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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" mea
