Exhibit 10.82

SEPARATION AGREEMENT

This Separation Agreement (“Agreement”) is made and entered into by and between
Taylor Crouch (“Crouch”) and Discovery Partners International, Inc. (the
“Company”), effective as of the Effective Date specified in Section 11 hereof. 
Crouch and the Company hereby agree as follows:

1.             SEPARATION DATE.

(a)           Separation Date.  Crouch and the Company agree that on January 18,
2005 Crouch’s employment with the Company will be terminated (the “Separation
Date”) pursuant to the terms and conditions stated herein.

(b)           Severance Pay.  In exchange for Crouch’s promises and covenants in
this Agreement, the Company will pay to Crouch the equivalent of fifty-six (56)
weeks of his base salary in effect as of the Separation Date (a gross sum of
$378,538), less standard required withholding and deductions, in a lump sum
payable within ten (10) business days following the Effective Date of this
Agreement (the “Payment Date”).  Upon the Separation Date, Crouch will be paid
for any accrued vacation and any salary earned through the Separation Date,
regardless of whether he signs this Agreement.

(c)           Benefits.  Crouch may exercise benefit conversion options as
available under plan provisions, applicable state insurance laws and COBRA, as
provided in Section 3 herein.  Crouch’s continued participation in all other
Company benefits will cease on the Separation Date.

(d)           Telephone and Email Coverage.  Until June 30, 2005, the
administrative assistant assigned to Crouch will direct personal calls to Crouch
in any reasonable manner specified by Crouch and the Company will forward any
personal emails directed to Crouch at the Company to such email address as
specified by Crouch.

(e)           Cell Phone and Computer.  Prior to the Separation Date, Crouch
shall deliver the laptop computer and all data stored thereon provided him by
the Company to a representative of the IT Department specified by the Company. 
The Company shall purge all Company-related data and will then transfer
ownership of the computer to Crouch no later than the Payment Date.  The Company
will transfer ownership of the cell phone provided to Crouch by the Company by
the Payment Date, provided that Crouch shall cooperate in transferring the
service account and changing the phone number.

(f)            Attorneys’ Fees.  The Company shall reimburse Crouch for
reasonable attorneys’ fees incurred in reviewing this Agreement, up to a maximum
of two thousand dollars ($2,000.00), upon presentation of satisfactory proof
such expenses have been incurred.

(g)           Options.  The Company will grant Crouch a period of up to one year
(365 days) from the Separation Date in which to exercise his vested options.

 

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2.             EXPENSE REIMBURSEMENT.  Crouch agrees that he will submit any
final documented expense reimbursement statements reflecting all business
expenses incurred prior to and including the Separation Date, for which he seeks
reimbursement no later than February 28, 2005.  The Company shall reimburse
Crouch’s expenses pursuant to Company policy and regular business practice.

(a)           JP Morgan Conference.  The Company will reimburse Crouch only for
reasonable transportation,  lodging, conference fees, and personal meal expenses
incurred in connection with the J.P. Morgan Chase Healthcare Conference.

3.             INSURANCE BENEFITS.  After the Separation Date, 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, Crouch will be
eligible to continue his health insurance benefits at his own expense.  Crouch
will be provided with a separate notice of his COBRA rights in advance of
exercising this Agreement.

4.             OTHER COMPENSATION AND BENEFITS.  Except as expressly provided
herein, Crouch acknowledges and agrees that he is not entitled to and will not
receive any additional compensation, severance, stock options, stock or benefits
from the Company.  Crouch agrees and understands that all vesting under any
stock compensation award (e.g., incentive stock option, nonqualified stock
option, stock purchase agreement, or restricted stock bonus agreement) from the
Company shall cease upon the Separation Date.  Other than as specified in this
Agreement, any and all rights that Crouch may have in any Employee Stock
Purchase Plan or Stock Option Plan shall be determined in accordance with the
provisions of the applicable plan and any related agreements signed by Crouch.

5.             REPAYMENT OF PROMISSORY NOTE AND SECURITY INTEREST.  Crouch shall
repay in full the principal sum of Three Hundred Thousand Dollars ($300,000.00)
to the Company, as described in the Promissory Note of July 29, 2002 made by
Crouch to the Company (the “Note”), on the Payment Date, at which point the Note
will be cancelled.

(a)           Reduction of Balance Owed by Bonus Credit.  Although the Company
has no legal obligation to pay Crouch a bonus for fiscal year 2004, the Company
will reduce the balance owed by Crouch under the Note by an amount equivalent to
the bonus Crouch could have earned for fiscal year 2004 (after withholding for
applicable taxes) had he met the eligibility requirements, after taking into
consideration corporate performance parameters for FY2004 to calculate the bonus
pool.

(b)           Reduction of Balance Owed by Portion of Unvested Stock Grant.  The
Company and Crouch agree that (i) the Company shall automatically reacquire at
no cost any remaining unvested portion of any Stock Grant made to Crouch on the
Effective Date; and (ii) the Company will reduce the balance owed under the Note
by an amount equivalent to the sum of the fair market value, on the Effective
Date, of 21,250 shares of Company Common Stock minus the amount of applicable
withholding taxes on such amount, as if the Stock Grants made to Crouch on
August 8, 2003 and July 12, 2004 had vested as to an additional twenty-five
percent (25%) of the shares subject to such Stock Grants on the Effective Date.

 

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(c)           Reduction of Balance Owed by Vested Stock Grant.  The Company and
Crouch agree that, Crouch will surrender 8,750 vested shares of Company Common
Stock to the Company and, in exchange for those vested shares, the Company shall
reduce the balance owed under the Note by amount equivalent to the fair market
value, on the Effective Date, of such vested shares minus the amount of
applicable withholding taxes on such amount, if any.

(d)           Tax Advice.  Crouch acknowledges and agrees that he has had an
opportunity to obtain the advice of counsel prior to executing this Agreement,
and Crouch fully understands all the terms of this Agreement and the transaction
contemplated by this Agreement.  Crouch further acknowledges and agrees that the
Company has recommended that he seek independent tax counsel to advise him
regarding this transaction, and Crouch has had the opportunity to seek such
counsel.

6.             COMPANY PROPERTY.  Upon the Separation Date, and except as
otherwise specified in this Agreement, Crouch shall return to the Company all
Company documents (and all copies thereof) and other Company property in his
possession or his control, including, but not limited to, Company files,
business plans, notes, samples, sales notebooks, drawings, specifications,
calculations, sequences, data, computer-recorded information, tangible property,
including, but not limited to, credit cards, entry cards, keys and any other
materials of any nature pertaining to Crouch’s work with the Company, and any
documents or data of any description (or any reproduction of any documents or
data) containing or pertaining to any proprietary or confidential material of
the Company.

7.             PROPRIETARY INFORMATION & INVENTIONS AGREEMENT.  Crouch
acknowledges his continuing obligations under his Proprietary Information and
Inventions 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 Crouch’s Proprietary
Information and Inventions Agreement is attached hereto as Exhibit A.

8.             CONFIDENTIALITY AND PUBLICITY.  The provisions of this Agreement
shall be held in strictest confidence by Crouch and the Company and shall not be
publicized or disclosed in any manner whatsoever; provided, however, that: 
(a) Crouch may disclose this Agreement, in confidence, to Crouch’s immediate
family; (b) the parties may disclose this Agreement, in confidence, to their
respective attorneys, accountants, auditors, tax preparers, and financial
advisors; (c) the Company may disclose this Agreement as necessary to fulfill
standard or legally required corporate reporting or disclosure requirements; and
(d) the parties may disclose this Agreement insofar as such disclosure may be
necessary to enforce its terms or as otherwise required by law.

9.             NONDISPARAGEMENT.  Crouch agrees that he will not at any time
disparage the Company or its directors, employees, shareholders and agents, in
any manner likely to be harmful to them or their business, business reputation
or personal reputation; provided that he shall respond accurately and fully to
any questions, inquiry or request for information when required by legal
process.  The Company agrees that it will direct its executive officers and the
members of its board of directors not to disparage Crouch in any manner likely
to be harmful to him or his business, business reputation, or personal
reputation; provided that the Company shall

 

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

10.          RELEASE OF CLAIMS BY CROUCH.  In exchange for the promises and
covenants set forth herein, Crouch hereby releases, acquits, and forever
discharges the Company, its parents and subsidiaries, and their officers,
directors, agents, servants, employees, attorneys, shareholders, partners,
successors, assigns and affiliates of and from any and all claims liabilities,
demands, causes of action, costs, expenses, attorneys’ fees, damages,
indemnities 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, acts or conduct
at any time prior to the date upon which Crouch executes this Agreement,
including, but not limited to:  all such claims and demands directly or
indirectly arising out of or in any way connected with the Company’s employment
of Crouch, the termination of that employment, and the Company’s performance of
its obligations as Crouch’s employer; 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, severance
pay, or any form of compensation; claims pursuant to any federal, state or local
law or cause of action including, but not limited to, the California Fair
Employment and Housing Act; Title VII of the federal Civil Rights Act of 1964,
as amended; the federal Age Discrimination in Employment Act (“ADEA”); the
federal Americans With Disabilities Act; the Employee Retirement Income Security
Act; tort law; contract law; wrongful discharge; discrimination; harassment;
fraud; defamation; emotional distress; and breach of the implied covenant of
good faith and fair dealing.

11.          ADEA Waiver.  Crouch acknowledges that he is knowingly and
voluntarily waiving and releasing any rights he may have under ADEA, and that
the consideration given for the waiver and release in this Agreement is in
addition to anything of value to which Crouch was already entitled.  Crouch
further acknowledges that he has been advised by this writing that:  (a) his
waiver and release do not apply to any rights or claims that may arise after the
execution date of this Agreement; (b) he should consult with an attorney prior
to executing this Agreement; (c) he has twenty-one (21) days to consider this
Agreement (although Crouch may choose to voluntarily execute this Agreement
earlier); (d) he has seven (7) days following the execution of this Agreement by
the parties to revoke the Agreement; and (e) this Agreement will not be
effective until the date upon which the revocation period has expired, which
will be the eighth day after the date Crouch executes this Agreement (the
“Effective Date”).  None of the payments or benefits provided by this Agreement
will be made to Crouch until the Agreement has become effective.

12.          SECTION 1542 WAIVER.  In giving this release, which includes claims
which may be unknown to Crouch at present, Crouch hereby 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.

 

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Crouch hereby expressly waives and relinquishes all rights and benefits under
Section 1542 and any law or legal principle of similar effect in any
jurisdiction with respect to claims released hereby.

13.          RELEASE OF CLAIMS BY THE COMPANY.  In exchange for the promises and
covenants set forth herein, the Company hereby releases, acquits, and forever
discharges Crouch, his successors, heirs, legal representatives and assigns of
and from any and all claims, liabilities, demands, causes of action, costs,
expenses, attorneys’ fees, damages, indemnities 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 any way related to
agreements, acts or conduct of Crouch in the good faith performance of duties
within the scope of his employment by the Company at any time prior to the date
upon which the Company executes this Agreement.

14.          NO ADMISSIONS.  The parties hereto hereby acknowledge that this is
a compromise settlement of various matters, and that the promised 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 whomsoever.

15.          ENTIRE AGREEMENT.  This Agreement, including Exhibit A, constitutes
the complete, final and exclusive embodiment of the entire Agreement between
Crouch and the Company with regard to the subject matter hereof.  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 Crouch and a duly authorized officer of the Company.

16.          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 agents, directors,
officers, employees, servants, heirs, successors and assigns.

17.          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.

18.          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.

19.          AUTHORITY.  Crouch warrants and represents that there are no liens
or claims of lien or assignments in law or equity or otherwise of or against any
of the claims or causes of action released herein and that Crouch is duly
authorized to give the release granted herein.

20.          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.

 

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20.          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.

21.          ARBITRATION.  To ensure rapid and economical resolution of any
disputes which may arise under this Agreement, you and the Company agree that
any and all disputes or controversies of any nature whatsoever, arising from or
regarding the interpretation, 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).  Any
arbitration proceeding pursuant to this Agreement shall be conducted by the
Judicial Arbitration and Mediation Service (“JAMS”) in San Diego, California,
under the then-existing JAMS’ rules.

 

HAVING READ AND UNDERSTOOD THE FOREGOING, I HEREBY AGREE TO THE TERMS AND
CONDITIONS STATED ABOVE.

 

 

 

 

 

 

Dated: 

 

 

Taylor Crouch

 

 

 

 

 

 

 

DISCOVERY PARTNERS INTERNATIONAL, INC.

 

 

 

 

 

 

 

 

 

Dated: 

 

 

By:  Riccardo Pigliucci,

 

 

 

        Chief Executive Officer

 

 

 

 

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