Sample Business Contracts

Consulting Agreement - Pharmacopeia Inc. and Paul A. Bartlett

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                              CONSULTING AGREEMENT
                           FOR FOUNDING MEMBERS OF THE
                               PHARMACOPEIA, INC.
                            SCIENTIFIC ADVISORY BOARD

                  This Agreement is made as of March ___, 1993, between
PharmaCopeia, Inc. (the "Company") and Paul A. Bartlett (the "Consultant") and
shall be effective upon execution by the Consultant (the "Effective Date").

                  The Consultant has been involved in scientific research in
fields of particular interest to the Company. The Company wishes to retain the
Consultant in a consulting capacity as a founding member of the Company's
Scientific Advisory Board, and the Consultant desires to perform such consulting
services. Accordingly, the parties agree as follows:

                  1.       SERVICES.

                           1.1.     The Consultant will advise the Company's
management, employees and agents, at reasonable times, in matters related to the
Company's field of interest, as requested by the Company as set forth below. The
Company's principal field of interest is the design and development of
pharmaceuticals utilizing state of the art methodologies in synthetic organic
and medicinal chemistry and related areas, including but not limited to the
generation and use of combinatorial chemical libraries (the "Company's Field of
Interest"). The Company's Field of Interest and area of consultation are
collectively referred to in this Agreement as the "Designated Field." In
addition, the Consultant shall assist the Company with development of its
general scientific direction and strategy, recruitment of full-time scientific
and management personnel, interactions with stockholders, potential inventors,
and potential strategic or corporate partners of the Company, and identification
of new inventions and technologies in the Designated Field.

                           1.2.     Consultant will provide up to 25 full days
of consulting per year (such days are referred to below as "Consulting Days").
Consultation may be sought by the Company over the telephone, in person at the
Consultant's office, at the Company's offices or another reasonable location (it
is anticipated that 10 days shall be at the Company's offices) or through
written correspondence, and will involve reviewing activities and developments
in the Company's Field of Interest. If the Company requests additional
consulting days, the Consultant will be paid a fee for each additional day as
set forth below. The Consultant also will participate as a founding member of
the Company's Scientific Advisory Board and agrees to use his best efforts to
attend Scientific Advisory Board meetings. Time spent at Scientific Advisory
Board meetings will be considered to be Consulting Days.

                  2.       CASH COMPENSATION. The Consultant will be paid an
annual fee of $75,000 per year starting as of the date of the Company's first
official Scientific Advisory Board meeting (the "Commencement Date"), and $1,000
for each Consulting Day in excess of 25 full days per year. Consultant shall not
be entitled to any fees for any services rendered to the


Company prior to the Commencement Date. The annual fee shall be paid in four
equal quarterly installments in advance on the first day of each calendar
quarter; except for the first installment, which shall cover the remaining term
of the calendar quarter in which the Commencement Date occurs and be paid pro
rata based on the number of days remaining in such quarter. Any fee for excess
Consulting Days will be paid at the end of the relevant quarter. Reasonable
expenses of the Consultant incurred at the request of the Company will be
reimbursed promptly by the Company, subject to customary verification.

                  3.       STOCK.

                           3.1.     Promptly after execution of this Agreement,
the Consultant will be offered the opportunity to purchase 275,000 shares of the
Company's Common Stock (the "Stock") at the founder stock price of $.001/share
as set forth below.

                           3.2.     The Stock will be issued pursuant to the
Company's standard form of Restricted Stock Purchase Agreement providing that
the Stock will vest 25% immediately with the 75% remaining balance vesting
monthly over a four-year period commencing as of March 1, 1993 based upon
continued service to the Company as a Consultant (any unvested Stock may be
repurchased by the Company at a price equal to the original purchase price) and
containing certain other restrictions prohibiting transfer of the Stock for
specific time periods, provided that in the event that Consultant's consulting
services are involuntarily terminated by the Company without cause, an
additional 50% of the unvested shares as of the date of such termination shall

                  4.       TERM. The term of this Agreement will begin on the
Effective Date of this Agreement and will end at the end of the calendar quarter
in which the fourth anniversary of this Agreement occurs or upon earlier
termination as provided below (the "Term"). This Agreement may be terminated at
an earlier time prior to the fourth anniversary hereof by either party with at
least 30 days written notice. The Term will be automatically renewed for
successive one-year periods, unless either party provides written notice at
least thirty (30) days prior to the end of the Term that such party does not
wish to renew this Agreement. Upon termination, all accrued payments will be
made and, regardless of quarter, the unpaid portion of the annual fee will be
paid in proportion to the portion of the Consulting Day commitments set forth in
Section 1.2 that has been provided.

                  5.       CERTAIN OTHER CONTRACTS.

                           5.1.     The Consultant is currently employed by an
academic or research institution (the "Institution"). The Company recognizes
that the Consultant's primary responsibility is to the Institution. In
connection with such employment, the Consultant has entered into certain
agreements with the Institution relating to ownership of intellectual property
rights, conflicts of interest and other matters, and is subject to certain
policy statements of the Institution (collectively, the "Institutional
Agreement"). If any provision of this Agreement is in conflict with the
Institutional Agreement, then the Institutional Agreement will govern to the


extent of such conflict, and the conflicting provisions of this Agreement will
not apply. Consultant agrees to furnish the Company with copies of such
agreements and policy statements.

                           5.2.     The Consultant will not disclose to the
Company any information that the Consultant is obligated to keep secret pursuant
to an existing confidentiality agreement with a third party, and nothing in this
Agreement will impose any obligation on the Consultant to the contrary.

                           5.3.     The consulting work performed hereunder will
not be conducted on time that is required to be devoted to the Institution or
any other third party. The Consultant shall not use the funding, resources and
facilities of the Institution or any other third party to perform consulting
work hereunder and shall not perform the consulting work hereunder in any manner
that would give the Institution or any third party rights to the product of such
work. Nothing done in Consultant's academic research shall be considered part of
services performed hereunder and nothing herein shall restrict Consultant's
academic research.

                           5.4.     The Consultant has disclosed and, during the
Term, will disclose to the Chief Executive Officer of the Company any conflicts
between this Agreement and any other agreements binding the Consultant.

                  6.       EXCLUSIVE SERVICES DURING THE TERM. Subject to
written waivers that may be provided by the Company upon request, which shall
not be unreasonably withheld, the Consultant agrees that during the Term of this
Agreement he will not directly or indirectly (i) provide any services in the
Field of Interest, to any other business or commercial entity, (ii) provide any
services to any business or commercial entity competitive with the Company,
(iii) participate in the formation of any business or commercial entity in the
Company's Field of Interest or otherwise competitive with the Company, or (iv)
solicit or hire away any employee or consultant of the Company. The Consultant
has disclosed his relationships with the companies listed on Exhibit A attached
hereto and the foregoing will not apply to such relationships as disclosed on
Exhibit A. Consultant shall notify the Company of all other consulting
agreements which Consultant has entered into, or any consulting services which
Consultant may provide, to any third party.

Subject to the Consultant's obligations under the Institutional Agreement and
confidentiality obligations to third parties, during the Term of this Agreement,
the Consultant will use his best efforts (i) to disclose to the Chief Executive
Officer of the Company, on a confidential basis, technology and product
opportunities which come to the attention of the Consultant in the Company's
Field of Interest, and any invention, improvement, discovery, process, formula
or method or other intellectual property relating to or useful in, the Company's
Field of Interest (collectively "New Discoveries") , whether or not patentable
or copyrightable, and whether or not discovered or developed by Consultant, and
(ii) will regard to any New Discoveries discovered or developed by Consultant at
the Institution, to solicit and encourage the institution to enter into an
agreement with the Company to exclusively license such New Discovery to the


PERFORMING SERVICES HEREUNDER. The Consultant will promptly and fully disclose
to the Chief Executive Officer of the Company any invention, improvement,
discovery, process, formula, technique, method, trade secret, or other
intellectual property, whether or not patentable, whether or not copyrightable
(collectively, "Invention") made, conceived, developed, or first reduced to
practice by the Consultant, either alone or jointly with others, while
performing services hereunder. The Consultant hereby assigns to the Company all
of his right, title and interest in and to any such Inventions. The Consultant
will execute any documents necessary to perfect the assignment of such
Inventions to the Company and to enable the Company to apply for, obtain, and
enforce patents or copyrights in any and all countries on such Inventions. The
Consultant hereby irrevocably designates the Secretary of the Company as his
agent and attorney-in-fact to execute and file any such document and to do all
lawful acts necessary to apply for and obtain patents and copyrights, and to
enforce the Company's rights under this paragraph. This Section 8 will survive
the termination of this Agreement.

                  9.       CONFIDENTIALITY.

                           9.1.     The Consultant acknowledges that, during the
course of performing his services hereunder, the Company will be disclosing
information to the Consultant, and the Consultant will be developing information
related to the Company's Field of Interest, Inventions, projects, products,
potential customers, personnel, business plans, and finances, as well as other
commercially valuable information (collectively "Confidential Information"). The
Consultant acknowledges that the Company's business is extremely competitive,
dependent in part upon the maintenance of secrecy, and that any disclosure of
the Confidential Information would result in serious harm to the Company.

                           9.2.     The Consultant agrees that the Confidential
Information will be used by the Consultant only in connection with consulting
activities hereunder, and will not be used in any way that is detrimental to the

                           9.3.     The Consultant agrees not to disclose,
directly or indirectly, the Confidential Information to any third person or
entity, other than representatives or agents of the Company. The Consultant will
treat all such information as confidential and proprietary property of the

                           9.4.     The term "Confidential Information" does not
include information that (i) is or becomes generally available to the public
other than by disclosure in violation of this Agreement, (ii) was within the
relevant party's possession prior to being furnished to such party, (iii)
becomes available to the relevant party on a nonconfidential basis, or (iv) was
independently developed by the relevant party without reference to the
information provided by the Company.

                           9.5.     The Consultant may disclose any Confidential
Information that is required to be disclosed by law, government regulation or
court order. If disclosure is required, the Consultant will give the Company
advance notice so that the Company may seek a protective order or take other
action reasonable in light of the circumstances.


                           9.6.     Upon termination of this Agreement, the
Consultant will promptly return to the Company all materials containing
Confidential Information as well as data, records, reports and other property,
furnished by the Company to the Consultant or produced by the Consultant in
connection with services rendered hereunder, together with all copies of any of
the foregoing. Notwithstanding such return, the Consultant shall continue to be
bound by the terms of the confidentiality provisions contained in this Section 9
for a period of three years after the termination of this Agreement.

                  10.      FREEDOM TO PUBLISH.

                           10.1.    The Company acknowledges the Consultant's
obligation to disseminate new knowledge and research findings. Notwithstanding
the confidentiality provisions, or any other provision, of this Agreement, the
Consultant may publish and make oral presentations of the results of the
Consultant's work performed pursuant to this Agreement under the terms set forth
in this Section 10.

                           10.2.    The Consultant acknowledges that publication
or oral disclosure of any Invention or other work prior to filing for patent or
copyright protection could result in the complete loss of any commercial value
of the Consultant's research to the Institution, the Company, and/or the
Consultant, as the case may be. The Consultant will provide the Company with
sufficient disclosure regarding Inventions owned by the Company under Section 8
at least 90 days prior to publication to allow the Company to evaluate such
disclosure; Consultant will work with the Institution (and the Company if
appropriate) to file patent or copyright applications prior to disclosure or
publication, or to modify such publication if such disclosure regarding
Inventions owned by the Company under Section 8 would materially affect the
business of the Company.

                  11.      USE OF NAME. It is understood that the name of the
Consultant and Consultant's affiliation with the Institution will appear in
disclosure documents required by securities laws, and in other regulatory and
administrative filings in the ordinary course of the Company's business. It is
also understood that the name of the Consultant and Consultant's affiliation
with the Institution will appear in such filings and disclosure documents in
connection with the Company's Scientific Advisory Board. The above described
uses will be deemed to be non-commercial uses. The name of the Consultant or the
Institution will not be used for any commercial purpose without the Consultant's

                  12.      NO CONFLICT: VALID AND BINDING. The Consultant
represents that neither the execution of this Agreement nor the performance of
the Consultant's obligations under this Agreement (as modified to the extent
required by Section 5) will result in a violation or breach of any other
agreement by which the Consultant is bound. The Company represents that this
Agreement has been duly authorized and executed and is a valid and legally
binding obligation of the Company, subject to no conflicting agreements.

                  13.      NOTICES. Any notice provided under this Agreement
shall be in writing and shall be deemed to have been effectively given (i) upon
receipt when delivered personally,


(ii) one day after sending when sent by private express mail service (such as
Federal Express), or (iii) 5 days after sending when sent by regular mail to the
following address:

                  In the case of the Company:

                           PharmaCopeia, Inc.
                           c/o Avalon Ventures
                           1020 Prospect Street, Suite 405
                           La Jolla, CA  902037
                           Attn:    Lawrence A. Bock
                                    Acting President

                  In the case of the Consultant:

                           Paul A. Bartlett
                           Department of Chemistry
                           University of California
                           Berkeley, CA  94720

  or to other such address as may have been designated by the Company or the
  Consultant by notice to the other given as provided herein.

                  14.      INDEPENDENT CONTRACTOR: WITHHOLDING. The Consultant
will at all times be an independent contractor, and as such will not have
authority to bind the Company. Consultant will not act as an agent nor shall he
be deemed to be an employee of the Company for the purposes of any employee
benefit program, unemployment benefits, or otherwise. The Consultant recognizes
that no amount will be withheld from his compensation for payment of any
federal, state, or local taxes and that the Consultant has sole responsibility
to pay such taxes, if any, and file such returns as shall be required by
applicable laws and regulations. Consultant shall not enter into any agreements
or incur any obligations on behalf of the Company.

                  15.      ASSIGNMENT. Due to the personal nature of the
services to be rendered by the Consultant, the Consultant may not assign this
Agreement. The Company may assign all rights and liabilities under this
Agreement (as a group with other similar agreements with members of the
Scientific Advisory Board) to a subsidiary or an affiliate or to a successor to
all or a substantial part of its business and assets without the consent of the
Consultant. Subject to the foregoing, this Agreement will inure to the benefit
of and be binding upon each of the heirs, assigns and successors of the
respective parties.

                  16.      SEVERABILITY. If any provision of this Agreement
shall be declared invalid, illegal or unenforceable, such provision shall be
severed and the remaining provisions shall continue in full force and effect.

                  17.      REMEDIES. The Consultant acknowledges that the
Company would have no adequate remedy at law to enforce Sections 6, 8 and 9
hereof. In the event of a violation by


the Consultant of such Sections, the Company shall have the right to obtain
injunctive or other similar relief, as well as any other relevant damages,
without the requirement of posting bond or other similar measures.

                  18.      GOVERNING LAW; ENTIRE AGREEMENT; AMENDMENT. This
Agreement shall be governed by the laws of the State of California applicable to
agreements made and to be performed within such State, represents the entire
understanding of the parties, supersedes all prior agreements between the
parties, and may only be amended in writing.


                  IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.

PHARMACOPEIA, INC.                            CONSULTANT:

By:      /s/ Lawrence A. Bock                          /s/ Paul A. Bartlett
   ----------------------------------         ----------------------------------
     Lawrence A. Bock                           Paul A. Bartlett
     Acting President


                                    EXHIBIT A

                               OTHER RELATIONSHIPS

                          [List, if none so indicate.]

Advisory services currently provided to other pharmaceutical companies

Agouron Pharmaceuticals, Inc. consultant
Sandoz Research Institute Scientific Advisory Board
Schering-Plough, Inc. consultant to process development group
SmithKline Beecham, Inc. Chemical Technologies Advisory Board
Tularik, Inc. Scientific Advisory Board