Document:

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                                                                    Exhibit 10.1

                              EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into as of
this 23rd day of June, 2000, by and between ALLIN CORPORATION ("Employer"), and
DEAN C. PRASKACH ("Employee"), a resident of Pennsylvania.

                                  WITNESSETH:
                                  ----------

     WHEREAS, Employer desires to employ Employee on a full-time and exclusive
basis and Employee is willing to serve on a full-time and exclusive basis, all
upon the terms and conditions hereinafter set forth.

     NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained and intending to be legally bound hereby, the parties do agree
as follows:

     Section 1. Employment.   Subject to the terms and conditions of this
     ---------------------
Agreement, Employer agrees to employ Employee as Chief Financial Officer of
Employer, and Employee accepts such employment.  Employee will diligently and
faithfully and in conformity with the directions of the Chief Executive Officer
and/or the Board of Directors of Employer perform the duties of his employment
hereunder, and he will devote his best efforts and attention on a full-time
basis to the performance of said duties.

     Section 2. Employment Period.
     ----------------------------

        (a)  Term.  The term of Employee's employment hereunder Shall commence
             -----
on June 23, 2000 and shall continue through June 23, 2005 unless sooner
terminated in accordance with the terms of Section 2 ("Employment Period").

        (b)  The Employment period shall terminate upon (i) Employee's death
or, unless waived by Employer, his disability, either physical or mental (as
determined by Employer's physician) which may reasonably be anticipated to
render him unable, for a period of at least six (6) months, effectively to
perform the obligations, duties and responsibilities of Employee's employment
with Employer (provided that if Employee is terminated due to a disability,
any long-term disability insurance provided to Employee shall continue in
effect post-termination); or (ii) the termination of Employee's employment by
the Chief Executive Officer or the Board of Directors with cause (as
hereinafter defined); or (iii) the passage of fourteen (14) days from the date
of delivery by either party to the other of his or its election to terminate
this Agreement. As used herein, "cause" shall mean (i) dishonest, fraudulent
or illegal conduct; (ii) misappropriation of Employer funds; (iii) conviction
of a felony; (iv) excessive use of alcohol; (v) use of controlled substances
or other addictive behavior; (vi) unethical business conduct; (vii) breach of
any statutory or common law duty of loyalty to Employer; and (viii) action by
Employee which is prejudicial or injurious to the business or goodwill of
Employer or a material breach of this Agreement.

     Section 3.  Employment Compensation and Other Benefits.
     ---------   ------------------------------------------

        (a)  Base Salary.  For services performed by Employee during the
             -----------
Employment Period, Employer will pay to Employee a base salary of One Hundred
Forty Thousand Dollars ($140,000) per annum, payable in equal semi-monthly
installments of $5833.33, prorated for any partial period of employment.

        (b)  Benefits.  During the term of his employment hereunder, Employee
             --------
will be entitled to the following:
<PAGE>

                (i)   payment by Employer of the premiums for medical and
dental insurance coverage for himself and his family consistent with programs
from time to time in effect for the employees of Employer; provided, however
that if Employer adopts a policy of requiring all of its employees to pay a
portion of such premiums, Employee will be responsible for paying for his
applicable portion, which portion shall be deducted from the salary otherwise
payable to Employee.

                (ii)  four weeks of paid vacation each year of employment; and

                (iii) such other benefits as are available to other
employees of Employer generally, including any 401(k) plan, profit-sharing plan,
or retirement plan.

        (c)  Business Expenses.  Employer will reimburse Employee for
             -----------------
reasonable  out-of-pocket expenses incurred by him, in accordance with
Employer's policies as in effect from time to time, for entertainment, travel,
lodging and similar items in connection with the business of Employer, provided
that Employee properly accounts for and promptly submits appropriate supporting
documentation with respect to all such expenses.

        (d)  Discretionary Bonus.  The Board of Directors of Employer may, in
             -------------------
its sole and absolute discretion, award an annual bonus to Employee. Such
bonus shall be determined based on Employee's performance and the performance
of Employer for the respective twelve (12) month periods ending at fiscal year
end 12/31/00, 12/31/01, 12/31/02, 12/31/03 and 12/31/04. The decision to award
a bonus is within the sole discretion of the Board of Directors of Employer,
and Employer has absolutely no obligation to award a bonus to Employee.
Furthermore, the decision to award a bonus to Employee in any particular year
shall in no way obligate Employer to award a bonus to Employee in any other
year.

        (e)  Stock Options.  Employee acknowledges receipt of options under
             -------------
Employer's  Stock Plans.  The options vest ratably at 20% per year on the
anniversary of issuance, however all options that have not previously expired or
been terminated will become fully vested on the date on which (i) the Company
sells all or substantially all of its assets, (ii) the Company merges with
another entity in a transaction in which the Company is not the surviving
corporation, or (iii) any person or group of affiliated persons other than the
shareholders of Allin Corporation as of the date of this Agreement owns or
controls 40% or more of the Company.  Any or all of these occurrences are deemed
to be a "Change of Control".  At the sole discretion of Employer's management
and Board of Directors, additional options may be issued to Employee, however
Employer's management and Board of Directors are under no obligation to issue
Employee additional options.

        (f)  Annual Merit Review.  Annually, on or before November 1 of each
             -------------------

year, Employer will conduct an annual review of Employee's performance under
this Agreement and, if deemed appropriate, implement adjustments to this
Section 3 for such year.

        (g)  Severance Pay.  If Employee's employment is terminated By
             -------------
Employer, during the Employment Period, without cause, Employee shall receive
semi-monthly severance payments equal to the semi-monthly base salary payment
which Employee was receiving immediately prior to the termination, until the
earlier of (i) the one year anniversary of the date of termination, or (ii) the
date on which Employee obtains other full-time employment.  The expiration of
the Employment Period shall not entitle Employee to receive severance pay;
provided, however, that if any severance payments would otherwise have been
payable had this Agreement not expired, the expiration of this Agreement shall
not affect the payments called for by this Section 3(g).

If Employee's employment is terminated without cause in conjunction with, or
within one year of, a Change of Control, Employee shall receive, in addition to
severance payments as outlined in the immediately preceding paragraph, a bonus
in the amount of one times Employee's annual base salary at the time of
termination.  In addition, upon termination, any options to acquire shares of
Employer that have not previously expired or been terminated, will become fully
vested, and will remain exercisable for the original term of such option grants,
whether or not Employee remains in the employ of Employer.
<PAGE>

          (h) Liability as an Officer.  Employee will be covered by any
              ------------------------
directors and officers insurance policy procured by Employer.  Employee shall
also be entitled to the indemnification set forth in Employer's Bylaws with
respect to actions taken by officers and directors of Employer.

     Section 4.  Conditions of Employment.  As conditions of his employment
     ------------------------------------
and in consideration of his employment, Employee covenants and agrees as
follows:

        (a)  that, during the period during which Employee is employed
by Employer, he will devote his full time, services and attention and best
efforts to the performance of his duties and to the promotion of the business
and interests of Employer;

        (b)  that, during the period during which Employee is employed by
Employer, and for a period of eighteen (18) months thereafter, he will not,
without the prior written consent of the Board of Directors of Employer,
directly or indirectly, as a stockholder (except as a stockholder owning
beneficially or of record less than five percent (5%) of the outstanding shares
of any class of publicly traded stock of any issuer), or as an officer,
director, manager, member, employee, partner, joint venturer, proprietor or
otherwise, engage in, become interested in, consult with, lend to or borrow
from, advise or negotiate for or on behalf of, any business which is of the type
in which Employer or any affiliate or subsidiary of Employer engages during the
period during which Employee is employed by Employer and which Employer has not
permanently ceased to be engaged in at the time of termination of this
Agreement; provided that the prohibition contained in this subsection 4(b) shall
not apply to any business which Employer was engaged during the Employment
Period if, during the eighteen (18) month period thereafter, Employer
permanently ceases to be engaged in such business;

        (c)  that, during the period during which Employee is employed by
Employer, and for a period eighteen (18) months thereafter, he will not
solicit any customer of Employer or any customer of any affiliate or subsidiary
of Employer, directly or indirectly, for the purpose of enticing such customers
to do business with anyone other than Employer;

        (d)  that, during the period which Employee is employed by Employer,
and for a period of eighteen (18) months thereafter, he will not solicit (or
employ or cause to be employed other than by Employer) other employees of
Employer or any affiliate or subsidiary of Employer, directly or indirectly,
for the purpose of enticing them to leave their employment with Employer or
any affiliate or subsidiary of Employer;

        (e)  that, during the period during which Employee is employed by
Employer, and for a period of eighteen (18) months thereafter, he will make
full and complete disclosure of the existence of this Agreement and the content
of this Section 4 to all prospective employers with whom he may discuss possible
employment;

        (f)  that, he will refrain from directly or indirectly disclosing,
making available or  using or causing to be used in any manner whatsoever, any
information of Employer of a proprietary or confidential nature (including
without limitation, information regarding inventions, processes, formulas,
systems, plans, programs, studies, techniques, "know-how," trade secrets, income
or earnings, tax data, customer lists and contracts to which Employer is a
party, but excluding any such information which may be in the public domain
through proper means) and, upon termination of his employment, such information,
to the extent that it has been reduced to writing (including any and all copies
thereof), together with all copies of all forms, documents and materials of
every kind, whether confidential or otherwise, shall forthwith be returned to
the Employer and shall not be retained by Employee or furnished to any third
party, either by sample, facsimile or by verbal communication;

        (h)  that, he will refrain from any disparagement, direct or indirect,
through innuendo or otherwise, of Employer or any of its employees, agents,
officers, directors, shareholders or affiliates;
<PAGE>

        (i)  that, during the period during which Employee is employed by
Employer, he will not, without the prior written consent in each case of the
Board of Directors of Employer: (i) participate actively in any other business
interests or investments which would conflict with his responsibilities under
this Agreement, or (ii) borrow money from, or lend to, customers (except those
commercial institutions whose business it is to lend money) or individuals or
firms from which Employer or any affiliate or subsidiary of Employer buys
services, materials, equipment or supplies, or with whom Employer or any
affiliate or subsidiary of Employer does business;

        (j)  that, during the Employment Period, he will not, without the
prior written consent in each case of the Chief Executive Officer or the
Board of Directors of Employer (i) exchange goods, products or services of
Employer in return for goods, products or services of any individual or firm or
(ii) accept gifts or favors from any outside organization or agency which,
individually or collectively, may cause undue influence in his selection of
goods, products or services for Employer;

        (k)  that, after the termination of his employment, he will not secure,
or attempt to secure, from any employee or former employee of Employer
or any affiliate or subsidiary of Employer, any information relating to Employer
or any affiliate or subsidiary of Employer or their business operations; and

        (l)  that he will promptly and voluntarily advise the Board of
Directors of Employer of any activities which might result in a conflict of
interest with his duties to Employer hereunder, and, further, will make such
other and further disclosures as Employer may reasonably request from time to
time.

     Employee represents and warrants to Employer that, notwithstanding the
operation of the covenants contained in this Section 4, upon the termination of
his employment hereunder, Employee will be able to obtain employment for the
purpose of earning a livelihood.

     Section 5.  Injunctive Relief.  Because the services to be performed
     -----------------------------
by Employee hereunder are of a special, unique, unusual, confidential
extraordinary and intellectual character which character renders such services
unique and because Employee will acquire by reason of his employment and
association with Employer an extensive knowledge of Employer's trade secrets,
customers, procedures, and other confidential information, the parties hereto
recognize and acknowledge that, in the event of a breach or threat of breach by
Employee of any of the terms and provisions contained in Section 4 or Section 7
of this Agreement, monetary damages alone to Employer would not be an adequate
remedy for a breach of any of such terms and provisions.  Therefore, it is
agreed that in the event of a breach or threat of a breach of any of the
provisions of Section 4 or Section 7 of this Agreement by Employee, Employer
shall be entitled to an immediate injunction from any court of competent
jurisdiction restraining Employee, as well as any third parties including
successor employers of Employee whose joinder may be necessary to effect full
and complete relief, from committing or continuing to commit a breach of such
provisions without the showing or proving of actual damages.  Any preliminary
injunction or restraining order shall continue in full force and effect until
any and all disputes between the parties to such injunction or order regarding
this Agreement have been finally resolved.  Employee hereby agrees to pay all
costs of suit incurred by Employer, including but not limited to reasonable
attorneys' fees, in obtaining any such injunction or order.  Employee hereby
waives any right he may have to require Employer to post a bond or other
security with respect to obtaining or continuing any such injunction or
temporary restraining order and, further, hereby releases Employer, its
officers, directors, employees and agents from and waives any claim for damages
against them which he might have with respect to Employer obtaining in good
faith any injunction or restraining order pursuant to this Agreement.

     Section 6.  Absence of Restrictions. Employee hereby represents and
     -----------------------------------
warrants that he has full power, authority and legal right to enter into this
Agreement and to carry out his obligations and duties hereunder and that the
execution, delivery and performance by Employee of this Agreement will not
violate or conflict with, or constitute a default under, any agreements or other
understanding to which Employee is a party or by which he may be bound or
affected, including but not limited to, any order, judgment or decree of any
court or governmental agency.
<PAGE>

     Section 7.  Patents and Inventions.  Employee will promptly submit to
     ----------------------------------
Employer written disclosures of all inventions, improvements, discoveries and
new ideas, relating to Employer's business, whether or not patentable
(hereinafter called "Inventions"), which are made or conceived by Employee,
alone or jointly with others, during the period during which Employee is
employed by Employer.  Title to all such Inventions that shall be within the
existing or contemplated scope of Employer's business at the time such
Inventions are made or conceived or which result from or are suggested by any
work Employee or others may do for or on behalf of Employer, together with such
patent, patents or other legal protection as may be obtained thereon in the
United States of America and all foreign countries, shall belong to Employer.
Employee will assign any rights or interest in such title to Employer, and upon
the request of Employer, will at any time during the period during which
Employee is employed by Employer and after termination of Employee's employment
for any reason, execute all proper papers for use in applying for, obtaining,
maintaining and enforcing such patents or other legal protection as Employer may
desire and will execute and deliver all proper assignments thereof, when so
requested, without remuneration but at the expense of Employer.

     Section 8.  General.
     ---------   -------

        (a)  Interpretation.  If the provisions of subsections 4(b), 4(c) or
             --------------
4(d) of this Agreement should be held to be invalid, illegal or unenforceable by
a court of competent jurisdiction because of time limitation or geographical
area therein provided, such provisions shall nevertheless be effective and
enforceable for such period of time and/or such geographical area as may be held
to be reasonable by such court.  Any provision of this Agreement that is
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without invalidating or rendering unenforceable the remaining
provisions of this Agreement, any such invalidity, illegality or
unenforceability shall not, of itself, affect the validity, legality or
enforceability of such provision in any other jurisdiction.

        (b)  Notices.  In any case where any notice or other communications
             -------
is to be given or made pursuant to any provision of this Agreement, such
notice or communication shall be deemed to be delivered when actually received
on the date specified in the return receipt for a notice or communication
mailed by registered or certified mail, postage prepaid, addressed as follows:

                    If to Employer:
                    --------------

                    Allin Corporation
                    381 Mansfield Avenue
                    Suite 400
                    Pittsburgh, PA 15220
                    Attention:   Mr. Richard W. Talarico

                    with copies to:

                    Bryan D. Rosenberger, Esq.
                    Eckert Seamans Cherin & Mellott
                    600 Grant Street, 44th Floor
                    Pittsburgh, PA 15219

                    If to Employee:
                    --------------

                    Mr. Dean C. Praskach
                    2516 Clubhouse Drive
                    Wexford, PA 15090
<PAGE>

or such other address or addresses as any party may specify by notice to the
other party given as herein provided.

        (c)  Headings.  The headings in this Agreement are inserted for
             --------
convenience and identification and in no way describe, interpret, define or
limit the scope, extent or intent of this Agreement or any provision hereof.

        (d)  No Presumption on Interpretation.  Nothing herein shall be
             --------------------------------
construed more strongly against or more favorably toward either party by reason
of either party having drafted this Agreement or any portion hereof.

        (e)  Binding Effect.  This Agreement shall be binding upon, and
             --------------
inure to the benefit of, the parties hereto and their respective heirs,
beneficiaries, executors, administrators, personal representatives, successors
and permissible assigns.

        (f)  Integration.  This Agreement constitutes and contains the entire
             -----------
Agreement and understanding between the parties with respect to the
subject matter hereof and supersedes any and all prior agreements, if any,
understandings and negotiations relating thereto.  No promise, understanding,
representation, inducement, condition or warranty not set forth herein has been
made or relied upon by any party hereto.

        (g)  Waivers; Modification.  This Agreement, or any provision hereof,
             ---------------------
may be amended, supplemented or modified only by a writing signed by both
parties and may be waived only by a writing signed by the party to be bound
thereby. A written waiver of any provision shall be valid only in the instance
for which given and shall not be deemed to be a continuing waiver or construed
as a waiver of any other provisions.

        (h)  Governing Law.  This Agreement shall be construed in accordance
             -------------
with and governed in all respects by the laws of the Commonwealth of
Pennsylvania (without giving effect to the conflicts of laws provisions
thereof).

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

                        ALLIN CORPORATION

                        By:  /s/ Richard Talarico
                           -----------------------------
                                 Richard Talarico
                                 Chairman

WITNESS:

/s/ Denise Smith            /s/ Dean C. Praskach
------------------------   -----------------------------
                                 Dean C. Praskach<PAGE>

                                                                    EXHIBIT 10.5

                              Licensing Agreement

                                    between

F.Hoffmann-La Roche Ltd, Grenzacherstrasse 124, CH-4070 Basel, Switzerland
("Roche Basel")

                                      and

Syntex (U.S.A.) Inc., a Delaware corporation, through its Roche Bioscience
division, 3401 Hillview Avenue, Palo Alto, California 94304, USA ("Roche
Bioscience"), both, Roche Basel and Roche Bioscience jointly called ("Roche")

                                on the one hand

                                      and

Pozen Inc., 6330 Quadrangle Drive, Suite 240, Chapel Hill, NC 27514, USA
("Pozen")

                               on the other hand

Whereas, Roche has certain patent rights (Roche Patents, as defined below) and
know how (Roche Know-how, as defined below) covering *****, a 5-HT2B receptor
antagonist being evaluated by Roche for the prophylactic treatment of migraine

Whereas, Pozen desires to be granted an exclusive license with the right to
sublicense to ***** and any pharmaceutical dosage form that includes ***** under
the Roche Patents and Roche Know-how in the Field throughout the Territory;

Whereas, Roche is willing to grant Pozen such license rights;

Now, therefore, in consideration of the foregoing recitals and the mutual
covenants, benefits and obligations set forth herein, Pozen and Roche agree as
follows:

     1.    Definitions

     1.1.  "Accounting Period" means a calendar half-year commencing on January
           1 and July 1, respectively.

     1.2.  "Adjusted Gross Sales" means the gross sales of Products to Third
           Parties less deductions for returns (including withdrawals and
           recalls), rebates (price reductions, including Medicaid, performance
           based and similar types of rebates e.g. chargebacks), volume
           (quantity) discounts granted at the time of invoicing, sales taxes
           and other taxes directly linked and included in the gross sales
           amount. Where

                                 page 1 of 35
<PAGE>

        (i)    a Product is sold together with other goods (a "combined
               transaction") with or without a separate price for the Product;
               or

        (ii)   the consideration for a Product shall include any non-cash
               element; or

        (iii)  a Product is transferred in any manner other than as an invoiced
               sale,

       the Adjusted Gross Sales applicable to the quantity of such Product in
       any such transaction shall be deemed to be the average Adjusted Gross
       Sales for such quantity of such Product for all transactions of Product
       other than those in (i), (ii) or (iii) made at the time of such
       transaction in the country in which the transaction occurred.

       In the case of Roche or a Roche licensee, Adjusted Gross Sales of the
       Product will be as computed in the central Roche sales statistics for the
       countries concerned or a Roche licensee's comparable measure of sales, as
       applicable. In the case of Pozen, Adjusted Gross Sales of the Product
       will be based on the sales statistics of Pozen and its sublicensees.

1.3.   "Affiliated Company" means

       a)  an organization more than fifty percent (50%) of the voting stock of
       which is owned and/or controlled directly or indirectly by either party
       to this Agreement;

       b)  an organization which directly or indirectly owns and/or controls
       fifty percent (50%) or more of the voting stock of either party of this
       Agreement; or

       c)  an organization which is directly or indirectly under common control
       with either party to this Agreement through common share holdings.

       The term "Affiliated Company" in connection with Roche shall not include
       Genentech Inc., 1 DNA Way, South San Francisco, CA 94080, USA, unless
       Genentech meets the above definition of an Affiliated Company and Roche
       opts for such inclusion by written notice to Pozen.

                                 page 2 of 35
<PAGE>

     1.4.  "Agreement" means the present agreement together with all amendments,
           appendices and schedules.

     1.5.  "Compound" means a 5-HT2B receptor antagonist having the chemical
           name ***** and further identified with the internal Roche number
           ***** including its salts, isomers, metabolites and hydrates.

     1.6.  "Development Costs" means the direct and indirect costs incurred by
           Pozen in any country in the Territory after the Effective Date in
           order to obtain marketing approval in a country in the Territory that
           are specifically attributable to the development of Products and are
           consistent with activities as set out in the Development Plan.
           Development Costs include Direct Costs and Indirect Costs incurred to
           obtain the authorization to manufacture, formulate, fill, ship and/or
           sell a Product in commercial quantities in the Territory and include
           but are not limited to costs of: (i) studies on the toxicological,
           pharmacokinetic, metabolic or clinical aspects of a Product, whether
           conducted internally or by individual investigators or consultants;
           (ii) manufacturing process development and scale up, (iii)
           qualification lots; (iv) preparing, submitting, reviewing or
           developing data or information necessary for the purpose of
           submission to the FDA in order to obtain and/or maintain approval of
           a Product in the Territory; (v) data management; (vi) statistical
           designs and studies; (vii) document preparation and other
           administration expenses associated with the clinical testing program.

           Development Costs shall not include patent costs, pricing costs,
           reimbursement costs, pre-registration marketing costs (e.g. trademark
           costs, advertising agency selection costs, pre-marketing studies),
           post-registration clinical and marketing studies (except for Phase IV
           Studies required for registration) that are not conducted as part of
           the Development Plan.

           In determining Development Costs, Pozen will use its applicable
           project cost system with the purpose of tracking costs as much as
           possible on a product indication-by-product indication basis.

           Pozen shall maintain, and cause the Third Parties acting for its
           account to maintain, books of account and complete and accurate
           records pertaining to the Development Costs in sufficient detail to
           permit Roche to confirm the correct calculation of Development Costs.

     1.7.  "Development Plan" means the development plan which is attached
           hereto as Appendix A and is hereby made a part of this Agreement.

     1.8.  "Development Program" means all normal and customary activities
           undertaken following the Effective Date by or on behalf of Pozen or
           Roche, independently or jointly, as the case may be, that are
           reasonably undertaken to assure for the timely development of the
           Compound and/or Products.

                                 page 3 of 35
<PAGE>

     1.9.   "Direct Costs" means the direct costs of developing or manufacturing
            Products, including, but not limited to: (i) direct labor (including
            fringe benefits), (ii) direct materials (excluding any drug
            substance or other materials supplied by Roche free of charge for
            use in manufacturing Products), (iii) direct Product testing costs,
            and (iv) Third Party contract costs undertaken to develop, test, or
            manufacture Products.

     1.10.  "Drug Substance" means the pure Compound in a powder or other
            physical form, agreed by Roche and Pozen ready for making any type
            of galenical formulation.

     1.11.  "Effective Date" means  September , 1999.

     1.12.  "FDA" means the United States Food and Drug Administration or an
            equivalent regulatory agency for countries outside of the United
            States.

     1.13.  "Field" means human medicinal use (other than diagnostic use) for
            any indication other than ***** provided, however, that Field shall
            include the ***** indications beginning on July 1, 2002.

     1.14.  "First Commercial Sale" means the first sale to a Third Party for
            use or consumption of a Product in a country after any required pre-
            marketing approval and, where applicable, pricing approval has been
            granted by the appropriate regulatory authorities of such country;
            provided, however, that no non-commercial sale or sale to an
            academic or not-for-profit organization for research purposes only
            shall be deemed a First Commercial Sale.

     1.15.  "Indirect Costs" means the indirect costs of developing or
            manufacturing Products, including, but not limited to: items treated
            as "overhead" which are allocated to development or manufacturing
            activities based on a space-occupied, headcount or other activity
            based accounting method and shall specifically include costs of
            items such as (a) indirect labor and materials, (b) occupancy, (c)
            payroll and purchasing functions, (d) information systems, (e)
            depreciation of property, plant and equipment to the extent (and
            only to the extent that) they are used in and allocable to the
            development or manufacturing process. Indirect Costs shall not
            include start-up and validation costs or idle or excess capacity
            charges, and shall not ***** percent (***** %) of the fully burdened
            Development Cost or Manufacturing Cost, as the case may be.

     1.16.  "IND" means Investigational New Drug application, the compilation of
            clinical and non-clinical data, including all amendments and
            additions, as described in Title 21,United States Code of Federal
            Regulations section 312.3 (21 C.F.R. ' 312.3) or comparable
            definitions in other countries, by which a party may conduct human
            studies of therapeutic compounds.

     1.17.  "Major Countries" means USA, France, Germany, Italy and the UK.

                                 page 4 of 35
<PAGE>

     1.18.  "Manufacturing Cost" shall mean the fully burdened manufacturing
            costs of Products shipped for clinical or commercial use and
            determined in accordance with generally accepted accounting
            principles as consistently applied by Pozen and shall include the
            Direct Costs and Indirect Costs, including royalties payable by
            Pozen to Third Parties relating to the manufacturing, formulation,
            and filling of the Product, for manufacturing or contracting for
            each stage of the manufacturing process of the Product shipped.
            Manufacturing Cost shall not include any costs associated with i)
            process development, assay development, scale-up, qualification lots
            and regulatory costs related to the manufacturing of the Product
            which shall be considered as Development Costs, ii) royalties
            payable by Pozen to Third Parties relating to the use or sale (but
            not the manufacturing, formulation, or filling) of the Product, or
            Products that have expired through the fault of Pozen.

     1.19.  "NDA" means a new drug or product license application filed with the
            FDA or any successor agency thereto to obtain marketing
            authorization in the USA, or the equivalent application in any other
            country or group of countries or jurisdiction other than the USA to
            obtain marketing authorization in or for that country or within that
            group of countries or for that jurisdiction.

     1.20.  "Net Sales" means Adjusted Gross Sales less a lump sum deduction of
            ***** percent (**%) of Adjusted Gross Sales for those sales-related
            adjustments that are not accounted for on a product-by-product basis
            (e.g. outward freights, transportation insurance, packing materials
            for dispatch of goods, custom duties, discounts granted later than
            at the time of invoicing, cash discounts and other direct expenses.
            If a Product is sold as a pharmaceutical preparation containing the
            Compound and one or more other pharmaceutically active agents
            ("Combination Product"), the Parties shall negotiate an appropriate
            royalty adjustment to reflect the relative significance of the
            Compound compared to the other pharmaceutically active agent(s).

     1.21.  "Phase II" means that portion of the clinical development program
            which provides for continued trials of a product on patients to
            establish dose ranging and first indication of efficacy of a product
            for the desired claims and indications, as more closely defined by
            the rules and regulations of the FDA and corresponding rules and
            regulations of other countries.

     1.22.  "Phase III" means that portion of the clinical development program
            which provides for the continued trials of a product on sufficient
            numbers of patients to establish the safety and efficacy of a
            product for the desired claims and indications, as more closely
            defined by the rules and regulations of the FDA and corresponding
            rules and regulations of other countries.

                                 page 5 of 35
<PAGE>

     1.23.  "Pozen Know-how" means any information and data concerning the
            manufacture of Compound and Products and the chemical, physical,
            pharmaceutical, toxicological, pre-clinical and clinical attributes
            of Compound and Product thereof elaborated by Pozen during the term
            of this Agreement. Pozen Know-how shall not include Roche Know-how.

     1.24.  "Pozen Patents" means

            a)  any patents, including applications for patents, owned or
            controlled by Pozen or which Pozen otherwise has the right to grant
            licenses under, relating to the Compound (including Products), the
            manufacture thereof, or the use thereof in the Field whether
            existing as of the Effective Date or arising thereafter;

            b)  all patents arising from said applications;

            c)  any additions, divisions, continuations, continuations-in-part,
            amendments, amalgamations, reissues and re-examinations of such
            applications or patents;

            d)  any confirmation, importation and registration patents thereof
            or therefore; and

            e)  any extensions and renewals of all such patents and patent
            applications, including supplementary protection certificates based
            on such patents or patent applications and administrative rights,
            e.g., so-called pipeline protection, in whatever legal form and by
            whatever legal title they are granted.

     1.25.  "Product" means any pharmaceutical preparation that contains or
            includes the Compound as an active ingredient.

     1.26.  "Product Option" means the exclusive option, as specifically set out
            in Article 2.2, for Roche to re-acquire all of the rights granted to
            Pozen under Article 2.1 below, as well as any data, documentation,
            Pozen Know-how, as defined in Article 1.22 and any additional
            intellectual property including but not limited to Pozen Patents,
            generated, owned or controlled by Pozen to the extent specifically
            related to Compound or a Product.

                                 page 6 of 35
<PAGE>

     1.27.  "Reasonable Efforts" means efforts at the level which a reasonably
            prudent pharmaceutical company would use in the development,
            registration and commercialization of a substantially equivalent
            product stemming from such company's own research. In the event that
            the original Development Plan for the migraine prophylaxis
            indication is delayed for more than ***** (**) months, such delay
            shall be deemed to demonstrate a prima facie lack of Reasonable
            Efforts by Pozen to develop Product for the indication, unless such
            delay is due to (i) circumstances outside the control of Pozen (but
            not circumstances related to Pozen's financial condition or changes
            in corporate strategy), or

            (ii) Pozen's good faith efforts to substantially enhance the
            commercial value of Product through additional work directed to
            enhance presentations or formulations, additional registration-
            oriented clinical trials, or the like.

            In the context of commercial marketing of a Product by a party,
            Reasonable Efforts shall mean such marketing activities and business
            practices that are intended to maximize the financial return from
            sales of Product to the extent consistent with activities and
            practices employed on substantially equivalent drug products being
            marketed by the party at the same stage of the marketing life cycle.

     1.28.  "Roche Know-how" means any information and data concerning the
            manufacture of Compound and Products and the chemical, physical,
            pharmaceutical, toxicological, pre-clinical and clinical attributes
            of Compound in the possession of Roche on the Effective Date. Roche
            Know-how shall not include Pozen Know-how.

     1.29.  "Roche Patents" means

            a)  any patents, including applications for patents, owned or
            controlled by Roche or which Roche otherwise has the right to grant
            licenses under, relating to the Compound (including Products), the
            manufacture thereof, or the use thereof in the Field whether
            existing as of the Effective Date or arising thereafter, including
            but not limited to, the patents listed in Appendix B to this
            Agreement (which Roche shall update from time to time, at the
            request of Pozen) which is attached hereto and is made a part
            hereof;

            b)  all patents arising from said applications;

            c)  any additions, divisions, continuations, continuations-in-part,
            amendments, amalgamations, reissues and re-examinations of such
            applications or patents;

            d)  any confirmation, importation and registration patents thereof
            or therefore; and

                                 page 7 of 35
<PAGE>

            e)  any extensions and renewals of all such patents and patent
            applications, including supplementary protection certificates based
            on such patents or patent applications and administrative rights,
            e.g., so-called pipeline protection, in whatever legal form and by
            whatever legal title they are granted.

     1.30.  "Territory" means all countries of the world.

     1.31.  "Third Party" means any person or legal entity other than Roche,
            Pozen, or an Affiliated Company of Roche or Pozen.

     1.32.  "USA" means the United States of America including Puerto Rico and
            its other territories and possessions.

     1.33.  "Valid Claim" means a claim of any issued and unexpired patent that
             has not been disclaimed, revoked or held unpatentable, invalid or
             unenforceable by an unappealable final decision of a court or other
             governmental agency of competent jurisdiction.

     2.      Scope of Agreement

     2.1.    License to Pozen

             2.1.1.  Roche hereby grants to Pozen a royalty-bearing exclusive
                     license to make, have made, use, sell, offer for sale and
                     import Compound and Product under the Roche Patents and
                     Roche Know-how in the Field throughout the Territory.
                     Following the expiration of Roche's Product Option, but not
                     before, the license to Pozen shall include the right to
                     sublicense. Pozen shall notify Roche of the identity of any
                     sublicensee and the territorial extent of the sublicense
                     within thirty (30) days from the date of any sublicense
                     agreement. Nothing contained in this Agreement shall be
                     construed to convey any rights or proprietary interest in
                     Compound or Product to either party except as expressly
                     provided for in this Agreement.

             2.1.2.  Roche will provide to Pozen, at no additional charge to
                     Pozen, all Drug Substance that is available to Roche on the
                     Effective Date on an as-is basis as further specified in
                     Article 6 and Appendix C. Roche warrants that the drug
                     substance provided by Roche will meet the manufacturing
                     control specifications set out in Roche's INDs for the
                     Compound so as to permit use by Pozen in its clinical
                     trials.

                                 page 8 of 35
<PAGE>

          2.1.3.  Pozen, either by itself or through agreements with Third
                  Parties, provided such Third Parties are performing services
                  on behalf of Pozen (e.g. Contract Research Organizations),
                  shall undertake Reasonable Efforts, at no cost to Roche (but
                  subject to Art. 3.2.1(b) and 3.2.2 credits to be allowed to
                  Pozen), to develop, register and market Compound for use in
                  the Field in at least each of the Major Countries in
                  accordance with the Development Plan. The Development Plan
                  includes a trial in which ***** which trial is designed to be
                  completed at the beginning of the Phase III Product Option
                  period (described below) to provide Roche with ***** data. Any
                  modifications to the Development Plan which are material will
                  require the written notification to Roche, including but not
                  limited to, any delays in the Development Plan of ******
                  months or increases in the Development Plan of ******percent
                  (**%) or more beyond the original estimated costs. Pozen will
                  inform Roche, in writing, on the results of its development
                  and registration activities at least every six months.

                  Roche shall have no obligation to perform any work (e.g.
                  research, development or manufacturing work), with the
                  exception of that work described in Article 6 below, for
                  Pozen. Should Pozen wish to have Roche perform certain work
                  hereunder, it shall be in the sole discretion of Roche to
                  decide whether such work will be performed by Roche. If Roche
                  agrees to perform such work, Roche shall provide Pozen with a
                  cost estimate and Pozen shall decide in writing whether to
                  accept the estimated costs under the specified payment terms
                  prior to the performance of any work. Each party shall appoint
                  a designee as contact person with the other party.

          2.1.4.  Pozen and its permitted licensees shall have the right to
                  manufacture or have manufactured the Compound and Products and
                  shall undertake such manufacture as required to meet Pozen's
                  obligations under the Development Plan.

          2.1.5.  Pozen and its permitted licensees shall have the right to
                  commercialize Products under its own trademark or under
                  trademarks owned by Pozen licensees if Roche does not exercise
                  its Product Option.

                                 page 9 of 35
<PAGE>

          2.1.6.  If Roche does not exercise its Product Option, and neither
                  Pozen nor a Pozen permitted licensee commences development of
                  a Product (i.e. doses a patient enrolled in a clinical trial)
                  in ***** within one year following the delivery to Roche of
                  the report required by Article 2.2.1(b), all rights granted by
                  Roche to Pozen under this Agreement shall be terminable by
                  Roche with respect to ******. Such termination with respect to
                  ***** shall take effect if, after receipt of written notice of
                  such termination from Roche, Pozen fails within ninety (90)
                  days from the date of such notice to commence development of a
                  Product (i.e. dose a patient enrolled in a clinical trial) in
                  ***** under a written development plan provided by Pozen to
                  Roche.

     2.2. Product Option of Roche

                  2.2.1.  Roche may exercise the Product Option with respect to
                  Compound only during two discrete periods by providing written
                  notice to Pozen as follows:

                  a)  a one-time Phase II exercise: within ninety (90) days
                  after delivery to Roche by Pozen of a summary report providing
                  all material information relating to safety and efficacy of
                  Phase II trials, on the Compound, including access (including,
                  to the extent available, electronic access in a format
                  compatible with Roche's internal systems) to all available
                  preclinical and clinical data upon which the summary report is
                  based; or

                  b)  a one-time Phase III exercise: within ninety (90) days
                  after delivery to Roche by Pozen of a summary report providing
                  all material information relating to safety and efficacy of a
                  pivotal Phase III efficacy trial on Compound including access
                  (including, to the extent available, electronic access in a
                  format compatible with Roche's internal systems) to all
                  available preclinical and clinical data upon which the summary
                  report is based, provided that the exercise period may be
                  extended, if necessary, to expire no fewer than sixty (60)
                  days after delivery to Roche by Pozen of a further summary
                  report providing all material information relating to safety
                  and efficacy of a ***** trial on Compound including access to
                  all available preclinical and clinical data upon which the
                  summary report for such ***** trial is based.

                  If at the time of issuing the summary report for such pivotal
                  Phase III clinical trial Pozen is conducting clinical trials
                  for any other indications, then Pozen shall provide to Roche
                  comparable access to any then-available preclinical and
                  clinical data for such other indications.

                                 page 10 of 35

<PAGE>

          2.2.2.  In accordance with the Development Plan, Pozen will complete
                  ***** trials of Compound for the ****** indication prior to
                  initiation of clinical trials for any other indication. In
                  accordance with the Development Plan, Pozen's ***** trial of
                  Compound will be for the ***** indication, unless Pozen has
                  made a determination, in light of Pozen's assessment of the
                  commercial potential for Compound as a human medicine, to
                  accelerate development of Compound for such other indication
                  such that Pozen's ****** clinical trial for Compound relates
                  to such non-migraine prophylaxis indication; provided,
                  however, that Pozen continues to pursue clinical development
                  for the migraine prophylaxis indication, i.e., the Development
                  Plan has not been amended as provided in Art. 2.3.2.

          2.2.3.  Where Pozen is allowed to first conduct a ***** trial for a
                  ****** indication, Roche shall have its one-time ******Product
                  Option with respect to clinical trials relating to such ******
                  indication.

          2.2.4.  If Roche exercises the Product Option, Pozen will, within
                  sixty (60) days of such exercise, (i) provide to Roche full
                  copies of all data and documentation related to the Product
                  and its manufacture, and (ii) deliver to Roche control of all
                  Drug Substance, intermediates and finished Product then in
                  Pozen's possession, free of additional charge.

          2.2.5.  In the event of Phase II exercise, Pozen will transfer to
                  Roche or its designee, free of additional charge, any and all
                  regulatory applications and approvals relating to Products. In
                  the event of Phase III exercise, Pozen shall be responsible
                  for any and all regulatory applications and approvals relating
                  to Products which shall subsequently be transferred to Roche.
                  Roche shall reimburse the reasonable costs incurred by Pozen
                  in order to transfer all regulatory applications and
                  approvals. These costs will include both Direct Costs and
                  Indirect Costs and fees and expenses for external services and
                  agencies. Roche and Pozen will agree on these costs.

          2.2.6.  Roche may, at its election, request that one or more Roche
                  employees conduct one or more visits to Pozen and its
                  manufacturers, at reasonable times and for reasonable
                  durations, during Product Option exercise period(s), at which
                  visit(s) Pozen will provide Roche access to all available data
                  related to the Development Program.

          2.2.7.  If Roche exercises its Product Option,

                  a)   the rights and obligations of Pozen set forth in Article
                       2.1.1 above shall terminate;

                  b)   Roche shall have the right to commercialize Compound
                       and/or Products under its own trademark;

                                 page 11 of 35
<PAGE>

                  c)   The parties shall use all Reasonable Efforts to assure a
                       smooth and orderly transition of all ongoing activities
                       to Roche;

                  d)   Pozen shall exclusively license to Roche in the Field any
                       Pozen Patents and/or other intellectual property to the
                       extent related to Compound or Products.

                  e)   Roche shall use Reasonable Efforts to develop, register
                       and market Compound in the Field at its own cost in at
                       least the Major Countries; and

                  f)   Roche shall further use all Reasonable Efforts to launch
                       any Product within ***** of NDA approval for such Product
                       in any Major Country and Japan.

     2.3.  Indications Other Than

           2.3.1.  The Development Plan foresees that Pozen will develop the
                   Product for the indication of *****. However, if Pozen wishes
                   to carry out any early stage research and development in the
                   Field in order to verify that a development program for the
                   Product for an indication other than ***** would be
                   worthwhile Pozen may do so. Such early stage research and
                   development shall be at no cost and expense to Roche, subject
                   to the remaining provisions of this Agreement.

           2.3.2.  If following such early stage research and development Pozen
                   wishes to carry out drug development activities on Compound
                   for any such other indication(s) in the Field it shall so
                   notify Roche and shall submit to Roche a proposed plan for
                   development of Product for such other indication(s) together
                   with details of Pozen's budgeted Development Costs. Pozen
                   shall be permitted to carry out development of Product for
                   such other indication(s). If Pozen proposes, and Roche
                   consents in writing, Pozen shall be entitled to amend the
                   Development Plan to delete the *** indication and substitute
                   therefor one of such other indications for which Pozen agrees
                   to proceed to develop in Phase III.

           2.3.3.  Notwithstanding any other provision of this Agreement, Pozen
                   shall not commence any research or development on Compound,
                   nor shall Pozen allow any Third Party to undertake such work,
                   related to ****** prior to July 1, 2002.

     3.    Financial conditions

     3.1.  Upfront payment to Roche

           Within thirty (30) days from the Effective Date, Pozen shall make to
           Roche a one-time non-refundable, and non-creditable payment of one
           million dollars (US$ 1,000,000).

                                 page 12 of 35
<PAGE>

     3.2.  Milestone payments to Roche

           3.2.1.  Subject to Article 2.2.2, in consideration of the license
                   granted by Roche to Pozen, Pozen will pay to Roche the
                   following:

                   a)   a royalty of **** percent (**%) on Pozen's Net Sales;
                   and

                   b)   ****** percent (**%) of

                        i)  all payments (e.g. downpayments, milestone payments
                        or royalties) owed Pozen by sublicensees minus

                        ii) Pozen's actual incurred and paid Development Cost.

          3.2.2.  Royalties shall be calculated on a country by country basis
                  and shall be paid with respect to Net Sales until (i) the last
                  date on which the making, having made, using, selling,
                  offering for sale or importing of Product in the given country
                  would, but for the rights granted hereunder, infringe a Valid
                  Claim of a Roche Patent, or (ii) ten (10) years after First
                  Commercial Sale of the Product, whichever is longer.

                  Where Pozen has taken a credit under Article 3.2.1b) against
                  all payments owed by sublicensees, for Pozen's Development
                  Costs incurred as of the date of such payment, the total of
                  all Development Costs shall be reduced by the amount of the
                  credit taken and such reduced amount shall be deemed the
                  remaining incurred Development Costs for the purposes of
                  taking further credits under this Article.

          3.2.3.  With regard to royalties due on Net Sales in the USA with
                  respect to a Product, if expiration of the Roche Patents that,
                  absent rights thereunder, would be infringed by the
                  manufacture or use of the Product in the USA takes place prior
                  to the tenth anniversary of the First Commercial Sale in the
                  USA of the Product, the royalty rate in the USA applicable to
                  the Product shall be reduced to **** percent (****) of Net
                  Sales. Reduction of the royalty rate shall begin from the date
                  of expiration of such Roche Patents and continue for the
                  remainder of the period of ten years after the First
                  Commercial Sale of the first Product in the USA.

    3.3.  Payments to Pozen if Roche exercises its Product Option

          3.3.1.  If Roche exercises its Product Option in Phase II, the
                  following non-refundable, non-creditable payments shall be due
                  by Roche:

                                 page 13 of 35
<PAGE>

               a)  upon exercise, a one-time payment of **** dollars (US$ ****);

               b)  upon the first NDA approval of the Product in a Major
                   Country, a one time payment of ***** dollars (US$ ****); and

               c)  a royalty of **** percent (****%) on Net Sales.

       3.3.2.  If Roche exercises the Product Option in Phase III, the following
               non-refundable, non-creditable payments shall be due by Roche:

               a)  upon exercise, a one-time payment of **** dollars (US$ ****);

               b)  upon the first NDA approval of the Product in a Major
                   Country, a one-time payment of **** dollars (US$ ****); and

               c)  a royalty of **** percent (****%) on Net Sales.

       3.3.3.  Royalties shall be calculated on a country by country basis
               and shall be paid with respect to Net Sales until (i) the last
               date on which the making, having made, using, selling, offering
               for sale or importing of Product in the given country would, but
               for the rights granted hereunder, infringe a Valid Claim of a
               Roche Patent or a Pozen Patent, or (ii)  ten (10)  years after
               First Commercial Sale of the Product, whichever is longer.

       3.3.4.  With regard to royalties due on Net Sales in the USA with
               respect to a Product, if expiration of the Roche Patents and the
               Pozen Patents that, absent rights thereunder, would be infringed
               by the manufacture or use of the Product in the USA takes place
               prior to the tenth anniversary of the First Commercial Sale in
               the USA of the Product, the royalty rate in the USA applicable to
               the Product shall be reduced as follows: a)  if Roche exercises
               its Product Option in Phase II, the royalty rate shall be reduced
               to **** percent (*%) of Net Sales and b) if Roche exercises its
               Product Option in Phase III, the royalty rate shall be reduced to
               **** percent (*%) of Net Sales.  Reduction of the royalty rate
               shall begin from the date of expiration of such Roche Patents and
               continue for the remainder of the period of ten years after the
               First Commercial Sale of the first Product in the USA.

                                 page 14 of 35
<PAGE>

           3.3.5.  If Roche exercises its Product Option, any royalty payable
                   for Compound or Product to any Third Party shall be paid by
                   Roche (with the exception of royalties related to
                   manufacturing, formulation, and filling of Product where
                   Product is manufactured by Pozen for Roche, which royalties
                   shall be paid by Pozen), provided that **** percent (**%) of
                   any such Third Party royalty for Compound or Product may be
                   offset against any royalty due to Pozen hereunder in a given
                   country in a calendar year, but in no event shall such
                   reduction exceed **** percent (*%) of Net Sales in such
                   country during such calendar year. If Roche does not exercise
                   its Product Option, any royalty payable for Compound or for a
                   Product to any Third Party shall be paid by Pozen, provided
                   that **** percent (**%) of any such Third Party royalty for
                   Compound or Product may be offset against any royalty due to
                   Roche hereunder in a given country in a calendar year.

     3.4.  Payment terms

           3.4.1.  All payments shall be made in United States dollars (US$).
                   Downpayments, milestone payments, and other payments with a
                   set due date for payment upon the occurrence of an act (e.g.,
                   the date of a regulatory approval) shall be made within
                   thirty (30) days after they become due. Royalties on Net
                   Sales shall be paid semi-annually within ninety (90) days
                   after the end of each Accounting Period.

           3.4.2.  Whenever for the purpose of calculating royalties, conversion
                   from any foreign currency shall be required, such conversion
                   shall be made as follows: when calculating the Adjusted Gross
                   Sales, the amount of such sales in foreign currencies shall
                   be converted into United States dollars, using the average
                   monthly rate of exchange at the time for such currencies as
                   retrieved from the Reuters System or some other source agreed
                   upon in writing by the parties for any particular country.

           3.4.3.  With each payment, the Royalty Paying Party (RPP) shall
                   deliver to the Royalty Receiving Party (RRP) a full and
                   accurate accounting for the applicable Accounting Period.
                   Each accounting shall include at least the following
                   information for each Product subject to royalty sold by the
                   RPP, its Affiliated Companies and licensees:

                   a)  by country, the total monthly Adjusted Gross Sales, in
                       local currency, the applicable rate of exchange into U.S.
                       dollars, and the total monthly Adjusted Gross Sales
                       converted into United States Dollars;

                   b)  the total theoretical amount payable to the RRP before
                       any royalty reduction or deduction;

                                 page 15 of 35
<PAGE>

                   c)  any royalty reduction under Articles 3.2.3 and 3.3.4, if
                       applicable;

                   d)  any royalty offsets under Article 3.3.5, if applicable.

           3.4.4.  All amounts owed under this Agreement shall be paid net of
                   all applicable taxes, fees, and other charges excluding only
                   taxes on a party's income. In particular, any tax required to
                   be withheld by the RPP under the laws of any country for the
                   account of the RRP (withholding taxes), shall be promptly
                   paid by the RPP for and on behalf of the RRP to the
                   appropriate governmental authority, and the RPP shall furnish
                   the RRP with proof of payment of such tax. Any such tax
                   actually paid on behalf of the RRP shall be deducted from
                   royalty payments due the RRP or promptly reimbursed to the
                   RPP if no further payments are due the RRP. The RPP shall use
                   reasonable efforts to assist the RRP in minimizing the
                   withholding taxes applicable to any payment made by the RPP
                   and in claiming tax refund at RRP's request.

           3.4.5.  If the fee reports and credits are not received as agreed to
                   above, the RPP shall pay to the RRP interest charges on the
                   outstanding payment at the then prevailing U.S. prime lending
                   rate (as quoted in the Wall Street Journal or comparable
                   financial publication as of the due date of such payment)
                   plus two percent (2%) provided that in no event shall such
                   rate exceed the maximum legal interest rate. Interest shall
                   be calculated from the date that payment was due until
                   actually received by the RRP.

                                 page 16 of 35
<PAGE>

     3.5.  Audit

           3.5.1.  At the RRP's expense, RRP has the right to engage RPP's
                   independent public accountant to perform, on behalf of RRP,
                   an audit, conducted in accordance with generally accepted
                   auditing standards in the USA, of such books and records of
                   RPP that are deemed necessary by RPP's independent public
                   accountants to report on Net Sales of the Product and
                   Development Costs for the Accounting Period or Accounting
                   Periods requested by RRP.

                   Such audit shall not be performed more frequently than once
                   per calendar year nor more frequently than once with respect
                   to records covering any specific period of time, upon at
                   least 30 (thirty) working days' prior written notice, and
                   shall be conducted during regular business hours in such a
                   manner as to not unnecessarily interfere with RPP's normal
                   business activities.

                   All information, data documents and abstracts herein referred
                   to shall be used only for the purpose of verifying royalty
                   statements or compliance with this Agreement, shall be
                   treated as the RPP's confidential information subject to the
                   obligations of this Agreement and need be retained no more
                   than nor more than five (5) years from the end of the
                   calendar year to which each shall pertain.

           3.5.2.  If such audit discloses an underpayment of more than ****
                   percent (*%) from the amount of royalties due, the RPP shall
                   bear the reasonable fees and expenses in connection with such
                   audit. Any sums found to be owing to either party as a result
                   of the inspection shall be settled within thirty (30) days
                   from receipt of the auditors' report, together with interest
                   charges at the then prevailing U.S. prime lending rate (as
                   quoted in the Wall Street Journal or comparable financial
                   publication as of the due date of such payment) plus ****
                   percent (*%) provided that in no event shall such rate exceed
                   the maximum legal interest rate. Interest shall be calculated
                   from the date the underpayment occurred until actually
                   received by the RRP. Further, if any audit discloses an
                   underpayment of more than **** percent (**), the RRP shall
                   have the right at RRP's expense to audit the books and
                   records of the RPP for all Accounting Periods during which
                   Net Sales were made subject to the record retention
                   limitations contained in Article 3.5.1.

                                 page 17 of 35
<PAGE>

     3.6.  Prohibited rates of Royalty

           If rates of royalties provided for herein are prohibited by law or
           regulation in any country where a Product is sold, the parties shall
           meet and agree on an adjustment to the royalty rates under Articles
           3.2 or 3.3 on the basis of the highest rate permitted in that country
           for a license of the type herein granted, provided that such rate is
           less than the highest rate applicable under Article 3.2 or 3.3.

     3.7.  Audit of sublicensing agreement and royalty payments

           If Pozen sublicenses a Product to a Third Party or provides contracts
           with a Third Party to develop a Product or the Compound, Roche has
           the right to perform and Pozen shall include in any such Third Party
           contract that Roche has the right to perform, an audit, to the same
           extent that such sublicensing agreement would provide that Pozen
           would have such a right to audit, of the sublicensing agreement and
           royalty payments between Pozen and the Third Party with a view to
           verifying Pozen's payment obligations to Roche under Article 3.2.1.
           At Roche's option, such an audit shall be performed in a similar
           fashion as described in Article 3.5.

                                 page 18 of 35
<PAGE>

    3.8.  Cost of material

          If Roche exercises its Product Option, Roche may require Pozen to
          assign to Roche any Third Party manufacturing contracts under which,
          absent Roche's option exercise, the Third Party would have supplied to
          Pozen all or a part of Pozen's requirements for Compound and for a
          Product.  If Pozen itself has developed capabilities for manufacturing
          all or part of its anticipated requirements of Compound or of the
          Product, then Roche, upon exercise of its Phase III Product Option,
          may require Pozen to provide Compound and Product to Roche (i) for a
          reasonable period of time to allow Roche to obtain alternative
          manufacturing capability, but not more than three (3) years after
          Roche's first launch of a Product in a Major Country, and (ii) to the
          extent of Pozen's then available capacity for manufacturing Compound
          or the Product, provided that in no event will Pozen be required to
          increase its then available capacity to meet Roche supply
          requirements.

          Pozen shall provide Product to Roche at ***** percent (**%) of Pozen's
          Standard Manufacturing Cost for Product, such Standard Manufacturing
          Cost to be determined by Pozen on an annual basis. Such Standard
          Manufacturing Cost for Product will consider yields, success factors
          (failures) and other pertinent data.  In any case, yield losses and
          failures which go beyond what was reasonably expected and included in
          the calculation of the standard cost shall remain the sole costs of
          Pozen.

          Pozen, at its own expense, agrees to instruct its independent
          accounting firm to verify to Roche the reasonableness of Pozen's
          determination of its Standard Manufacturing Cost. Notwithstanding the
          preceding, if after reviewing the information received from Pozen,
          Roche believes that an additional audit is appropriate to deal with an
          apparent unreasonableness, Roche shall have the right, by any
          independent public accountant or audit specialty firm reasonably
          acceptable to Pozen, employed by Roche and at Roche's own expense, to
          interview knowledgeable employees of Pozen and to examine and make
          notes of pertinent books and records of Pozen in order to deal with
          that unreasonableness. Pozen shall not unreasonably withhold
          acceptance of an independent certified public accountant appointed by
          Roche.  In the event that Pozen's Standard Manufacturing Costs must be
          adjusted downward in order to be reasonable, such adjustments shall be
          settled within thirty (30) days from the determination that the
          Standard Manufacturing Costs were not reasonable. If Pozen's Standard
          Manufacturing Costs must be adjusted downward based in part on the
          results of the additional audit by Roche in an amount of more than
          ***** percent (**%) from the original Standard Manufacturing Cost,
          then Pozen shall bear the reasonable fees and expenses in connection
          with such audit.

                                 page 19 of 35
<PAGE>

     4.   Patent prosecution
          ------------------

     4.1. Roche shall have the sole responsibility for the filing, prosecution
          and maintenance of the Roche Patents. Roche agrees to assign, at
          Pozen's cost, the Roche Patents to Pozen, should it no longer be
          interested in prosecuting or maintaining them and should Pozen ask for
          such an assignment.  Roche shall notify Pozen in writing not less than
          ninety (90) days prior to ceasing the prosecution or maintenance of
          any Roche Patent.

     4.2. Pozen shall have the sole responsibility for the filing, prosecution
          and maintenance of the Pozen Patents. Pozen agrees to assign, at
          Roche's cost, the Pozen Patents to Roche, should it no longer be
          interested in prosecuting or maintaining them and should Roche ask for
          such an assignment.  Pozen shall notify Roche in writing not less than
          ninety (90) days prior to ceasing the prosecution or maintenance of
          any Pozen Patent.

     4.3. Pozen shall notify Roche in writing of any infringement in the Field
          and Territory known to Pozen of the Roche Patents and shall provide
          Roche with all available evidence of such infringement.  Roche shall
          have the right, but not the obligation, to bring at Roche's sole
          expense and in its sole control an appropriate action against any
          person or entity infringing the Roche Patents with regard to the
          Compound and Product in the Field and Territory.  If Roche does not
          bring such action within ninety (90) days of written notification
          thereof by Pozen, Pozen shall have the right, but not the obligation,
          to bring such appropriate action at Pozen's sole expense and control
          except that Pozen may not settle the action or otherwise consent to an
          adverse judgment in such action that adversely affects the rights or
          interests of Roche, including issues of patent validity of Roche
          Patents, without the prior written consent of Roche. Where Pozen
          exercises its right to bring an action as provided in this Article,
          Roche agrees to join in such action whenever Roche would be a
          necessary party to the action.  The party not bringing an action shall
          be entitled to separate representation in such action by counsel of
          its own choice and at its own expense, but such party shall fully
          cooperate with the party bringing such action and shall in this case
          be considered a participating party.  All monies recovered upon the
          final judgment or settlement of any such action to enforce the Roche
          Patents shall be divided, after reimbursement of the reasonable
          expenses (including attorney's fees) of each participating party
          according to the relative monetary damage that they have incurred as a
          result of the infringement.

                                 page 20 of 35
<PAGE>

    4.4.  Roche shall notify Pozen in writing of any infringement in the Field
          and Territory known to Roche of the Pozen Patents and shall provide
          Pozen with all available evidence of such infringement.  Pozen shall
          have the right, but not the obligation, to bring at Pozen's sole
          expense and in its sole control an appropriate action against any
          person or entity infringing the Pozen Patents with regard to the
          Compound and Product in the Field and Territory.  If Pozen does not
          bring such action within ninety (90) days of written notification
          thereof by Roche, Roche shall have the right, but not the obligation,
          to bring such appropriate action at Roche's sole expense and control
          except that Roche may not settle the action or otherwise consent to an
          adverse judgment in such action that adversely affects the rights or
          interests of Pozen, including issues of patent validity of Pozen
          Patents, without the prior written consent of Pozen. Where Roche
          exercises its right to bring an action as provided in this Article,
          Pozen agrees to join in such action whenever Pozen would be a
          necessary party to the action.  The party not bringing an action shall
          be entitled to separate representation in such action by counsel of
          its own choice and at its own expense, but such party shall fully
          cooperate with the party bringing such action and shall in this case
          be considered a participating party.  All monies recovered upon the
          final judgment or settlement of any such action to enforce the Pozen
          Patents shall be divided, after reimbursement of the reasonable
          expenses (including attorney's fees) of each participating party
          according to the relative monetary damage that they have incurred as a
          result of the infringement.

     5.   Secrecy obligations
          -------------------

     5.1. Both Pozen and Roche agree to keep in strict confidence all
          information and data received from the other party under the terms of
          this Agreement ("Confidential Information") and not disclose it to any
          Third Party. The parties agree to make use of Confidential Information
          only in connection with its rights and obligations under this
          Agreement.  The secrecy obligations shall not apply to the extent that
          such information and data must be submitted to local authorities for
          the purpose of registering the Product.  In addition, the secrecy
          obligations shall not apply to the extent that such information and
          data:

          a)    must be submitted to a governmental authority in compliance with
              a requirement of law; provided that the non-disclosing party is
              given notice sufficient to enable such party to limit or oppose
              such disclosure,

          b)    were known by the recipient party at the date of disclosure as
              demonstrated by written record, or

          c)    are public knowledge at the time of disclosure to the recipient
              party, or

          d)    become public knowledge at a later date without any fault of the
              recipient party, or

                                 page 21 of 35
<PAGE>

          e)    are independently developed by the recipient party without
              access to the confidential information of the disclosing party.

     5.2  Confidential Information shall only be disclosed to permitted
          sublicensees and Third Parties performing work on behalf of Pozen and
          shall agree to be bound by the same obligations of confidentiality to
          which Pozen is bound pursuant to this Agreement.

     6.   Transfer of material and data
          -----------------------------

     6.1. After the Effective Date to the extent Roche is not contractually
          prohibited from doing so, Roche will provide Pozen with the Roche
          Know-how not in Pozen's possession at the Effective Date.  In
          particular, within the time periods set out in Appendix D after the
          Effective Date, Roche shall (i) provide to Pozen full copies of all
          data and documentation related to the Compound and its manufacture
          including without limitation analytical methods and (ii) deliver to
          Pozen all Drug Substance as described in Appendix C which is not
          needed for clinical manufacturing (not to exceed ** kg), in accordance
          with Article 6.2 below, together with quality control data, then in
          Roche's possession. For a period of one hundred and twenty (120)
          daysfollowing the Effective Date (the "Technology Transfer Period"),
          Roche shall additionally make available for consultation to Pozen, on
          a reasonable basis, Roche personnel with knowledge of the Compound,
          including knowledge of Compound non-clinical and clinical properties
          and manufacturing know-how.  Such consultation shall not exceed a
          total of four man-weeks (but not more than three (3) man-weeks for
          manufacturing).

     6.2. Roche shall not later than ninety (90) days following the Effective
          Date, provide Pozen with the lesser of (i) amounts of Compound and
          Drug Substance necessary for clinical studies and the technical
          development and (ii) the amounts available at Roche at the Effective
          Date.  Roche may retain samples of Compound or Product provided to
          Pozen for its own records. As part of its obligation to provide
          available Compound and Product to Pozen, Roche shall take all
          reasonable steps required to recrystallize for use in clinical studies
          all Drug Substance available to Roche as of the Effective Date.

     6.3. Pozen will assume all responsibility for clinical manufacturing,
          clinical packaging, quality control on finished product, stability
          testing, storage and distribution of all Product and Compound provided
          by Roche in accordance with Article 6.2 and all other Product and
          Compound.

     6.4. Roche shall use Reasonable Efforts and shall undertake all necessary
          actions to have Pozen made the sponsor of record for the IND and
          otherwise transfer to Pozen any and all regulatory applications and
          approvals relating to the Compound or to Products as soon as
          practicable.

                                 page 22 of 35
<PAGE>

     7.    Term and Termination
           --------------------

     7.1.  The Agreement shall enter into force on the Effective Date.

     7.2.  The royalty provisions and other payment obligations hereunder shall
           survive any termination of the Agreement.

     7.3.  Until Roche has exercised the Product Option, Pozen may terminate the
           Agreement at any time without cause on one-hundred-and-eighty (180)
           days prior written notice. After Roche has exercised the Product
           Option, Pozen may only terminate this Agreement in accordance with
           Articles 7.5 and 7.6.

     In the event of termination under this Article 7.3 prior to completion of
           the Development Program by Pozen, Roche shall have the right to
           acquire or reacquire from Pozen any regulatory filings or data
           relating to Compound or Products; provided, however, that Roche shall
           reimburse Pozen for its Development Costs from the date of Pozen's
           notification of termination until the first to occur of (i) any
           subsequent notification to Pozen by Roche that Roche elects not to
           further develop a Product; (ii) any notification to Pozen by Roche
           that Roche elects to proceed with Compound or Product development and
           will assume responsibility for all of Pozen's ongoing Product
           development activities and expenses; or (iii) the conclusion of the
           180 day notice period.

     7.4.  After Roche has exercised the Product Option, Roche may terminate its
           development and commercialization activities for Compound at any time
           on one-hundred-and-eighty (180) days prior written notice to Pozen.
           In such case and upon request of Pozen (to be provided within the
           one-hundred-and-eighty (180) days termination period) all rights and
           obligations existing prior to Roche's exercising its Product Option
           (including the license grant to Pozen and the obligation by Pozen to
           pay milestone payments and royalties) shall apply again and the term
           Roche Know-how shall be amended to include all know-how resulting
           from Roche's development activities hereunder at that time. If Roche
           has assumed Pozen's manufacturing contract(s) with a Third Party
           pursuant to Article 3.8, Roche shall be solely responsible for its
           obligations under such contract unless otherwise agreed by Pozen for
           a period of **** (**) years.

                                 page 23 of 35
<PAGE>

    7.5.  Either party may terminate this Agreement with immediate effect if
          the other party does not cure a material breach of any of its
          obligations within ninety (90) days written notice of the non-
          breaching party. In the event of termination for cause, any vested
          rights of the terminating party, including license rights or options
          rights granted to the terminating party by the breaching party, shall
          survive termination.

          If Roche materially breaches any of its obligations under this
          Agreement during the first thirty (30) days following the Effective
          Date and Pozen decides to terminate this Agreement in accordance with
          the provisions of this Article 7.5, Roche shall return to Pozen all
          payments Roche received from Pozen under Article 3.1.

    7.6.  Either party may terminate this Agreement with immediate effect if the
          other party files for protection from creditors under the bankruptcy
          laws of any jurisdiction, or is dissolved, liquidated or bankrupt,
          provided that each party's financial obligations to the other party
          will survive termination under this Article 7.6.

    7.7.  In case of a termination of this Agreement for cause under Article 7.5
          all rights granted to the non-terminating party shall revert to the
          terminating party and any trademarks related to a Product will revert
          to the terminating party. In addition, if the Agreement is terminated
          by Pozen in accordance with Article 7.3 or by Roche in accordance with
          Articles 7.5 and 7.6, Roche shall have rights with respect to Pozen
          Know-how and Pozen Patents to the same extent as though Roche had
          exercised its Product Option under Article 2.2.

    7.8.  In case of termination under circumstances where one party or the
          other has the right to acquire or reacquire rights from the other
          party, both parties shall use all Reasonable Efforts to assure a
          smooth and orderly transition of all ongoing activities (e.g. know-
          how, registrations).

    7.9.  Articles 3, 4, 5, 8, 9, 10 and 11 shall survive any termination of
          this Agreement.

                                 page 24 of 35
<PAGE>

   8.    Miscellaneous Provisions

   8.1.  This Agreement, including the attachments and schedules, constitutes
         the full agreement of the parties with respect to the subject matter of
         this Agreement, and incorporates any prior discussions between them
         with respect to such subject matter.  This Agreement, including the
         attachments hereto, shall not be amended, supplemented or otherwise
         modified, except by an instrument in writing signed by duly authorized
         officers of the parties.

   8.2.  Any notice required or permitted to be given under this Agreement
         shall be in writing and shall be given in person, delivered by a
         nationally recognized overnight delivery service, sent by certified
         mail or by telefax whose receipt is confirmed by confirming telefax.
         The notice shall be addressed to each party as follows:

         F.Hoffmann-La Roche Ltd
         Grenzacherstrasse 124
         CH-4070 Basel, Switzerland
         Attention:  Corporate Law

         and

         Syntex (U.S.A.) Inc.
         3401 Hillview Avenue
         Palo Alto, California  94304
         Attention:  Legal Services Division
         and

         Pozen Inc.
         Suite 240
         6330 Quadrangle Drive
         Chapel Hill, NC 27514, USA
         Attention:  President

         or to such other address as the addressee shall have last furnished in
         writing in accordance with this provision to the addressor.

                                 page 25 of 35
<PAGE>

   8.3.  This Agreement shall be assignable by Roche without the prior written
         consent of Pozen. This Agreement shall be assignable by Pozen with the
         prior written consent of Roche, which consent shall not be unreasonably
         withheld. Pozen may assign this Agreement to an Affiliated Company of
         Pozen without the prior written consent of Roche or to a successor
         entity in the event of a merger or sale of all or substantially all of
         Pozen's assets.  In the event of any assignment to a successor entity
         by Pozen, the assignee must expressly confirm in writing its acceptance
         of all the obligations that, in the absence of the assignment, would
         have been borne by Pozen, including the obligations of Pozen to
         exercise Reasonable Efforts as provided in this Agreement.

   8.4.  If any provision of this Agreement is held to be invalid, such
         invalidity shall not affect the validity of the remaining provisions.

   8.5.  If any provision of this Agreement is held by a court of competent
         jurisdiction to be unenforceable because it is invalid or in conflict
         with any law of any relevant jurisdiction, the validity of the
         remaining provisions shall not be affected, and the rights and
         obligations of the parties shall be construed and enforced as if the
         Agreement did not contain the particular provisions held to be
         unenforceable.

   9.    Publicity

         Any publication or press release made by a party hereto regarding the
         existence or the content of this Agreement as well as all matters
         related to the collaboration shall require the prior written approval
         of the other party, which approval shall not be unreasonably withheld.
         However, either party may, for the purpose of securing corporate
         financing (through equity, debt or otherwise) provide non-financial
         information concerning the Agreement in a required disclosure document,
         to the extent material to the party's financing efforts.

   10.   Governing law and arbitration

   10.1. This Agreement shall be governed, construed and interpreted in
         accordance with the laws of the State of New York.

   10.2. Any dispute, controversy, or claims arising under, out of or relating
         to this Agreement, its valid conclusion, binding effect, interpretation
         performance, breach or termination, including tort claims, shall be
         referred to and finally determined by arbitration in accordance with
         the Rules of Arbitration of the American Arbitration Association as in
         force at the time when initiating the arbitration. The arbitration
         tribunal shall consist of three arbitrators. The place of arbitration
         shall be New York City. The language to be used in the arbitration
         proceedings shall be English.

                                 page 26 of 35
<PAGE>

   10.3. The obligations of either party hereunder (except for monetary
         obligations) shall be excused during such period of time that such
         obligations cannot be carried out because of Acts of God and other
         events beyond the reasonable control of such party.

   11.   Representations, Warranties and Covenants

   11.1. All parties hereby represent and warrant that such party is duly
         organized and validly existing under the laws of the state or country
         of its incorporation and has full corporate power and authority to
         enter into this Agreement and to carry out the provisions hereof.

   11.2. All parties hereby represent and warrant that such party is duly
         authorized to execute and deliver this Agreement and to perform its
         obligations hereunder.

   11.3. All parties hereby represent and warrant that this Agreement is a
         legal and valid obligation binding upon it and is enforceable in
         accordance with its terms and further that the execution, delivery and
         performance of this Agreement by such party does not conflict with any
         agreement, instrument or understanding, oral or written, to which it is
         a party or by which it may be bound, and does not violate any law or
         regulation of any court, governmental body or administrative or other
         agency having authority over it.

   11.4. No party makes any representation or warranty with respect to the
         safety or usefulness of any Compound or Product.  EXCEPT AS EXPRESSLY
         SET FORTH IN THIS AGREEMENT, NO PARTY MAKES ANY REPRESENTATION OR
         WARRANTY TO THE OTHER PARTY OF ANY NATURE, EXPRESS OR IMPLIED,
         INCLUDING WITHOUT LIMITATION ANY WARRANTY OF VALIDITY, NON-
         INFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

   11.5. Each Party ("Indemnifying Party") hereby agrees to save, defend and
         hold the other party and its officers, directors, employees,
         consultants and agents ("Indemnified Party") harmless from and against
         any and all liabilities, expenses and losses, including reasonable
         legal expense and attorneys' fees ("Losses") incurred as a result of
         Third Party suits, claims, actions, or demands of personal injury or
         death resulting from the manufacture, development, use, handling,
         storage, sale or other disposition of Products by the Indemnifying
         Party, its Affiliated Companies or sublicensees except to the extent
         such Losses result from the gross negligence or willful misconduct of
         the Indemnified Party.  If a Party seeks indemnification under this
         Article, it shall inform the Indemnifying Party of a claim as soon as
         reasonably practicable after it receives notice of the claim, shall
         permit the Indemnifying Party to assume direction and control of the
         defense of the claim (including the right to settle the claim solely
         for monetary consideration), and shall cooperate as requested (at the
         expense of the Indemnifying Party) in the defense of the claim.

         Pozen hereby agrees to save, defend and hold Roche and its officers,

                                 page 27 of 35
<PAGE>

         directors, employees, consultants and agents harmless from and against
         any and all liabilities, expenses and losses, including reasonable
         legal expense and attorneys' fees incurred as a result of Third Party
         suits, claims, actions, or demands related to misappropriation by Pozen
         of any know-how or infringement by Pozen of any patent claiming the use
         of Compound for *****.  Further, in the event Pozen is found to be in
         breach of Pozen's limitations contained in this Agreement regarding the
         use of Compound for ******, then the foregoing indemnification shall
         apply to any breach of contract claims brought against Roche to the
         extent based entirely on actions by Pozen that are in breach of
         limitations contained in this Agreement regarding the use of Compound
         for *****.

  11.6.  Except with respect to Roche Patents and Roche Know-how relating to
         any use of Compound or Product for *****, for which Roche makes no
         representations or warranties and expressly excludes any implied
         representations and warranties,  Roche hereby represents and warrants
         to Pozen that to the best of Roche's actual knowledge as of the
         Effective Date:

         a)  each of the Roche Patents set out in Appendix B is valid and in
             full force and effect.

         b)  Roche owns, or has the right to use pursuant to valid and effective
             agreements, all the Roche Patents and Roche Know-how, and the
             consummation of the transactions contemplated hereby will not
             materially adversely alter or impair any such rights.

         c)  No litigation or claims are pending against Roche by any person
             with respect to the ownership or the use of any of the Roche
             Patents or Roche Know-how or challenging or questioning the
             validity or effectiveness of any license or agreement relating to
             the same, and the current use by Roche of the Roche Patents and
             Roche Know-how does not infringe upon or violate any patent,
             copyright, trademark, trade secret or other intellectual property
             rights of any Third Party.

         d)  No Roche Patent has been or is  currently the subject of an
             interference proceeding before the U.S. Patent Office.

         e)  No person or entity is presently selling or marketing a product
             which is covered by the Roche Patents, and the Roche Patents have
             not been challenged, infringed or threatened in any way.

         f)  All Roche Patents are currently in compliance with formal legal
             requirements (including payment of filing, examination and
             maintenance fees), and there is nothing known to Roche that would
             render the Roche Patents invalid or unenforceable.

                                 page 28 of 35
<PAGE>

         g)  Roche has not licensed any of the Roche Patents or Know-how to any
             Third Party, and no Third Party shall continue to have any right to
             use any of the Roche Patents or Know-how following the Effective
             Date.

         h)  Roche has provided to Pozen or will provide to Pozen the
             information set out in Appendix D during the Technology Transfer
             Period.

     ______________________________________

                                 page 29 of 35
<PAGE>

Basel, ................................, 1999    F.Hoffmann-La Roche Ltd

_________________________________

Palo Alto, ............................, 1999    Syntex (U.S.A) Inc.

_________________________________

Chapel Hill, .........................., 1999    Pozen Inc.

_________________________________

Appendix A  Pozen Development Plan

Appendix B  Roche Patents

Appendix C  Characterization and Availability of Drug Substance

Appendix D  Items Required by Pozen for Technology Transfer

                                 page 30 of 35
<PAGE>

Appendix A
Pozen Development Plan

"Month 0" shall commence at the start of recrystallization of drug substance.
In the event that Pozen does not commence manufacture of drug substance into
Product prior to October 31,1999, then the start of Month 0 shall be delayed by
the period of delay in the commencement of such manufacture beyond October 31,
1999, provided, however, that in no event shall Month 0 commence later than
sixty (60) days after shipment of the recrystallized drug substance to Pozen by
Roche.

                                 page 31 of 35
<PAGE>

Appendix B

Roche Patents of

Patent applications filed abroad, which include *****, are based on the US
priorities of Serial Nos. 60-018218/96 and 60-040377/97 filed on May 23, 1996
and March 10, 1997.  These applications have been applied for in the following
countries:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
Country                   Appl.dt.          Appl.no.          Grant dt           Patent no.            expiry
------------------------------------------------------------------------------------------------------------------
<S>                    <C>              <C>               <C>               <C>                   <C>
Argentina                   22.05.1997         970102176                                                22.05.2017
------------------------------------------------------------------------------------------------------------------
Australia                   14.05.1997          28978/97                                                14.05.2017
------------------------------------------------------------------------------------------------------------------
Brazil                      14.05.1997       PI9709599.0                                                14.05.2012
------------------------------------------------------------------------------------------------------------------
Canada                      14.05.1997           2255705                                                14.05.2017
------------------------------------------------------------------------------------------------------------------
Chile                       22.05.1997            970/97
------------------------------------------------------------------------------------------------------------------
China                       14.05.1997        97196018.6                                                14.05.2017
------------------------------------------------------------------------------------------------------------------
Colombia                    22.05.1997          97028097                                                22.05.2017
------------------------------------------------------------------------------------------------------------------
Croatia                     20.05.1997          P970275A                                                20.05.2017
------------------------------------------------------------------------------------------------------------------
Czech                       14.05.1997        PV 3803/98
------------------------------------------------------------------------------------------------------------------
Ecuador                     22.05.1997           2134/97                                                22.05.2017
------------------------------------------------------------------------------------------------------------------
Europe                      14.05.1997        97923071.1                                                14.05.2017
(17 countries)
------------------------------------------------------------------------------------------------------------------
Hong Kong
------------------------------------------------------------------------------------------------------------------
Hungary                     14.05.1997          42345/98                                                14.05.2017
------------------------------------------------------------------------------------------------------------------
India                       14.05.1997       1014/MAS/97                                                14.05.2004
------------------------------------------------------------------------------------------------------------------
Indonesia                   23.05.1997          P-971727                                                23.05.2012
------------------------------------------------------------------------------------------------------------------
Israel                      14.05.1997            127056                                                14.05.2017
------------------------------------------------------------------------------------------------------------------
Japan                       14.05.1997         09-541482
------------------------------------------------------------------------------------------------------------------
Malaysia                    20.05.1997        PI 9702204
------------------------------------------------------------------------------------------------------------------
Mexico                      14.05.1997            989650
------------------------------------------------------------------------------------------------------------------
Morocco                     21.05.1997             24630                                                21.05.2017
------------------------------------------------------------------------------------------------------------------
New Zealand                 14.05.1997            332802                                                14.05.2017
------------------------------------------------------------------------------------------------------------------
Nigeria                     16.05.1997            144/97        30.06.1997  RP 12776                    16.05.2017
------------------------------------------------------------------------------------------------------------------
Norway                      14.05.1997          19985392                                                14.05.2017
------------------------------------------------------------------------------------------------------------------
Pakistan                    16.05.1997            324/97                                                16.05.2013
------------------------------------------------------------------------------------------------------------------
Peru                        20.05.1997            393/97                                  98-685        20.05.2017
------------------------------------------------------------------------------------------------------------------
Philippines                 21.05.1997             56514
------------------------------------------------------------------------------------------------------------------
Poland                      14.05.1997  P-330069                                                        14.05.2017
------------------------------------------------------------------------------------------------------------------
Russia                      14.05.1997          98123001                                                14.05.2017
------------------------------------------------------------------------------------------------------------------
Saudi Arabia                01.07.1997          97180191
------------------------------------------------------------------------------------------------------------------
</TABLE>

                                 page 32 of 35
<PAGE>

<TABLE>
<CAPTION>

------------------------------------------------------------------------------------------------------------------
<S>                    <C>              <C>               <C>               <C>                   <C>
Singapore                   14.05.1997         9805760.7
------------------------------------------------------------------------------------------------------------------
South Africa                16.05.1997           4281/97        28.01.1998               97/4281        16.05.2017
------------------------------------------------------------------------------------------------------------------
South Korea                 14.05.1997        EP97/02454
------------------------------------------------------------------------------------------------------------------
Taiwan                      09.05.1997          86106209                                                09.05.2017
------------------------------------------------------------------------------------------------------------------
Thailand                    12.05.1997             37272                                                12.05.2017
------------------------------------------------------------------------------------------------------------------
Turkey                      14.05.1997          98/02391                                                14.05.2017
------------------------------------------------------------------------------------------------------------------
USA                         23.05.1996      60-018218/96                                                23.05.1997
                            priority
------------------------------------------------------------------------------------------------------------------
USA                         10.03.1997      60-040377/97                                                10.03.1998
                            priority
------------------------------------------------------------------------------------------------------------------
USA                         20.05.1997         858964/97                                                20.05.2017
------------------------------------------------------------------------------------------------------------------
USA                         03.11.1997         08/963390
                            priority
------------------------------------------------------------------------------------------------------------------
USA                         21.11.1997         08/976418
                            priority
------------------------------------------------------------------------------------------------------------------
Uruguay                     22.05.1997             24560
------------------------------------------------------------------------------------------------------------------
Venezuela                   22.05.1997            935/97                                                22.05.2017
------------------------------------------------------------------------------------------------------------------
Yugoslavia                  14.05.1997  P-532/98                                                        14.05.2017
------------------------------------------------------------------------------------------------------------------
</TABLE>

                                 page 33 of 35
<PAGE>

Appendix C

Characterization and Availability of Drug Substance and Product

Active Pharmaceutical Ingredient

Chemical Name

 .  The production of ***** involves ***** synthetic steps and has been scaled-up
   to the 200 gallon (27 kg) level.

 .  All existing clinical trials materials, including matching *****, unless such
   existing clinical trials materials have expired in which case this amount
   will only include the non-expired clinical trials materials.

 .  Approximately *** kg of drug substance from 2 batches (*** kg for human use
   and *** kg for animal use).

 .  An additional ***** kg of drug substance to be made available in accordance
   with Article 6.2.

 .  Validated analytical methods for drug substance.

                                 page 34 of 35
<PAGE>

Appendix D

Items Required by Pozen for Technology Transfer

A.  Items to be delivered to Pozen within seven (7) business days from the
Effective Date:

 .  Current IND as it exists on the Effective Date for the indication *****.
 .  Current IND as it exists on the Effective Date for the indication *****.
 .  Any and all correspondence between Roche and the FDA or other regulatory
   authorities relating to Compound or Product.
 .  Complete batch records relating to the manufacture of Compound and Product.
 .  Analytical methods and validation reports for Drug Substance and Product.
 .  Stability data for Drug Substance (all lots) and Product (in all packaging
   configurations).
 .  The 'pre-formulation book.'

B. Items to be delivered to Pozen within thirty (30) days from the Effective
   Date:

 .  Formulation development report with animal data included.
 .  Drug metabolism package (preclinical metabolism and analytical procedures &
   validation).

                                 page 35 of 35

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