EXHIBIT 10.2
July 30, 1997
Xxxx X. Xxxx, Ph.D.
Therapeutic Discovery Corporation
1454 Page Mill Road, Ste. 220
X.X. Xxx 00000
Xxxx Xxxx, XX 00000-0000
Dear Xx. Xxxx:
This letter serves to set forth the agreement reached by ALZA Corporation
("ALZA") and Therapeutic Discovery Corporation ("TDC") regarding the royalties
payable to TDC in the event ALZA exercises its license option for any TDC
product, and the amount of TDC's operating reserve. I believe that ALZA and
TDC have agreed as follows:
1. The parties agree that the last sentence in Section 3.1 of the form of
License Agreement which is attached as Exhibit A to the License Option
Agreement by and between ALZA and TDC dated as of March 10, 1993 is hereby
deleted and the following replaced therefor in any License Agreement entered
into by ALZA and TDC after June 30, 1997 for any country or countries pursuant
to the License Option Agreement:
"In determining payments under this Section 3.1, Development Costs shall be
determined as of the last day of each calendar quarter (beginning with the
calendar quarter preceding the effective date of the relevant License
Agreement) in order to determine the rates payable for the next calendar
quarter for all countries included in the Territory as of the first day of such
next calendar quarter and for any country added to the Territory during such
next calendar quarter."
In addition, in the event ALZA does not exercise its license option under the
License Option Agreement with respect to a particular product prior to the
expiration of the license option for such product, ALZA agrees, at no
additional charge to TDC, to provide TDC with ongoing technical support in
connection with TDC's efforts to make arrangements with third parties for the
commercialization of such product.
2. TDC agrees to limit to $500,000 the amount that TDC will set aside as its
operating reserve out of "Available Funds" (as such term is defined in the
Development Agreement by and between ALZA and TDC dated as of March 10, 1993).
ALZA acknowledges that the foregoing does not prevent TDC from maintaining all
or any portion of its funds other than Available Funds as an operating reserve.
21
Page 2
Xxxx X. Xxxx
July 30, 1997
If the foregoing accurately reflects your understanding of the agreement
between the parties, please sign the acknowledgment below on behalf of TDC.
Except as otherwise expressly set forth in this letter, the terms of the
outstanding agreements between ALZA and TDC, as previously amended, remain in
full force and effect.
Very truly yours,
ALZA Corporation
/s/ Xxxxx X. Xxxxxx
--------------------------------
Xxxxx X. Xxxxxx
Senior Vice President and
Chief Financial Officer
TDC hereby agrees to the foregoing amendments to the agreements between ALZA
and TDC.
Therapeutic Discovery Corporation
/s/ Xxxx X. Xxxx, Ph.D.
--------------------------------
Name: Xxxx X. Xxxx, Ph.D.
Title: President and
Chief Executive Officer
22
