Document:

Exhibit 10.1

ITEX CORPORATION

EXECUTIVE RESTRICTED STOCK AGREEMENT

          This Agreement is made as of the Grant Date (as defined in section 1.0), by and between the Participant (as defined in section 1.0) and ITEX Corporation, a Nevada corporation (the “Company”).

          Whereas, the Company maintains the ITEX Corporation 2004 Equity Incentive Plan (the “Plan”), which is incorporated into and forms a part of this Agreement, and the Participant has been selected by the Compensation Committee administering the Plan (the “Committee”) to receive a Restricted Stock award under the Plan;

          NOW, THEREFORE, IT IS AGREED, by and between the Company and the Participant, as follows:

1.0     Terms of Award  

          1.1     The following terms used in this Agreement shall have the meanings set forth in this paragraph 1.0:

	
  
 
  	
  
(a)
  	
  
The   “Participant” is Steven White, CEO.
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
(b)
  	
  
The   “Grant Date” is July 6, 2006.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(c)
  	
  
The   “Restricted Period” is the period beginning on the Grant Date and ending on   July 6, 2009, subject to the vesting schedule in Section 5.0 below.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(d)
  	
  
The number of shares of “Restricted
Stock” awarded under this Agreement shall be 300,000 shares.  Shares
of “Restricted Stock” are shares of Stock granted under this Agreement
and are subject to the terms of this Agreement and the Plan.
 

          Other terms used in this Agreement are defined pursuant to paragraph 6 or elsewhere in this Agreement.  Unless otherwise defined in this Agreement, the terms defined in the Plan shall have the same defined meanings in this Agreement.

2.0     Award  

          2.1     The Participant is hereby granted the number of shares of Restricted Stock set forth in paragraph 1.0.

3.0     Dividends and Voting Rights

          3.1     The Participant shall be entitled to receive any dividends paid with respect to shares of Restricted Stock that become payable during the Restricted Period; provided, however, that no dividends shall be payable to or for the benefit of the Participant for shares of Restricted Stock with respect to record dates occurring prior to the Grant Date, or with respect to record dates occurring on or after the date, if any, on which the Participant has forfeited those shares of Restricted Stock.  The Participant shall be entitled to vote the shares of Restricted Stock during the Restricted Period to the same extent as would have been applicable to the Participant if the Participant was then vested in the shares; provided, however, that the Participant shall not be entitled to vote the shares with respect to record dates for such voting rights arising prior to the
Grant Date, or with respect to record dates occurring on or after the date, if any, on which the Participant has forfeited the shares of Restricted Stock.

4.0     Deposit of Shares of Restricted Stock

          4.1     Each certificate issued in respect of shares of Restricted Stock granted under this Agreement shall be registered in the name of the Participant and shall be deposited in escrow with the Secretary of the Company or with outside counsel for the Company.  The grant of Restricted Stock is conditioned upon the Participant endorsing in blank an Assignment Separate from Certificate for the Restricted Stock in the form of Exhibit A.  The deposited certificates, together with any other assets or securities from time to time deposited with the Company pursuant to the requirements of this Agreement, shall remain in escrow until such time or times as the certificates (or other assets and securities) are to be released or otherwise surrendered for cancellation in accordance with Section 5.  Upon delivery of the certificates (or other assets and securities) to the
Company, the Owner shall be issued an instrument of deposit acknowledging the number of shares of Restricted Stock (or other assets and securities) delivered in escrow to the Secretary of the Company.

5.0     Vesting; Transfer and Forfeiture of Shares

          5.1     If the Participant’s Date of Termination (as defined below) does not occur during the Restricted Period with respect to any shares of Restricted Stock, then, at the end of the Restricted Period for such shares, the Participant shall become fully vested in those shares of Restricted Stock, and shall own the shares free of all restrictions otherwise imposed by this Agreement.  Provided the Participant continues to be an Eligible Recipient, Participant shall become vested in the shares of Restricted Stock, and become owner of the shares free of all restrictions otherwise imposed by this Agreement, prior to the end of the Restricted Period, in accordance with the following provisions:  

	
  
 
  	
  
(a)
  	
  
The   shares of Restricted Stock shall vest monthly over the Restricted Period,   such that 1/36th of the Restricted Shares shall vest one month   after the Grant Date and an additional 1/36th of the remaining   number of shares of Restricted Stock shall vest after each of the next 35   months thereafter.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(b)
  	
  
The   Participant shall become vested in the shares of Restricted Stock prior to   the date the Restricted Stock would otherwise become vested as of the   Participant’s Date of Termination, if the Participant’s Date of Termination   occurs by reason of the Participant’s death or Disability, or if the   Participant’s Date of Termination occurs by reason of the Participant’s   termination by the Company other than for Good Cause (as defined below).
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
(c)
  	
  
The   Participant shall become vested in the shares of Restricted Stock as of the   date of a Change in Control (as defined below), if the Change in Control   occurs prior to the end of the Restricted Period, and the Participant’s Date   of Termination does not occur before the Change in Control date.
  

          5.2     Shares of Restricted Stock may not be sold, assigned, transferred, pledged or otherwise encumbered until the expiration of the Restricted Period or, if earlier, until the Participant is vested in the shares.  Except as otherwise provided in this paragraph 5, if the Participant’s Date of Termination occurs during the Restricted Period, the Participant shall forfeit the Restricted Stock as of the Participant’s Date of Termination.

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6.0     Definitions

          6.1     For purposes of this Agreement, the terms used in this Agreement shall be subject to the following:

          (a)          Change in Control.  The term “Change in Control” means an event involving one  transaction or a related series of transactions in which one of the following occurs:  (i) the Company issues securities equal to 50% or more of the Company’s issued and outstanding voting securities, determined as a single class, to any individual, firm, partnership or other entity, including a “group” within the meaning of section 13(d)(3) of the Securities Exchange Act of 1934;  (ii) the Company issues securities equal to 50% or more of the issued and outstanding common stock of the Company in connection with a merger,  consolidation or other business combination;  (iii) the Company is acquired in a merger or other business combination transaction in which the Company is not the surviving company; (iv)
all or substantially all of the Company’s assets are sold or transferred; or (v) there is a change in the majority of the members of the Board of Directors as a result of one or more contested elections for board membership. 

          (b)     Date of Termination.  The Participant’s “Date of Termination” shall be the first day occurring on or after the Grant Date on which the Participant is either: (a) not employed by the Company or any Subsidiary, or (b) is no longer an Eligible Person under the Plan who, in the opinion of the Committee, is rendering valuable services to the Company or any Subsidiary, regardless of the reason for the termination of employment or services; provided that a termination of employment shall not be deemed to occur (i) if the Participant voluntarily left the Company for any reason other than retirement, disability or “Good Reason,”  or (ii) by reason of a transfer of the Participant between the Company and a Subsidiary or between two Subsidiaries; and further provided that the Participant’s employment shall not be considered terminated
while the Participant is on a leave of absence from the Company or a Subsidiary approved by the Participant’s employer.  If, as a result of a sale or other transaction, the Participant’s employer ceases to be a Subsidiary (and the Participant’s employer is or becomes an entity that is separate from the Company), and the Participant is not, at the end of the 30-day period following the transaction, employed by the Company or an entity that is then a Subsidiary, then the occurrence of such transaction shall be treated as the Participant’s Date of Termination caused by the Participant being discharged by the employer.

          (c)     Disability.  Except as otherwise provided by the Committee, the Participant shall be considered to have a “Disability” during the period in which the Participant is unable, by reason of a medically determinable physical or mental impairment, to engage in any substantial gainful activity, which condition, in the opinion of a physician selected by the Committee, is expected to have a duration of not less than 120 days.

          (d)     Good Cause.  The term “Good Cause” means that the Participant is terminated by majority vote of (excluding Participant) the Board of Directors as a result of (1) the occurrence of one of the following: (i) serious misconduct, dishonesty or disloyalty, directly related to the performance of duties for the Company, which results from a willful act or omission or from gross negligence, and which is materially or potentially materially injurious to the operations, financial condition or business reputation of the Company or any significant subsidiary thereof; (ii) Participant being convicted (or entering into a plea bargain admitting criminal guilt) in any criminal proceeding that may have a material adverse impact on the Company’s reputation and standing in the community; (iii) drug or alcohol abuse, but only to the extent that such abuse has an
obvious and material effect on the Company’s reputation and/or on the performance of Participant’s duties and responsibilities; or (iv) willful and continued failure to substantially perform Participant’s duties; and (2) such event, conduct or condition that may result in termination for Good Cause is not cured within thirty days after written notice is delivered to Participant from the Company.  For these purposes, no act or failure to act shall be considered “willful” unless it is done, or omitted to be done, in bad faith without reasonable belief that the action or omission was in the best interest of the Company. 

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          (e)     Good Reason.  The term “Good Reason” means that the Participant, without Participant’s consent has either:

	
  
 
  	
  
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incurred   a material reduction in Participant’s title, status, authority or   responsibility as CEO at the Company; or
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
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failed   to be re-elected to the Board and continue as the CEO/Chairman and been able   to nominate one officer to the Board; or
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
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incurred   a reduction in the Participant’s base compensation from the Company; or
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
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been   notified that Participant’s principal place of work will be relocated by a   distance of fifty (50) miles or more; or
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
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been   required to work more than ten (10) days per month outside of Participant’s   principal offices for a six (6) month continuous period.
  

          (f)     Plan Definitions.  Except where the context clearly implies or indicates the contrary, a word, term, or phrase used in the Plan is similarly used in this Agreement.

7.0     Heirs and Successors

          7.1     This Agreement shall be binding upon, and inure to the benefit of, the Company and its successors and assigns, and upon any person acquiring, whether by merger, consolidation, purchase of assets or otherwise, all or substantially all of the Company’s assets and business.  If any rights of the Participant or benefits distributable to the Participant under this Agreement have not been exercised or distributed, respectively, at the time of the Participant’s death, such rights shall be exercisable by the Designated Beneficiary, and such benefits shall be distributed to the Designated Beneficiary, in accordance with the provisions of this Agreement and the Plan.  The “Designated Beneficiary” shall be the beneficiary or beneficiaries designated by the Participant in a writing filed with the Committee in such form and at such time as the Committee
shall require. If a deceased Participant fails to designate a beneficiary, or if the Designated Beneficiary does not survive the Participant, any rights that would have been exercisable by the Participant and any benefits distributable to the Participant shall be exercised by or distributed to the legal representative of the estate of the Participant.  If a deceased Participant designates a beneficiary and the Designated Beneficiary survives the Participant but dies before the Designated Beneficiary’s exercise of all rights under this Agreement or before the complete distribution of benefits to the Designated Beneficiary under this Agreement, then any rights that would have been exercisable by the Designated Beneficiary shall be exercised by the legal representative of the estate of the Designated Beneficiary, and any benefits distributable to the Designated Beneficiary shall be distributed to the legal representative of the estate of the Designated Beneficiary.

8.0     Administration

          8.1     The authority to manage and control the operation and administration of this Agreement shall be vested in the Committee, and the Committee shall have all powers with respect to this Agreement as it has with respect to the Plan.  Any interpretation of the Agreement by the Committee and any decision made by it with respect to the Agreement is final and binding.

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9.0     Plan Governs

          9.1     Notwithstanding anything in this Agreement to the contrary, the terms of this Agreement shall be subject to the terms of the Plan, a copy of which may be obtained by the Participant from the office of the Secretary of the Company.

10.0   Amendment

          10.1     This Agreement may be amended by written agreement of the Participant and the Company, without the consent of any other person.

IN WITNESS WHEREOF, the Participant has executed this Agreement, and the Company has caused this Agreement to be executed in its name and on its behalf, all as of the Grant Date.

	
  
ITEX   Corporation
  	
  
 
  	
  
PARTICIPANT
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  

  	
  
 
  	
  

  
	
  
By:
  	
  
Eric   Best
  	
  
 
  	
  
Steven   White, CEO
  
	
  
 
  	
  
Committee   Chairman
  	
  
 
  	
    
 

  
	
  
 
  	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
 
  	
  
 
  	
  
Printed   Name
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  
Address:
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  

 
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  

  

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EXHIBIT A

Assignment Separate from Certificate

          FOR VALUE
RECEIVED and pursuant to that certain Restricted Stock Agreement (the
“Agreement”), Steven White  hereby sells, assigns and transfers
unto ITEX Corporation, a Nevada corporation (“Assignee”), Three
Hundred Thousand (300,000) shares of the Common Stock of the Assignee, standing
in the undersigned’s name on the books of said corporation represented by
Certificate No.      herewith and does hereby
irrevocably constitute and appoint the Secretary and/or the transfer agent of
the Assignee as attorney-in-fact to transfer the said stock on the books of the
within named company with full power of substitution in the premises.  This
Assignment may be used only in accordance with and subject to the terms and
conditions of the Agreement, in connection with the forfeiture of shares of
Common Stock of said corporation issued to the undersigned pursuant to the
Agreement, and only to the extent that such shares remain unvested and subject
to forfeiture under the Agreement.

Dated:  ________________________

	
  
 
  	
  
Signature________________________________
  
	
  
 
  	
  
 
  
	
  
 
  	
  
 
  
	
  
 
  	
  
 
  
	
   
  	
  
Signature________________________________
  

ELECTION UNDER SECTION 83(b)
 OF THE INTERNAL REVENUE CODE

          The undersigned taxpayer hereby elects, pursuant to the above-referenced Federal Tax Code, to include in taxpayer’s gross income for the current taxable year, the amount of any compensation taxable to taxpayer in connection with his receipt of the property described below. The name, address, taxpayer identification number and taxable year of the undersigned are as follows:

	
  
 
  	
  
NAME:
  
	
  
 
  	
  
 
  
	
  
 
  	
  
ADDRESS:
  
	
  
 
  	
  
 
  
	
  
 
  	
  
TAXPAYER IDENTIFICATION   NO.:
  
	
  
 
  	
  
 
  
	
   
  	
  
TAXABLE YEAR: 2006
  

          The property
with respect to which the election is made is described as follows:
300,000 shares (the “Shares”) of the Common Stock of ITEX
Corporation (the “Company”).

          The date on which the property was transferred is:  July 6, 2006. 

          The property is subject to the following restrictions:

	
  
 
  	
  
The Shares will be   forfeited if taxpayer’s employment is terminated before July 6, 2009.  This risk of forfeiture lapses with regard   to a portion of the Shares based on the continued performance of services by   the taxpayer over time.
  

          The fair market value at the time of transfer, determined without regard to any restriction other than a restriction which by its terms will never lapse, of such property is:  $177,000.

          The amount (if any) paid for such property is: $0.00.

          The undersigned has submitted a copy of this statement to the person for whom the services were performed in connection with the undersigned’s receipt of the above-described property. The transferee of such property is the person performing the services in connection with the transfer of said property.

          The undersigned understands that the foregoing election may not be revoked except with the consent of the Commissioner.

	
  
 
  	
  
Dated: July ___, 2006
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
Taxpayer
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  

  	
  
 
  
	
   
  	
  (Name)
  	
   
  

          The undersigned spouse of taxpayer joins in this election. Dated: July          , 2006 

          Spouse

	
   
  	
  

  	
   
  
	
   
  	
  (Name)EX-10.1

AMENDED AND RESTATED

EXECUTIVE EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made as of the
5th day of July, 2006 (the “Effective Date”), by and between David Tierney (the “Executive”), and
Valera Pharmaceuticals, Inc. (the “Company”).

WHEREAS, the Company and the Executive are parties to an Executive Employment Agreement, dated
September 16, 2003, pursuant to which the Executive serves as the Chief Executive Officer of the
Company (the “Existing Employment Agreement”); and

WHEREAS, the Company has determined it is essential to the business of the Company to provide
for the continued employment of the Executive and certain prohibitions against competition
following his termination of that employment under certain circumstances; and

WHEREAS, Section 13 of the Existing Employment Agreement provides that the Company and the
Executive may amend the Existing Employment Agreement by mutual agreement in writing; and

WHEREAS, the Company and the Employee desire to amend and restate the Existing Employment
Agreement in its entirety.

NOW, THEREFORE, in consideration of the mutual covenants and obligations contained herein, and
intending to be legally bound, the parties, subject to the terms and conditions set forth herein,
agree as follows:

1. Employment and Term; Service as Board Member. The Company will continue to employ
the Executive, and the Executive hereby accepts such continued employment with the Company, as the
Chief Executive Officer (such position, referred to herein as the Executive’s “Position”) for the
period commencing on the Effective Date and continuing until the third anniversary of the Effective
Date (the “Initial Term”), and shall thereafter automatically renew for additional one-year periods
(each, a “Renewal Term”), unless sooner terminated in accordance with Section 6 of this Agreement.
The Initial Term and any Renewal Term are herein collectively referred to as the “Term.” In
addition and for no additional consideration, Executive hereby agrees to serve as a member of the
Company’s Board of Directors (the “Board”) to the extent elected by the shareholders of the Company
and consistent with the by-laws of the Company as they may be amended from time-to-time.

2. Duties and Responsibilities.

2.1. Generally. During the Term, Executive hereby agrees to serve the Company
faithfully and to the best of his ability and shall devote his full time, attention, skill and
efforts to the performance of the duties: (i) as shall be specified and designated from
time-to-time by the Chairman of the Board; and (ii) customarily performed by the Chief Executive
Officer of a business of the size and nature similar to that of the Company. During the Term,
Executive shall report directly to the Chairman of the Board. Without limiting the generality of
the foregoing, the Executive will be responsible for the overall well being of the Company.

2.2. Travel Obligations. Executive acknowledges that his Position will require travel
from time-to-time for Company business.

2.3. Primary Location. On the Effective Date, Executive’s business location of record
will be Cranbury, New Jersey.

3. Other Business Activities. During the Term, the Executive will not, without the
prior written consent of the Board, which consent shall not be unreasonably withheld, directly or
indirectly engage in any other business activity or pursuit whatsoever, except such activities in
connection with any charitable or civic activities or serving as an executor, trustee or in other
similar fiduciary capacity as do not interfere with his performance of his responsibilities and
obligations pursuant to this Agreement.

4. Compensation.

4.1. Base Salary. The Company shall pay the Executive, and the Executive hereby
agrees to accept, as compensation for all services rendered by Executive in any capacity under this
Agreement or otherwise in consideration for the covenants referenced in Section 5 of this
Agreement, base salary at the annual rate of Three Hundred Fifty Thousand Dollars ($350,000) less
applicable withholding (as the same may hereafter be adjusted, the “Base Salary”). Base Salary
shall be paid in accordance with the Company’s payroll practices in effect from time-to-time. The
Board (excluding Executive in his capacity if a member of the Board), shall review the performance
of Executive annually, on or about the anniversary of the Effective Date and to make appropriate
adjustments to the Executive’s Base Salary.

4.2.  Annual Bonus Program. For each calendar year of the Agreement, Executive will
be eligible to participate in any annual bonus programs (the “Annual Bonus”) established by the
Board (excluding Executive in his capacity if a member of the Board) from time-to-time for the
benefit of Company management, in each case to the extent Executive is eligible under the terms of
such annual bonus program.

4.3. Benefits and Expenses. The Executive shall be eligible to participate in the
benefit plans and programs (including without limitation, the sick leave, holidays and retirement
plans or programs) that are available to other employees of the Company generally on the same terms
as such other employees (excluding any equity-based compensation plan, program or policy), in each
case to the extent that the Executive is eligible under the terms of such plans or programs.
Executive shall be eligible for expense allowances and/or reimbursements for reasonable expenses
incurred in connection with the performance of his duties hereunder as are consistent with the
Company’s usual practice and policies with respect to such allowances and reimbursements.

4.4. Vacation. In addition to paid holidays recognized by the Company from
time-to-time, Executive shall be entitled to twenty (20) days of paid vacation during any calendar
year of the Term of this Agreement. Vacation accrued with respect to any calendar year will be
forfeited if Executive does not take such vacation prior to the last day of such calendar year
unless Executive receives, prior to such last day, written confirmation from the Board that such
vacation will not be forfeited.

4.5. Withholding. The Base Salary and all other payments made under this Agreement are
inclusive of all applicable income, social security and other taxes and charges which are required
by law to be withheld from Executive’s wages by the Company, and which will be withheld and paid in
accordance with applicable law and the Company’s normal payroll practices.

5. Confidential Information and Non-Competition Agreement. Executive acknowledges
that, in connection with the execution of this Agreement and in consideration of the Company’s
obligations hereunder, he has executed an Employee Confidentiality and Non-Competition Agreement in
the form attached hereto as Exhibit A (the “Confidentiality Agreement”) and he hereby
ratifies and reaffirms his obligations under the Confidentiality Agreement. Executive hereby
agrees to disclose the existence and terms of this Section 5 to any individual or entity for whom
he may work or otherwise provide service for compensation during the one (1) year period following
the termination of his employment with the Company. In addition, Executive agrees that such
disclosure will occur not later than five (5) business days prior to his accepting an offer to
become employed by or to perform services for any such entity.

6. Termination. The Executive’s employment hereunder may be terminated during the
Term upon the occurrence of any one of the events described in this Section 6. Upon termination,
the Executive shall be entitled only to such compensation and benefits as described in this Section
6.

6.1. Termination for Disability.

(a) In the event of the Disability (as hereinafter defined) of the Executive, the Executive’s
employment and/or his performance of service as a member of the Board may be terminated by the
Company by notice to the Executive.

(b) In the event of a termination of the Executive’s employment pursuant to Section 6.1(a):
(i) the Executive will be entitled to receive any accrued and unpaid Base Salary and Annual Bonus
through the date of such termination (and reimbursement for expenses, in accordance with Section
4.3, incurred prior to the termination of employment), including without limitation, payment
prescribed under any disability plan or arrangement in which he is a participant or to which he is
a party in his capacity as an employee of the Company; and (ii) if the Executive and/or his spouse
or eligible dependents elect continuation of medical and/or dental benefits under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company will pay the full
premium cost of such participation for a period of twenty-nine (29) months following the date of
such termination or until the Executive or his spouse or dependents cease to be eligible for
participation under COBRA, whichever is shorter. Except as specifically set forth in this Section
6.1, or to the extent provided under any Company-provided disability benefits policy, the Company
shall have no other liability or obligation to the Executive for compensation or benefits by reason
of such termination.

(c) For purposes of this Section 6.1, “Disability” shall mean a physical or mental condition
that entitles the Executive to benefits under the Company’s long-term disability policy which
covers the Executive, if any, or, in the absence of coverage under any such policy, a disability
which prevents the Executive from performing his duties, with or without a reasonable
accommodation, under this Agreement for forty-five (45) days during any 180-day period. The
Company will notify the Executive of commencement of the disability period, which period cannot
commence more than fourteen (14) days prior to the date of the notice. The determination of
whether the Executive has a Disability will be made by the Board (excluding Executive in his
capacity if a member of the Board). Any dispute as to whether the Executive is or was prevented
from performing his duties under this Agreement because of a physical or mental disability or
incapacitation, whether his disability or incapacity has ceased or whether he is able to resume his
duties under this Agreement shall be finally and conclusively decided by a licensed physician
chosen by the Company, and any such determination by the physician shall be conclusive and binding
on the parties hereto. The Executive must submit to all tests and examinations and provide all
information the requested by the physician.

6.2. Termination by Death. Executive’s employment and his performance of service as a
member of the Board shall automatically be terminated on his death. Executive’s executors, legal
representatives or administrators shall receive any accrued and unpaid Base Salary and Annual Bonus
through the date of such termination (and reimbursement for expenses, in accordance with Section
4.3, incurred prior to the termination of employment). In addition, if the Executive’s spouse
and/or eligible dependents elect continuation of medical and/or dental benefits under COBRA, the
Company will pay the full premium cost of such participation for a period of twenty-four (24)
months following the date of the Executive’s death or until the Executive’s spouse or dependents
cease to be eligible for participation under COBRA, whichever is shorter. Except as specifically
set forth in this Section 6.2, or to the extent provided under any Company-provided life insurance
policy, the Company shall have no other liability or obligation hereunder to the Executive’s
executors, legal representatives, administrators, heirs or assigns or any other person claiming
under or through him by reason of the Executive’s death.

6.3. Termination by the Executive Without Good Reason. Upon thirty (30) days prior
written notice to the Board, the Executive may terminate his employment and his performance of
service as a member of the Board with the Company without Good Reason (as defined below) and for a
reason other than those identified in Section 6.1 or Section 6.2 of this Agreement. In the event
of a termination of the Executive’s employment and his performance of service as a member of the
Board pursuant to this Section 6.3, the Executive shall be entitled to receive any accrued and
unpaid Base Salary and Annual Bonus through the date of such termination (and reimbursement for
expenses, in accordance with Section 4.3, incurred prior to such date). All other Base Salary and
Annual Bonus shall cease at the effective date of such termination. Except as specifically set
forth in this Section 6.3, the Company shall have no other liability or obligation hereunder by
reason of such termination.

6.4. Termination By the Company for Cause.

(a) Upon written notice to the Executive from the Board or an appropriate officer of the
Company designated by the Board, the Company may terminate the Executive’s employment and his
performance of service as a member of the Board at any time for Cause as defined in Section 6.4(c)
of this Agreement.

(b) In the event of a termination of the Executive’s employment and his performance of service
as a member of the Board pursuant to Section 6.4(a), the Executive shall be entitled to receive
accrued and unpaid Base Salary and Annual Bonus through the date of such termination (and
reimbursement for expenses, in accordance with Section 4.3, incurred prior to the termination of
employment). All other Base Salary and Annual Bonus shall cease at the effective date of such
termination. Except as specifically set forth in this Section 6.4, the Company shall have no other
liability or obligation hereunder by reason of such termination.

(c) For purposes of this Agreement, “Cause” shall mean, as determined by the Board:

(i) any material breach by the Executive of any of his obligations or representations under
this Agreement;

(ii) gross negligence in the performance by the Executive of his duties required hereunder;

(iii) a material violation, by the Executive, of the Company’s employee policies, as may be
amended from time to time;

(iv) any conduct of the Executive involving any type of disloyalty, dishonesty, breach of
fiduciary duty, or willful misconduct, including without limitation fraud, embezzlement, theft or
dishonesty in the course of his employment or the commission by the Executive of any other action
with the intent to materially injure the Company;

(v) the Executive’s conviction of, plea of guilty to, or plea of nolo contendere to any
felony, or any crime involving moral turpitude;

(vi) the Executive’s failure to satisfactorily pass any drug screening test required by the
Company and, if appropriate, any supplemental security checks;

(vii) the Executive’s refusal, after explicit written notice, to obey any lawful resolution of
or direction by the Board which is consistent with his duties to the Company;

(viii) the Executive’s chronic absence from work (excluding vacation, illness or leaves of
absence approved by the Board); or

(ix) the Executive’s unlawful use (including being under the influence) or possession of
illegal drugs on the Company’s premises.

If termination for Cause is based upon Sections 6.4(c)(i), 6.4(c)(ii), 6.4(c)(iii),
6.4(c)(vi), 6.4(c)(vii) or 6.4(c)(viii) and Board determines that the applicable breach, conduct or
violation is capable of being cured, then such applicable breach, conduct or violation shall
constitute a reason for a termination with Cause only if the Board determines that the Executive
has failed to cure such breach, conduct or violation within thirty (30) days following written
notice to the Executive from the Board.

(d) The Executive shall not, under any circumstances, be deemed to have been terminated for
Cause unless and until there shall have been delivered to him a copy of a Board resolution (the
“Board Resolution”) duly adopted by the affirmative vote of not less than fifty one percent (51%)
of the Board (with Executive not being permitted to vote on this matter) at a meeting of the Board
held for that purpose. Any such Board Resolution, which in the event of an alleged termination for
Cause shall be dated no sooner than ten (10) days after such notice has been deemed to have been
given to the Executive and the Executive shall have had an opportunity, together with counsel, to
be heard before the Board, shall find that in the good faith opinion of the Board, the Executive
was guilty of conduct constituting Cause and specifying the particulars thereof in detail.

6.5. Termination by the Company Without Cause.

(a) Upon written notice to the Executive from the Board or an appropriate officer of the
Company designated by the Board, the Company may terminate the Executive’s employment and his
performance of service as a member of the Board at any time without Cause.

(b) In the event of a termination of the Executive’s employment and his performance of service
as a member of the Board pursuant to Section 6.5(a): (i) the Company will pay to Executive any
earned but unpaid Base Salary through the date of such termination; (ii) the Company will reimburse
the Executive’s unreimbursed business expenses pursuant to Section 4.3 for all expenses incurred in
the performance of his duties prior to the date of such termination; (iii) the Company will pay to
Executive any earned and accrued but unpaid Annual Bonus as of the date of such termination; (iv)
commencing on the day immediately following the date of such termination, the Company will continue
to pay to the Executive his then current Base Salary for the twelve (12) month period following
such date of termination without Cause; provided, however, that if Executive is terminated without
Cause during the period commencing on the thirtieth (30th) day immediately preceding a
Change in Control (as defined below) and ending on the first anniversary date of a Change in
Control, the Company will (i) continue to pay to Executive his then current Base Salary for the
twenty-four (24) month period following such date of termination, which amount shall be paid as a
lump sum within thirty (30) days after the date of termination, or, at the Company’s election, in
accordance with the Company’s payroll practices in effect from time-to-time and (ii) pay to
Executive a bonus equal to two times the highest Annual Bonus received by Executive during the
three most recently completed fiscal years of the Company. Except as specifically set forth in
this Section 6.5, the Company shall have no other liability or obligation hereunder by reason of
such termination.

(c) Notwithstanding any other provision in this Agreement to the contrary, Executive hereby
agrees and acknowledges that he will not be entitled to and the Company shall have no obligation to
pay or provide any amount or benefit provided under Section 6.5 of this Agreement unless Executive
executes and delivers to the Company and does not revoke a release satisfactory to the Company in a
manner consistent with the requirements of the Age Discrimination in Employment Act.

6.6. Termination by the Executive for Good Reason.

(a) The Executive may terminate the Executive’s employment and his performance of service as a
member of the Board at any time for Good Reason (as hereinafter defined), upon written notice from
the Executive to the Company in connection with his resignation for Good Reason setting forth the
effective date of termination (which shall not be less than thirty (30) business days from the date
such notice is given).

(b) In the event of a termination of the Executive’s employment for Good Reason pursuant to
Section 6.6(a): (i) the Company will pay to Executive any earned but unpaid Base Salary through
the date of such termination; (ii) the Company will reimburse the Executive’s unreimbursed business
expenses pursuant to Section 4.3 for all expenses incurred in the performance of his duties prior
to the date of such termination; (iii) the Company will pay to Executive any earned and accrued but
unpaid Annual Bonus as of the date of such termination; (iv) commencing on the day immediately
following the date of such termination, the Company will continue to pay to the Executive his then
current Base Salary for the twelve (12) month period following such date of termination for Good
Reason; provided, however, that if Executive terminates his employment and performance of service
as a member of the Board for Good Reason during the period commencing on the thirtieth
(30th) day immediately preceding a Change in Control and ending on the first anniversary
date of a Change in Control, the Company will (i) continue to pay to Executive his then current
Base Salary for the twenty-four (24) month period following such date of termination, which amount
shall be paid as a lump sum within thirty (30) days after the date of termination, or, at the
Company’s election, in accordance with the Company’s payroll practices in effect from time-to-time
and (ii) pay to Executive a bonus equal to two times the highest Annual Bonus received by Executive
during the three most recently completed fiscal years of the Company. Except as specifically set
forth in this Section 6.6, the Company shall have no other liability or obligation hereunder by
reason of such termination.

(c) Notwithstanding any other provision in this Agreement to the contrary, Executive hereby
agrees and acknowledges that he will not be entitled to and the Company shall have no obligation to
pay or provide any amount or benefit provided under Section 6.6 of this Agreement unless Executive
executes and delivers to the Company and does not revoke a release satisfactory to the Company in a
manner consistent with the requirements of the Age Discrimination in Employment Act.

6.7. Definitions.

(a) For purposes of this Agreement, “Good Reason” means, without the Executive’s prior written
consent, any of the following:

(i) an adverse change in the Executive’s title;

(ii) a reduction in the Executive’s authority, duties or responsibilities, or the assignment
to the Executive of duties that are inconsistent, in a material respect, with Executive’s position;

(iii) the relocation of the Executive’s principal worksite more than 50 miles from the
Cranbury, New Jersey area;

(iv) a reduction in the Executive’s Base Salary, unless the percentage by which the Base
Salary is reduced applies generally to all other executive officers of the Company; or

(v) the Company’s failure to pay any compensation due to Executive.

However, the foregoing events or conditions will constitute Good Reason only if the Executive
provides the Company with written objection to the event or condition within fifteen (15) days
following the occurrence thereof, the Company does not reverse or otherwise cure the event or
condition within thirty (30) days of receiving that written objection and the Executive resigns his
employment within fifteen (15) days following the expiration of that cure period.

(b) For purposes of this Agreement, “Change in Control” means the first to occur of any of the
following after the date hereof: (i) the direct or indirect acquisition by any person or related
group of persons (other than the Company or a person that directly or indirectly controls, is
controlled by, or is under common control with, the Company) of beneficial ownership (within the
meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of securities possessing
more than 50% of the total combined voting power of the Company’s then outstanding securities; (ii)
a change in the composition of the Board over any twelve month period such that a majority of the
Board members ceases to be comprised of individuals who either (A) have been board members
continuously since the beginning of such period, or (B) have been elected or nominated for election
as Board members during such period by at least a two-thirds majority of the Board members
described in clause (A) who were still in office at the time such election or nomination was
approved by the Board; (iii) the consummation of any consolidation, share exchange or merger of the
Company in which (Y) the stockholders of the Company immediately prior to such transaction do not
own at least a majority of the voting power of the entity which survives/results from that
transaction, or (Z) a shareholder of the Company who does not own a majority of the voting stock of
the Company immediately prior to such transaction, owns a majority of the Company’s voting stock
immediately after such transaction; or (iv) the liquidation or dissolution of the Company, or any
sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of
all or substantially all the assets of the Company, including stock held in subsidiary corporations
or interests held in subsidiary ventures.

6.8. Timing of Payments. In the event that any amounts payable under this Agreement
that would otherwise be considered deferred compensation subject to an excise tax on Executive
pursuant to Section 409A of the Code (or any applicable regulations or guidance promulgated by the
Secretary of the Treasury in connection therewith) if paid within six (6) months following the date
of termination of employment, such amounts shall be paid at the later of the time otherwise
provided under this Agreement or the time that will prevent such amounts from being considered
deferred compensation under Section 409A of the Code.

7. Parachute Payments. Payments under this Agreement shall be made without regard to
whether the deductibility of such payments (or any other payments) would be limited or precluded by
Section 280G of the Internal Revenue Code of 1986 (the “Code”) and without regard to whether such
payments would subject the Executive to the federal excise tax levied on certain “excess parachute
payments” under Section 4999 of the Code; provided, however, that if the Total After-Tax Payments
(as defined below) would be increased by the limitation or elimination of any amount payable under
this Agreement, then the amount payable under this Agreement will be reduced to the extent
necessary to maximize the Total After-Tax Payments. The determination of whether and to what
extent payments under this Agreement are required to be reduced in accordance with the preceding
sentence will be made at the Company’s expense by a qualified independent expert selected by the
Executive and reasonably acceptable to the Company. In the event of any underpayment or
overpayment under this Agreement (as determined after the application of this Section 7), the
amount of such underpayment or overpayment will be immediately paid by the Company to the Executive
or refunded by the Executive to the Company, as the case may be, with interest at the applicable
federal rate provided for in Section 7872(f)(2) of the Code. For purposes of this Agreement,
“Total After-Tax Payments” means the total of all “parachute payments” (as that term is defined in
Section 280G(b)(2) of the Code) made to or for the benefit of Executive (whether made hereunder or
otherwise), after reduction for all applicable federal taxes (including, without limitation, the
tax described in Section 4999 of the Code).

8. Representations. The Executive represents and warrants to the Company that:

(a) There are no restrictions, agreements or understandings whatsoever to which the Executive
is a party which would prevent or make unlawful the Executive’s execution of this Agreement or the
Executive’s employment hereunder, or which is or would be inconsistent or in conflict with this
Agreement or the Executive’s employment hereunder, or would prevent, limit or impair in any way the
performance by the Executive of his obligations hereunder;

(b) That the Executive’s execution of this Agreement and the Executive’s employment hereunder
shall not constitute a breach of any contract, agreement or understanding, oral or written, to
which the Executive is a party or by which the Executive is bound; and

(c) That the Executive is free to execute this Agreement and to enter into the employ of the
Company pursuant to the provisions set forth herein.

9. Survival of Provisions. The provisions of this Agreement set forth in Sections 5,
7, 9, 10, 11, 12, 13, 14, 15 16, 17 and 18 hereof shall survive the termination of the Executive’s
employment hereunder.

10. Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the Company and the Executive and their respective successors, executors,
administrators, heirs and/or permitted assigns; provided, however, that neither the Executive nor
the Company may make any assignments of this Agreement or any interest herein, by operation of law
or otherwise, without the prior written consent of the other party hereto, except that, without
such consent, the Company may assign this Agreement to an Affiliate or any successor to all or
substantially all of its assets and business by means of liquidation, dissolution, merger,
consolidation, transfer of assets, or otherwise, provided that such successor assumes in writing
all of the obligations of the Company under this Agreement, subject, however, to the Executive’s
rights as to termination as provided in Section 6 hereof.

11. Notice. Any notice or communication required or permitted under this Agreement
shall be made in writing and sent by certified or registered mail, return receipt requested,
addressed as follows:

	 	 	 
	If to Executive, to the address on file with the Company.

	 
	 	 
	If to the Company:

	 	Valera Pharmaceuticals, Inc.

7 Clarke Drive

Cranbury, New Jersey 08512

Attn: Chief Financial Officer

Fax: (609) 409-1650
	 
	 	 
	With a copy to:

	 	Christopher S. Miller, Esq.

Pepper Hamilton LLP

400 Berwyn Park

899 Cassatt Road

Berwyn, PA 19312-1183

Phone: (610) 640-7837

Fax: (610) 640-7835

or to such other address as either party may from time-to-time duly specify by notice given to the
other party in the manner specified above.

12. Waiver of Personal Liability. To the extent permitted by applicable law,
Executive hereby acknowledges and agrees that he shall have recourse only to the Company (and its
successors-in-interest) with respect to any claims he may have for compensation or benefits arising
in connection with his employment, whether or not under this Agreement or under any other plan,
program, or arrangement, including, but not limited to, any agreements related to the grant or
exercise of equity options or other equity rights in the Company. To the extent permitted by
applicable law, the Executive hereby waives any such claims for compensation, benefits and equity
rights against officers, directors, managers, members, stockholders, or other representatives in
their personal or separate capacities.

13. Entire Agreement; Amendments. This Agreement and the Confidentiality Agreement
contain the entire agreement and understanding of the parties hereto relating to the subject matter
hereof, and merges and supersedes all prior and contemporaneous discussions, agreements and
understandings of every nature between the parties hereto relating to the employment of the
Executive with the Company. This Agreement may not be changed or modified, except by an agreement
in writing signed by each of the parties hereto, provided, however, if and to the extent that the
parties determine that the terms of any provision of this Agreement or any payment to Executive
hereunder may result in the imposition of an excise tax on Executive pursuant to Section 409A of
the Code (or any applicable regulations or guidance promulgated by the Secretary of the Treasury in
connection therewith), the parties hereby agree to negotiate in good faith to take such action to
amend or modify the Agreement or any payments to Executive hereunder as the parties deem necessary
or advisable to limit or, if possible, avoid the impact of any such excise tax.

14. Waiver. The waiver of the breach of any term or provision of this Agreement shall
not operate as or be construed to be a waiver of any other or subsequent breach of this Agreement.

15. Governing Law. This Agreement shall be construed and enforced in accordance with
the laws of the State of New Jersey, without regard to its rules on conflict of laws.

16. Invalidity. In case any one or more of the provisions contained in this Agreement
shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect the validity of any other provision of
this Agreement, and such provision(s) shall be deemed modified to the extent necessary to make it
enforceable.

17. Section Headings. The section headings in this Agreement are for convenience
only; they form no part of this Agreement and shall not affect its interpretation.

18. Legal Fees; Limitations. If an action at law or in equity is necessary to enforce
or interpret the terms of this Agreement and the Executive is the prevailing party, he shall be
entitled to recover, in addition to any other relief, all reasonable attorney’s fees, costs and
disbursements. In the event that the provisions of Sections 5 or 6 hereof should ever be
adjudicated to exceed the time, geographic, or other limitations permitted by applicable law in any
applicable jurisdiction, then such provisions shall be deemed reformed in such jurisdiction to the
maximum time, geographic, or other limitations permitted by applicable law.

19. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, and all of which together shall be deemed to be one and the same
instrument.

[Signature Page Follows]

1

IN WITNESS WHEREOF AND INTENDING TO BE LEGALLY BOUND, the parties have caused this Agreement
to be executed on the day first written above.

Valera Pharmaceuticals, Inc.

_/s/ Andrew T. Drechsler

By: Andrew T. Drechsler

Title: Chief Financial Officer

Executive

/s/ David Tierney

David Tierney

2

EXHIBIT A

EMPLOYEE CONFIDENTIALITY, INVENTION ASSIGNMENT

AND NON-COMPETITION AGREEMENT

This Agreement (“Agreement”) is made and entered into this 5th day of July, 2006, by and
between Valera Pharmaceuticals, Inc. a New Jersey corporation having an address at 7 Clarke Drive
(“Company”) and David S. Tierney, an individual having an address at Shrewsbury, NJ. (“Employee”).

Employee is to be employed by the Company and as a condition of that employment shall be
subject to the terms set forth in this Agreement.

In consideration of Employee’s employment, the mutual covenants and promises set forth in this
Agreement, and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound, the parties agree as follows:

20. At-Will Employment. Employee understands and acknowledges that Employee’s
employment with the Company is for an unspecified duration and constitutes “at-will” employment.
Employee acknowledges that this employment relationship may be terminated at any time, with or
without good cause or for any or no cause, at the option of either of the Company or Employee, with
or without notice.

21. Confidential Information.

21.1. Ownership. All right, title and interest in and to any confidential, proprietary,
business and technical information, and trade secrets of the Company or of any subsidiary,
affiliate, employee, client, consultant or business associate of the Company, including without
limitation, any information relating to research, processes, inventions, Company Creations (as
defined below), products, methods, computer codes or instructions, software documentation,
equipment, costs, profits, markets, sales, contracts, customer lists, business studies, business
procedures, business plans, marketing plans, strategic plans, forecasts, budgets, projections, and
finances, and any other materials that have not been made available to the general public
(collectively, “Confidential Information”) are and shall remain the sole and exclusive property of
the Company.

21.2. Confidentiality.  Employee recognizes and acknowledges that the Confidential
Information is a valuable, special and unique asset of the Company. Employee also recognizes and
acknowledges that the Confidential Information is essential to the success of the Company’s
business, that it gives the Company a competitive advantage over those who do not know the
Confidential Information, and that it is the policy of the Company to maintain as secret and not
disclose to others the Confidential Information. As a result, both during the term of Employee’s
employment by the Company and thereafter, Employee shall not, without the prior written consent of
the Company, directly or indirectly, use, make available, sell, commercialize, disclose or
otherwise divulge, in whole or in part, any Confidential Information to any person, firm,
corporation, association or other entity for any reason or purpose whatsoever, nor shall Employee
make use of any such Confidential Information for Employee’s own purposes or for the benefit of any
person, firm, corporation or other entity under any circumstances during or after the term of
Employee’s employment. Failure to label or otherwise mark information as confidential or
proprietary will not affect its status as Confidential Information.

21.3. Third Party Information.  Employee acknowledges that the Company has received
and may in the future receive confidential and proprietary information from third parties subject
to a duty on the Company’s part to maintain the confidentiality of such information and, in some
cases, to use it only for certain limited purposes. Employee agrees that he owes the Company and
such third parties, both during the term of Employee’s employment and thereafter, a duty to hold
all such confidential or proprietary information in strictest confidence and not to disclose or use
it in any manner that is not consistent with the Company’s agreement with or legal obligations to
such third parties.

21.4. Location and Reproduction. Employee shall not remove from the Company’s offices
or premises, unless necessary in accordance with Employee’s duties and responsibilities, any
documents, records, notebooks, files, correspondence, reports, memoranda, computer tapes, computer
disks or other materials containing or embodying Confidential Information or other property of any
kind belonging to the Company. In the event Employee removes any such material or property from
the Company’s offices or premises, Employee shall return them to the proper files or places of
safekeeping as promptly as possible after the removal has served its specific purpose. Employee
shall not make, remove or distribute any copies of the foregoing for any reason whatsoever and
shall not divulge to any third person the nature of or contents of any of the foregoing or of any
other oral or written information. Immediately upon termination of Employee’s employment or at any
time upon the request of the Company, Employee shall deliver to the Company all originals and
copies of the above-described materials, Confidential Information and all other Company property
then in Employee’s actual or potential possession or control in any tangible or electronic form,
whether prepared by Employee or by others.

22. Intellectual Property & Company Creations.

22.1. Ownership. All right, title and interest in and to any and all ideas,
inventions, designs, technologies, formulas, methods, processes, development techniques,
discoveries, computer programs or instructions (whether in source code, object code, or any other
form), computer hardware, algorithms, plans, customer lists, memoranda, tests, research, designs,
specifications, models, data, diagrams, flow charts, techniques (whether reduced to written form or
otherwise), patents, patent applications, formats, test results, marketing and business ideas,
trademarks, trade secrets, service marks, trade dress, logos, trade names, fictitious names, brand
names, corporate names, original works of authorship, copyrights, copyrightable works, mask works,
computer software, all other similar intangible personal property, and all improvements, derivative
works, know-how, data, rights and claims related to the foregoing that have been or are conceived,
developed or created in whole or in part by the Employee (a) at any time and at any place that
relates directly or indirectly to the business of the Company, as then operated, operated in the
past or under consideration or development or (b) as a result of tasks assigned to Employee by the
Company (collectively, “Company Creations”), shall be and become and remain the sole and exclusive
property of the Company and shall be considered “works made for hire” as that term is defined in
Sections 101 and 201 of the Copyright Act (17 U.S.C. §§ 101 and 201).

22.2. Assignment.  To the extent that any of the Company Creations may not by law be
considered a work made for hire, or to the extent that, notwithstanding the foregoing, Employee
retains any interest in or to the Company Creations, Employee hereby irrevocably assigns and
transfers to the Company any and all right, title, or interest that Employee has or may have,
either now or in the future, in and to the Company Creations, and any derivatives thereof, without
the necessity of further consideration. Employee shall promptly and fully disclose all Company
Creations to the Company and shall have no claim for additional compensation for Company Creations.
The Company shall be entitled to obtain and hold in its own name all copyrights, patents, trade
secrets, trademarks, and service marks with respect to such Company Creations.

22.3. Disclosure & Cooperation.  Employee shall keep and maintain adequate and current
written records of all Company Creations and their development by Employee (solely or jointly with
others), which records shall be available at all times to and remain the sole property of the
Company. Employee shall communicate promptly and disclose to the Company, in such form as the
Company may reasonably request, all information, details and data pertaining to any Company
Creations. Employee further agrees to execute and deliver to the Company or its designee(s) any
and all formal transfers and assignments and other documents and to provide any further cooperation
or assistance reasonably required by the Company to perfect, maintain or otherwise protect its
rights in the Company Creations. Employee hereby designates and appoints the Company or its
designee as Employee’s agent and attorney-in-fact to execute on Employee’s behalf any assignments
or other documents deemed necessary by the Company to perfect, maintain or otherwise protect the
Company’s rights in any Company Creations.

23. Non-Competition & Non-Interference. During the term of Employee’s employment with
the Company and for a period of twelve (12) months after the termination of Employee’s employment
with the Company, irrespective of the reason or absence of reason for such termination, Employee
shall not, without the express written consent of the Board of Directors of the Company, directly
or indirectly: (i) own, manage, operate, join, control, finance or participate in the ownership,
management, operation, control or financing of, or be connected as an officer, director, employee,
partner, principal, agent, representative, consultant or otherwise with, or use or permit his name
to be used in connection with, any business or enterprise, in direct competition with the Company’s
business; (ii) call on or solicit, either directly or indirectly, any person, firm, corporation or
other entity who or which at the time of Employee’s termination was, or within two (2) years prior
thereto had been, a customer of the Company or any of its affiliates with respect to the activities
prohibited by this section; or (iii) employ or cause to be employed in any capacity, or retain or
cause to be retained as a consultant, any person who was employed by the Company at any time during
the six (6) month period following the end date of Employee’s employment. The Employee
acknowledges and agrees that adherence to the terms of this section does not preclude Employee from
earning a livelihood and that the restrictions contained in this Section 4 are reasonable and
necessary to protect the Company’s legitimate interests in the conduct of its business and do not
impose an undue hardship on Employee. The foregoing restriction shall not be construed to prohibit
the ownership by Employee of not more than five percent (5%) of any class of securities of any
corporation which is in competition with the Company and which corporation has a class of
securities registered pursuant to the Securities Exchange Act of 1934, provided that such ownership
represents a passive investment and that neither Employee nor any group of persons including
Employee in any way, either directly or indirectly, manages or exercises control of any such
corporation, guarantees any of its financial obligations, otherwise takes any part in its business,
other than exercising his rights as a shareholder, or seeks to do any of the foregoing. In the
event that the provisions of this Section 4 are deemed to exceed the time, geographic or scope of
limitations permitted by applicable law, then such provisions shall be modified to reflect the
maximum time, geographic or scope limitations, as the case may be, permitted by applicable laws.

24. Equitable Remedies. Employee agrees that it would be impossible or inadequate to
measure and calculate the Company’s damages from any breach of the covenants set forth in
Sections 2, 3, and 4 herein. Accordingly, Employee agrees that if Employee breaches any of such
Sections, the Company will have available, in addition to any other right or remedy available, the
right to obtain an injunction from a court of competent jurisdiction restraining such breach or
threatened breach and to specific performance of any such provision of this Agreement. Employee
further agrees that no bond or other security shall be required in obtaining such equitable relief
and Employee hereby consents to the issuance of such injunction and to the ordering of specific
performance.

25. Employee Authorization.  Employee hereby authorizes the Company at any time during
or after the term of employment to withhold from any amounts otherwise owed to Employee (including
without limitation, salary, bonus, commissions and expense reimbursements) any and all amounts due
to the Company from Employee, including without limitation, cash advances, travel advances,
overpayments made by the Company to Employee, amounts received by Employee due to the Company’s
error, unpaid personal credit card or phone charges or any debt Employee owes to the Company for
any reason, including amounts in respect of misuse or misappropriation of Company assets or breach
of this Agreement.

26. Representations and Warranties. Employee represents and warrants: (i) that
Employee is not subject to any obligations, legal or otherwise, inconsistent with the terms of this
Agreement or with his undertaking a relationship with the Company; (ii) that the performance of
Employee’s services for the Company do not and will not violate any applicable law, rule or
regulation or any proprietary or other right of any third party; (iii) that Employee will not use
in the performance of Employee’s responsibilities for the Company any confidential information or
trade secrets of any other person or entity; (iv) that Employee has not entered into or will enter
into any agreement (whether oral or written) that conflicts with this Agreement; (v) that Employee
will honor all agreements with Employee’s former employer that may bear on Employee’s employment
with the Company, including without limitation, any noncompetition agreement, employment agreement,
proprietary rights agreement, nondisclosure agreement or the like; and (vi) that Employee will not
do, or cause to be done, any act or thing that will infringe upon or interfere with the Company’s
enjoyment of its right, title and interest in and to the Confidential Information or Company
Creations, including without limitation, not producing any works that are substantially similar to,
or confusingly similar with, or likely to cause confusion, deception or mistake with respect to the
Company Creations.

27. Binding Effect and Assignment. This Agreement shall inure to the benefit of the
Company and its successors and assigns, and shall be binding upon Employee and Employee’s heirs,
executors, administrators, successors and assigns. Employee may not assign Employee’s rights or
delegate Employee’s obligations under this Agreement without the prior written consent of the
Company.

28. Waiver. Any waiver by either party of any breach of any term or condition in this
Agreement will not operate as a waiver of any other breach of such term or condition or of any
other term or condition, nor will any failure to enforce any provision hereof operate as a waiver
of such provision or of any other provision hereof or constitute or be deemed a waiver or release
of any other rights, in law or in equity.

29. Governing Law. This Agreement shall be construed and enforced in accordance with
the laws of the State of New Jersey, without regard to the application of the principals of
conflicts of laws.

30. Severability. If any provision of this Agreement is held to be invalid, illegal
or unenforceable, such invalidity, illegality or unenforceability shall not affect the validity and
enforceability of the remaining provisions of this Agreement.

31. Notice. All notices to be given hereunder shall be in writing or by written
telecommunication addressed to the Company at the address set forth above and to Employee at the
address set forth in the Company’s records or at such other address designated by the parties.

32. Entire Agreement. This Agreement contains the entire agreement of the parties
hereto relating to the subject matter hereof, and supersedes all prior and contemporaneous
agreements and understandings with respect to the subject matter hereof. This Agreement may not be
modified, except by a written instrument executed by the parties hereto.

IN WITNESS WHEREOF, the parties, intending to be legally bound, have executed this Agreement
as of the date first written above.

	 	 	 
	VALERA PHARMACEUTICALS, INC.

	 
	 	 
	By:

	 	/s/ Alisa Molbet
	
 
	 	 
	Title:

	 	Associate Director, Human Resources
	
 
	 	 
	Date:

	 	July 5, 2006
	
 
	 	 

	 	 	 
	 	 	

                     [EMPLOYEE]                          }
                     By:              /s/ David S. Tierney

                     Date:            July 5, 2006       }

[EMPLOYEE]
	 	 	By:	 	 	/s/ David S. Tierney
	 	 	Date:	 	 	July 5, 2006

3

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