COLLABORATION AND LICENSE AGREEMENT

EXHIBIT 10.1

Execution Copy

COLLABORATION AND LICENSE AGREEMENT

by and between

POZEN INC.

and

ASTRAZENECA AB

August 1, 2006

TABLE OF CONTENTS

6.   MANUFACTURE OF POZEN PRODUCTS

EXHIBITS AND SCHEDULES

Exhibit A - Formulation Budget

Exhibit B - Initial U.S. Development Plan

Exhibit C -U.S. Development Timeline

Exhibit D - Initial ROW Development Plan

Exhibit E - ROW Development Timeline

Exhibit F - TPP Studies

Schedule 1.58 - Licensed Patents

Schedule 4.1.2 - IMS MAT Data

Schedule 6.1 - Initial POZEN Product Specifications

Schedule 8.4.1 - Segregated Royalty Example

Schedule 8.4.3 - Market Reduction Example

Schedule 10.1 - Disclosure Schedule

Schedule 10.7 - POZEN Subcontractors

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COLLABORATION AND LICENSE AGREEMENT

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

RECITALS

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

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

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

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

AGREEMENT

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

1.16    "Change of Corporate Control" means the occurrence of either of the following:

(a)    a Business Combination involving POZEN; or

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

1.54    "Joint Patent" means a Patent claiming a Joint Invention.

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

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

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

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

1.59    "Licensed Technology" means the Licensed Patents and the Licensed Know-How.

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

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

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

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

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

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

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

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

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

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

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

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(c)   

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

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

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

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

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

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

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

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

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

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

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

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

1.74    "******" has the meaning set forth in Section 6.1.3.

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

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

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

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

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

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

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

1.82    "Pre-Approval Failure" means any of the following:

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

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

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

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

(e)    TPP Failure;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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2.1    Establishment.

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

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

2.2    Membership and Procedures.

2.2.1    GPT.

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

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

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

2.2.2    JSC.

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

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

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

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

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

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2.3    Decision-Making.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

3.1    Development Plans.

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

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

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

3.2    Core Development Activities.

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

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

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

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

3.3    Additional Development Activities.

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

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

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

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

3.4    Development of Products by AstraZeneca. 

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

3.4.2    Substitution.  

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

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

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

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

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

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

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

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

3.7    Audits and Inspections.

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

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

4.1    Responsibilities; Diligence.

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

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

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

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

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

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

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

4.3    Interactions with Regulatory Authorities.

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

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

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

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

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

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

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

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

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

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

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

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

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

5.3    Performance; Diligence.

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

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

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5.4    Commercialization Plan.

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

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

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

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

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

5.7.1    Responsibilities. AstraZeneca will select all Product Trademarks for use on or in connection with POZEN Products, will be the sole owner of the Product Trademarks, will be responsible for the filing, prosecution, maintenance and defense of all registrations of the Product Trademarks, and will be responsible for the payment of any costs relating to filing, prosecution, maintenance and defense of the Product Trademarks.

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

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

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