**Exhibit 10.34**

** **

**GUARANTEE**

This GUARANTEE is dated July 9, 2003 bySchering-Plough Corporation, a New Jersey corporation **(“Guarantor”)**in favor ofPharmacopeia, Inc., a Delaware corporation **(“Beneficiary”).**

WHEREAS, Schering Corporation, a New Jerseycorporation **(“Schering”)** andBeneficiary have entered into a Collaboration and License Agreement (the **“Schering****Agreement”)**dated as of July9, 2003;

WHEREAS, Schering-Plough Ltd., a Swisscorporation **(“Ltd.”)**and Beneficiaryhave entered into a Collaboration and License Agreement (the **“Ltd.Agreement”)**dated as of July 9, 2003 (Schering and Ltd. arecollectively referred to as the “**Subsidiaries**”)(the Schering Agreement and the Ltd. Agreement are collectively referred to asthe **“Agreements”);**

WHEREAS, Guarantor is the parent company ofthe Subsidiaries; and

WHEREAS, to induce Beneficiary to enter intothe Agreements, and for other good and valuable consideration, the receipt andsufficiency of which are hereby acknowledged, the Guarantor has agreed toguarantee the Guaranteed Obligations (as hereinafter defined) on the terms setforth herein.

NOW THEREFORE, the parties hereto agree,effective as of the Effective Date of the Agreements, as follows:

Section 1. Guarantee. Subject to theterms and conditions set forth below, Guarantor hereby irrevocably andunconditionally guarantees the performance of all obligations of theSubsidiaries under the Agreements and promises to pay in full any amounts,including any arbitration awards, which become due by either or both of theSubsidiaries to Beneficiary under the Agreements, except to the extentpreviously paid by the Subsidiaries (such obligations being herein collectivelycalled the **“Guaranteed Obligations”**or **“Guaranteed Payments”).**Guarantor’sobligation to make Guaranteed Payments may be satisfied by direct payment ofthe required amounts to Beneficiary or by causing a Subsidiary to pay suchamounts to Beneficiary.

1.1           Waiver of CertainRights. Guarantor hereby waives, to the fullest extent permitted by law,notice of acceptance of this Guarantee and of any liability to which it appliesor may apply, presentment, demand for payment, protest, notice of nonpayment,notice of dishonor, notice of redemption and all other notices and demands.

1.2           ContinuingGuarantee. The guarantee in this Section 1 is a continuing guarantee, andshall apply to all Guaranteed Obligations whenever arising.

1.3           AdequateInformation. Guarantor acknowledges and confirms that Guarantor itself hasestablished its own adequate means of obtaining from its Subsidiaries on acontinuing basis all information desired by Guarantor concerning the financialcondition of the Subsidiaries and their performance under the Agreements andthat Guarantor will look to the Subsidiaries and not to Beneficiary in order forGuarantor to keep adequately informed of changes in the Subsidiaries’ financialcondition or performance under the Agreements.

1.4           ProceedingDirectly Against Guarantor. This Guarantee is a guarantee of payment andnot of collection. Beneficiary may enforce this Guarantee directly againstGuarantor, and Guarantor waives any right or remedy to require that any actionbe 

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brought against the Subsidiaries or any other person or entity beforeproceeding against Guarantor. All waivers herein contained shall be withoutprejudice to the right of Beneficiary, at its option, to proceed against theSubsidiaries, whether by separate action or by joinder. Guarantor agrees thatthis Guarantee shall not be discharged except by payment of the GuaranteePayments in full (to the extent not previously paid by the Subsidiaries) and bycomplete performance of all Guaranteed Obligations under this Guarantee.

1.5           IndependentObligations. Guarantor acknowledges that its obligations hereunder areindependent of the obligations of the Subsidiaries with respect to theAgreements and that Guarantor shall be liable as principal and sole debtorunder this Guarantee to make Guarantee Payments in full pursuant to the termsof this Guarantee.

1.6           Amendment ofAgreementsNot Require Guarantor Consent. Any amendment, modification or alterationof, or waiver by the Subsidiaries with respect to the terms of the Agreementsshall be effective without requiring any consent on the part of the Guarantor.

Section 2.               Representationsand Warranties. Guarantor represents and warrants to Beneficiary that (a)Guarantor is a corporation, duly organized, validly organized and in goodstanding under the laws of the State of New Jersey, (b) Guarantor has allrequisite power and authority to enter into and perform this Guarantee and allcorporate action on the part of Guarantor necessary for the execution andperformance of this Guarantee has been taken, (c) this Guarantee is the legaland binding obligation of Guarantor, enforceable in accordance with its terms,except where such enforceability may be limited by bankruptcy, insolvency, orother laws of general application relating to or affecting the enforcement ofcreditors’ rights generally, and (d) Guarantor’s execution, delivery andperformance of this Guarantee will not violate or conflict with any laws,regulations or agreements binding upon Guarantor or to which Guarantor isotherwise subject or is a party.

Section 3.               Miscellaneous.

3.1           Governing Law.This Guarantee shall be governed by, and construed in accordance with, the lawsof the State of New Jersey.

3.2           Successors andAssigns. This Guarantee may not be assigned or transferred by Guarantorwithout the express written consent of Beneficiary. This Guarantee shall bebinding upon Guarantor, its permitted successors and assigns, and shall inureto the benefit of and be enforceable by Beneficiary and its successors,transferees and assigns.

3.3.          Attorneys’ Fees.If Beneficiary commences any action or proceeding against Guarantor to enforcethis Guarantee, the prevailing party in such action or proceeding shall beentitled to recover from the other party the reasonable attorneys’ fees andother costs and expenses incurred by that prevailing party in connection withsuch action or proceeding and in connection with enforcing any judgment, awardor order thereby obtained.

3.4           Miscellaneous.This Guarantee, together with the Agreements, constitutes the entire agreementof Guarantor with respect to the matters set forth herein. The rights andremedies herein provided are cumulative and not exclusive of any remediesprovided 

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by law or any other agreement, and this Guarantee shall be in addition to anyother guarantee of or collateral security provided by the Subsidiaries or anyother person or entity for any of the Guaranteed Obligations. The invalidity orunenforceability of any one or more sections of this Guarantee shall not affectthe validity or enforceability of its remaining provisions. Captions are forease of reference only and shall not affect the meaning of the relevantprovisions. The meanings of all defined terms used in this Guarantee shall beequally applicable to the singular and plural forms of the terms defined.

3.5           Termination. ThisGuarantee shall terminate automatically upon the termination of both the Ltd.Agreement and the Schering Agreement.

IN WITNESS WHEREOF, the undersigned doeshereby execute this Guarantee as of the date first set above.

| **“GUARANTOR”** |
|---------------------------|
|                      |   |
| By:                       | /s/ David A. Nichols |
|                      |   |
| Name:                     | David A. Nichols |
|                      |   |
| Title:                    | Senior Vice President — Taxes |

 

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