did not
      occur, then AstraZeneca’s termination of this Agreement shall be deemed to have
      been made at will pursuant to Section 12.5, and accordingly, AstraZeneca shall
      pay POZEN the difference between the termination fee provided for in Section
      12.6.4(a) and the amount paid by AstraZeneca to POZEN pursuant to Section
      12.6.3(b), which payment shall be the sole and exclusive consideration owed
      to
      POZEN on account of such termination and such decision. If such decision
      provides that a TPP Failure did occur, then AstraZeneca’s termination of this
      Agreement shall be deemed to have been made pursuant to Section
      12.4.1(i).

     

    15.5  Notices.
      All
      notices or other communications that are required or permitted hereunder will
      be
      in writing and delivered personally, sent by facsimile (and promptly confirmed
      by personal delivery or overnight courier as provided herein), or sent by
      internationally-recognized overnight courier addressed as follows:

     


    
      
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                If
                  to POZEN, to:

              
	 	
                POZEN
                  Inc.

                1414
                  Raleigh Road, Suite 400

                Chapel
                  Hill, NC 27517

                USA

                Attention:
                  President and CEO

                Facsimile:
                  (919) 913-1039

              
	 
	
                With
                  a copy to:

              
	 	
                Cooley
                  Godward LLP

                One
                  Freedom Square

                11951
                  Freedom Square 

                Reston,
                  Virginia 20190

                USA

                Attention:
                  Kenneth J. Krisko 

                Facsimile:
                  (703) 456-8000

              
	 
	
                If
                  to AstraZeneca, to:

              
	 	
                AstraZeneca
                  AB

                SE-431
                  83

                Mölndal

                Sweden

                Attention:
                  Manager Legal Department Mölndal

                Facsimile:
                  +46 31 776 38 15

              
	 


      

    

    
 

     

     

     

    


     


    
      
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    or
      to
      such other address as the Party to whom notice is to be given may have furnished
      to the other Party in writing in accordance herewith. Any such communication
      will be deemed to have been given (i) when delivered, if personally delivered
      or
      sent by facsimile on a Business Day, and (ii) on the second Business Day after
      dispatch, if sent by nationally-recognized overnight courier. It is understood
      and agreed that this Section 15.5
      (Governing Law; Dispute Resolution) is not intended to govern the day-to-day
      business communications necessary between the Parties in performing their
      duties, in due course, under the terms of this Agreement.

     

    15.6  Entire
      Agreement; Modifications.
      This
      Agreement including the Exhibits attached hereto, each of which is hereby
      incorporated and made part of in this Agreement by reference, together with
      the
      AE Agreement (as such term is defined in Section 4.6
      (Adverse
      Event Reporting)), sets forth and constitutes the entire agreement and
      understanding between the Parties with respect to the subject matter hereof
      and
      supersedes all prior agreements, understandings, promises and representations,
      whether written or oral, with respect thereto. Each Party confirms that it
      is
      not relying on any representations or warranties of the other Party except
      as
      specifically set forth herein. No amendment or modification of this Agreement
      will be binding upon the Parties unless in writing and duly executed by
      authorized representatives of both Parties. Subject to Section 11.1
      (Confidentiality) hereof, the Parties hereby confirm that the Confidentiality
      Agreement by and between the Parties, dated as of June 15, 2006 is hereby
      terminated.

     

    15.7  Relationship
      of the Parties.
      It is
      expressly agreed that the Parties’ relationship under this Agreement is strictly
      one of licensor-licensee, and that this Agreement does not create or constitute
      a partnership, joint venture, or agency. Neither Party will have the authority
      to make any statements, representations or commitments of any kind, or to take
      any action, which will be binding (or purport to be binding) on the
      other.

     

    15.8  Waiver.
      Any term
      or condition of this Agreement may be waived at any time by the Party that
      is
      entitled to the benefit thereof, but no such waiver will be effective unless
      set
      forth in a written instrument duly executed by or on behalf of the Party waiving
      such term or condition. The waiver by either Party hereto of any right hereunder
      or of claims based on the failure to perform or a breach by the other Party
      will
      not be deemed a waiver of any other right hereunder or of any other breach
      or
      failure by said other Party whether of a similar nature or
      otherwise.

     

    15.9  Counterparts.
      This
      Agreement may be executed in two or more counterparts, each of which will be
      deemed an original, but all of which together will constitute one and the same
      instrument.

     

    15.10  No
      Benefit to Third Parties.
      The
      representations, warranties, covenants and agreements set forth in this
      Agreement are for the sole benefit of the Parties hereto and their successors
      and permitted assigns, and they will not be construed as conferring any rights
      on any Third Party.

     

    
      
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    15.11  Further
      Assurance.
      Each
      Party will duly execute and deliver, or cause to be duly executed and delivered,
      such further instruments and do and cause to be done such further acts and
      things, including the filing of such assignments, agreements, documents and
      instruments, as may be necessary or as the other Party may reasonably request
      in
      connection with this Agreement or to carry out more effectively the provisions
      and purposes, or to better assure and confirm unto such other Party its rights
      and remedies under this Agreement.

     

    15.12  No
      Drafting Party.
      This
      Agreement has been submitted to the scrutiny of, and has been negotiated by,
      both Parties and their counsel, and will be given a fair and reasonable
      interpretation in accordance with its terms, without consideration or weight
      being given to any such terms having been drafted by any Party or its counsel.
      No rule of strict construction will be applied against either
      Party.

     

    15.13  Construction.
      Except
      where the context otherwise requires, wherever used, the use of any gender
      will
      be applicable to all genders and the word “or” is used 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 means including, without limiting the generality of
      any description preceding such term. Unless the context indicates otherwise,
      the
      singular will include the plural and the plural will include the singular.
      Unless the context requires otherwise, (a) any definition of or reference to
      any
      agreement, instrument or other document refer to such agreement, instrument
      or
      other document as from time to time amended, supplemented or otherwise modified
      (subject to any restrictions on such amendments, supplements or modifications
      set forth herein or therein), (b) any reference to any laws refer to such laws
      as from time to time enacted, repealed or amended, (c) the words “herein”,
“hereof” and “hereunder”, and words of similar import, refer to this Agreement
      in its entirety and not to any particular provision hereof, and (d) all
      references herein to Sections and Exhibits, unless otherwise specifically
      provided, refer to the Sections and Exhibits of this Agreement.

     

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

     


    
      
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    IN
      WITNESS WHEREOF,
      the
      Parties have executed this Collaboration and License Agreement by their
      respective authorized representatives as of the date first written
      above.

     

    

      
        	
                POZEN
                  INC.

                 

              
	
                By:

              	 
	 
	
                Name:

              	 
	 
	
                Title:

              	 
	 
	 	 
	 
	
                ASTRAZENECA
                  AB (publ)

                 

              
	
                By:

              	 
	 
	
                Name:

              	 
	 
	
                Title:

              	 
	 


      



     

     

    


     


    
      
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    EXHIBIT
      A

     

    FORMULATION
      BUDGET 

     


    
      
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    EXHIBIT
      B

     

    INITIAL
      U.S. DEVELOPMENT PLAN

     

    
      	
               

              Study
                Number

               

            	
               

              Title/Design

               

            	
               

              Endpoints

               

            	
               

              Comment

               

            	
               

              Responsibility
                to Conduct

               

            	
               

              Responsibility
                to Pay

               

            
	
               

              NONCLINICAL

               

            
	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            
	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            
	
               

              PHASE
                1

               

            
	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            
	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            
	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            
	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            
	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            
	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            
	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            
	
               

              PHASE
                2 

               

            
	 	 	 	 	 	 
	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            
	
               

              PHASE
                3

               

            
	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            
	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            
	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            


    

    


     


    
      
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              Study
                Number

               

            	
               

              Title/Design

               

            	
               

              Endpoints

               

            	
               

              Comment

               

            	
               

              Responsibility
                to Conduct

               

            	
               

              Responsibility
                to Pay

               

            
	
               

              PHASE
                3

               

            
	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            


    

    


     


    
      
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    EXHIBITS
      C AND E

    U.S
      AND ROW DEVELOPMENT PLAN TIMELINES

    


    U.S.
      DEVELOPMENT PLAN TIMELINE

    


    ******

    


    ROW
      DEVELOPMENT PLAN TIMELINE

     

    


     

    ******

     

    


     


    
      
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    EXHIBIT
      D

     

    INITIAL
      ROW DEVELOPMENT PLAN

     

    
      	
               

              Study
                Number

               

            	
               

              Title/Design

               

            	
               

              Endpoints

               

            	
               

              Comment

               

            	
               

              Responsibility
                to Conduct

               

            	
               

              Responsibility
                to Pay

               

            
	
               

              NONCLINICAL

               

            
	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            
	
               

              ******

               

            	
               

              ******

               

            	 	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            
	
               

              PHASE
                1

               

            
	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            
	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            
	
               

              PHASE
                2 

               

            
	
               

              ******
                

               

            
	
               

              PHASE
                3

               

            	 	 	 	 	 
	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            	
               

              ******

               

            


    

    


     


    
      
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    EXHIBIT
      E

     

    ROW
      DEVELOPMENT PLAN TIMELINE

     

    (See
      Exhibit C)

     


    
      
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    EXHIBIT
      F

     

    TPP STUDIES
      

    


     

    
      	 	 	 	 	 	 	 	 	 
	
              ******

            	
              ******

            	
              ******

            	
              ******

            	
              ******

            	
              ******

            
	
              ******

            	
              ******

            	
              ******

            	
              ******

            	
              ******

            	
               

              ******

            
	 	 	 	 	 	 	 	 	 
	
              ******

            	
              ******

            	
              ******

            	
              ******

            	
              ******

            	
              ******

            
	 	 	 	 	 	 	 	 	 
	
              ******

            	
              ******

            	
              ******

            	
              ******

            	
              ******

            	
              ******

            
	 	 	 	 	 	 	 	 	 
	
              ******

            	
              ******

            	
              ******

            	
              ******

            	
              ******

            	
              ******

            
	 	 	 	 	 	 	 	 	 
	 
	
              ******

            
	 


    

    


     


    
      
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    SCHEDULE
      1.58 

     

    LICENSED
      PATENTS

     

    


    
      	
               

              SERIAL
                NUMBER/FILING
                DATE

               

            	
               

               

              PUBLICATION
                NUMBER/ DATE

            	
               

               

              TITLE

               

            	
               

               

              TERRITORY

            
	
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        -
          94
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    SCHEDULE
      4.1.2

     

    IMS
      MAT DATA

     

    


     

    
      	
              ******
                markets 

            	
              MAT
                Q4/05

            
	
              (******)
                Combined

            	
              Sales
                USD

            
	 	
              Thousands

            
	
              Total

            	
              ******

            
	
              US
                TOTAL

            	
              ******

            
	
              JAPAN
                COMBINED

            	
              ******

            
	
              FRANCE
                COMBINED

            	
              ******

            
	
              TURKEY
                RETAIL

            	
              ******

            
	
              ITALY
                COMBINED

            	
              ******

            
	
              U.K.
                COMBINED

            	
              ******

            
	
              MEXICO
                RETAIL

            	
              ******

            
	
              BRAZIL
                RETAIL

            	
              ******

            
	
              GERMANY
                COMBINED

            	
              ******

            
	
              CANADA
                COMBINED

            	
              ******

            
	
              SPAIN
                COMBINED

            	
              ******

            
	
              KOREA
                COMBINED

            	
              ******

            
	
              PORTUGAL
                RETAIL

            	
              ******

            
	
              INDIA
                RETAIL

            	
              ******

            
	
              VENEZUELA
                RETAIL

            	
              ******

            
	
              POLAND
                COMBINED

            	
              ******

            
	
              AUSTRALIA
                COMBINED

            	
              ******

            
	
              GREECE
                RETAIL

            	
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              ARGENTINA
                RETAIL

            	
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              NETHERLANDS
                COMBINED

            	
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              Total
                Others

            	
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    SCHEDULE
      6.1 

     

    INITIAL
      POZEN PRODUCT SPECIFICATIONS

     

    


     

    PN
      Drug Product Release Specifications

     

    
      	
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        -
          96
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    SCHEDULE
      8.4.1

     

    


     

    In
      ******, AZ has Net Sales for ****** in country Y in the amounts of $******
      for
      the first Product and $****** for the ******. In ****** in all other countries
      of the Territory the total Net Sales of Products are $******, and Net Sales
      do
      not occur in any other country for more than ******.

     

    


     

    The
      calculation of the Segregated Royalty Amount would be:

     

    

      
        	
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     The
      calculation of the Remaining Royalty Amount would be:

     

    
      	
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    The
      total
      royalty payable for all Net Sales in the Territory would be $******.


     


    
      
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    SCHEDULE
      8.4.3

     

    


     

    Assume
      that in the ****** the total world-wide Net Sales of Products are ******. In
      that example the following royalties would be payable prior to application
      of
      any Market Reduction:

     

    


     

    
      	
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    Assume
      that in country X during Q1 of ****** a Competing Product had commenced sales
      in
      country X, and in Q1 of this year, ******, achieved the criteria to trigger
      a
      Market Reduction under Section 8.4.3
      (Rate
      Step Down for Competing Product Entrants). Assume that Net Sales of Products
      in
      Country X were $****** in ******.

     

    ************

     

    

      
        	
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    The
      Market reduction in Country X would result in a reduction to royalties payable
      of an amount equal to ****** Therefore the total royalty payable for Product
      Net
      Sales would be ******

     


    
      
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        -
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    SCHEDULE
      10.1 

     

    


     

    Part
      10.1.14 - Agreements

     

    


     

    


     

    [To
      be
      agreed by the Parties prior to the Effective Date]

     


    
      
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    SCHEDULE
      10.7

     

    


     

    POZEN
      Subcontractors

     

    


     

    [To
      be
      agreed by the Parties prior to the Effective Date]

    



    
      
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