<PAGE>



                                                                   EXHIBIT 10.7

                               MOLICHEM R&D, INC.
                          STANDARD TERMS OF EMPLOYMENT


         THIS AGREEMENT is made as of the 17th day of September, 2001, by and
among Molichem Medicines, Inc., a Delaware corporation, with its mailing address
at 100 Europa Drive, Suite 421, Chapel Hill, North Carolina 27514 ("MLCM"),
MoliChem R&D, Inc., a North Carolina corporation with its mailing address at 100
Europa Drive, Suite 421, Chapel Hill, North Carolina 27514 (the "Employer"), and
Ronald E. Keeney, an individual residing at 1433 Princess Ann Drive, Raleigh,
North Carolina 27607 ("Employee").

         The following terms of employment are agreed to by the Parties:

         1. Engagement. Employer agrees to engage Employee and Employee accepts
an engagement from Employer to serve initially as Executive Vice President and
Chief Medical Officer, subject to change as appropriate to the needs of the
Employer.

         2. Commitment. During and throughout the term of this Agreement,
Employee will devote Employee's entire working time, attention, and energies to
carry out, fulfill and perform the duties and responsibilities to be performed
by Employee under the terms of this Agreement, and as assigned to Employee by
Employer from time to time, and shall not, during the term of this Agreement,
engage in any other business activity unless specifically sanctioned by the
President of Employer. Employee's commitment under this Agreement shall be
full-time. This provision shall not be construed as preventing Employee from
investing Employee's assets in other businesses provided that the investment
does not require significant services or time commitments on the part of
Employee in the affairs of the businesses in which the investments are made;
provided, however, that Employee shall not devote any time to any business
related to or likely to be competitive with the business of Employer, as that
business is defined in Employee's Special Terms and Conditions of Employment,
which are ancillary to this Agreement, without written authorization from the
President of Employer.

         Notwithstanding the foregoing, Employer agrees that Employee may engage
in consulting activities for third parties for up to ten (10) hours per week
provided such activities do not detract from Employee's obligations to Employer,
and are not in violation of the terms of confidentiality or non-competition set
forth in this Agreement or in the "Special Terms of Employment" entered into by
Employee in connection herewith, and provided Employee assumes responsibility
for all of his expenses and taxes in connection with such consulting.

         3. Compensation.

         A. Employee shall be paid an initial salary at the annual rate of one
hundred twenty-five thousand dollars ($125,000), payable in monthly installments
or in such other intervals during the year as Employer regularly pays its other
employees. Employer and Employee shall


                                      E-65

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review Employee's performance on an annual basis in accordance with Employer's
standard practice, and at that time shall determine whether Employee's salary
should be increased.

         B. Employee shall be paid a signing bonus in the amount of thirty
thousand dollars ($30,000). Such payment is in consideration of Employees' start
date in advance of his prior employer's bonus payment date. Such bonus shall be
due upon the commencement of employment, provided however, if Employee receives
his annual bonus from his previous employer prior to his commencement date with
Employer, no signing bonus shall be due to Employee. In the event Employee
receives his annual bonus from his previous employer after his commencement date
with Employer, Employee shall reimburse Employer for the amount of the signing
bonus.

         C. Upon the approval of the Board of Directors, Employee shall have the
opportunity to earn an annual bonus in the amount of twenty percent (20%) of
base compensation and shall be eligible for other incentive compensation
payments, in accordance with such plans as may be adopted by the Board of
Directors of Employer.

         D. In addition to the compensation under Sections 3.a., 3.b. and 3.c.,
Employee shall be awarded an option to purchase one hundred thousand (100,000)
shares of the common stock of MLCM at a purchase price of one dollar and fifty
cents ($1.50) per share pursuant to the terms and conditions of the Option
Agreement in the form of Exhibit A, which agreement provides for vesting of the
options at a rate of 1/36 per month for three years beginning October 1, 2001.
In addition, at the discretion of the Board of Directors of MLCM, Employee may
be granted additional options for the common stock of MLCM upon the completion
of minimum revenue and funding targets to be established by MLCM.

         E. All applicable federal and state taxes and other governmental
assessments shall be deducted from Employee's salary or bonus payments, as
required by law.

         4. Benefits.

         A. Vacation. Employee shall be entitled to fifteen (15) days of paid
vacation each calendar year, which shall accrue at the rate of 3.25 days per
quarter, and to compensation in respect of earned but unused vacation. Vacation
days not used in one calendar year shall carry over to the following calendar
year up to a maximum amount of five (5) days. No compensation shall be due for
unused vacation days that do not carry over.

         B. Sick and Personal Leave. Employee shall be entitled to ten (10) days
of sick and personal leave each calendar year, which shall accrue at the rate of
2.5 days per quarter. Sick leave may be used with respect to illness of Employee
or to attend to illness of any member of his or her immediate family who resides
with Employee. Personal leave may be used to attend to personal matters such as
medical appointments, or funerals of family members. Sick and personal leave
days not used in one calendar year shall carry over to the following calendar
year up to a maximum of thirty (30) days of such leave. No payment shall be made
for unused sick and personal leave.



                                      E-66

<PAGE>



         C. Leave Policies. Employer may at its sole option change its vacation
or sick and personal leave policy by providing a new policy in writing to
Employee and specifically referencing it as an amendment to this Agreement, such
amendment to be prospective only.

         D. Holidays. Employee shall be entitled to such paid holidays as are
provided to the other Employer employees.

         E. Insurance. Employer agrees to Employee's individual health, life and
disability insurance premiums for Employee's Glaxo Retirement Medical coverage,
American Medical Association excess major medical coverage, American Medical
Association Life Insurance and American Express Financial long term disability
insurance; provided however, Employer may at any time at its option elect to
discontinue payment of part of all of such premiums and to instead provide
Employee with the standard health, life and disability coverage provided to
other employees, which coverage may vary from time to time or may be eliminated,
provided that Employee is treated the same as other employees similarly
situated. If the Employer offers family coverage on any such policy and Employee
elects such coverage, Employee shall be responsible for payment of the premiums
for Employee's family members other than Employee.

         F. Membership Fees. Employer shall pay Employee's following membership
fees during the term of employment: American Medical Association, American
Academy of Pediatrics, American Academy of Pharmaceutical Physicians,
Association of Clinical Research Professionals, Drug Information Association,
Faculty of Pharmaceutical Physicians of the Royal College of Physicians U.K.,
Ambulatory Pediatric Association and any other organizations as are mutually
agreed upon by Employer and Employee.

         G. Other Benefits. Employee shall be entitled to participate in any
other group benefit plans or arrangements made available to Employer's employees
in the future, subject to and on a basis consistent with the terms, conditions
and overall administration of such plans and arrangements. Nothing paid to
Employee under any plan or arrangement shall be deemed to be in lieu of
compensation payable to Employee pursuant to Paragraph 4.

         H. Expenses. During the term of this Agreement Employee shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred by
Employee in performing services on behalf of Employer, including all expenses of
travel, provided that such expenses are documented by proper receipts and in
accordance with the travel and reimbursement policies established by Employer.

         5. Drug and Alcohol Use. Employee acknowledges that the use,
possession, or sale of narcotics, hallucinogens, depressants, stimulants,
marijuana, or other controlled substances on Employer premises or while in
pursuit of Employer business is prohibited. (This does not apply to medication
prescribed by a licensed physician and taken in accordance with such
prescription). The use of the above substances on or away from Employer premises
or of any other substance such as alcohol, which adversely affects Employee's
job performance, or which may reflect unfavorably on public confidence in the
manner in which Employer carries out its responsibilities, as determined by
Employer, is also prohibited.


                                      E-67

<PAGE>



         6. Term and Termination.

         A. Employee may terminate his employment at any time upon giving two
week's written notice to Employer.

         B. Employer may terminate Employee at any time, at?will, and with or
without cause, upon two weeks' prior notice, or upon immediate notice with
payment of two weeks' salary in accordance with subparagraph (d) below; provided
however, in the event Employee is terminated for other than cause, Employer
shall pay Employee a severance payment in the amount of six (6) months salary in
accordance with subparagraph (d) below. For the purpose of this Agreement,
"cause" shall mean (i) the failure of Employee to perform or observe (other than
by reason of illness, injury or incapacity) any of the material terms or
provisions of this Agreement, (ii) dishonesty or misconduct on the part of
Employee that is or is reasonably likely to be materially damaging or materially
detrimental to the business of the Company, (iii) conviction of a felony, (iv)
failure to comply with the reasonable directions of the Board of Directors or
officers of the Company in a way that is materially damaging or materially
detrimental to the business of the Company, or (v) failure to perform his
material duties under this Agreement due to abuse of alcohol or drugs. Prior to
terminating this Agreement on account of Employee's failure to perform or
observe any of the material terms and conditions of this Agreement (as described
in clauses (i), (iv) or (v) of the preceding sentence), the Company shall give
Employee thirty (30) days' written notice and an opportunity to cure such
failure to the satisfaction of the Company.

         C. In addition, Employer may terminate Employee's employment
immediately upon the happening of any of the following:

         (1) Employee's death; or

         (2) Except as may otherwise be provided under the Americans with
Disabilities Act, Employee's disability defined as Employee becoming ill or
injured or otherwise so incapacitated that Employee cannot, in the opinion of
the Board, carry out and perform Employee's duties, and such incapacity
continues for a period in excess of three (3) months; or

         (3) Dissolution of Employer or discontinuance of its business; or

         (4) Employee's violation of representations or obligations under
Paragraph 3 of this Agreement, or of Employee's Special Terms and Conditions of
Employment; or

         (5) Misconduct, including, but not limited to violation of Employer
policies or procedures, unwillingness to perform, insubordination, or a
reasonably based suspicion of dishonesty or other material breach of ethical or
professional standards.

         D. Upon termination, Employer shall make a final payment of all amounts
due for any reason no later than three (3) months after the termination date,
provided that any salary due and payable to Employee shall be paid no later than
the next pay period net of any amounts due from Employee to Employer and
provided further that any severance payment due to Employee shall be paid in
regular monthly installments. Employee agrees that to the extent Employee owes
money or


                                      E-68

<PAGE>



property to Employer, such amounts can be offset by the amounts due to Employee.
As a condition to final payment, Employee shall sign a release indicating that
no further compensation of any type is due prior to receiving the final payment.

         E. Notwithstanding any such termination, the obligations and
restrictions imposed on the Employee pursuant to the Special Terms and
Conditions of Employment shall survive termination of this Agreement and shall
exist in accordance with the terms of that document.

         7. Employee Handbook. From time to time, Employer may distribute
employee manuals or handbooks, and officers or other representatives of Employer
may make written or oral statements relating to Employer's policies and
procedures. Employee shall abide by such policies, procedures and statements. No
policies, procedures, or statements of any nature by or on behalf of Employer
(whether written or oral, and whether or not contained in any formal employee
manual or handbook) shall be construed to modify this Agreement or Employee's
Special Terms and Conditions of Employment.

         This Agreement is effective as of the date first above written and is
executed in duplicate originals.
                                        MOLICHEM R&D, INC.

                                        By:
----------------------------               ------------------------------
Employee
                                        Its:
                                           ------------------------------

                                        MOLICHEM MEDICINES, INC.

----------------------------
Witness                                 By:
                                           -------------------------------

                                        Its:
                                            ------------------------------

                                      E-69

<PAGE>



                               MOLICHEM R&D, INC.
                   SPECIAL TERMS AND CONDITIONS OF EMPLOYMENT

         This Agreement is made the 17th day of September, 2001, between
MoliChem R&D, Inc., a North Carolina corporation with its mailing address at 100
Europa Drive, Suite 421, Chapel Hill, North Carolina 27514, (the "Company"), and
Ronald E. Keeney, an individual residing at 1433 Princess Ann Drive, Raleigh,
North Carolina 27607 ("Employee").

         This Agreement is based on the following understandings:

         A. The Company wishes to employ Employee and Employee desires to be
employed by the Company in a position of trust and confidence to aid the Company
in its Business; and

         B. Prior to employment of Employee, as a condition of employment, and
as part of the initial financial compensation established for Employee, the
Parties wish to establish their respective rights in and to the use of certain
proprietary and confidential information and intellectual property and to the
work product of Employee, and to enter into an understanding regarding the use
of the Company's assets, information and goodwill to compete with the Company;
and

         C. The Company has informed Employee that entering into this Agreement
is a condition of initial employment and the Company would not employ Employee
unless Employee agreed to the terms herein; and

         D. Nothing contained in this Agreement shall be deemed to give Employee
the right to be employed by the Company for any specific length of time or at
any specific wage, it being understood that this Agreement is ancillary to the
understandings between the Company and Employee related to compensation,
benefits and other terms of employment.

         Therefore, the Parties to this Agreement, affirming the correctness of
each recital above, contract and agree as follows:

         1. Consideration. This Agreement is executed by Employee in
consideration of initial employment of Employee by the Company, it being
understood and agreed that the execution of this Agreement by Employee was
contemplated in accepting employment and agreeing to the compensation the
Company is to pay to Employee. Employee acknowledges that this consideration is
sufficient and adequate consideration for all covenants and commitments made by
Employee to the Company in this Agreement.

         2. Reasonableness and Enforceability. EMPLOYEE HAS READ AND CAREFULLY
CONSIDERED THE TERMS OF THIS AGREEMENT, HAS HAD THE OPPORTUNITY TO CONTACT
EMPLOYEE'S OWN LEGAL COUNSEL TO ADVISE EMPLOYEE REGARDING THE TERMS OF THIS
AGREEMENT, AND EMPLOYEE NOW AGREES THAT THE TERMS OF THIS AGREEMENT ARE FAIR AND
REASONABLE AND ARE REASONABLY REQUIRED FOR THE PROTECTION OF THE INTEREST OF THE
COMPANY AND THE COMPANY'S SHAREHOLDERS. EMPLOYEE FURTHER AGREES THAT THE
RESTRICTIONS AND COVENANTS OF THIS AGREEMENT WILL NOT IMPAIR


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<PAGE>


THE ABILITY OF EMPLOYEE TO SECURE EMPLOYMENT SO AS TO BE ABLE TO MAKE A
REASONABLE LIVING. The provisions of this Agreement shall be enforceable
notwithstanding the existence of any claim or cause of action of Employee
against the Company whether predicated on this Agreement or otherwise. Failure
of the Company to enforce at any time or for any period of time any of the
conditions or covenants of this Agreement shall not be construed as a waiver of
such provisions or of the right of the Company to enforce subsequent breaches of
the same or other conditions and covenants, unless such permanent waiver is
provided to Employee in writing and signed by President of the Company.

         3. The Company's Business. It is understood by Employee that the
"Company's Business" includes, without limitation, research, development and
commercialization of treatments for respiratory diseases, including but not
limited to cystic fibrosis, chronic obstructive pulmonary disorders,
tuberculosis, chronic bronchitis and related diseases and treatment of sepsis,
ARDS and related diseases. Any notification of Employee by the Company, oral or
written, or any reasonable knowledge on the part of Employee that the Company's
Business includes other specific aspects shall expand Employee's obligations
under this Agreement to include those additional aspects of the Company's
Business.

        4.  Confidential Information.

         (a) For the purposes of this Agreement, "Confidential Information"
shall mean each of the following: (i) any information or material proprietary to
the Company or designated as confidential either orally or in writing by the
Company; (ii) any information not generally known by non?Company personnel
(other than persons subject to an obligation of confidentiality); (iii) any
information which Employee should know the Company would not care to have
revealed to others or used in competition with the Company; and (iv) any
information which Employee made or makes, conceived or conceives, developed or
develops or obtained or obtains knowledge or access through or as a result of
Employee's relationship with the Company (including information received,
originated, discovered or developed in whole or in part by Employee) from the
initial date of Employee's employment with the Company. The Confidential
Information includes but is not limited to the following types of information
and other information of a similar nature (whether or not reduced to writing):
Inventions (as defined below), development procedures, test methodologies,
research results, know-how, specifications, models, software in various stages
of development, technical, user and product documentation under development,
internal documentation, diagrams, data, flowcharts, spreadsheets, marketing and
development plans, customer (licensee) names and other information related to
current and potential customers (licensees) (including without limitation names,
addresses, phone and fax numbers, hardware configurations, computer software
licenses, support required, terms of dealing, and other customer information
acquired in the course of providing products or services to customers), price
lists, pricing policies, supplier lists, financial information and employee
files. Confidential Information shall also include, without limitation, data,
notes, records, files, memoranda, email, reports, designs, drawings, plans,
sketches, documents, print?outs, and the like, in any way or in any medium
incorporating or reflecting any of the Confidential Information, or relating to
the Company's Business, or to any client, vendor, licensor, licensee or other
party transacting business with the Company. Confidential Information also
includes any information described above which the Company obtains from another
party and which the Company treats as proprietary or designates as Confidential
Information, whether or not owned

                                      E-71

<PAGE>

or developed by the Company, including without limitation information of or
concerning the Company's customers. The failure of the Company to mark any of
the above-described information as proprietary, confidential, or secret shall
not affect its status as part of the Confidential Information protected by this
Agreement.

         (b) For the purposes of this Agreement, "Inventions" shall mean ideas,
designs, creations, concepts, techniques, inventions, improvements, discoveries,
and works of authorship, whether or not patentable or protectable by copyright
or patent, whether or not fixed in a tangible medium of expression and whether
or not reduced to practice, including but not limited to the nature and results
of research and development activities, processes, formulae, devices, designs,
processes, computer programs, and methods, together with any improvements
thereon or thereto, derivative works or applications derived therefrom, and
know?how related thereto.

         (c) Information publicly known that is generally employed by the
industry of the Company (the "Company's Industry") at or after the time Employee
first learns of such information, or generic information or knowledge which
Employee would have learned in the course of similar employment or work
elsewhere in the Company's Industry shall not be deemed part of the Confidential
Information.

         5. Nondisclosure and Non-use of Confidential Information.

         (a) Employee agrees that Employee has a fiduciary duty to the Company
and that Employee shall hold in confidence and shall not, except in the course
of performing Employee's employment obligations or pursuant to written
authorization from the Company: (i) directly or indirectly reveal, report,
publish, disclose or transfer the Confidential Information or any part thereof
to any person or entity; (ii) use any of the Confidential Information or any
part thereof for any purpose other than for the benefit of the Company; or (iii)
assist any person or entity other than the Company to secure any benefit from
the Confidential Information or any part thereof.

         (b) This Paragraph 5 shall remain in effect from Employee's initial
employment with the Company and at all times during Employee's employment with
the Company and for ten (10) years after termination of Employee's relationship
with the Company, except that this Paragraph 5 shall remain in effect
indefinitely as to Confidential Information that is a trade secret (as defined
by statute and common law).

         6. Ownership of Confidential Information and Work Product.

         (a) Except as limited by this Paragraph, Employee agrees that all
Confidential Information and all other work product of any type or nature
created by Employee or resulting from work performed by Employee for the
Company, using the Company's facilities, equipment, supplies or other property,
during business hours, or related to the Company's Business, even if not
Confidential Information (such Confidential Information and work product being
defined as "Work Product"), shall belong to the Company exclusively and without
any additional compensation to Employee. Employee agrees that any original
copyrightable Work Product shall be considered as "works made for hire," and
that the Company shall be deemed the author thereof, provided that to the extent
such Work Product is determined not to constitute "works made for hire"


                                      E-72

<PAGE>


as a matter of law, Employee hereby irrevocably assigns and transfers to the
Company all rights in and to such Work Product.

         (b) The Company's ownership right to such Work Product shall extend
regardless of the hours during which or facilities at which the Work Product is
made or the resources or ownership of resources used in making it; provided
however that the assignment of rights shall not apply to creations developed
entirely on Employee's own time without using the Company's facilities,
equipment, supplies or other property, Confidential Information or Work Product,
provided that the creations do not (a) relate to the Company's Business or
actual or demonstrably anticipated research or development, or (b) result from
any work performed by Employee for the Company. This Agreement is not intended
to, and shall not be interpreted to, assign or vest in the Company rights not
assignable pursuant to North Carolina General Statutes Section 66-57.1.

         (c) Upon request Employee will execute any instrument required to vest
in the Company complete title and ownership to all Work Product, and will, at
the request and expense of the Company, execute any instruments necessary to
obtain legal protection in the United States and foreign countries for all Work
Product and for the purpose of vesting title thereto in the Company, or its
nominee, all without any additional compensation of any kind to Employee. Only
if the Company executes a written statement that it does not desire to obtain
protection for a particular Invention or copyrightable creation is Employee free
to obtain protection in Employee's own name and at Employee's own expense,
provided, however, that the Company shall have a royalty-free nonexclusive
irrevocable license under any patent or copyright so obtained by Employee.

         7. Disclosure to the Company. Upon the conception of any Work Product
by Employee (either solely or in conjunction with others) and without waiting to
perfect or complete it, Employee promises and agrees immediately to fully
disclose to an officer of the Company, and to no one else, and thereafter to
treat the Work Product as the property and secret of the Company. This shall
include Work Product made, conceived or reduced to practice after the term of
Employee's employment but which belong to the Company pursuant to Paragraphs 6
and 14. Upon request Employee will reduce any concept in the Work Product to
writing and deliver all copies of the writing to the President of the Company,
or if Employee is the President of the Company, such copies shall be delivered
to the Secretary of the Company. These obligations shall continue beyond the
termination of employment with respect to Work Product conceived or made during
the period of employment.

         8. Collaboration. Employee warrants that Employee will disclose the
participation of any other person in any of Employee's work for the Company.
Absent such disclosure, Employee warrants that all work performed by Employee
will be Employee's own and that no other person shall have any right, title, or
interest in any work submitted to the Company.

         9. Records. Employee agrees that Employee will keep and maintain
adequate and current written records of all Work Product created by Employee.
All written records relating to any Work Product, whether in the form of notes,
data, reference materials, sketches, drawings, memoranda, correspondence,
blueprints, manuals, letters, notebooks, reports, flowcharts, programs,
proposals, or any other form, and whether in written, electronic or other media,
concerning the

                                      E-73

<PAGE>


Company's Business or incorporating or reflecting any of the Work Product, shall
be and remain the property of and available to the Company at all times, and
shall be delivered to the Company on demand or upon Employee leaving the
Company's service. The Company may, at any time and without notice to Employee,
take possession of such records regardless of their location, including
Employee's files, desk, computer or other areas under the control of the
Company.

         10. Assistance After Employment. Employee agrees that if, subsequent to
Employee's employment by the Company, his assistance is needed in regard to
securing, defending, or enforcing any patent or copyright of which Employee is
an inventor, co-inventor, author or co-author Employee shall provide requested
assistance and the Company shall pay reasonable compensation for his time at a
rate to be agreed upon but not higher than 150% of the last salary rate paid to
Employee by the Company during his employment, together with full reimbursement
of reasonable and necessary directly-related expenses.

         11. Third-Party Obligations. Employee acknowledges that the Company
from time to time may have agreements with other person or entities or with
government or other agencies that impose obligations or restrictions on the
Company regarding work to be created by Employee or the Company during the
course of work thereunder, or regarding the confidential nature of the work or
Confidential Information of the third party disclosed during or used as part of
such work. Employee agrees to be bound by all such obligations and restrictions
and to take all action necessary to discharge the obligations of the Company
thereunder.

         12. Non-Competition. Employee will obtain access to Confidential
Information and to the Company's clients and goodwill immediately or within a
very short period of time after employment, all of which can be used to provide
Employee with an unfair advantage if used to compete against the Company.
Employee recognizes that the Company has invested substantial amounts of money
and other resources to place the Company in a position where the Company and its
employees are accorded respect as a member of a premiere organization in the
areas of the Company's Business, that Employee by reason of Employee's
affiliation with the Company has acquired a high stature and goodwill in the
industry related to the Company's Business, and that it would be unfair for
Employee to trade on this stature and goodwill to the competitive disadvantage
of the Company. Employee further acknowledges that the nature of the Company's
Business results in activities and customers located throughout the United
States and the world. The Company's Business could be performed and its goodwill
used in any location in the United States or the world; the fact that a customer
or employee is not currently located in a city or state does not mean that the
undertaking of activities by Employee in such city or state in competition with
the Company's Business would have a different impact than undertaking of the
activity in a city or state where customers or employees are located. The
Parties also recognize that it is the intent of the Company, to the fullest
extent permitted by law, to protect the unique aspects of the Company's Business
and to prevent specialized knowledge, skills and relationships acquired by
Employee during the course of Employee's employment with the Company from being
used in a manner that interferes with the Company's goodwill or customer
relations or gives an unfair advantage to the former Employee and/or Employee's
new employer, or places Employee or the new employer in an unfair competitive
position. Employee recognizes that in order to protect the legitimate business
interests and goodwill of the Company and the investments of its Shareholders,
it is reasonable and necessary for Employee to restrict certain of Employee's
actions during Employee's employment and for the period of time


                                      E-74

<PAGE>


after the date of Employee's termination of employment as specified below.
Therefore Employee agrees as follows:

         (a) Employee (i) will not consult with or accept employment with a
business which competes with the Company's Business if such consulting or
employment will require Employee to engage in actions similar to those actions
undertaken by Employee in the course and scope of Employee's employment with the
Company, draw upon specialized training or knowledge received at the Company,
utilize specialized skills developed at the Company, draw upon the Company's
goodwill, draw upon industry or current or potential customer contacts developed
at the Company, or utilize procedures developed by the Company; and (ii) will
not accept consult or accept employment with a business that competes with the
Company's Business if such employment will require Employee to engage in actions
similar to those actions undertaken by Employee in the course and scope of
Employee's employment with the Company; and (iii) will not engage in, or take
action for the purpose of enabling Employee to engage in, either as an
individual, employee, consultant, independent contractor, advisor, or otherwise,
or be interested in (as present or prospective owner, partner, investor,
shareholder (except in a publicly traded company), advisor, or otherwise), a
business which engages in or competes with the Company's Business, except that
Employee may be employed by such a competing business provided that Employee
does not work in the section or division of the competing business which
competes with the Company's Business and that such employment will not require a
breach of the non-disclosure and non-use requirements of Paragraph 5.

         (b) Employee will not, either individually or through any other person
or entity: (i) employ or seek to employ or engage as an independent contractor
or seek to engage as an independent contractor in any business competitive with
the Company's Business, any person who is an employee of the Company or is an
independent contractor engaged in the provision of services to the Company, or
any person who was an employee of the Company or was an independent contractor
engaged in provision of services to the Company (x) within six months prior to
such employment or engagement of such person by Employee, or (y) within seven to
twelve months prior to such employment or engagement of such person by Employee,
or (y) within thirteen to eighteen months prior to such employment or engagement
of such person by Employee; or (ii) knowingly take any action detrimental to the
relationship between the Company and its present and future employees or
independent contractors.

         (c) Employee will not, either individually or through any other person
or entity, solicit, (i) influence, or attempt to influence any customer
(licensee) or potential customer (licensee) of the Company with regard to the
customer's purchase (or licensing) of products or services from the Company or
from any competing business offering the same or substitutable products or
services if such business is a customer or prospective (under negotiation)
customer of the Company or was a customer or prospective (under negotiation)
customer of the Company (x) within six months prior to the termination of
Employee's employment with the Company, or (y) within seven to twelve months
prior to the termination of Employee's employment with the Company, or (z)
within thirteen to eighteen months prior to the termination of Employee's
employment with the Company; or (ii) take any action detrimental to the existing
or prospective (under negotiation) relationships between the Company and any
customer or potential customer.



                                      E-75

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         (d) Employee will not, either individually or through any other person
or entity, (i) solicit, influence, or attempt to influence any provider of
services or products to the Company, with regard to the provision of services or
products to the Company, nor shall Employee do so with respect to any person or
entity which was a provider of services or products to the Company (x) within
six months prior to the termination of Employee's employment with the Company,
or (y) within seven to twelve months prior to the termination of Employee's
employment with the Company, or (z) within thirteen to eighteen months prior to
the termination of Employee's employment with the Company; or (ii) take any
action detrimental to the existing or prospective (under negotiation)
relationships between the Company and any provider of services or products.

         (e) The term of the restrictions specified in this Paragraph 12 is the
period of Employee's employment by the Company and for one (1) year after the
termination of Employee's employment by the Company. The term specified in this
subparagraph (e) shall be tolled during any period of actual competition by the
Employee and/or any period of litigation required to enforce the Employee's
obligations under this Agreement.

         (f) The geographic scope of the restriction set forth in this Paragraph
12 is: (i) a fifty mile radius of the corporate headquarters of the Company; and
(ii) a fifty mile radius of Employee's residence; and (iii) a fifty mile radius
of all cities where the Company is conducting research, development,
manufacturing or commercialization activities related to the Company's products;
(iv) a fifty mile radius of all cities where the Company has contracted to do
business; and (v) a fifty mile radius of all cities where the Company has
contracts pertaining to license, research, development, manufacture or sales of
the Company's products, or has or had negotiations related to the same; and (vi)
the United States; and (vii) Canada; and (viii) the world.

         The provisions and clauses of this Paragraph 12 are separate and
independent covenants, and the invalidity or unenforceability of one or more of
the provisions or clauses hereof shall not affect the validity or enforceability
of the remaining provisions or clauses.

       13.  Change of Noncompetition Restrictions.

         (a) The parties recognize that the law relating to noncompetition has
been and is evolving, and what may be permitted as restrictions change with
decisions of the courts and new statutes. Therefore, the parties agree that to
the extent the law changes the Company may, without the prior consent of
Employee or any further compensation to Employee, amend any provision or clause
of Paragraph 12 to meet the requirements of the change; provided, however, that
no such amendment shall impose any greater restrictions on Employee than those
in Paragraph 12.

         (b) Employee agrees that if Employee believes the provisions and
clauses of Paragraph 12 are unreasonable, based on the circumstances existing at
the relevant time and the legitimate interests of the Company, Employee will
request that the Company waive or modify such provisions and clauses so as to
reasonably protect the Company's legitimate interests, which request shall
include an explanation of the how and to what extent the provisions and clauses
of Paragraph 12 are unreasonable. The Company may, but shall not be required to,
waive or modify the provisions and clauses of Paragraph 12.


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<PAGE>


         14. Warranty by Employee. Employee represents and warrants that his
performance of all terms under this Agreement does not result in a breach of any
duty owed by Employee to another, under contract or otherwise, or violate any
confidence of another. Employee agrees not to disclose to the Company or induce
the Company to use any confidential or proprietary information belonging to any
of the Employee's previous employers or others. Employee warrants that Employee
has executed no prior noncompetition, nondisclosure or confidentiality
agreements that would in any way interfere with his work for or employment by
the Company. Employee represents and warrants that Exhibit A attached hereto,
entitled "List of Work Product," is a true and complete list of all creations,
if any, whether or not patented or copyrighted and whether or not reduced to
practice, made by Employee prior to his employment with the Company, and which
therefore are not subject to the provisions of Paragraph 6; provided, however,
that any improvements, whether or not patentable or reduced to practice, made to
or on, or any derivative work made from, any of the listed confidential and
propriety information after Employee's commencement of employment by the Company
are subject to the terms of Paragraph 6.

         Employee agrees to notify the Company in writing before Employee makes
any disclosure to or performs any work on behalf of the Company which appears to
threaten or conflict with any proprietary right Employee claims in any Work
Product and in the event of Employee's failure to give such notice, Employee
shall make no claim against the Company with respect to any such Work Product.

         15. Exit Interview. Employee agrees that upon termination of Employee's
employment for any reason, Employee shall participate in an exit interview with
Company personnel. At or prior to the time of this interview Employee shall
deliver to the Company all materials or media referenced in Paragraph 4 of this
Agreement containing Confidential Information, as well as all records referenced
in Paragraph 9 of this Agreement, in Employee's possession or control, or which
the Employee has otherwise removed from the premises of the Company. Employee
agrees that, upon request Employee will execute a sworn statement that Employee
has complied with the terms of the Agreement. Should Employee fail to execute
such a statement, in addition to any other remedies the Company may have, the
Company may withhold any and all amounts due to Employee for any reason, except
minimum compensation required by law.

         16. Extraordinary Relief. Nothing in this Agreement shall be construed
as prohibiting the Company from pursuing all remedies available to the Company
for breach of this Agreement. Employee recognizes and agrees that because of the
unique nature of the Confidential Information and the competitive position of
the Company, his breach of this Agreement will irreparably injure the Company
for which the Company could not adequately be compensated by remedies at law.
Should Employee at any time reveal or use for the benefit of other than the
Company or threaten to so reveal or use any Confidential Information, or during
any restricted period violate or threaten to violate any of the restrictions in
Paragraph 12, the Company shall be entitled to an injunction restraining
Employee from doing or continuing to do or performing any such acts, and
Employee hereby consents to the issuance of such injunction against Employee.
Employee further agrees to waive any bond requirement that may arise if the
Company is forced to seek injunctive relief to enforce the terms of this
Agreement. Employee agrees that the existence of any other claim or cause of
action, whether predicated on any other provision of this Agreement; or
otherwise as a result of the relationship between the parties, shall not
constitute a defense to the


                                      E-77

<PAGE>



enforcement of the restrictions in Paragraph 12 or any provisions protecting the
Confidential Information.

         17. Accounting for Profits; Indemnification. Employee covenants and
agrees that, if Employee shall violate any of Employee's covenants or agreements
under this Agreement, the Company shall be entitled to an accounting and
repayment of all profits, compensation, royalties, commissions, remunerations or
benefits which Employee directly or indirectly shall have realized or may
realize relating to, growing out of or in connection with any such violation;
such remedy shall be in addition to and not in limitation of any injunctive
relief or other rights or remedies to which the Company is or may be entitled at
law or in equity or otherwise under this Agreement. Employee hereby agrees to
defend, indemnify and hold harmless the Company against and in respect of: (i)
any and all losses and damages resulting from, relating or incident to, or
arising out of any misrepresentation or breach by Employee of any warranty,
covenant or agreement made or contained in this Agreement; and (ii) any and all
actions, suits, proceedings, claims, demands, judgments, payments, costs and
expenses (including reasonable attorneys' fees) incident to the foregoing.

         18. Successor Employers. Employee hereby authorizes the Company to
provide a copy of this Agreement, including any Exhibits, to any and all future
employers, and to notify any and all future employers that the Company intends
to exercise its legal rights arising out of or in conjunction with the Agreement
and/or any breach or any inducement of breach of it.

         19. Reformation/Severability of Agreement. If any provision of this
Agreement shall for any reason be adjudged by any court of competent
jurisdiction or arbiter to be illegal, invalid or otherwise unenforceable, such
judgment shall not affect, impair or invalidate the remainder of this Agreement
but shall be confined in its operation to the provision of this Agreement
directly involved in the controversy in which such judgment shall have been
rendered. The invalid or unenforceable provision shall be reformed so that each
party shall have the obligation to perform reasonably alternatively to give the
other party the benefit of its bargain. In the event the invalid or
unenforceable provision cannot be reformed, the other provisions or applications
of this Agreement shall be given full effect, and the invalid or unenforceable
provision shall be deemed struck.

         20. Successor and Assigns. This Agreement shall inure to the benefit of
and be binding upon the Company, its successors and assigns, including without
limitation any entity which may acquire all or substantially all of the
Company's assets and business or into which the Company may be consolidated or
merged, and the Employee, his/her heirs, executors, administrators and legal
representatives. Employee may not assign any of his obligations under this
Agreement.

         21. Governing Law and Venue. This Agreement shall be governed by and
construed in accordance with the laws of North Carolina applicable to contracts
between residents of North Carolina which are wholly executed and performed in
North Carolina and no conflict of law provisions shall be invoked to permit the
laws of any other state or jurisdiction to apply. Any lawsuit brought under the
terms of this Agreement shall have exclusive venue in the state and federal
courts of Orange County, North Carolina; provided, however, that with respect to
any proceeding for injunctive relief the Company may, at its option, bring the
proceeding before a court where Employee resides at the time of such proceeding.



                                      E-78

<PAGE>



         22. Merger. This Agreement (together with my other employment
agreement(s) that may exist between the Company and Employee (the "Additional
Agreements")) constitutes the entire Agreement between the Parties with respect
to the subject matter hereof; and supersedes and replaces any oral or written
communications and any undertakings otherwise made between the Parties relating
to the subject matter. The Additional Agreements (if any) shall remain in full
force and effect except that to the extent this Agreement and any Additional
Agreement are inconsistent, this Agreement shall prevail. Except as specified in
Paragraph 13 or 19, no changes, modifications, or amendments of any terms and
conditions of this Agreement are valid or binding unless agreed to in a writing
signed by Employee and the President of the Company or, if Employee is the
President, the Secretary of the Company.

         This Agreement is effective as of the date first above written and is
executed in duplicate originals.

MOLICHEM R&D, INC.


By:
     --------------------------
             President



EMPLOYEE                                  WITNESS


-------------------------------           -------------------------------
         (Signature)                               (Signature)

-------------------------------           -------------------------------
        (Print Name)                              (Print Name)


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