<PAGE>
 
                                                                    CONFIDENTIAL

                                                                  EXECUTION COPY

                              CONSULTING AGREEMENT

            This consulting agreement (the "Agreement") is made as of August 3,
1998, by and between Magainin Pharmaceuticals Inc., a Delaware corporation (the
"Company"), and Jay Moorin ("Consultant").

            WHEREAS, Consultant has served as the Chairman, President and Chief
Executive Officer of the Company;

            WHEREAS, by mutual consent Consultant's employment with the Company
as Chairman, President and Chief Executive Officer will be terminated as of 5:00
p.m., Philadelphia time, on August 3, 1998 (the "Effective Date");

            WHEREAS, the parties hereto desire to enter into this Agreement on
the date hereof to set forth their agreement with respect to said termination of
employment and to provide for the retention by the Company of Consultant after
the Effective Date as a consultant to the Company and for certain other matters
in connection therewith upon the terms and conditions hereinafter set forth.

            NOW, THEREFORE, in consideration of the covenants and conditions set
forth in this Agreement, the parties, intending to be legally bound, agree as
follows:

            1. Termination of Employment. Consultant hereby voluntarily and
irrevocably resigns as a director, officer and employee of the Company and as a
director, officer and employee of each subsidiary and affiliate of the Company
of which he is a director, officer or employee, in each case as of the Effective
Date. The Company and Consultant acknowledge and agree that all rights and
obligations of any nature of the Company and Consultant with respect to such
employment or positions shall be duly and effectively terminated on the
Effective Date, except as expressly provided below. Consultant further
acknowledges and agrees that payments made or to be made and benefits provided
or to be provided hereunder are in lieu of any and all compensation and benefits
of any nature whatsoever due to Consultant under the terms of any agreement,
arrangement or understanding (whether written or oral) binding upon the Company
and Consultant.

            2. Consulting Arrangement. The Company hereby retains Consultant as
a consultant to the Company to perform the consulting services in accordance
with the terms and conditions hereinafter set forth.

            2.1 Term. The period during which consulting services shall be
provided under this Agreement (the "Consulting Term") shall begin on the
Effective Date and end on the first anniversary thereof, subject to the
provisions for earlier termination thereof set forth in Section 5 of this
Agreement.
<PAGE>
 
            2.2 Duties and Responsibilities as a Consultant. During the
Consulting Term, Consultant shall provide consulting services to the Company as
an independent contractor and not as an employee of the Company. Consultant
shall at all times during the Consulting Term act as an independent contractor
and during such period nothing hereunder shall create or imply a relationship of
employer-employee between the Company and Consultant. Consultant shall provide
such consulting and advisory services to the Company as may be reasonably
requested from time to time by the chief executive officer of the Company.

            2.3 Extent of Service as a Consultant. During the Consulting Term,
Consultant agrees to devote such time, attention and energy as is necessary to
fulfill his duties and responsibilities as a consultant under Section 2.2
hereof, but in no event shall Consultant be required to spend more than one day
in any week or more than a total of 52 days during the Consulting Term in such
consulting activities.

            2.4 Compensation for Consulting Services.

                  (a) During the Consulting Term, the Company shall pay
Consultant compensation at the annual rate of $343,355, payable in twelve (12)
equal monthly installments, for all services rendered by Consultant to the
Company pursuant to this Agreement, payable at such times as the Company pays
its senior executive officers.

                  (b) Consultant acknowledges that the period within which the
Company must make available the purchase of health insurance under COBRA will
commence as of the Effective Date. The Company will pay Consultant an amount in
cash equal to the cost of health insurance purchased by him under COBRA for a
period of twelve (12) months from the Effective Date, or until Consultant
obtains new health insurance coverage, whichever is earlier. Except as expressly
stated above, Consultant shall not be entitled to any benefits provided to
employees of the Company during the Consulting Term, and, Consultant
specifically acknowledges that he is not entitled to participate in any of the
Company's benefit plans, including, without limitation, the Company's health and
life insurance, disability insurance or 401(k) plans.

                  (c) Consultant alone, and not the Company will be solely
responsible for payment of all federal, state and local taxes in respects of the
payments to be made and benefits to be provided to him under this Agreement.
Consultant hereby acknowledges that the Company is responsible for the
withholding of income, FICA and FUTA taxes in connection with all payments in
excess of $50,000 per year, and the Company is authorized to make such
withholdings.

            2.5 Stock Options. The Company has previously granted Consultant
options to acquire a total of 938,612 shares of the Company's common stock (the
"Stock Options") as set forth on Attachment A hereto pursuant to various stock
option agreements (the "Option Agreements"). The Company and Consultant hereby
acknowledge and agree that (i) the provisions of the Option Agreements will
continue to apply to the Company and Consultant

                                      -2-
<PAGE>
 
during the Consulting Term, (ii) during the Consulting Term, Consultant may
exercise the Stock Options as such options have vested, or will vest during the
Consulting Term, in accordance with the terms of the Option Agreements, and
(iii) all provisions of the Option Agreements relating to the period of
employment of Consultant by the Company or its subsidiaries shall instead refer
to the period of Consultant's services as a consultant to the Company during the
Consulting Term.

            2.6 Return of Company Property. As soon as possible after the
Effective Date, Consultant will return to the Company all lists, books, records,
documents, credit cards and other materials or property in his possession,
custody or control which are or were owned by the Company or any of its
subsidiaries or affiliates, or which are or were used by Consultant or any other
officers, employees or agents of the Company or any of its subsidiaries or
affiliates in connection with the conduct of the business of the Company or any
of its subsidiaries or affiliates, and Consultant will not retain or deliver to
any other persons or entities copies thereof or permit any copies thereof to be
made by any other person or entity.

            3. General Release. In consideration of the foregoing, (including
without limitation the promises and payments as described in Section 2 above,
which are in excess of that to which Consultant would have otherwise been
entitled upon termination of employment), Consultant hereby knowingly, willingly
and voluntarily remises, waives, releases and forever discharges the Company and
its subsidiaries and affiliates, the directors, officers, employees, advisors
and agents of the Company and its subsidiaries and affiliates, and the heirs,
executors, administrators, successors and assigns of such parties (collectively
referred to as the "Releases") of and from any and all manner of actions and
causes of action, suits, debts, dues, accounts, bonds, covenants, contracts,
agreements, judgments, claims and demands whatsoever by law or equity which
Consultant, his heirs, executors, administrators or assigns has, had or may
hereafter have against the Releases or any of them from or by reason of any
cause, matter or thing whatsoever from the beginning of his employment with the
Company to the Effective Date, excepting only claims against the Company
relating to its obligations under Section 2 of this Agreement and including,
without in any way limiting the generality of the foregoing, any and all matters
relating to his employment by the Company and the termination thereof, any and
all claims under any federal, state or local law, any common law claims and all
claims for counsel fees and costs. Consultant covenants and agrees never to
commence, aid in any way, prosecute or permit to be commenced against the
Releases any action or other proceeding based upon any matters which are the
subject of or covered by the foregoing. Nothing in this Section 3 shall affect
or modify in any manner (i) the rights of Consultant and the obligations of the
Company to indemnify Consultant for acts or matters occurring prior to the
Effective Date, if and to the extent required pursuant to the Company's By-Laws
or the Delaware General Corporation Law, in each case as in effect on or prior
to the Effective Date, and (ii) the rights, if any, of Consultant under any
directors and officers insurance policy purchased by the Company and in effect
on or prior to the Effective Date.

                                      -3-
<PAGE>
 
            4. Developments and Confidential Information, etc.

                  (a) Consultant acknowledges that, upon, and as a condition of,
first becoming an employee of the Company in 1991, he executed and delivered to
the Company the Company's standard form of proprietary information agreement,
the current version of which is attached as Attachment B hereto (the "Employee
Agreement"). In consideration of the provisions of this Agreement, Consultant
(i) is executing the Employee Agreement contemporaneously with the execution of
the Agreement, thereby confirming that he is and shall be legally bound by its
terms, and (ii) acknowledges that terms of the Employee Agreement are valid,
binding and enforceable, and that he is and shall remain legally bound thereby
at all times after the Effective Date regardless of termination of his
employment by the Company or termination of the Consulting Term.

                  (b) Consultant recognizes that the Company has received, and
prior to the Effective Date and during the Consulting Term may continue to
receive, from third parties their confidential or proprietary information
subject to a duty on the Company's part to maintain the confidentiality of such
information and to use it only for certain limited purposes. Consultant shall
hold all such confidential or proprietary information in the strictest
confidence and shall not disclose it to any person or entity or use it except as
consistent with the Company's agreements with such third parties.

                  (c) Consultant agrees that he will provide, and that the
Company may similarly provide, a copy of the Employee Agreement to any business
or enterprise (i) which he may directly or indirectly own, manage, advise,
operate, finance, join, control or participate in the ownership, management,
operation, financing, or control of or (ii) with which he may be connected with
as an officer, director, advisor, employee, partner, principal, agent,
representative, consultant or otherwise, or in connection with which he may use
or permit his name to be used.

            5. Early Termination of the Consulting Term. The Consulting Term
shall terminate prior to the first anniversary of the Effective Date upon the
occurrence of any one of the following events:

                  (a) Death. In the event that Consultant dies during the
Consulting Term, the Consulting Term shall terminate, but the Company shall
continue to pay to his executors, legal representatives or administrators the
unpaid portions of the cash compensation set forth in Sections 2.4(a).

                  (b) Breach by Consultant. In the event Consultant violates any
of his obligations under this Agreement or the Employee Agreement, the Company
may, upon 7 days prior notice to Consultant, terminate the Consulting Term;
provided, however, that Consultant shall have a reasonable opportunity to cure
any breach of his obligations under Sections 2.2, 2.3 or 2.6 of this Agreement
during such 7 days' notice period. In the event of a termination

                                      -4-
<PAGE>
 
pursuant to this Section 5(b), all payment obligations of the Company set forth
in this Agreement shall terminate, and Consultant shall not be entitled to
receive any unpaid portion of the cash payments set forth in Sections 2.4(a) and
(b) of this Agreement.

            6. Survival. Notwithstanding the termination of the Consulting Term
under Section 5(b) hereof or for any other reason, Consultant's obligations
under the Employee Agreement shall survive and remain in full force and effect
for the periods therein provided, and the provisions of Sections 1, 2.6, 3, 4,
and 6-13 of this Agreement shall survive and remain in full force and effect.

            7. Governing Law. This Agreement shall be governed by and
interpreted under the laws of the Commonwealth of Pennsylvania, without giving
effect to the principles of conflicts of law thereof.

            8. Notices. All notices and other communications required or
permitted hereunder or necessary or convenient in connection herewith shall be
in writing and shall be deemed to have been given when hand delivered or mailed
by registered or certified mail, as follows (provided that notice of change of
address shall be deemed given only when received):

      If to the Company, to:

            Magainin Pharmaceuticals Inc.
            5110 Campus Drive
            Plymouth Meeting, PA 19462
            Attention: President and Chief Executive Officer

      With a required copy to:

            Morgan, Lewis & Bockius LLP
            2000 One Logan Square
            Philadelphia, PA 19103-6993
            Attention: David R. King, Esquire

      If to Consultant, to:

            Jay Moorin
            31 Hereford Drive
            Princeton Junction, NJ 08550

or to such other names or addresses as the Company or Consultant, as the case
may be, shall designate by notice to each other person entitled to receive
notices in the manner specified in this Section.

                                      -5-
<PAGE>
 
            9. Contents of Agreement; Amendment and Assignment.

                  (a) This Agreement supersedes all prior agreements and sets
forth the entire understanding among the parties hereto with respect to the
subject matter hereof, except that this Agreement shall not supersede and shall
be in addition to the Employee Agreement any other agreements between Consultant
and the Company with respect to confidentiality or other intellectual property
rights. This Agreement and the Employee Agreement may not be changed, modified,
extended or terminated except upon written amendment executed by Consultant and
approved by the board of directors of the Company and executed on behalf of the
Company by a duly authorized officer. Without limitation of the foregoing,
Consultant and the Company acknowledge that the effect of this provision is that
no oral modifications of any nature whatsoever to this Agreement or the Employee
Agreement shall be permitted.

                  (b) All of the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
heirs, executors, administrators, legal representatives, successors and assigns
of the parties hereto, except that the duties and responsibilities of Consultant
hereunder are of a personal nature and shall not be assignable or delegable in
whole or in part by Consultant and the Company may not transfer or convey its
rights hereunder to any third party other than an affiliate of the Company
without the prior express written consent of Consultant.

            10. Severability. If any provision of this Agreement or the Employee
Agreement, or the application thereof to any person or circumstance, is held
invalid or unenforceable in any jurisdiction, the remainder of this Agreement or
the Employee Agreement, and the application of such provision to such person or
circumstance in any other jurisdiction or to other persons or circumstances in
any jurisdiction, shall not be affected thereby.

            11. Remedies Cumulative; No Waiver. No remedy conferred upon the
Company by this Agreement or the Employee Agreement is intended to be exclusive
of any other remedy, and each and every such remedy shall be cumulative and
shall be in addition to any other remedy given hereunder or now or hereafter
existing at law or in equity. No delay or omission by the Company in exercising
any right, remedy or power hereunder or existing at law or in equity shall be
construed as a waiver thereof, and any such right, remedy or power may be
exercised by the Company from time to time and as often as may be deemed
expedient or necessary by the Company in its sole discretion.

            12. Miscellaneous. All section headings are for convenience only.
This Agreement may be executed in counterparts, each of which is an original. It
shall not be necessary in making proof of this Agreement or any counterpart
hereof to produce or account for any of the other counterparts.

                                      -6-
<PAGE>
 
            13. Consultation with Legal Counsel, Etc. Consultant and Company
acknowledge that no promise or inducement for this Agreement has been made
excepts as set forth herein. Consultant acknowledges that this Agreement is
executed without Consultant's reliance upon any statement or representation by
or on behalf of the Company; that Consultant has had an opportunity to discuss
this Agreement with his attorney; and that Consultant is legally competent to
and does voluntarily execute this Agreement and accept full responsibility
therefor.

            IN WITNESS WHEREOF, the undersigned, intending to be legally bound,
have executed this Agreement as of the date first above written.

                             MAGAININ PHARMACEUTICALS INC.

                             By: /s/ Michael R. Dougherty
                                 -------------------------------------
                                 Michael R. Dougherty
                                 President and Chief Executive Officer


                             CONSULTANT

                             /s/ Jay Moorin
                             -----------------------------------------
                             Jay Moorin

                                      -7-
<PAGE>
 
                                                                    ATTACHMENT A

                                   Plan Legend
                                   ---------------------------------------------
                                        A    Options granted "Outside-the-Plans"
Magainin Pharmaceuticals Inc.           B    Options Granted under the 1990 Plan
Option Detail x Person                  C    Options Granted under the 1992 Plan
                                        D    Options Granted under the 1998 plan
                                   ---------------------------------------------

<TABLE>
<CAPTION>
==============================================================================================================================
                                                                                        1994 Option
                                                                                           Exchange                           
                                                                                            Program                            
                                                                                                                              
                                                                               Original      Number     Revised
                                                                 Exercise       Options     Options     Options               
                    Item Count     Plan           Grant Date        Price       Granted     Granted     Granted     Exercised 
            ------------------------------------------------------------------------------------------------------------------
<S>                     <C>         <C>            <C>            <C>           <C>         <C>         <C>              <C>  
            ---------   1           A              22-Apr-91       $2.000       595,612           0     595,612          0    
Employee => J. Moorin   2           C              22-Jul-93       $3.750       100,000     (10,000)     90,000          0    
                CEO     3           C              20-Jun-94       $3.750        33,000                  33,000          0    
            ---------   4           C              21-Jul-95       $7.130        45,000                  45,000          0    
                        5           C              28-Jun-96      $10.500        50,000                  50,000          0    
                        6           C              28-Jun-96      $10.500        55,000                  55,000          0    
                        7           C               9-Jul-97       $7.380        70,000                  70,000          0    
                                                                                                              0          0    
                                                                                                      ------------------------
                                                                                                        938,612          0    
                                                                                                      ------------------------
==============================================================================================================================

<CAPTION>
==============================================================================================================================

                                                                                                        
                              
                                                        --------------------------------------                      
                                          As Of" Date =                 6/30/98                       # Vesting Periods 
                                                        --------------------------------------        ----------------- 
                                                          Options                                                  
                    Item Count            Terminated    Outstanding       Vested     Unvested          Total    Earned 
            ------------------------------------------------------------------------------------------------------------------ 
                              
<S>                     <C>                <C>          <C>          <C>          <C>                  <C>      <C> 
                              
            ---------   1                      0            595,612      595,612           0  OK          1        1   
Employee => J. Moorin   2                      0             90,000       90,000           0  OK          4        4   
                CEO     3                      0             33,000       33,000           0  OK          4        4   
            ---------   4                      0             45,000       22,500      22,500  OK          4        2   
                        5                      0             50,000       25,000      25,000  OK          4        2   
                        6                      0             55,000       22,000      33,000  OK          5        2   
                        7                      0             70,000            0      70.000  OK          4        0   
                                               0                  0          N/A         N/A              0        0   
                                           -------------------------------------------------                         
                                               0            938,612      788,112     150,000  OK                     
                                           -------------------------------------------------                         
============================================================================================================================== 

</TABLE>

                                  Confidential
                          Do Not Disclose Outside MAGN               Page 1 of 2

                                      -8-
<PAGE>
 
                                                                    ATTACHMENT B

                         MAGAININ PHARMACEUTICALS INC.

                       PROPRIETARY INFORMATION AGREEMENT

                             ________________, 1998

In consideration of my employment and/or continued employment, as the case may
be, with Magainin Pharmaceuticals Inc., a Delaware corporation (together with
its affiliates and subsidiaries, if any, the "Company"), and the compensation
received by me from the Company from time to time, I _________________________,
hereby agree with the Company as follows:

      1. Definitions

      (a) "Invention" shall mean any Technical Information created, discovered,
      developed, made, conceived of, reduced to practice or learned by, or which
      otherwise became known to, me, either alone or jointly with others, which
      is not generally known to the public (other than by reason of my breach of
      this Agreement).

      (b) "Proprietary Information" shall mean (i) Technical Information (A)
      that has been created, discovered, developed, made, conceived of, reduced
      to practice or learned by, or otherwise become known to, the Company, (B)
      that constitutes an Invention that arose during the period of my
      employment with the Company, resulted from tasks assigned to me by the
      Company or resulted from the use of premises or property (including,
      without limitation, computer systems and engineering facilities) owned,
      leased or contracted for by the Company, or (C) in which property rights
      have been or may be assigned or otherwise conveyed to the Company, which
      Technical Information is not generally known to the public (other than by
      reason of my breach of this Agreement) and which provides or may provide a
      competitive advantage to the Company; and (ii) all Trade Information which
      is related to the business of the Company;

      (c) "Technical Information" shall mean systems, processes, formulas, data,
      functional specifications, computer programs, blueprints, know-how,
      improvements, discoveries, developments, designs, inventions, techniques,
      new products and licenses, whether or not patentable, registrable or
      otherwise protectable under patent, copyright, trademark or similar
      statutes.

      (d) "Trade Information" shall mean strategies, forecasts, unpublished
      financial statements, budgets, projections, prices, costs, and licensor,
      licensee, joint venture, partner, client, customer and supplier lists.

      2. Acknowledgements. I have been advised and understand and acknowledge
that:

                                      -9-
<PAGE>
 
      (a) the Company is engaged in a continuous program of research, design,
      development, production, marketing and servicing with respect to the
      business of the Company.

      (b) my employment creates a relationship of confidence and trust between
      me and the Company with respect to certain information, however learned,
      which directly or indirectly relates to the business of the Company;

      (c) during my employment with the Company, I will have access to
      Proprietary Information which is, and must continue to be, confidential
      and which is not readily accessible to competitors of the Company;

      (d) as used herein, the period of my employment includes any time during
      which I may be retained by the Company as an employee.

      3. Ownership of Proprietary Information. Nondisclosure. All Proprietary
Information (including, without limitation, Inventions which constitute
Proprietary Information) shall be the sole property of the Company and the
Company shall be the sole owner of all patents, copyrights, trademarks and other
rights and protections in connection therewith. I hereby assign to the Company
all rights and protections I may have or acquire in any Proprietary Information.
At all times, both during the term of my employment with the Company and after
its termination, I will keep in strictest confidence and trust all Proprietary
information and information which the Company receives from third parties which
the Company treats as confidential and I will not use or disclose any
Proprietary Information without the written consent of the Company except (i) as
may be necessary in the ordinary course of performing my duties as an employee
of the Company and (ii) such Proprietary Information which is in the public
domain other than by reason of my breach of this Agreement.

      4. Documentation: Upon the termination of my employment with the Company
for any reason whatsoever, whether voluntary or involuntary, I will deliver to
the Company all Proprietary Information that is embodied in a tangible medium of
expression, including, without limitation, documents, notes, drawings, software
and other materials, and will not retain or take any of the foregoing or any
reproduction of any of the foregoing.

      5. No-solicitation. I will not at any time either during the term of my
employment or after the cessation of my employment with the Company for whatever
reason, either on my own account or for any other person, firm or company,
solicit, interfere with or endeavor to entice away from the Company other
employees of the Company.

      6. Disclosure of Inventions. I will promptly disclose to the Secretary or
Assistant Secretary of the Company all Inventions which (i) may reasonably be
deemed to constitute Proprietary Information or (ii) arise during the period of
my employment. The Company agrees to receive all such disclosures in confidence
pending determination of whether such inventions constitute Proprietary
Information.

                                      -10-
<PAGE>
 
      7. Enforcement Assistance. I shall assist the Company (at the Company's
expense) in every proper way as to all inventions which constitute Proprietary
Information to obtain and from time to time to enforce patents, copyrights,
trademarks and other rights and protections relating to such Inventions in any
and all countries, and to that end I will execute all documents for use in
applying for, prosecuting or enforcing such patents, copyrights, trademarks and
other rights and protections on such Inventions as the Company may desire,
together with any assignments thereof to the Company or persons designated by
it. My obligation so to assist the Company shall continue indefinitely after the
termination of my employment with the Company, but the Company shall compensate
me at a reasonable rate after my termination for time actually spent by me at
the Company's request on such assistance. In the event the Company is unable for
any reason whatsoever, after reasonable effort, to secure my signature on any
documents for use in applying for, prosecuting or enforcing any patent,
copyright, trademark or other right, I designate and appoint the Company and its
duly authorized officers and agents as my agent and attorney-in-fact to act for
and on my behalf to execute and file any such documents and to do all other
lawfully permitted acts to further the prosecution, issuance and enforcement of
patents, copyrights, trademarks or other rights or protections thereon with the
same legal force and effect as if executed by me, and I hereby ratify, affirm
and approve all such acts accordingly.

      8. No Conflicting Agreements. I represent and warrant that my engagement
by the Company and my execution and delivery of this Agreement and compliance
with all the terms of this Agreement do not and will not breach any written or
oral agreement I have entered into relating to intellectual property,
noncompetition or otherwise. I shall not enter into any written or oral
agreement in conflict with this Agreement. For so long as I shall be an employee
of the Company, I will not, without the Company's prior written consent, engage
in any employment or business which requires substantial efforts on my part,
other than for the Company.

      9. Use of Confidential Information of Other Persons. I represent and
warrant that I have not brought and will not bring with me to the Company, or
use at the Company, any Technical Information or Trade Information which is
proprietary to another person (natural or otherwise) and not generally available
to the public, unless express written authorization from such other person for
the possession and use of such Technical Information or Trade Information has
been obtained.

      10. Remedies. I acknowledge that a remedy at law for any breach or
threatened breach of the provisions of this Agreement would be inadequate and
therefore agree that the Company may be entitled to injunctive and other
equitable relief in addition to any other available rights and remedies in case
of any such breach or threatened breach; provided, however, that nothing
contained in this Agreement shall be construed as prohibiting the Company from
or limiting the Company in pursuing any other remedies available for any such
breach or threatened breach.

                                      -11-
<PAGE>
 
      11. Assignment. This Agreement and the rights and obligations of the
parties shall bind and inure to the benefit of any successors or assigns of the
Company. Neither this Agreement nor any rights or obligations under this
Agreement may be assigned by me.

      12. Interpretation. It is the desire and intent of the parties that the
provisions of this Agreement be enforced to the fullest extent permissible under
the law and public policies applied in each jurisdiction in which enforcement is
sought. Accordingly, if any particular provision of this Agreement shall be
adjudicated to be invalid or unenforceable, such provision shall be deemed
amended to delete therefrom the portion thus adjudicated to be invalid or
unenforceable, such deletion to apply only with respect to the operation of such
provision in the particular jurisdiction in which such adjudication is made. In
addition, if any particular provision contained in this Agreement shall for any
reason be held to be excessively broad as to duration, activity or subject, it
shall be construed by limiting and reducing such provision as to such
characteristic so that the provision is enforceable to the fullest extent
compatible with the applicable law as it shall then appear.

      13. Notices. Any notice which a party is required or may desire to give
pursuant to this Agreement shall be given in writing by personal delivery, by
telex. telegram or telecopy, by registered or certified mail, return receipt
requested, postage prepaid, or by overnight courier, addressed to the employee
at his address of record with the Company and addressed to the Company at its
principal office, or at such other place as either party may from time to time
designate in writing. Any notice personally delivered or given by telex,
telegram or telecopy shall be deemed received on the date thereof, any notice
given by overnight courier shall be deemed received on the next business day and
any notice mailed shall be deemed received on the third business day thereafter.

      14. Waivers. If either party shall waive any breach of any provision of
this Agreement, such party shall not thereby be deemed to have waived any other
provision or any preceding or succeeding breach of the same provision of this
Agreement.

      15. Headings. The headings of the sections of this Agreement are inserted
for convenience only and shall not be deemed to constitute a part nor to affect
the meaning of this Agreement.

      16. Governing Law, Jurisdiction. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the Commonwealth of
Pennsylvania without giving effect to the principles of conflicts of laws
thereof. In any suit, action or proceeding arising out of or relating to this
Agreement, I hereby submit to the jurisdiction of any court or agency in which
or with whom the Company commences such suit, action or proceeding, and waive
any and all objections to jurisdiction that I may have under relevant law.

      17. No Employment Agreement. I acknowledge that this agreement does not
constitute an employment agreement, and I further acknowledge that my term with
the Company may be terminated at will either by me or by the Company. I agree
that this

                                      -12-
<PAGE>
 
proprietary information agreement shall be binding upon me whether or not my
consulting shall continue for any length of time after this agreement is
executed, and whether or not my consulting is terminated by me or by the Company
for any reason whatsoever, whether voluntarily or involuntarily.

      18. Complete Agreement Amendments; Prior Agreements. This Agreement is the
entire agreement of the parties with respect to its subject matter and may not
be amended, supplemented, cancelled or discharged, nor may any provision be
waived, except by written instrument executed by both parties.

This agreement supersedes any and all prior agreements between the parties with
respect to the matters covered.

                  Signature:              /s/ Jay Moorin
                                          -----------------

                  Date:                   Aug 3, 1998
                                          -----------------

Accepted and agreed to
as of the date first
above written:


By: /s/ M.R. Dougherty
    ------------------

Name:
     -----------------  
     
Title:
      ---------------- 
                                      -13-