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Exhibit 10.8
AMENDMENT NO. 2 TO TERMINATION AGREEMENT
THIS AMENDMENT NO. 2 TO TERMINATION AGREEMENT (this "SECOND
AMENDMENT") is
made and effective on this 31st day of August 2004 by and
between Valera
Pharmaceuticals, Inc., a Delaware corporation ("VALERA"), and
The Population
Council, Inc., a not-for-profit New York corporation ("THE
COUNCIL").
BACKGROUND
GP Strategies Corporation, the successor to National Patent
Development
Corporation (collectively "GP STRATEGIES"), and The Council are
parties to an
agreement entitled "Termination of Agreement dated September 12,
1990" that was
signed on October 1, 1997 by GP Strategies and September 26,
1997 by The Council
and was subsequently amended by an Amendment dated as of
November 29, 2001
(collectively, the "TERMINATION AGREEMENT"). GP Strategies
assigned the
Termination Agreement to Valera and Valera accepted all of the
rights and
responsibilities of GP Strategies thereunder. Valera and The
Council desire to
amend the Termination Agreement as set forth in this Second
Amendment.
TERMS
NOW, THEREFORE, for good and valuable consideration, the receipt
and
sufficiency of which are hereby acknowledged, Valera and The
Council agree as
follows:
1. AMENDMENT TO PARAGRAPH 5 OF THE TERMINATION AGREEMENT.
Paragraph 5 of the
Termination Agreement is deleted in its entirety and replaced
with the
following:
5. Allocation of Royalties and Net Sales.
(a) NPDC shall pay to The Council, within thirty (30) days
following
NPDC's receipt of Royalties (as defined in Paragraph 5(d)(vii)),
an amount equal
to the following percentages of Royalties:
(i) one hundred percent (100%) of the first thirty five
thousand
dollars ($35,000) of Royalties, as a fee for the transfer of the
IND sponsorship
to NPDC from The Council;
(ii) after payment in accordance with Paragraph 5(a)(i),
thirty
percent (30%) of Royalties from grants of licenses to the LHRH
Implant to
Licensees to the extent involving the use or sale of a LHRH
Implant in the NPDC
Territory (as defined in Paragraph 5(d)(vi)); and
(iii) after payment in accordance with Paragraph 5(a)(i),
five
percent (5%) of Royalties from grants of licenses to the
Non-LHRH Implant to
Licensees to the extent involving the use or sale of a Non-LHRH
Implant in the
NPDC Territory.
(b) NPDC shall also pay to The Council, on or before the 30th
day
following the end of each calendar quarter, the following
amounts:
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(i) three percent (3%) of NPDC Net Sales received during the
just
completed calendar quarter from Commercial Sales (as defined in
Paragraph
5(d)(i)) of LHRH Implants; and
(ii) one-half of one percent (0.5%) of NPDC Net Sales
received
during the just completed calendar quarter from Commercial Sales
of Non-LHRH
Implants.
(c) NPDC shall also cause each Non-NPDC Territory Licensee (as
defined
in Paragraph 5(d)(iv)) to pay The Council, on or before sixty
(60) days
following the end of each calendar quarter, the following
amounts:
(i) four percent (4%) of Non-NPDC Net Sales (as defined in
Paragraph 5(d)(ii)) received during the just completed calendar
quarter from
Commercial Sales of LHRH Implants by such Non-NPDC Territory
Licensee; and
(ii) two thirds of one percent (0.667%) of Non-NPDC Net
Sales
received during the just completed calendar quarter from
Commercial Sales of
Non-LHRH Implants by such Non-NPDC Territory Licensee.
(iii) Notwithstanding anything herein to the contrary, NPDC
shall
be liable to The Council for payments due to the Council
pursuant to Paragraph
5(c) and shall be discharged from the obligation to make any
such payment at the
time that such payment is received in full by The Council from
the Non-NPDC
Territory Licensee.
(d) For purposes of this Paragraph 5, the following terms shall
have
the following meanings:
(i) "Commercial Sale" means, as the context requires (1) a
sale
of an Implant by NPDC for commercial use (or resale which will
ultimately result
in commercial use) in the NPDC Territory or a sale to a Non-NPDC
Territory
Licensee for use or sale in the NPDC Territory but specifically
excluding sales
of Implants by NPDC that are used for research, development,
investigation,
clinical trials or as samples or that are sold to a Non-NPDC
Territory licensee
for use or sale in the Non-NPDC Territory or (2) a sale of an
Implant by a
Non-NPDC Territory Licensee to a third party for commercial use
(or resale which
will ultimately result in commercial use) in the Non-NPDC
Territory but
specifically excluding sales of Implants by a Non-NPDC Territory
Licensee that
are used for research, development, investigation, clinical
trials or as
samples.
(ii) "Non-NPDC Net Sales" means gross revenues received by
Non-NPDC Territory Licensees with respect to the Commercial
Sales of Implants by
Non-NPDC Territory Licensees described in clause (2) of
Paragraph 5(d)(i) less
the aggregate of (1) returns and/or credits for returns, (2)
sales tax, value
added tax, goods and services tax or any other tax that may be
imposed on the
sale of Implants, (3) promotional, cash, trade or volume
discounts including
those resulting from governmental or managed care contracts and
(4) freight,
transport and delivery (including insurance).
(iii) "Non-NPDC Territory" means the nations and countries
within
the European Union, all nations and countries that accede to the
European Union
subsequent to the
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date hereof, Australia, Brunei, Cambodia, China, India,
Indonesia, Laos,
Malaysia, New Zealand, Philippines, Singapore, South Korea,
Taiwan, Thailand and
Vietnam.
(iv) "Non-NPDC Territory Licensee" means a
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