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Separation Agreement - Diversa Corp. and Terrance J. Bruggeman

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                             SEPARATION AGREEMENT

     This Separation Agreement ("Agreement") is made and entered into by
and between Terrance J. Bruggeman ("Mr. Bruggeman") and Diversa Corporation (the
"Company"), as of the Effective Date provided for in paragraph 20 herein.

     1.   Resignation.  Effective February 4, 1999, Mr. Bruggeman tendered and
the Company accepted his resignation as Chief Executive Officer and any and all
other positions he may have held with the Company and its subsidiaries (the
"Separation Date").  As part of this Agreement, Mr. Bruggeman agrees to resign
his position as a Director on the Company's Board of Directors as of the
Effective Date of this Agreement.

     2.   Accrued Salary and Vacation.  The Company has paid Mr. Bruggeman all
accrued salary, and all accrued and unused vacation benefits earned prior to the
Separation Date, subject to standard payroll deductions and withholdings.

     3.   Expense Reimbursement.  Within thirty (30) business days of Mr.
Bruggeman's execution of this Agreement, Mr. Bruggeman agrees that he will
submit his final documented expense reimbursement statement reflecting all
business expenses he incurred prior to and including the Separation Date, if
any, for which he seeks reimbursement.  The Company shall reimburse Mr.
Bruggeman's expenses pursuant to Company policy and regular business practice.

     4.   Severance.  The Company agrees to make severance payments to Mr.
Bruggeman in the form of continuation of his base salary in effect on the
Separation Date up until the earlier of (i) twelve (12) months from the
Separation Date, or (ii) the date in which Mr. Bruggeman begins employment with
another company or business entity (the "Severance Period").  These payments
will be made on the Company's ordinary payroll dates, and will be subject to
standard payroll deductions and withholdings.  The Company further agrees that,
in the event Mr. Bruggeman dies during the Severance Period, it will continue to
pay Mr. Bruggeman's Severance Payments to his estate for the duration of the
Severance Period.

     5.   Relocation.  The Company agrees that it will pay Mr. Bruggeman the sum
of Four Thousand Two Hundred Dollars ($4,200.00) as a cost of living adjustment
payment provided for under his relocation benefits arrangement with the Company
within five (5) business days of the Effective Date of this Agreement.  Mr.
Bruggeman acknowledges that he is not entitled to, and shall not receive from
the Company, any additional relocation benefits or payments.

     6.   Attorneys' Fees.  The Company agrees that, as part of this Agreement
and in consideration thereof, it will reimburse Mr. Bruggeman for the cost of
his reasonable attorneys' fees in connection with the review and negotiation of
this Agreement in an amount not to exceed Four Thousand Five Hundred Dollars
($4,500.00).

                                      1.
<PAGE>

     7.   Additional Severance.  The Company agrees that, as part of this
Agreement and in consideration thereof, it will pay Mr. Bruggeman the sum of
Fifty Thousand Dollars ($50,000.00) subject to standard deductions and
withholdings, within ten (10) business days of the Effective Date of this
Agreement.

     8.   Job Search Reimbursement.  The Company agrees that, as part of this
Agreement and in consideration thereof, it will reimburse Mr. Bruggeman for the
costs and expenses that he may incur in connection with his job search and other
related expenses incurred prior to December 31, 1999, in an amount not to exceed
Fifteen Thousand Dollars ($15,000.00).

     9.   Stock Options.  In exchange for the promises and covenants set forth
herein, and in consideration thereof, the Company agrees that the vesting of
each outstanding stock option (the "Stock Options") held by Mr. Bruggeman as
listed on Exhibit A attached hereto, shall be accelerated such that, as of the
Effective Date of this Agreement, the number of shares vested under the Stock
Options shall equal the number of shares that would have vested through June 10,
1999 had he remained an employee of the Company continuously through that date.
Should Mr. Bruggeman choose to exercise any such Stock Options, he must do so
within 90 days of the Separation Date.  The Stock Options will terminate 90 days
after the Separation Date if not exercised. Except as provided herein, Mr.
Bruggeman understands and agrees that all vesting under any stock compensation
award (e.g., incentive stock option, non-qualified stock option, stock purchase
agreement, or restricted stock bonus agreement) from the Company shall cease
upon the Separation Date.

     10.  Health Insurance.  To the extent provided by the federal COBRA law or,
if applicable, state insurance laws, and by the Company's current group health
insurance policies, Mr. Bruggeman will be eligible to continue his health,
prescription drug, vision and dental insurance benefits.  Mr. Bruggeman will be
provided with a separate notice of his COBRA rights.  In the event that Mr.
Bruggeman elects continued coverage under COBRA, the Company will pay his COBRA
insurance premiums up until the earlier of (i) eighteen (18) months from the
Separation Date, or (ii) the date in which Mr. Bruggeman begins employment with
another company or business entity (the "Premium Period").  Thereafter, Mr.
Bruggeman shall be solely responsible for the payment of his COBRA premiums, if
any.  The Company further agrees that, in the event Mr. Bruggeman dies during
the Premium Period, it will continue to pay Mr. Bruggeman's dependents' COBRA
insurance premiums for the duration of the Premium Period.

     11.  Key Man Life Insurance.  The Company agrees that it will cancel the
key man life insurance policy on Mr. Bruggeman's life within a reasonable period
of time following the execution of this Agreement.

     12.  Condition Precedent.  This Agreement is expressly conditioned on the
closing of the purchase of 793,455 shares of Mr. Bruggeman's Series B
Convertible Preferred Stock (the "Shares") by certain current shareholders of
such stock at a price of $1.09 per share (the "Transaction").  This Transaction
is to be completed within a reasonable period of time after the execution of the
Agreement, but no later than April 12, 1999.  The Company has prepared the
necessary documentation for the Transaction which is submitted to Mr. Bruggeman
concurrent with this Agreement and which Mr. Bruggeman agrees he will execute.
In the event the

                                      2.
<PAGE>

purchase price for the Shares is not tendered by the purchasing shareholders,
for whatever reason (other than Mr. Bruggeman's refusal to accept the purchase
price), this Agreement shall be rescinded and Mr. Bruggeman will return to
Diversa any sums or amounts paid to him hereunder; provided, however, in such
event, Mr. Bruggeman may retain the benefits provided for in paragraphs 2, 3, 4,
5 and 10 pursuant to the terms and conditions of each respective paragraph.

     13.  Other Compensation and Benefits.  Except as expressly provided herein,
Mr. Bruggeman acknowledges that he will not receive (nor is he entitled to) any
additional compensation, severance, stock options, stock or benefits from the
Company, notwithstanding any prior agreements to the contrary.

     14.  Nonsolicitation.  Mr. Bruggeman agrees that for one (1) year after the
Separation Date, he will not, either directly or through others, solicit or
attempt to solicit any person (including any entity) who is then an employee,
consultant or independent contractor of the Company to terminate his, her or its
relationship with the Company in order to become an employee, consultant or
independent contractor to or for any other person or entity.

     15.  Proprietary Information Obligations.  Mr. Bruggeman hereby
acknowledges his continuing obligations under the Employee Invention and Non-
Disclosure Agreement not to use or disclose any confidential or proprietary
information of the Company without prior written authorization from a duly
authorized representative of the Company.  A copy of Mr. Bruggeman's Employee
Invention and Non-Disclosure Agreement is attached hereto as Exhibit B.  Mr.
Bruggeman acknowledges that irreparable damage would result to the Company if he
breached the provisions of this paragraph 12, and the Company would not have an
adequate remedy at law for such a breach or threatened breach.  In the event of
such a breach or threatened breach, Mr. Bruggeman agrees that the Company, may,
notwithstanding anything to the contrary herein contained, and in addition to
the other remedies which may be available to it, seek to enjoin him, together
with all those persons associated with him, from the breach or threatened breach
of such covenants.

     16.  Company Property.  Mr. Bruggeman agrees to return to the Company,
within ten (10) days of the execution of the Agreement, all Company documents
(and all copies thereof) and other Company property in his possession, or his
control, including, but not limited to, Company files, notes, drawings, records,
business plans and forecasts, financial information, specifications, computer-
recorded information, tangible property, credit cards, entry cards,
identification badges and keys; and, any materials of any kind which contain or
embody any proprietary or confidential material of the Company (and all
reproductions thereof); provided, however, that if Mr. Bruggeman discovers any
such documents or property in his possession after the expiration of such ten
(10) day period, Mr. Bruggeman agrees to return such property to the Company as
soon as practicable following discovery.

     17.  Nondisparagement.  Mr. Bruggeman agrees that he will not at any time
intentionally disparage the Company in any manner likely to be harmful to the
Company, its business reputation, or the personal or business reputation of its
directors, stockholders or employees, and the Company agrees that neither it nor
its officers and directors will at any time intentionally disparage Mr.
Bruggeman or his personal or business reputation, provided that each

                                      3.
<PAGE>

party shall respond accurately and fully to any question, inquiry or request for
information when required by legal process.

     18.  Confidentiality and Publicity.  The provisions of this Agreement shall
be held in strictest confidence by Mr. Bruggeman and the Company and shall not
be publicized or disclosed in any manner whatsoever other than as follows:  (a)
the parties may disclose this Agreement in confidence to their respective
attorneys, accountants, auditors, tax preparers, and financial advisors (and, in
the case of Mr. Bruggeman, to members of his family); (b) the Company may
disclose this Agreement as necessary to fulfill standard or legally required
corporate reporting or disclosure requirements; and (c) the parties may disclose
this Agreement insofar as such disclosure may be necessary to enforce its terms
or as otherwise required by law.  In particular (and without limitation), Mr.
Bruggeman agrees not to discuss the contents of this Agreement with present or
former Company employees or other personnel.

     19.  Release of Claims by Mr. Bruggeman.  Except as otherwise set forth in
this Agreement, Mr. Bruggeman hereby releases, acquits and forever discharges
the Company, its officers, directors, agents, attorneys, servants, employees,
shareholders, successors, assigns and affiliates, of and from any and all
claims, liabilities, demands, causes of action, costs, expenses, attorneys'
fees, damages and obligations of every kind and nature, in law, equity, or
otherwise, known and unknown, suspected and unsuspected, disclosed and
undisclosed, arising out of or in any way related to agreements, events, acts or
conduct at any time prior to and including the execution date hereof, including
but not limited to:  any and all such claims and demands directly or indirectly
arising out of or in any way connected with Mr. Bruggeman's employment with the
Company or the termination of that employment; claims or demands related to
salary, bonuses, commissions, stock, stock options, or any other ownership
interests in the Company, vacation pay, fringe benefits, expense reimbursements,
sabbatical benefits, severance benefits, or any other form of compensation;
claims pursuant to any federal, state or local law or cause of action including,
but not limited to, the federal Civil Rights Act of 1964, as amended; the
federal Age Discrimination in Employment Act of 1967, as amended (the "ADEA");
the federal Americans with Disabilities Act of 1990; the California Fair
Employment and Housing Act, as amended; tort law; contract law; wrongful
discharge; discrimination; fraud; defamation; emotional distress; and breach of
the implied covenant of good faith and fair dealing.  Notwithstanding the above,
Mr. Bruggeman does not release any claims he may have (i) under this Agreement,
(ii) for indemnification pursuant to and in accordance with applicable statutes
and the applicable terms of the charters, articles of incorporation or bylaws of
Company, including but not limited to the Company's general liability and
Director's and Officer's Liability Policies, (iii) for accrued and vested
benefits under the terms of applicable employee benefit plans, or (iv) with
respect to his Stock Options or his Series B Convertible Stock Agreements.

     20.  ADEA Waiver.  Mr. Bruggeman acknowledges that he is knowingly and
voluntarily waiving and releasing any rights he may have under the ADEA.  He
also acknowledges that the consideration given for the waiver in paragraphs 6,
7, 8 and 9 is in addition to anything of value to which he was already entitled.
He further acknowledges that he has been advised by this writing that:  (a) his
waiver and release do not apply to any claims that may arise after he signs this
Agreement; (b) he has the right to consult with an attorney prior to executing
this Agreement; (c) he has twenty-one (21) days within which to consider this
Agreement (although he may choose to voluntarily execute this Agreement
earlier); (d) he has

                                      4.
<PAGE>

seven (7) days following the execution of this Agreement to revoke the
Agreement; (e) this Agreement shall not be effective until the date upon which
the revocation period has expired, which shall be the eighth day after this
Agreement is executed by Mr. Bruggeman, provided that the Company has also
signed the Agreement by that date (the "Effective Date").

     21.  Section 1542 Waiver.  Mr. Bruggeman acknowledges that he has read and
understands Section 1542 of the Civil Code of the State of California which
reads as follows:

          A general release does not extend to claims which the creditor does
          not know or suspect to exist in his favor at the time of executing the
          release, which if known by him must have materially affected his
          settlement with the debtor.

Mr. Bruggeman hereby expressly waives and relinquishes all rights and benefits
under that section and any law or legal principle of similar effect in any
jurisdiction with respect to the release granted in this Agreement.

     22.  Release of Claims by the Company. The Company hereby releases, acquits
and forever discharges Mr. Bruggeman and his agents, successors, assigns and
affiliates from any and all claims, liabilities, demands, causes of action,
costs, expenses, attorneys' fees, damages, indemnities and obligations of every
kind in nature, in law, equity or otherwise arising out of or in any way related
to agreements, events, acts or conduct at any time prior to and including the
date the Company executes this Agreement, relating to any act or omission by Mr.
Bruggeman within the authorized course and scope of his employment with the
Company, with the exception of any claim arising out of his obligations under
this Agreement, including the Employee Invention and Non-Disclosure Agreement or
any other obligations relating to the proprietary information of the Company.
The Company, its officers, directors and managerial employees acknowledge that
as of the Effective Date they have no knowledge, information or belief that Mr.
Bruggeman has performed any act or omission outside the authorized course and
scope of his employment.

     23.  No Admissions.  It is understood and agreed by Mr. Bruggeman and the
Company that this Agreement represents a compromise settlement of various
matters, and that the promises and payments in consideration of this Agreement
shall not be construed to be an admission of any liability or obligation by
either party to the other party or to any other person.

     24.  Notices.  All notices, instructions and other communications given
hereunder or in connection herewith shall be in writing.  Any such notice,
instruction or communication shall be sent either (a) by registered or certified
mail, return receipt requested, postage prepaid, or (b) via a reputable express
courier service, in each case to the address set forth below.  Any such notice,
instruction or communication shall be deemed to have been delivered three
business days after it is mailed, by certified mail, postage prepaid, return
receipt requested, or one business day after it is sent via a reputable
nationwide overnight courier service.

                                      5.
<PAGE>

If to the Company:            Diversa Corporation
                              10665 Sorrento Valley Road
                              San Diego, California  92121-1623
                              Attn:  Chief Executive Officer

If to Mr. Bruggeman:          Terrance J. Bruggeman
                              5240 Fiore Terrace, #J-215
                              San Diego, California  92122

Any party may give any notice, instruction or communication in connection with
this Agreement using any other means (including personal delivery, telecopy or
ordinary mail), but no such notice, instruction or communication shall be deemed
to have been delivered unless and until it is actually received by the party to
whom it was sent.  Any party may change the address to which notices,
instructions or communications are to be delivered by giving the other party to
this Agreement notice thereof in the manner set forth in this paragraph 21.

     25.  Entire Agreement.  This Agreement, including the Exhibits hereto,
constitutes the complete, final and exclusive embodiment of the entire agreement
between Mr. Bruggeman and the Company with regard to the subject matter hereof,
and supercedes that certain employment offer letter dated May 10, 1996, between
Mr. Bruggeman and the Company.  It is entered into without reliance on any
promise or representation, written or oral, other than those expressly contained
herein.  It may not be modified except in a writing signed by Mr. Bruggeman and
a duly authorized officer of the Company.  Each party has carefully read this
Agreement, has been afforded the opportunity to be advised of its meaning and
consequences by his or its respective attorneys, and signed the same of his or
its own free will.

     26.  Successors and Assigns.  This Agreement shall bind the heirs, personal
representatives, successors, assigns, executors, and administrators of each
party, and inure to the benefit of each party, its heirs, successors and
assigns.  However, because of the unique duties under this Agreement, Mr.
Bruggeman agrees not to delegate the performance of such duties under this
Agreement.

     27.  Applicable Law.  This Agreement shall be deemed to have been entered
into and shall be construed and enforced in accordance with the laws of the
State of California as applied to contracts made and to be performed entirely
within California.

     28.  Severability.  If a court of competent jurisdiction determines that
any term or provision of this Agreement is invalid or unenforceable, in whole or
in part, then the remaining terms and provisions hereof shall be unimpaired.
Such court will have the authority to modify or replace the invalid or
unenforceable term or provision with a valid and enforceable term or provision
that most accurately represents the parties' intention with respect to the
invalid or unenforceable term or provision.

     29.  Arbitration.  To ensure rapid and economical resolution of any
disputes which may arise under this Agreement, Mr. Bruggeman and the Company
agree that any and all disputes or controversies of any nature whatsoever,
arising from or regarding the interpretation,

                                      6.
<PAGE>

performance, enforcement or breach of this Agreement shall be resolved by
confidential, final and binding arbitration (rather than trial by jury or court
or resolution in some other forum) to the fullest extent permitted by law. Any
arbitration proceeding pursuant to this Agreement, shall be conducted by the
American Arbitration Association ("AAA") in San Diego under the then existing
AAA arbitration rules. If for any reason all or part of this arbitration
provision is held to be invalid, illegal, or unenforceable in any respect under
any applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability will not effect any other portion of this arbitration provision
or any other jurisdiction, but this provision will be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or unenforceable part
or parts of this provision had never been contained herein, consistent with the
general intent of the parties insofar as possible.

     30.  Attorneys' Fees.  In any legal action or other proceeding brought to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to recover reasonable attorneys' fees and documented out-of-pocket
expenses.

     31.  Section Headings.  The section and paragraph headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.

     32.  Counterparts.  This Agreement may be executed in two counterparts,
each of which shall be deemed an original, all of which together shall
constitute one and the same instrument.

     In Witness Whereof, the parties have duly authorized and caused this
Agreement to be executed as follows:

Terrance J. Bruggeman,
an individual.


 /s/ Terrance J. Bruggeman
------------------------------
Terrance J. Bruggeman

Dated: April 5, 1999
      ------------------------


Daniel T. Carroll,
Chairman of the Human Resource
Committee of the Board of Directors


 /s/ Daniel T. Carroll
------------------------------
Daniel T. Carroll

Dated: April 6, 1999
      ------------------------

                                      7.
<PAGE>

                                   EXHIBIT A


                                 STOCK OPTIONS
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
  Date of Grant    Vesting Commencement   Shares Subject to the   Vested as of
                           Date                  Option             06-10-99
--------------------------------------------------------------------------------
<S>                <C>                    <C>                     <C>
    11-05-96             11-05-96                1,646,462          1,234,846
--------------------------------------------------------------------------------
</TABLE>
<PAGE>

                                   EXHIBIT B

                       Recombinant BioCatalysis(TM) Inc.
                EMPLOYEE INVENTION AND NON-DISCLOSURE AGREEMENT

This Employee Invention and Non-Disclosure Agreement is made this 15th day of
September, 1996 ("Effective Date") by and between RECOMBINANT BIOCATALYSIS(TM)
INC., a Delaware corporation with a principal place of business at Elmwood Court
Two, 512 Elmwood Avenue, Sharon Hill, PA 19079-1003, and a further place of
business at 505 coast Boulevard South, La Jolla, California 92037 ("RBI"), and
T. J. Bruggeman, an individual having an address at 6 ________________________
("Employee").

     In consideration of the mutual promises and other good and valuable
consideration, and as part of the terms of employment of Employee by RBI, the
parties agree as follows:

INVENTIONS

     1.   Employee agrees to disclose to RBI promptly in writing any and all
inventions, developments, discoveries, improvements and ideas, whether
patentable or not; (a) which are made, discovered, and/or conceived by Employee
alone or with others in the course of his or her employment or provision of
services to RBI; (b) which are based on or utilize RBI Proprietary Information
(as defined in Paragraph 6); or (c) which result or arise from or relate to the
use of RBI's facilities, equipment, materials, funds, or actual or demonstrably
anticipated research or development.  All such improvements, inventions,
developments, discoveries, ideas, and intellectual property rights, shall be
referred to individually and collectively as "Developed Technology."  RBI shall
receive such disclosures in confidence.  To the extent required by contracts
between RBI and the United States or any of its agencies, full title to certain
patents and inventions shall be in the United States.

     2.   Employee agrees that all Developed Technology made, discovered or
conceived by Employee, either solely or in collaboration with any other person,
during the term of Employee's employment with RBI, whether or not patented or
copyrighted, is and shall remain the sole and exclusive property of RBI, its
successors and assigns.  Employee irrevocably agrees to assign and does assign
to RBI or its nominees, successors or assigns, all right, title and interest in
and to Developed Technology.  Employee agrees to execute any and all papers and
perform any and all acts as may be necessary to perfect such assignment.

     3.   With regard to the copyright laws of the United States, RBI notes that
U.S. Copyright Act (S) 101 defines the term "work made for hire," in pertinent
part, as a "work prepared by an employee within the scope of his or her
employment."  U.S. Copyright Act (S) 201(b) provides that "[i]n the case of a
work made for hire, the employer or other person for whom the work was prepared
is considered the author for purposes of this title and, unless the parties have
expressly agreed otherwise in a written instrument signed by them, owns all of
the rights comprised in the copyright."  RBI further notes that the judicial
decisions under the U.S. Copyright Act broadly interpret the phrase "within the
scope of his or her employment."  This phrase has been applied to cover, among
other things, some works created by an employee at
<PAGE>

home on his own time and for no additional pay, without any request by the
employer. RBI intends to assert its ownership and other rights in the "work made
for hire" are to the fullest legally permissible extent.

     4.  In the event that RBI makes or proposes to make any United States or
foreign patent application relating to Developed Technology owned by RBI
pursuant to this Agreement, Employee shall cooperate fully with RBI and its
patent counsel in preparing and prosecuting any such application.  Employee
agrees to execute, acknowledge and deliver all such papers, including, but not
limited to, applications for patents, applications for copyright registration
and applications for trademark registration as may be necessary or appropriate
to enable RBI to publish or protect Developed Technology owned by RBI by
patents, copyrights or otherwise in the name of RBI or its nominees, successors
or assigns.  Employee further agrees to render all such assistance as RBI may
require in any patent office, proceeding, litigation or other administrative,
judicial or related proceeding in the United States or foreign country,
involving Developed Technology owned by RBI.

     5.   In the event RBI is unable, after reasonable effort to secure
Employee's signature on any of the documents referenced in Paragraphs 2 and 4
whether because of Employee's physical or mental incapacity or for any other
reason whatsoever, Employee irrevocably designates and appoints RBI and its duly
authorized officers and agents as Employee's agent and attorney-in-fact, for
purposes of effecting any or all prosecutions and/or issuances of any such
copyright, patent or trademark protection or other analogous protection.

CONFIDENTIAL INFORMATION

     6.   For purposes of this Agreement, the phrase "RBI Proprietary
Information" includes without limitation the following:

          (a) technical information, including patent strategy, information
encompassed by Developed Technology or trade secrets, locations and sources of
bio-material, methods of harvesting bio-material, experiment and research
design, results, techniques and processes; biological materials, including but
not limited to enzymes and clones; work in progress; manufacturing and process
know-how; laboratory notebooks, research journals, idea notebooks, notes and
letters; concepts; ideas; apparatus and equipment design; and computer software;

          (b) technical management information, including technical manuals,
product proposals, status reports, performance objectives and criteria and
analyses of areas for business development; and

          (c) business information, including cost, pricing, project, financial,
accounting and personnel information, notes, letters, business strategies,
plans, proposals, projections and forecasts, customer lists, customer
information and sales and marketing plans, proposals, projections, efforts,
information and data.

     "RBI Proprietary Information" shall also include any and all information
and materials received by RBI or Employee from a third party subject to an
obligation of confidentiality and/or non-disclosure.
<PAGE>

     7.   Developed Technology owned by RBI and RBI Proprietary Information
shall be considered confidential and trade secret and shall not be disclosed to
any person or entity or used by Employee for any purpose at any time during or
following the termination or cessation of Employee's employment with RBI, except
as required in Employee's performance of job duties for RBI.  Nothing in this
Agreement shall restrict Employee's ability to make such disclosures during the
course of his or her employment as may be necessary or appropriate to the
effective and efficient discharge of the duties and responsibilities of Employee
or as such disclosures may be required by law.  Failure by  RBI to mark any of
RBI Proprietary Information as "confidential" or "proprietary" shall not affect
its status as RBI Proprietary Information under the terms of this Agreement.

COMPETITIVE ACTIVITIES

     8.   During the term of Employee's employment with RBI, and for a period of
two (2) years after the termination or cessation of Employee's employment with
RBI, Employee shall not, without the prior written approval of RBI, alone or as
a partner, officer, director, consultant, employee, stockholder, agent,
contractor or otherwise, engage in any employment, consulting, business or other
activity or occupation competitive with RBI.

     9.   During the term of Employee's Employment with RBI, and for a period of
two (2) years after the termination or cessation of Employee's employment with
RBI, Employee shall not directly or indirectly disrupt, damage, impair or
interfere with RBI, whether by way of interfering with, raiding, hiring,
soliciting its employees, disrupting its relationships with customers, agents,
representatives or vendors, or otherwise or by attempting to do any of the
foregoing.

     10.  Employee acknowledges that the identifies of RBI's customers, of
customer leads, contracts with customers and other related customer information
gained during Employee's employment with RBI about those customers is secret and
confidential and constitutes a trade secret and Employee agrees that during the
term of Employee's employment with RBI, and for a period of two (2) years after
termination or cessation of Employee's employment with RBI, Employee shall not
use, rely on or exploit, directly or indirectly, such information to solicit
business from any such customers.

     11.  Employee acknowledges that Employee has carefully read and construed
the provision of the preceding paragraphs and believes that Employee has
received and will receive sufficient consideration and other benefits in
connection with Employee's employment relationship with RBI to justify such
restrictions.

RBI PROPERTY

     12.  At the request of RBI, and in any event at the time of leaving RBI's
employment, Employee shall return any and all materials and documents, and
copies thereof, in the possession of or under the control of Employee, whether
prepared by RBI.  Employee or anyone else, when such materials or documents are,
include, incorporate or refer to RBI Proprietary Information or Developed
Technology.  The term document is used in its broadest sense, and includes,
without limitation, drawings, blueprints, laboratory notebooks, binders,
research journals, idea
<PAGE>

notebooks, memoranda, specifications, formulas, devices, documents, list and
files (including those pertaining to employees, customers and suppliers),
equipment, apparatus, correspondence, computer hardware, systems, programs,
software, storage media (whether on or in the form of computer discs, tapes,
hard drives, or other method whether now known or devised in the future),
manuals, printouts, routines, sub-routines, price lists, pricing information,
devices, and writings of any and every kind or nature.

     13.  During the term of Employee's employment with RBI, Employee shall not
remove from RBI's offices or premises any documents, records, files,
correspondence, reports, memoranda or similar materials of or containing RBI
Proprietary Information, or other materials or property of any kind belonging to
RBI, unless necessary or appropriate in accordance with the duties and
responsibilities of Employee.  In the event that such materials or property are
removed, all of the above-referenced documents and materials shall be returned
to their proper files or places of safekeeping as promptly as possible after the
removal shall service its specific purpose.  Notwithstanding the foregoing,
laboratory notebooks shall not be removed from RBI's offices or premises at
anytime for any reason, other than for off site storage of the notebooks.

     14.  During the term of Employee's employment with RBI, Employee shall not
make, retain, remove and/or distribute any copies of any of the above-referenced
documents and materials for any reason whatsoever, except as may be necessary in
the discharge of his or her assigned duties.  Employee shall not divulge to any
third person the nature of an/or contents of any of the above-referenced
documents and materials, or of any other oral or written information to which he
or she may have access or with which for any reason he or she may become
familiar, except as disclosure shall be necessary in the performance of the
duties and responsibilities of Employee.

GENERAL PROVISIONS

     15.  Employee represents and warrants to RBI that there are no
restrictions, agreements or understandings whatsoever to which Employee is a
party which would prevent or make unlawful Employee's execution of this
Agreement or Employee's employment. Employee further represents and warrants
that there are no restrictions, agreements or understandings whatsoever to which
Employee is a party, which are, or would be inconsistent or in conflict with,
this Agreement or Employee's employment or would prevent, limit or impair in any
way the performance by Employee of the obligations set forth in this Agreement.

     16.  No rights or licenses, expressed or implied, in or to any RBI
Proprietary information or Developed Technology are granted to Employee under
this Agreement.

     17.  This Agreement constitutes the entire and exclusive Agreement between
Employee and RBI with respect to the subject matter and supersedes and mergers
any and all prior or contemporaneous discussions, agreements, representations
and understandings of the parties with respect to the employment of Employee
with RBI.  No supplement, modification or amendment of this Agreement shall be
binding upon RBI or Employee unless set forth in a written agreement executed by
RBI and Employee, which agreement specifically references this Agreement.
<PAGE>

     18.  No provision of this Agreement may be waived orally.  Waivers of any
terms of this Agreement shall be in writing and shall be signed by the party
sought to be bound by such waiver.

     19.  Neither this Agreement, nor any benefits of this Agreement, are
assignable by Employee, however, RBI may assign this Agreement to, and this
Agreement's terms and provisions shall insure to the benefit of, any parent,
subsidiary, affiliate, successor or other assignee of RBI.

     20.  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.

     21.  Employee acknowledges that it is impossible to measure fully in money
the injury that will be caused to RBI in the event of a breach or threatened
breach of any of the provisions of this Agreement, and therefore agrees and
acknowledges that RBI has no adequate remedy at law.  Accordingly, Employee
shall not, in any action or proceeding to enforce any of the provisions of this
Agreement, assert the claim or defense that such an adequate remedy at law
exists.  RBI shall be entitled to injunctive relief to enforce the provisions of
this Agreement, without prejudice to any other remedy RBI may have at law or in
equity.

     22.  The periods of time set forth in Paragraphs 8, 9 and 10 of this
Agreement shall not include, and shall be deemed extended by, any time required
for litigation to enforce the relevant covenant periods, provided that RBI is
successful on the merits in any such litigation.  The "time required for
litigation" is defined to mean the period of time from service of process upon
Employee through the expiration of all appeals related to such litigation.

     23.  If an action at law or in equity is brought to enforce or interpret
the terms of this Agreement, the prevailing party shall be entitled to recover,
in addition to any other relief, reasonable attorney's fees, costs and
disbursements.

     24.  The language of this Agreement shall be construed as a whole according
to its fair meaning and not strictly for or against any of the parties hereto.

     25.  If any provision of this Agreement is adjusted to be void or otherwise
unenforceable, in whole or in part, such adjudication shall not affect the
validity of the remainder of the Agreement.

     26.  This agreement shall be interpreted and governed by the laws of the
State of California without reference to its choice of law principles.

     27.  Any notice by either party shall be given by personal delivery or by
sending such notice by certified mail, return-receipt requested, or telecopied,
addressed or telecopied as the case may be, to the other party at its address
set forth below or at such other address designated by notice in the manner
provided in this Paragraph 27.  Such notice shall be deemed to have been
received upon the date of actual delivery or personally delivered or, in the
case of mailing, two (2) days after deposit with the U.S. mail, or, in the case
of facsimile transmission, when confirmed by the facsimile machine report.
<PAGE>

     If to RBI, to:                         If to Employee, to:

     Recombinant BioCatalysis, Inc.         Terrance J. Bruggeman
     10665 Sorrento Valley Drive            6 ______________ Road
     San Diego, CA  92121                   Westport, CT  06880
     Telecopier:  (619) 453-7032            Telecopier:  (203) 454-7901

     In Witness Whereof, the parties have executed this Agreement effective as
of the date referenced above.

     Recombinant BioCatalysis, Inc.         Employee

     By:________________________            By: /s/ Illegible Signature
                                               -------------------------

     Title:_____________________            Title: Chief Executive Officer
                                                  ------------------------