exhibit10_8.htm


    Exhibit
      10.8

     

    

      Confidential
        Treatment has been requested for portions of this exhibit.  The copy
        filed herewith omits the information subject to the confidentiality
        request.  Omissions are designated as “ ***”.  A complete
        version of this exhibit has been filed separately with the Securities and
        Exchange Commission.


      AMENDMENT
        NO. 1 TO THE COLLABORATION AND LICENSE AGREEMENT

      


      This
        Amendment No. 1 to the
        Collaboration and License Agreement (this “Amendment”) is made effective
        as of September 6, 2007 (the “Amendment Effective
        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 may be referred
        to herein individually as a “Party,” or collectively as the
“Parties.”

      


      RECITALS

      


      
        	
                A.  

              	
                POZEN
                  and AstraZeneca entered into that certain Collaboration and License
                  Agreement, dated as of August 1, 2006, and effective as of September
                  7,
                  2006 (as amended hereby, the
                  “Agreement”).

              


      

      


      
        	
                B.  

              	
                POZEN
                  and AstraZeneca desire to amend the
                  Agreement.

              


      

      


      NOW,
        THEREFORE, in consideration of the
        mutual promises and covenants hereinafter set forth, the parties hereto agree
        to
        amend the Agreement as follows:

      


      Capitalized
        terms used herein have the
        respective meanings assigned to them as defined in this
        Amendment.  Other capitalized terms not otherwise defined herein have
        the meaning ascribed thereto in the Agreement.

      


      ARTICLE
        1 - AMENDMENTS

      


      1.1  Amendment
        to Section 1.77.  Section 1.77 of the Agreement is hereby
        amended and restated to read in its entirety as follows:

       

      ""***,  ***,  ***,
        and  *** Studies" means
        the  ***,  ***,  ***, and  *** Studies
        described in the U.S. Development Plan, each of which may be referred to
        individually (e.g., the "*** Study") to describe that particular study in
        the
        U.S. Development Plan."

       

      1.2  Amendment
        to Section 1.82(b).  Section 1.82(b) of the Agreement is
        hereby amended and restated to read in its entirety as follows:

       


      
        
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      "(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  *** Study
        or  *** Study shall not be counted toward such $***
        limit;"

       

      1.3  Amendment
        to Section 1.104.  Section 1.104 of the Agreement is hereby
        amended and restated to read in its entirety as follows:

       

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

       

      1.4  Amendment
        to Section 2.2.1(a).  Section 2.2.1(a) of the Agreement is
        hereby amended and restated to read in its entirety as follows:

       

      "(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.  Attendance of POZEN representatives at GPT meetings shall be
        agenda-driven, as determined in the sole discretion of
        AstraZeneca.  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 with 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."

       

      1.5  Amendment
        to Section 2.2.1(c).  Section 2.2.1(c) of the Agreement is
        hereby amended and restated to read in its entirety as follows:

       


      
        
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      "(c)           Meetings.  The
        GPT will hold meetings when called by the GPT Chair.  Meetings may be
        held in person or by means of telecommunication (telephone, video, or web
        conference).  Face-to-face GPT meetings that require POZEN attendance
        will be convened on an as-needed basis as mutually agreed by AstraZeneca
        and
        POZEN, but in any event, at least twice per annum.  The location of
        these meetings, will be based on business requirements and determined by
        mutual
        agreement between AstraZeneca and POZEN.  Following any GPT meeting,
        the GPT Chair will be responsible for preparing and issuing minutes of such
        meeting within fifteen (15) Business Days thereafter.  When POZEN has
        participated in the meeting, 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."

       

      1.6  Amendment
        to Section 3.3.3.  In Section 3.3.3 of the Agreement, the
        phrase "(including upon finalization of the scope of the  ***
        and  *** studies)" is hereby deleted and replaced with the
        following:

       

      "(including
        upon the finalization of the design of
        the  ***,  ***,  ***, and  *** Studies,
        and any agreed Additional New Studies referenced in Section 1.15 of this
        Amendment)" 

       

      1.7  Amendment
        to Section 8.2.  Section 8.2 of the Agreement is hereby
        amended and restated to read in its entirety with the following:

       

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

       


      
        
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                Milestone
                  Event

              	
                Milestone
                  Payment

              
	
                1. Execution
                  of
                  this Amendment.

              	
                $10,000,000

              
	
                2. Achievement
                  of  ***  ***, and achievement
                  of  ***.

              	
                $20,000,000

              
	
                3.
                  Notification by the FDA that it has accepted the first
                  U.S. NDA
                  submission for a POZEN Product in accordance with Section 4.1.1
                  (Regulatory Responsibilities Inside the U.S.).

              	
                $***

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

              	
                $***

              
	
                5.
                  *** of the first *** to  *** a  *** in
                  a  *** that includes  *** and/or  *** (if
                  available) at an  *** of the POZEN Product  *** than
                  the  *** of (a) the  *** for a  *** in
                  such  ***, or (b)  ***.

              	
                $***

              


      

      


      "POZEN
        shall notify AstraZeneca in writing upon the achievement of Milestones Events
        3
        and 4 above, and shall provide AstraZeneca with reasonable evidence that
        such
        Milestone Events have been achieved.  The payments due with respect to
        achievement of each Milestone Event shall be due and payable
        within  *** (***) days after (i) AstraZeneca receives notification
        from POZEN of the achievement of Milestone Events #3 and 4, and (ii) the
        occurrence of the Milestone Event #5.  The Parties agree that
        Milestone Event #2 above has been achieved as of the Amendment Effective
        Date,
        and that development Milestone Event #1 previously set forth in Section 8.2
        the
        Agreement will be deemed to have been achieved through the performance and
        achievement of Milestone Event #2 above.  Milestone Events #1 and 2
        shall be payable within  *** (***) Business Days after the execution
        of this Amendment.  The date on which any such milestone payment is
        due and payable in accordance with the preceding sentence is hereinafter
        referred to as the “Milestone Due
        Date.”


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

       

      1.8  Amendment
        to Section 8.3.  Section 8.3 of the Agreement is hereby
        amended and restated and replaced in its entirety with the
        following:

       

      “8.3  Sales
        Milestone Payments.  Subject to the terms and conditions of
        this Agreement, AstraZeneca will pay to POZEN the following one-time,
        non-creditable, non-refundable payments within thirty (30) days following
        the
        achievement of the corresponding events described in the table
        below.

       

      
        	
                Milestone
                  Event

              	
                Milestone
                  Payment

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

              	
                $***

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

              	
                $***

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

              	
                $***

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

              	
                $***

              


      

      


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

       

      1.9  Amendment
        to Section 8.4.1.  Section 8.4.1 of the Agreement is hereby
        amended and restated and replaced in its entirety with the
        following:

       

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

       

      
        	
                 

              	
                “(a)

              	
                ***%
                  of the portion of aggregate Net Sales of Products sold in the United
                  States during a calendar year.

              


      

       


      
        
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      "(b)           For
        Net Sales of Products sold outside the United States:

       

      "(i)           For
        Net Sales  ***:

       

      
        	
                 

              	
                “1.

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

              


      

       

      
        	
                 

              	
                "2.

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

              


      

       

      
        	
                 

              	
                "3.

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

              


      

       

                 “(ii)           For
        Net Sales  ***:

       

      
        	
                 

              	
                “1.

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

              


      

       

      
        	
                 

              	
                “2.

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

              


      

       

      
        	
                 

              	
                “(c)

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

              


      

       

      
        	
                 

              	
                “(i)

              	
                ***
                  percent (***%) of the total Net Sales of the  *** sold in any
                  country shall be added to the total Net Sales of the  *** (the
                  resulting amount being the “Segregated Net Sales”), and
                  the applicable royalty rates set forth in Section 8.41(a) and (b)
                  shall be
                  applied to the Segregated Product Net Sales (the resulting amount
                  being
                  the “Segregated Royalty
                  Amount”);

              


      

       

      
        	
                 

              	
                “(ii)

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

              


      

       

      
        	
                 

              	
                “(iii)

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

              


      

       


      
        
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                “(iv)

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

              


      

       

      1.10  Amendment
        to Section 8.4.3.  Section 8.4.3 of the Agreement is hereby
        amended and restated and replaced in its entirety with the
        following:

       

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

       

      1.11  Amendment
        to Section 12.9.  Section 12.9 of the Agreement is hereby
        amended and restated and replaced in its entirety with the
        following:

       

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

       

      1.12  Amendment
        to U.S. Development Plan.  The U.S. Development Plan of the
        Agreement is hereby amended and restated to read in its entirety as set forth
        in
Exhibit B attached hereto.

       

      1.13  Amendment
        to US. Development Plan Timeline.  The U.S. Development Plan
        Timeline of the Agreement is hereby amended and restated to read in its entirety
        as set forth in Exhibit C attached hereto.

       


      
        
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      1.14  Amendment
        to Exhibit F (TPP Profile and TPP Studies).  Exhibit F of the
        Agreement is hereby amended and restated to read in its entirety as set forth
        in
Exhibit F attached hereto.

       

      1.15  Amendment
        to Schedules 8.4.1 and 8.4.3.  Schedule 8.4.1 and Schedule
        8.4.3of the Agreement is hereby amended and restated to read in its entirety
        as
        set forth in Schedule 8.4.1 and Schedule 8.4.3 attached
        hereto.

       

      1.16  Termination
        of  ***.  Promptly after execution of this
        Amendment, POZEN will terminate ***  ***,
        including  ***.  POZEN shall terminate these activities in a
        professional manner and will use reasonable efforts to minimize termination
        expenses.  AstraZeneca will be responsible for the costs associated
        with the termination of such activities in accordance with Section 3.3.3
        (Expenses) of the Agreement.  Due to the extraordinary nature of these
        expenses, AstraZeneca will use commercially reasonable efforts to pay POZEN
        within  *** (***) days, but in any event within  *** (***)
        days, following receipt of invoice for such termination costs.  To
        allow rapid approval of the invoice, copies of vendor documentation of work
        performed and billing will be included in the invoice.

       

      1.17  New
        Studies.

       

      (a)  As
        promptly as practicable following the execution of this Amendment, the Parties
        agree to update the U.S. Development Plan to reflect  *** of
        the  ***, in a manner that is consistent with  *** in
        the  ***.  AstraZeneca will pay POZEN for its costs
        for  *** in accordance with Section 3.3.3 of the Agreement (Expenses);
provided, however, that in no event will  *** for
        the  *** in the  ***.  The Parties
        will  ***.  The Parties will use Diligent Efforts
        to  *** and to  *** in the  *** for
        the  *** within the  ***.

       

      (b)  To
        the
        extent that  *** in the  ***, the GPT will agree
        upon  *** of the  *** provided, however,
        that  *** for the  *** in the  ***, if any, may
        include, but would not be limited to,  *** and a  *** of
        the  *** of the  ***.  If the  *** in
        the  *** as an  ***.  AstraZeneca will
        conduct  *** for the  *** taking into account  ***
        to the  *** of
        the  ***.  Assessments  *** for this purpose will
        include  ***.  Representatives from POZEN will
        participate  *** to the  ***.  AstraZeneca will be
        obligated to  *** if the  ***.  In the event that
        AstraZeneca’s and POZEN’s representatives on the GPT  *** of a ***
        will be *** of the  *** to be  *** of
        the  ***.  AstraZeneca will conduct  ***, but in
        any event will  ***.

       

      (c)  ***
        of
        the  *** but if  ***.   *** of
        the  ***.  Promptly after execution of this Amendment by
        both Parties, the Parties will  *** for the  *** and
        will  *** after the  *** of
        the  ***.  The expenses  *** in
        the  ***.

       

      (d)  AstraZeneca
        will  ***, at AstraZeneca’s expense,  *** with
        the  *** of the  *** in the  *** of
        the  *** in the  ***.

       


      
        
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      1.18  Operating
        Principles.  Promptly after the Amendment Effective Date, the
        GPT will review, discuss and adopt new operating principles consistent with
        the
        draft principles attached hereto as Exhibit G that will guide the conduct
        of the GPT and clinical subteam meetings.  To the extent there is any
        conflict between the attached operating principles and the terms and conditions
        of the Agreement (as amended by this Amendment), then the Agreement will
        control.

       

      ARTICLE
        2 – REFERENCE TO AND EFFECT ON THE AGREEMENT

       

      2.1  Reference
        to Agreement.  Upon and after the
        effectiveness of this Amendment, each reference in the Agreement to “this
        Agreement,” “hereunder,” “hereof” or words of like import referring to the
        Agreement shall mean and be a reference to the Agreement as modified and
        amended
        hereby.

       

      2.2  Effectiveness
        of Agreement.  The amendments set forth
        above shall not be effective until execution and delivery of this Amendment
        by
        both parties.  Except as specifically amended above, the Agreement, as
        amended, is and shall continue to be in full force and effect and is hereby
        in
        all respects ratified and confirmed and shall constitute the legal, valid,
        binding and enforceable obligations of the parties.

       

      2.3  No
        Waiver.  The execution, delivery and
        effectiveness of this Amendment shall not operate as a waiver of any right,
        power or remedy of either Party under the Agreement, nor constitute a waiver
        of
        any provision of the Agreement.

       

      ARTICLE
        3 - MISCELLANEOUS

       

      3.1  Governing
        Law; Dispute Resolution.  Section 15.4
        of the Agreement governs any dispute arising out of or related to this
        Amendment.

       

      3.2  Notices.  All
        notices or other communications that are required or permitted hereunder
        will be
        made according to Section 15.5 of the Agreement.

       

      3.3  Headings.  The
        headings for each Article and Section in this Amendment have been inserted
        for convenience of reference only and are not intended to limit or expand
        on the
        meaning of the language contained in the particular Article or
        Section.

       

      3.4  Counterparts.  This
        Amendment may be executed in two (2) or more counterparts, each of which
        shall
        be deemed an original, but all of which together shall constitute one and
        the
        same instrument.

       

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

       

      


       


      
        
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      IN
        WITNESS WHEREOF, the Parties have executed this Amendment in duplicate
        originals by their duly authorized representatives as of the Amendment Effective
        Date.

       

      


       

      POZEN
        INC.

       

      


       

      
        	
                POZEN
                  INC.

              	 	
                ASTRAZENECA
                  AB

              
	 	 	 
	 	 	 
	
                By:

              	
                /s/
                  John R. Plachetka

              	 	
                By:

              	 /s/
                Olof Ljungstrand
	
                Print
                  Name:

              	John
                R. Plachetka, Pharm.D.	 	
                Print
                  Name:

              	 Olof
                Ljungstrand
	
                Title:

              	 Chairman,
                President and Chief Executive Officer	 	
                Title:

              	 Sr.
                Counsel, Manager Legal Department
                Molndal


      


      
        
          
          

        

        
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      (Exhibit
        A to Agreement Unchanged)

       

      


       


      
        
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      EXHIBIT
        B - U.S. DEVELOPMENT PLAN

      
        	
                Study
                  Number

              	
                Title

              	
                Endpoints

              	
                Design/Comment

              	
                Responsibility
                  to Conduct/Pay

              
	
                NONCLINICAL:

              
	
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                Study
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                Endpoints

              	
                Design/Comment

              	
                Responsibility
                  to Conduct/Pay

              
	
                PHASE
                  3

              
	
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      EXHIBIT
        C

      U.S.
        DEVELOPMENT PLAN TIMELINE   ***

      



      
        
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      EXHIBIT
        F

      TPP
        STUDIES

      


       

      
        	 	 	 	 	 	 	 	 	 
	
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      EXHIBIT
        G

      OPERATING
        PRINCIPLES

      


      GPT
        Meetings:

       

       ***.

      


      CPT
        Meetings:

       ***

      


      Face-to-Face
        GPT Meetings:

       ***.


      
        
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      SCHEDULE
        8.4.1

      


      (i)           For
        Products sold outside the U.S.:  In  ***, AstraZeneca has
        Net Sales for  *** in country Y in the amounts of $*** for the first
        Product and $*** for the  ***.  In  *** in all
        other countries of the Territory (outside the U.S.) the total Net Sales of
        Products are $*** million, and Net Sales do not occur in any other country
        for  ***.  The calculation of the Segregated Royalty Amount
        would be:

      


      
        	
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      The
        calculation of the Remaining Royalty Amount would be:

      


      
        	
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      The
        total
        royalty payable for all Net Sales in the Territory (outside of the US) would
        be
        $***

       

      (ii)           For
        Products sold in the U.S.:  In  ***, AstraZeneca has Net
        Sales for  *** in the U.S. in the amounts of $*** for the first
        Product and $*** for  ***. The total royalty payable for all U.S. Net
        Sales would be $*** (Net Sales for  *** would be charged a royalty
        of  ***%).


      
        
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      SCHEDULE
        8.4.3

      (i)           For
        Products sold outside the U.S.:  Assume that in the  *** the
        total ex-U.S. Net Sales of Products are $***n.  In that example the
        following royalties would be payable prior to application of any Market
        Reduction:

      


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

      


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      The
        Market Reduction in country X would result in a reduction to royalties payable
        of an amount equal to $*** ($***).  Therefore the total ex-U.S.
        royalty payable for Product Net Sales would be $***

      


      (ii)           For
        Products sold in the United States:

      Assume
        that in the U.S. during the first  *** a Competing Product had
        commenced sales in the U.S., and in the first  *** achieved the
        criteria to trigger a Market Reduction under Section 8.4.3 (Rate Step Down
        for
        Competing Product Entrants).  Assume that Net Sales of Products in the
        U.S. were $*** in  ***.  The Market Reduction is applied to
        Net Sales in the U.S. by reducing the royalty rates set forth in Section
        8.4.1(a) by  ***%.  The total royalty payable for all U.S.
        Net Sales would be $*** (net sales would be charged at a royalty
        of  ***%).


      
        
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