<SUBMISSION>
<ACCESSION-NUMBER>0001036050-00-001361
<TYPE>S-1/A
<PUBLIC-DOCUMENT-COUNT>19
<FILING-DATE>20000728
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>3 DIMENSIONAL PHARMACEUTICALS INC
<CIK>0000914201
<ASSIGNED-SIC>2834
<IRS-NUMBER>232716487
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>S-1/A
<ACT>33
<FILE-NUMBER>333-37606
<FILM-NUMBER>681318
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>665 STOCKTON DRIVE
<STREET2>SUITE 104
<CITY>EXTON
<STATE>PA
<ZIP>19341
<PHONE>6104588959
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>665 STOCKTON DRIVE
<STREET2>SUITE 104
<CITY>EXTON
<STATE>PA
<ZIP>19341
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>S-1/A
<SEQUENCE>1
<FILENAME>0001.txt
<DESCRIPTION>AMENDMENT NO. 3 TO FORM S-1 REGISTRATION STATEMENT
<TEXT>

<PAGE>


   As filed with the Securities and Exchange Commission on July 28, 2000
                                            Registration Statement No. 333-37606
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                               ----------------

                              AMENDMENT NO. 3
                                       TO
                                    FORM S-1
                             REGISTRATION STATEMENT
                                     Under
                           The Securities Act of 1933
                               ----------------
                      3-Dimensional Pharmaceuticals, Inc.
             (Exact name of Registrant as specified in its charter)
        Delaware                     2834                    23-2716487
     (State or other           (Primary Standard            (IRS Employer
     jurisdiction of              Industrial           Identification Number)
    incorporation or       Classification Code No.)
      organization)

                     Eagleview Corporate Center, Suite 104
                               665 Stockton Drive
                                Exton, PA 19341
                                  610-458-8959
  (Address, including zip code, and telephone number, including area code, of
                   registrant's principal executive offices)
                               ----------------
                           David C. U'Prichard, Ph.D.
                            Chief Executive Officer
                      3-Dimensional Pharmaceuticals, Inc.
                     Eagleview Corporate Center, Suite 104
                               665 Stockton Drive
                                Exton, PA 19341
                                  610-458-8959
 (Name, address, including zip code, and telephone number, including area code,
                             of agent for service)
                               ----------------
                                   Copies to:
         Randall B. Sunberg                         Jeffrey E. Cohen
     Morgan, Lewis & Bockius LLP                    Coudert Brothers
         1701 Market Street                    1114 Avenue of the Americas
       Philadelphia, PA 19103                    New York, NY 10036-7703
           (215) 963-5000                            (212) 626-4400
  Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
  If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
  If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
  If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
  If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
  If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
                               ----------------
  The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended or until this Registration Statement
shall become effective on such date as the Commission, acting pursuant to such
Section 8(a), may determine.

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>

                                    PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution

  The expenses (other than underwriting discounts and commissions) payable in
connection with this offering are as follows:

<TABLE>
   <S>                                                              <C>
   Securities and Exchange Commission registration fee............. $   18,480
   NASD filing fee.................................................      7,500
   Nasdaq filing fee...............................................    100,000
   Printing and engraving expenses.................................    200,000
   Legal fees and expenses.........................................    400,000
   Accounting fees and expenses....................................    100,000
   Blue Sky fees and expenses (including legal fees)...............     10,000
   Transfer agent and rights agent and registrar fees and
    expenses.......................................................     25,000
   Miscellaneous...................................................    139,020
                                                                    ----------
     Total......................................................... $1,000,000
                                                                    ==========
</TABLE>

  All expenses are estimated except for the SEC fee and the NASD fee.

Item 14. Indemnification of Directors and Officers

  The Registrant's Certificate of Incorporation permits indemnification to the
fullest extent permitted by Delaware law. The Registrant's bylaws require the
Registrant to indemnify any person who was or is an authorized representative
of the Registrant, and who was or is a party or is threatened to be made a
party to any corporate proceeding, by reason of the fact that such person was
or is a director or officer of the Registrant, against all liability and loss
suffered and expenses reasonably incurred by such person in connection with
such proceeding. Such indemnification is mandatory under the Registrant' bylaws
as to expenses reasonably incurred. Delaware law also permits indemnification
in connection with a proceeding brought by or in the right of the Registrant to
procure a judgment in its favor. Insofar as indemnification for liabilities
arising under the Act may be permitted to directors, officers or persons
controlling the Registrant pursuant to the foregoing provisions, the Registrant
has been informed that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in that Act and is
therefore unenforceable. The Registrant currently has a directors' and
officers' liability insurance policy.

  The Underwriting Agreement provides that the underwriters are obligated,
under certain circumstances, to indemnify directors, officers, and controlling
persons of the Registrant against certain liabilities, including liabilities
under the Act. Reference is made to the form of Underwriting Agreement which
will be filed by amendment as Exhibit 1.1 hereto.

Item 15. Recent Sales of Unregistered Securities

  Since our inception, we have issued the following securities that were not
registered under the Act (all amounts are on a pre-split basis and are as of
June 30, 2000):

  Since our inception, we have issued an aggregate of 2,730,395 shares of
common stock, par value $0.001 per share. These shares include 11,974 shares of
common stock issued in July 1996 at a purchase price per share of $0.01 for a
total of $120, 1,113,088 shares of common stock issued upon exercise of options
granted under our equity compensation plan at a weighted average exercise price
of $0.62 per share and 2,170,500

                                      II-1
<PAGE>

shares of common stock issued in the form of restricted stock grants under our
equity compensation plan at a weighted average purchase price of $0.24 per
share, of which 565,167 shares have been repurchased by the Company. All such
sales and issuances were deemed to be exempt from registration under Section
4(2) of the Act and/or Rule 701, or Regulation D or Regulation S promulgated
thereunder.

  Since our inception we have also issued an aggregate of 36,922,488 shares of
preferred stock, par value of $0.001 per share. These shares include (i)
6,686,986 shares of series A-1 preferred stock prior to 1996 at a purchase
price per share of $1.00, for a total of approximately $6.7 million; (ii)
4,333,990 shares of series A-2 preferred stock issued in October 1996 at a
purchase price per share of $1.25, for a total of approximately $5.4 million;
(iii) 10,304,264 shares of series A-3 preferred stock issued in March 1997 at a
purchase price per share of $1.21, for a total of approximately $12.5 million;
(iv) 4,000,000 shares of series A-4 issued in January 1998 at a purchase price
per share of $2.60 for a total of approximately $10.4 million; (v) 9,572,248
shares of series A-5 preferred stock issued in March 2000 at a purchase price
per share of $3.00, for a total of approximately $28.7 million, which amount
includes 3,451,165 shares issued upon the conversion of convertible promissory
notes issued in November 1999; (vi) 1,000,000 shares of series B preferred
stock issued in October 1996 at a purchase price per share of $2.25 for a total
of approximately $2.3 million; (viii) 400,000 shares of series C preferred
stock issued in June 1997 at a purchase price per share of $2.50 for a total of
approximately $1.0 million; and (ix) 625,000 shares of series D preferred stock
issued in May 2000 at a purchase price per share of $8.00 for a total of
approximately $5.0 million. All such sales and issuances were deemed to be
exempt from registration under the Securities Act by virtue of Section 4(2),
Regulation D or Regulation S promulgated thereunder.

  Since our inception, we have issued warrants to purchase a total of 4,932,600
shares of common stock and 239,475 shares of series A-1 preferred stock which
will either be exercised prior to the completion of this offering or become
exercisable for 239,475 shares of common stock upon the completion of this
offering.

  The warrants we have issued consist of warrants to purchase a total of
1,320,000 shares of common stock issued prior to 1997 at an exercise price of
$0.01 per share, including warrants to purchase 11,974 shares which were
exercised in July 1996, and warrants to purchase (i) 3,500,000 shares of common
stock at an exercise price of $1.25 per share issued in November 1999; (ii)
12,600 shares of common stock at an exercise price of $2.50 per share issued in
June 1997; (iii) 239,475 shares of series A-1 preferred stock, which will
either be exercised prior to the completion of this offering or become
exercisable for 239,475 shares of common stock at an exercise price of $1.00
per share reissued in July 1998; and (iv) 100,000 shares of common stock at an
exercise price of $0.01 per share issued in March 1997. All such sales and
issuances were deemed to be exempt from registration under the Securities Act
by virtue of Section 4(2), Regulation D or Regulation S promulgated thereunder.

  Under our equity compensation plan, as of June 30, 2000, 5,914,735 shares are
issuable upon the exercise of options outstanding under the plan at a weighted
average exercise price of $1.23 per share and 2,718,421 shares have been issued
under the plan, including 706,488 shares subject to repurchase at a weighted
average purchase price of $0.92 per share. For a more detailed description of
our equity compensation plan, see Management--Equity Compensation Plan. In
granting the options and selling the underlying securities upon exercises of
the options, we are relying upon exemption from registration set forth in
Section 4(2) of the Act and/or Rule 701, Regulation D or Regulation S
promulgated thereunder.

                                      II-2
<PAGE>

Item 16. Exhibits and Financial Statement Schedules

  (a) Exhibits:

<TABLE>
<CAPTION>
 Exhibit
 Number                                Description
 -------                               -----------
 <C>     <S>
  1.1    Form of Underwriting Agreement.*

  3.1    Seventh Restated Certificate of Incorporation of the Company, which is
         currently in effect.!

  3.2    Bylaws of the Company, which are currently in effect.!

  3.3    Form of Eighth Restated Certificate of Incorporation of the Company,
         to be filed prior to the closing of this offering.*

  3.4    Form of Ninth Restated Certificate of Incorporation of the Company, to
         become effective upon the closing of this offering.*

  3.5    Form of Amended and Restated Bylaws of the Company, to become
         effective upon the closing of this offering.*

  4.1    Form of Common Stock Certificate of Company.!

  5.1    Opinion of Morgan, Lewis & Bockius LLP.!

 10.1    3-Dimensional Pharmaceuticals, Inc. Equity Compensation Plan, as
         amended.!

 10.2    Third Amended and Restated Stockholders' Agreement by and among the
         Company and the Stockholders identified therein, dated March 31,
         2000.!

 10.3    Series B Preferred Stock Purchase Agreement between the Company and
         Merck KgaA, dated October 11, 1996.!

 10.4    Series C Preferred Stock Purchase Agreement between the Company and
         American Home Products Corporation, dated June 13, 1997.!

 10.5    Series D Preferred Stock Purchase Agreement between the Company and
         Schering Berlin Venture Corporation, dated May 17, 2000.!

 10.6    Warrant to Purchase Common Stock of the Company issued to HealthCare
         Ventures III, L.P., dated November 18, 1999.!

 10.7    Warrant to Purchase Common Stock of the Company issued to HealthCare
         Ventures IV, L.P., dated November 18, 1999.!

 10.8    Warrant to Purchase Common Stock of the Company issued to Rho
         Management Trust II, dated November 18, 1999.!

 10.9    Warrant to Purchase Common Stock of the Company issued to Aetna Life
         Insurance Company, dated November 18, 1999.!

 10.10   Warrant to Purchase Common Stock of the Company issued to Henry
         Rothman, dated November 18, 1999.!

 10.11   Warrant to Purchase Common Stock of the Company issued to Abingworth
         Bioventures SICAV, dated November 18, 1999.!

 10.12   Warrant to Purchase Common Stock of the Company issued to Sentron
         Medical, Inc., dated November 18, 1999.!

 10.13   Warrant to Purchase Common Stock of the Company issued to Biotech
         Growth S.A., dated November 18, 1999.!
</TABLE>


                                      II-3
<PAGE>

<TABLE>
<CAPTION>
 Exhibit
 Number                                Description
 -------                               -----------
 <C>     <S>
 10.14   Employment Offer Letter to David C. U'Prichard, dated September 1,
         1999.!

 10.15   Settlement Agreement between the Company and Scriptgen
         Pharmaceuticals, Inc., dated March 7, 2000.*@

 10.16   Research Collaboration Agreement between the Company and Biocryst
         Pharmaceuticals, Inc., dated October 18, 1996, and Amendment No.1
         thereto, dated October 18, 1996.*@

 10.17   Collaborative Discovery and Lead Optimization Agreement between the
         Company and Boehringer Ingelheim Pharmaceuticals, Inc., dated December
         17, 1999.*@

 10.18   Collaborative Research and License Agreement between the Company and
         Hoechst Schering AgrEvo GmbH, now a part of Aventis Crop Science CmbH,
         dated October 18, 1999.*@

 10.19   Collaborative Research and License Agreement between the Company and
         E.I. DuPont de Nemours & Co., dated October 12, 1998.*@

 10.20   Collaborative Discovery and Lead Optimization Agreement between the
         Company and DuPont Pharmaceuticals Company, dated February 11, 2000.*@

 10.21   Nonexclusive Patent License Agreement between the Company and DuPont
         Pharmaceuticals Company, dated February 11, 2000.*@

 10.22   Research and License Agreement between the Company and the Heska
         Corporation, dated December 18, 1997, and Amendment No.1 thereto,
         dated December 18, 1997.*@

 10.23   License and Research Agreement between the Company and Schering AG,
         Germany, dated May 17, 2000.*@

 10.24   Master Loan and Security Agreement between the Company and Phoenixcor,
         Inc., dated June 18, 1998.!

 10.25   Amended and Restated Lease for Combination Office/Laboratory/Light
         Manufacturing Space at Eagleview Corporate Center Lot 28 between the
         Company and Eagleview Technology Partners, dated December 12, 1997.*

 10.26   Master Lease Agreement between the Company and Transamerica Business
         Credit Corporation, dated June 12, 1997.!

 10.27   Warrant to Purchase Common Stock of the Company issued to Transamerica
         Business Credit Corporation, dated June 12, 1997.!

 10.28   Master Lease Agreement, Loan Agreement and Subordination Agreement
         between the Company and Comdisco, Inc., dated March 7, 1994.!

 10.29   Warrant to Purchase Series A Preferred Stock, originally dated March
         7, 1994 and reissued to CDC Realty, Inc., dated July 21, 1998.!

 10.30   Warrant to Purchase Series A Preferred Stock, originally dated March
         7, 1994 and reissued to Gregory Stento, dated July 21, 1998.!

 10.31   Warrant to Purchase Series A Preferred Stock, originally dated April
         25, 1995 and reissued to Comdisco, Inc., dated July 21, 1998.!

 10.32   Warrant to Purchase Series A Preferred Stock, originally dated April
         25, 1995 and reissued to Gregory Stento, dated July 21, 1998.!

 10.33   Form of Warrant to Purchase Common Stock (along with Schedule of
         Holders of Certain Warrants to Purchase Common Stock).!
</TABLE>


                                      II-4
<PAGE>

<TABLE>
<CAPTION>
 Exhibit
 Number                                Description
 -------                               -----------
 <C>     <S>
 10.34   3-Dimensional Pharmaceuticals, Inc. 2000 Equity Compensation Plan, to
         become effective upon the closing of this offering.!

 10.35   DiscoverWorks(TM) Drug Discovery Collaboration Agreement between the
         Company and Bristol-Myers Squibb Company, dated July 7, 2000.*@

 10.36   DiscoverWorks(TM) Nonexclusive License and Purchase Agreement between
         the Company and Bristol-Myers Squibb Company, dated July 7, 2000.*@

 10.37   GPCR License and User Agreement between the Company and Bristol-Myers
         Squibb Company, dated July 7, 2000.*@

 10.38   PERT Internal Use License and Option Agreement between the Company and
         Bristol-Myers Squibb Company, dated July 7, 2000.*@

 21.1    Subsidiaries of the Registrant.!

 23.1    Consent of Richard A. Eisner & Company, LLP.!

 23.2    Consent of Morgan, Lewis & Bockius LLP (to be included in Exhibit
         5.1).!

 24.1    Power of Attorney (included on signature page).!

 27.1    Financial Data Schedule.!
</TABLE>
--------
*  Filed herewith.
#  To be filed by amendment.
!  Previously filed.
@  Confidential treatment will be requested with respect to portions of this
   exhibit. Omitted portions will be filed separately with the Securities and
   Exchange Commission.

  (b) Financial Statement Schedules

     Schedule II--Valuation and Qualifying accounts.

  All other information for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission is either
included in the financial statements or is not required under the related
instructions or is inapplicable, and therefore has been omitted.

Item 17. Undertakings.

  Insofar as indemnification for liabilities arising under the Securities Act
of 1933, the Act, may be permitted to directors, officers and controlling
persons of the registrant pursuant to provisions described in Item 14 above, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities, (other than the
payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any
action, suit or proceeding), is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.

  The undersigned registrant hereby undertakes (1) to provide to the
underwriter at the closing specified in the underwriting agreement,
certificates in such denominations and registered in such names as required by
the underwriter to permit prompt delivery to each purchaser; (2) for purposes
of determining any liability under the Act, the information omitted from the
form of prospectus filed as part of a registration statement in reliance upon
Rule 430(A) and contained in the form of prospectus filed by the registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Act shall be deemed to be
part of this registration statement as of the time it was declared effective;
and (3) that for the purpose of determining any liability under the Act, each
post-effective amendment that contains a form of prospectus shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.

                                      II-5
<PAGE>

                                   SIGNATURES

  Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-1 and has duly caused this Amendment No. 3 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in Exton, Pennsylvania, on July 28, 2000.

                                          3-Dimensional Pharmaceuticals, Inc.

                                                  /s/ David C. U'Prichard
                                          By___________________________________
                                                    David C. U'Prichard
                                                  Chief Executive Officer

  Pursuant to the requirements of the Securities Exchange Act of 1933, this
Amendment No. 3 to the Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
              Signature                          Title                   Date
              ---------                          -----                   ----

<S>                                    <C>                        <C>
     /s/ David C. U'Prichard           Chief Executive Officer       July 28, 2000
______________________________________  and Director (Principal
         David C. U'Prichard            Executive Officer)

      /s/ Michael J. Wassil            Vice President and Chief      July 28, 2000
______________________________________  Financial Officer
          Michael J. Wassil             (Principal Financial
                                        Officer)

       /s/ Scott M. Horvitz            Vice President, Finance       July 28, 2000
______________________________________  and Administration
           Scott M. Horvitz             (Principal Accounting
                                        Officer)

      /s/ F. Raymond Salemme           President, Chief              July 28, 2000
______________________________________  Scientific Officer and
          F. Raymond Salemme            Director

                  *                    Director                      July 28, 2000
______________________________________
           Stephen Bunting

                  *                    Director                      July 28, 2000
______________________________________
           Bernard Canavan

                  *                    Director                      July 28, 2000
______________________________________
          James H. Cavanaugh

                  *                    Director                      July 28, 2000
______________________________________
           Zola P. Horovitz

                  *                    Director                      July 28, 2000
______________________________________
            David R. King

                  *                    Director                      July 28, 2000
______________________________________
             Joshua Ruch

                  *                    Director                      July 28, 2000
______________________________________
           Harold R. Werner
</TABLE>

     /s/ David C. U'Prichard
*By______________________________
       David C. U'Prichard
   Attorney-in-fact and Agent

                                      II-6
<PAGE>

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
 Exhibit
 Number                                Description
 -------                               -----------
 <C>     <S>
  1.1    Form of Underwriting Agreement.*

  3.1    Seventh Restated Certificate of Incorporation of the Company, which is
         currently in effect.!

  3.2    Bylaws of the Company, which are currently in effect.!

  3.3    Form of Eighth Restated Certificate of Incorporation of the Company;
         to be filed prior to the closing of this offering.*

  3.4    Form of Ninth Restated Certificate of Incorporation of the Company, to
         become effective upon the closing of this offering.*
  3.5    Form of Amended and Restated Bylaws of the Company, to become
         effective upon the closing of this offering.*

  4.1    Form of Common Stock Certificate of Company.!

  5.1    Opinion of Morgan, Lewis & Bockius LLP.!

 10.1    3-Dimensional Pharmaceuticals, Inc. Equity Compensation Plan, as
         amended.!

 10.2    Third Amended and Restated Stockholders' Agreement by and among the
         Company and the Stockholders identified therein, dated March 31,
         2000.!

 10.3    Series B Preferred Stock Purchase Agreement between the Company and
         Merck KgaA, dated October 11, 1996.!

 10.4    Series C Preferred Stock Purchase Agreement between the Company and
         American Home Products Corporation, dated June 13, 1997.!

 10.5    Series D Preferred Stock Purchase Agreement between the Company and
         Schering Berlin Venture Corporation, dated May 17, 2000.!

 10.6    Warrant to Purchase Common Stock of the Company issued to HealthCare
         Ventures III, L.P., dated November 18, 1999.!

 10.7    Warrant to Purchase Common Stock of the Company issued to HealthCare
         Ventures IV, L.P., dated November 18, 1999.!

 10.8    Warrant to Purchase Common Stock of the Company issued to Rho
         Management Trust II, dated November 18, 1999.!

 10.9    Warrant to Purchase Common Stock of the Company issued to Aetna Life
         Insurance Company, dated November 18, 1999.!

 10.10   Warrant to Purchase Common Stock of the Company issued to Henry
         Rothman, dated November 18, 1999.!

 10.11   Warrant to Purchase Common Stock of the Company issued to Abingworth
         Bioventures SICAV, dated November 18, 1999.!

 10.12   Warrant to Purchase Common Stock of the Company issued to Sentron
         Medical, Inc., dated November 18, 1999.!

 10.13   Warrant to Purchase Common Stock of the Company issued to Biotech
         Growth S.A., dated November 18, 1999.!

 10.14   Employment Offer Letter to David C. U'Prichard, dated September 1,
         1999.!

 10.15   Settlement Agreement between the Company and Scriptgen
         Pharmaceuticals, Inc., dated March 7, 2000.*@
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
 Exhibit
 Number                                Description
 -------                               -----------
 <C>     <S>
 10.16   Research Collaboration Agreement between the Company and Biocryst
         Pharmaceuticals, Inc., dated October 18, 1996, and Amendment No.1
         thereto, dated October 18, 1996.*@

 10.17   Collaborative Discovery and Lead Optimization Agreement between the
         Company and Boehringer Ingelheim Pharmaceuticals, Inc., dated December
         17, 1999.*@

 10.18   Collaborative Research and License Agreement between the Company and
         Hoechst Schering AgrEvo GmbH, now a part of Aventis Crop Science CmbH,
         dated October 18, 1999.*@

 10.19   Collaborative Research and License Agreement between the Company and
         E.I. DuPont de Nemours & Co., dated October 12, 1998.*@

 10.20   Collaborative Discovery and Lead Optimization Agreement between the
         Company and DuPont Pharmaceuticals Company, dated February 11, 2000.*@

 10.21   Nonexclusive Patent License Agreement between the Company and DuPont
         Pharmaceuticals Company, dated February 11, 2000.*@

 10.22   Research and License Agreement between the Company and the Heska
         Corporation, dated December 18, 1997, and Amendment No.1 thereto,
         dated December 18, 1997.*@

 10.23   License and Research Agreement between the Company and Schering AG,
         Germany, dated May 17, 2000.*@

 10.24   Master Loan and Security Agreement between the Company and Phoenixcor,
         Inc., dated June 18, 1998.!

 10.25   Amended and Restated Lease for Combination Office/Laboratory/Light
         Manufacturing Space at Eagleview Corporate Center Lot 28 between the
         Company and Eagleview Technology Partners, dated December 12, 1997.*

 10.26   Master Lease Agreement between the Company and Transamerica Business
         Credit Corporation, dated June 12, 1997.!

 10.27   Warrant to Purchase Common Stock of the Company issued to Transamerica
         Business Credit Corporation, dated June 12, 1997.!

 10.28   Master Lease Agreement, Loan Agreement and Subordination Agreement
         between the Company and Comdisco, Inc., dated March 7, 1994.!

 10.29   Warrant to Purchase Series A Preferred Stock, originally dated March
         7, 1994 and reissued to CDC Realty, Inc., dated July 21, 1998.!

 10.30   Warrant to Purchase Series A Preferred Stock, originally dated March
         7, 1994 and reissued to Gregory Stento, dated July 21, 1998.!

 10.31   Warrant to Purchase Series A Preferred Stock, originally dated April
         25, 1995 and reissued to Comdisco, Inc., dated July 21, 1998.!

 10.32   Warrant to Purchase Series A Preferred Stock, originally dated April
         25, 1995 and reissued to Gregory Stento, dated July 21, 1998.!

 10.33   Form of Warrant to Purchase Common Stock (along with Schedule of
         Holders of Certain Warrants to Purchase Common Stock).!

 10.34   3-Dimensional Pharmaceuticals, Inc. 2000 Equity Compensation Plan, to
         become effective upon the closing of this offering.!
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
 Exhibit
 Number                                Description
 -------                               -----------
 <C>     <S>
 10.35   DiscoverWorksTM Drug Discovery Collaboration Agreement between the
         Company and Bristol-Myers Squibb Company, dated July 7, 2000.*@

 10.36   DiscoverWorks Nonexclusive License and Purchase Agreement between the
         Company and Bristol-Myers Squibb Company, dated July 7, 2000.*@

 10.37   GPCR License and User Agreement between the Company and Bristol-Myers
         Squibb Company, dated July 7, 2000.*@

 10.38   PERT Internal Use License and Option Agreement between the Company and
         Bristol-Myers Squibb Company, dated July 7, 2000.*@

 21.1    Subsidiaries of the Registrant.!

 23.1    Consent of Richard A. Eisner & Company, LLP.!

 23.2    Consent of Morgan, Lewis & Bockius LLP (to be included in Exhibit
         5.1).!

 24.1    Power of Attorney (included on signature page).!

 27.1    Financial Data Schedule.!
</TABLE>

--------
*  Filed herewith.
#  To be filed by amendment.
!  Previously filed.
@  Confidential treatment will be requested with respect to portions of this
   exhibit. Omitted portions will be filed separately with the Securities and
   Exchange Commission.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-1.1
<SEQUENCE>2
<FILENAME>0002.txt
<DESCRIPTION>UNDERWRITING AGREEMENT
<TEXT>

<PAGE>

                        _________ SHARES OF COMMON STOCK

                     3 - DIMENSIONAL PHARMACEUTICALS, INC.

                             UNDERWRITING AGREEMENT
                             ----------------------

                                                                    ______, 2000

BEAR, STEARNS & CO. INC.
U.S. BANCORP PIPER JAFFRAY INC.
CHASE SECURITIES INC.
  as Representatives of the
  several Underwriters named in
  Schedule I attached hereto
c/o Bear, Stearns & Co. Inc.
245 Park Avenue
New York, NY  10167

Ladies and Gentlemen:

     3-Dimensional Pharmaceuticals, Inc., a corporation organized and existing
under the laws of Delaware (the "Company"), proposes, subject to the terms and
conditions stated herein, to issue and sell to the several underwriters named in
Schedule I hereto (the "Underwriters") an aggregate of _________ shares (the
"Firm Shares") of its common stock, par value $0.001 per share (the "Common
Stock"), and, for the sole purpose of covering over-allotments in connection
with the sale of the Firm Shares, at the option of the Underwriters, up to an
additional _______ shares (the "Additional Shares") of Common Stock.  The Firm
Shares and any Additional Shares purchased by the Underwriters are referred to
herein as the "Shares."  The Shares are more fully described in the Registration
Statement referred to below.

1.  Representations and Warranties of the Company.  The Company represents and
warrants to, and agrees with, the Underwriters that:

    (a)  The Company has filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of 1933,
as amended (the "Act"), and the rules and regulations of the Commission
thereunder (the "Regulations") a registration statement, and may have filed an
amendment or amendments thereto, on Form S-1 (No. 333-37606), for the
registration of the Shares under the Act. Such registration statement, including
the prospectus, financial statements and schedules, exhibits and all other
documents filed as a part thereof, as amended at the time of effectiveness of
the registration statement, including any information deemed to be a part
thereof as of the time of effectiveness pursuant to paragraph (b) of Rule 430A
or Rule 434 of the Regulations, is herein called the "Registration
<PAGE>

Statement" and the prospectus, in the form first filed with the Commission
pursuant to Rule 424(b) of the Regulations or filed as part of the Registration
Statement at the time of effectiveness if no Rule 424(b) or Rule 434 filing is
required, is herein called the "Prospectus". Any registration statement filed
pursuant to Rule 462(b) of the Regulations is herein called the "Rule 462(b)
Registration Statement", and after such filing any reference herein to the term
"Registration Statement" shall include such Rule 462(b) Registration Statement.
The term "preliminary prospectus" as used herein means a preliminary prospectus
as described in Rule 430 of the Regulations. All of the Shares have been duly
registered under the Act pursuant to the Registration Statement or, if any Rule
462(b) Registration Statement is filed, have been or will be duly registered
under the Act with the filing of such Rule 462(b) Registration Statement.
Neither the Commission nor the Blue Sky or securities authority of any
jurisdiction has issued a stop order suspending the effectiveness of the
Registration Statement, preventing or suspending the use of any preliminary
prospectus, the Prospectus, the Registration Statement or any amendment or
supplement thereto, refusing to permit the effectiveness of the Registration
Statement or suspending the registration or qualification of the Shares, nor, to
the Company's knowledge, has any of such authorities instituted or threatened to
institute any proceedings with respect to a stop order.

    (b)  At the time of the effectiveness of the Registration Statement or any
Rule 462(b) Registration Statement or the effectiveness of any post-effective
amendment to the Registration Statement, when the Prospectus is first filed with
the Commission pursuant to Rule 424(b) or Rule 434 of the Regulations, when any
supplement to or amendment of the Prospectus is filed with the Commission and at
the Closing Date and the Additional Closing Date, if any (as hereinafter
respectively defined), the Registration Statement and the Prospectus and any
amendments thereof and supplements thereto (including any prospectus wrapper)
complied or will comply in all material respects with the applicable provisions
of the Act and the Regulations and does not or will not contain an untrue
statement of a material fact and does not or will not omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein (i) in the case of the Registration Statement, not misleading and (ii)
in the case of the Prospectus, in light of the circumstances under which they
were made, not misleading, and the Prospectus, any preliminary prospectus and
any supplement thereto or prospectus wrapper prepared in connection therewith,
at their respective times of issuance and at the Closing Date, complied and will
comply in all material respects with any applicable laws or regulations of
foreign jurisdictions in which the Prospectus and such preliminary prospectus,
as amended or supplemented, if applicable, are distributed in connection with
the offer and sale of the Directed Shares (as hereinafter defined). When any
related preliminary prospectus was first filed with the Commission (whether
filed as part of the registration statement for the registration of the Shares
or any amendment thereto or pursuant to Rule 424(a) of the Regulations) and when
any amendment thereof or supplement thereto was first filed with the Commission,
such preliminary prospectus and any amendments thereof and supplements thereto
complied in all material respects with the applicable provisions of the Act and
the Regulations and did not contain an untrue statement of a material fact and
did not omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. No representation and warranty is
made in this subsection (b), however, with respect to any information contained
in or omitted from the Registration Statement or the Prospectus or any related
preliminary prospectus or any amendment thereof or supplement thereto in
reliance upon and in conformity with information

                                       2
<PAGE>

furnished in writing to the Company by or on behalf of any Underwriter through
you as herein stated expressly for use in connection with the preparation
thereof. If Rule 434 is used, the Company will comply with the requirements of
Rule 434.

    (c)  Richard Eisner & Company, who have certified the financial statements
and supporting schedules included in the Registration Statement, are independent
public accountants as required by the Act and the Regulations.

    (d)  The Company does not have any subsidiaries other than those listed on
Schedule II and does not own or control, directly or indirectly, any interest in
any other corporation, association or other business entity. All the issued and
outstanding capital stock of each subsidiary of the Company have been duly and
validly issued and are fully paid and nonassessable and were not issued in
violation of preemptive rights (unless such rights have been duly waived by the
holders of such rights), and are owned directly or indirectly by the Company,
free and clear of any lien, encumbrance, claim, security interest, restriction
on transfer, shareholders' agreement, voting trust or other defect of title
whatsoever.

    (e)  Subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as set forth in the
Registration Statement and the Prospectus, there has been no material adverse
change in the business, prospects, properties, operations, condition (financial
or other) or results of operations of the Company and its subsidiaries, taken as
a whole ("Material Adverse Change"), whether or not arising from transactions in
the ordinary course of business, and since the date of the latest balance sheet
presented in the Registration Statement and the Prospectus, neither the Company
nor any of its subsidiaries has incurred or undertaken any liabilities or
obligations, direct or contingent, which are material to the Company and its
subsidiaries, taken as a whole, except for liabilities or obligations which are
reflected in the Registration Statement and the Prospectus.

    (f)  This Agreement and the transactions contemplated herein have been duly
and validly authorized by the Company, and this Agreement has been duly and
validly executed and delivered by the Company and is enforceable against the
Company in accordance with its terms, except as rights to indemnity and
contribution may be limited by federal or state securities laws relating thereto
and except as (i) may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors' rights and
remedies generally and (ii) enforcement is subject to general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or law).

    (g)  The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby do not and will not (i)
conflict with or result in a breach of any of the terms and provisions of, or
constitute a default (or an event which with notice or lapse of time, or both,
would constitute a default) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company or
any of its subsidiaries pursuant to, any contract, agreement, instrument,
understanding, franchise, license or permit to which the Company or any of its
subsidiaries is a party or by which any of such companies or any of their
respective properties or assets may be bound or (ii) violate or conflict with
any provision of the certificate of incorporation or the by-laws of the Company
or any of its subsidiaries or any judgment, decree, order, statute, rule or
regulation of any court or

                                       3
<PAGE>

any public, governmental or regulatory agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their respective properties or
assets. No consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any court or any public,
governmental or regulatory agency or body having jurisdiction over the Company
or any of its subsidiaries or any of their respective properties or assets is
required for the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby, including the issuance,
sale and delivery of the Shares to be issued, sold and delivered by the Company
hereunder, except the registration under the Act of the Shares and such
consents, approvals, authorizations, orders, registrations, filings,
qualifications, licenses and permits as may be required under state securities
or Blue Sky laws or foreign equivalents of such regulations or statutes, where
applicable, in connection with the purchase and distribution of the Shares by
the Underwriters.

    (h)  Upon the sale of the Firm Shares on the Closing Date, the only shares
of capital stock of the Company issued and outstanding (other than the Shares)
will be ________ shares of Common Stock. All of the issued and outstanding
shares of capital stock of the Company are duly and validly authorized and
issued, fully paid and nonassessable, and none of such shares was issued in
violation of or is subject to any preemptive or similar rights. The Shares have
been duly and validly authorized for issuance and sale to the Underwriters
pursuant to this Agreement and, when delivered by the Company in accordance with
this Agreement, will be duly and validly issued and outstanding, fully paid and
nonassessable and will not have been issued in violation of or be subject to any
preemptive or similar rights. The Company had, at ________, 2000, an authorized
and outstanding capitalization as set forth in the Registration Statement and
the Prospectus. The authorized capital stock of the Company, including the Firm
Shares and the Additional Shares, conforms in all material respects to the
description thereof contained in the Registration Statement and the Prospectus.
Except as disclosed in the Registration Statement and the Prospectus, there are
no outstanding options, warrants or other rights calling for the issuance of,
and no commitments, obligations, plans or arrangements to issue, any shares of
capital stock of the Company or any security convertible into or exchangeable
for capital stock of the Company. The outstanding stock options and warrants
relating to the Common Stock have been duly authorized and validly issued and
conform in all material respects to the descriptions thereof contained in the
Registration Statement and the Prospectus.

    (i)  Each of the Company and its subsidiaries has been duly organized and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation. Each of the Company and its subsidiaries is duly
qualified to transact business and is in good standing as a foreign corporation
in each jurisdiction in which the character and location of its properties
(owned, leased or licensed) or nature or conduct of its business makes such
qualification necessary, except where the failure to so qualify would not have a
material adverse effect (considered individually or when aggregated with other
such instances) on the business, prospects, properties, operations, condition
(financial or other) or results of operations of the Company and its
subsidiaries, taken as a whole (a "Material Adverse Effect"). Each of the
Company and its subsidiaries has all requisite power and authority and all
necessary consents, approvals, authorizations, orders, registrations,
qualifications, licenses and permits (collectively, "Governmental Licenses") of
and from all public, regulatory or governmental agencies and bodies, to own,
lease and operate its respective properties and conduct its business as now
being

                                       4
<PAGE>

conducted and as described in the Registration Statement and the Prospectus, and
each such Governmental License is valid and in full force and effect. No such
Governmental License contains a materially burdensome restriction not adequately
disclosed in the Registration Statement and the Prospectus, and neither the
Company nor any of its subsidiaries, as applicable, has received any notice of
proceedings to the revocation of any such Governmental Licenses. Each of the
Company and its subsidiaries is in compliance with all applicable laws, orders,
rules, regulations, ordinances and directives, except where the failure to be in
compliance could not have a Material Adverse Effect.

    (j)  Each of the Company and its subsidiaries is not in violation of any
provision of its certificate of incorporation or of its by-laws or in breach of,
or in default under (nor has any event occurred that with notice, lapse of time,
or both, would constitute a breach of, or default under), except where such
breach or default would not have a Material Adverse Effect, any provision of any
agreement, instrument, franchise, lease, license or permit to which the Company
or any of its subsidiaries is a party or by which any of their respective
properties or assets may be bound or affected or any judgment, decree, order,
statute, rule or regulation of any court or any public, governmental or
regulatory agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their respective properties or assets.

    (k)  There is no litigation, arbitration, proceeding, investigation or claim
to which the Company or any of its subsidiaries is a party or to which any
property or assets of the Company or any of its subsidiaries are subject which
is pending or, to the knowledge of the Company, threatened or contemplated
against the Company or any of its subsidiaries which (in the case of any pending
such matter) might result in or (in the case of any threatened or contemplated
such matter) could reasonably be expected might result in any Material Adverse
Effect or any development involving a Material Adverse Effect or which is
required to be disclosed in the Registration Statement and the Prospectus.

    (l)  Neither the Company nor any of its directors, officers or affiliates
(as defined in the Regulations) has taken or will take, directly or indirectly,
any action designed to cause or result in, or which constitutes or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of the shares of Common Stock to facilitate the sale or resale of the
Shares or a violation of Regulation M under the Securities Exchange Act of 1934,
as amended (the "Exchange Act").

    (m)  The financial statements, including the notes thereto, and supporting
schedules included in the Registration Statement and the Prospectus present
fairly the financial position of the Company as of the dates indicated and the
results of its operations for the periods specified; said financial statements
have been prepared in conformity with generally accepted accounting principles
applied on a consistent basis; and the supporting schedules included in the
Registration Statement present fairly the information required to be stated
therein; and the selected financial data and the summary financial information
included in the Registration Statement and the Prospectus present fairly the
information shown therein and have been compiled on a basis consistent with that
of the financial statements included in the Registration Statement and the
Prospectus. No other financial statements are required by Form S-1 or otherwise
to be included in the Registration Statement of the Prospectus other than those
included therein.

                                       5
<PAGE>

    (n)  Except as described in the Registration Statement and the Prospectus
and except for rights that have been effectively waived in writing (complete and
accurate copies of which have been made available to the Underwriters prior to
the date of this Agreement), which waivers are in full force and effect, no
holder of securities of the Company has any rights to cause the Company to issue
to it, or register pursuant to the Act, any securities of the Company because of
the filing of the Registration Statement or otherwise, in connection with the
sale of the Shares contemplated hereby or otherwise. No holder of securities of
the Company has preemptive rights or other rights to purchase any of the Shares.

    (o)  The Company is not, and upon consummation of the transactions
contemplated hereby and the application of the proceeds therefrom as described
in the Prospectus will not be, an "investment company" or a person "controlled"
by an "investment company" under the Investment Company Act of 1940.

    (p)  The Common Stock of the Company, including the Shares, have been
approved for quotation on the National Association of Securities Dealers
Automated Quotation National Market System.

    (q)  The Company owns or possesses valid and enforceable licenses or other
rights to use all inventions, patents, patent applications, trademarks, service
marks, trade names, copyrights, technology, software, databases, Internet domain
names, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures),
proprietary techniques (including processes and substances) and other
intellectual property rights used in, or necessary to conduct, the business now
conducted by the Company and its subsidiaries, as described in the Registration
Statement and the Prospectus (collectively, "Intellectual Property") free and
clear of all liens, claims and encumbrances, except where the failure to own or
possess such rights would not reasonably be expected to have a Material Adverse
Effect; other than as described in the Registration Statement and the Prospectus
or as would not reasonably be expected to have a Material Adverse Effect: (i)
there are no third parties who have any rights in the Intellectual Property that
could preclude the Company or any of its subsidiaries from conducting their
respective business as currently conducted; (ii) there are no pending or
threatened actions, suits, proceedings, investigations or claims by others
challenging the rights of the Company or any of its subsidiaries or (if the
Intellectual Property is licensed) the licensor thereof in any Intellectual
Property owned or licensed to the Company or any of its subsidiaries; (iii)
neither the Company or any of its subsidiaries nor (if the Intellectual Property
is licensed) the licensor thereof has infringed, or received any notice of
infringement of or conflict with, any rights of others with respect to the
Intellectual Property; and (iv) there is no dispute between it and any licensor
with respect to any Intellectual Property. The Company has taken all reasonable
steps to protect, maintain and safeguard the Intellectual Property for which
improper or unauthorized disclosure would impair its value or validity and has
entered into appropriate nondisclosure and confidentiality agreements and made
appropriate filings and registrations in connection with the foregoing. True and
correct copies of all licenses and other agreements between the Company or any
of its subsidiaries and any third party relating to the Intellectual Property,
and all amendments and supplements thereto, have been made available to the
Underwriters.

                                       6
<PAGE>

    (r)  The Company and its subsidiaries have timely filed all federal, state,
local and foreign income and franchise tax returns and reports required to be
filed and have paid all taxes shown thereon and all assessments received by them
to the extent that such taxes have become due and are not being contested in
good faith, and there is no tax deficiency that has been or, to the Company's
knowledge, might be asserted or threatened against the Company or any of its
subsidiaries that might have a Material Adverse Effect; and all tax liabilities
are adequately provided for on the books of the Company.

    (s)  The Company and its subsidiaries maintain insurance with insurers of
recognized financial responsibility of the types and in the amounts (i)
generally deemed adequate for their businesses and consistent with insurance
coverage maintained by similar companies in similar businesses and (ii) required
under any of the Company's or any of its subsidiaries' agreements, licenses or
other contracts, all of which insurance is in full force and effect; the Company
has no reason to believe that it or any of its subsidiaries will not be able to
renew its existing insurance as and when such coverage expires or to obtain
similar insurance with similar insurers adequate and customary for its business
and sufficient to satisfy any requirements of its contracts at a cost that would
not have a Material Adverse Effect.

    (t)  Each of the Company and its subsidiaries is in compliance with all
applicable federal, state, local or foreign laws, regulations, rules,
ordinances, orders or directives effective as of the date hereof relating to
pollution or (in connection therewith) protection of human health and safety,
the environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or threatened release
of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum or petroleum products (collectively, "Hazardous
Materials") or to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), except where such failure to comply with the
Environmental Laws would not have a Material Adverse Effect; to the Company's
knowledge, no material expenditures are or will be required to comply with the
Environmental Laws, and each of the Company and its subsidiaries holds all
permits, licenses and approvals required to conduct its business thereunder and
is in compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance or failure to comply with the terms
and conditions of, or failure to receive, such permits, licenses or approvals
will not singly or in the aggregate have a Material Adverse Effect; to the
Company's knowledge, all properties and assets leased or owned by the Company or
its subsidiaries, including, without limitation, all structures, contents, soil,
subsoil and groundwater, do not contain Hazardous Materials that would require
remediation under the Environmental Laws; and to the Company's knowledge,
neither the Company nor any of its subsidiaries has any material liability or
obligation, whether to any governmental authority or to any other person or
entity, for damages, claims, penalties, forfeitures or otherwise, as a
consequence of the generation, transportation or disposal of any Hazardous
Materials or otherwise under the Environmental Laws.

    (u)  As of the date of this Agreement and except as described in the
Registration Statement and the Prospectus, neither the Company nor any of its
subsidiaries is required to file or obtain any registration, application,
license, request for exemption, permit or other regulatory authorization with
the U.S. Food and Drug Administration (the "FDA") or any

                                       7
<PAGE>

other federal, state, local or foreign regulatory body in order to conduct its
business as described in the Registration Statement and Prospectus.

    (v)  The human clinical trials, animal studies and other preclinical tests
conducted by or on behalf of the Company or any of its subsidiaries that are
described in the Registration Statements and the Prospectus (the "Company
Studies"), have been and will continue to be conducted in accordance with
experimental protocols, procedures and controls generally used by qualified
experts in preclinical or clinical trials; the descriptions of the results of
such Company Studies contained in the Registration Statements and Prospectus are
accurate and constitute a fair summary of such results in all material respects;
and the Company has no knowledge of any other trials, studies or tests, the
results of which reasonably call into question the results described or referred
to in the Registration Statement and Prospectus.

    (w)  Each of the Company and its subsidiaries has good and marketable title
to all properties (real and personal) owned by the Company or any of its
subsidiaries, free and clear of all mortgages, pledges, liens, security
interests, claims, restrictions or encumbrances of any kind except such as do
not, singly or in the aggregate, materially affect the value of such property
and do not materially interfere with the use made and proposed to be made of
such property by the Company or any of its subsidiaries; and all properties held
under lease or license by the Company or any of its subsidiaries are held under
valid, existing and enforceable leases or licenses, except where the failure to
do so would not have a Material Adverse Effect.

    (x)  Each of the Company and its subsidiaries maintains a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general and specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets, (iii) access to
assets is permitted only in accordance with management's general or specific
authorizations, and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.

    (y)  No labor dispute with the employees of the Company or any of its
subsidiaries is pending, or, to the Company's knowledge, is imminent; and the
Company is not aware of any existing, threatened or imminent labor disturbance
by the employees of any of its or any of its subsidiaries principal suppliers,
collaborative or strategic partners, manufacturers or contractors that could
result in any Material Adverse Effect.

    (z)  Each employee benefit plan, within the meaning of Section 3(3) of the
Employee Retirement Income Securities Act of 1974, as amended ("ERISA"), that is
maintained, administered or contributed to by the Company or any of its
affiliates for employees or former employees of the Company and its affiliates
has been maintained in compliance in all material respects with its respective
terms and the requirements of any applicable statutes, orders, rules and
regulations, including but not limited to ERISA and the Internal Revenue Code of
1986, as amended (the "Code"). No prohibited transaction, within the meaning of
Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to
any such plan that could result in a material liability to the Company or any of
its affiliates, excluding transactions effected pursuant to a statutory or
administrative exemption. For each such plan that is subject to the funding
rules

                                       8
<PAGE>

of Section 412 of the Code or Section 302 of ERISA, no "accumulated
funding deficiency," as defined in Section 412 of the Code, has been incurred,
whether or not waived, and the fair market value of the assets of each such plan
(excluding for these purposes accrued but unpaid contributions) exceeds the
present value of all benefits accrued under such plan determined using
reasonable actuarial assumptions.

    (aa) The Company has reviewed its and its subsidiaries' operations and those
of any third parties with which the Company or any of its subsidiaries has a
material relationship to evaluate the extent to which the business or operations
of the Company and its subsidiaries have been or will be affected by the Year
2000 Problem (as defined herein). As a result of such review, the Company has no
reason to believe, and does not believe, that the Year 2000 Problem will have a
Material Adverse Effect or result in any material loss or interference with the
Company's business or operations or those of any of its subsidiaries. The "Year
2000 Problem" as used herein means any significant risk that computer hardware
or software used in the receipt, transmission, processing, manipulation,
storage, retrieval, retransmission or other utilization of data or in the
operation of mechanical or electrical systems of any kind will not, in the case
of dates or time periods occurring after December 31, 1999, function at least as
effectively as in the case of dates or time periods occurring prior to January
1, 2000.

    (bb) No subsidiary of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock, from repaying to the Company
any loans or advances to such subsidiary from the Company or from transferring
any of such subsidiary's property or assets to the Company or any other
subsidiary of the Company, except as described in or contemplated by the
Prospectus.

    (cc) The statistical and market-related data included in the Registration
Statement and the Prospectus are derived from sources which the Company
reasonably and in good faith believes to be accurate, reasonable and reliable,
and such data agree with the sources from which they were derived.

    (dd) There are no contracts, licenses, agreements or other documents which
are required to be described in the Registration Statement and the Prospectus or
filed as exhibits to the Registration Statement by the Act or by the Regulations
which have not been described in the Registration Statement and the Prospectus
or filed as exhibits to the Registration Statement.

    (ee) No relationship, direct or indirect, exists between or among the
Company or any of its affiliates on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company on the other hand, which is
required to be described in the Registration Statement and the Prospectus that
is not so described.

2.  Purchase, Sale and Delivery of the Shares.

    (a)  On the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to sell to the Underwriters and the Underwriters,
severally and not jointly, agree to purchase from the Company, at a purchase
price per share of $_____, the number of Firm Shares set forth

                                       9
<PAGE>

opposite the respective names of the Underwriters in Schedule I hereto plus any
additional number of Shares which such Underwriter may become obligated to
purchase pursuant to the provisions of Section 9 hereof.

    (b)  Payment of the purchase price for, and delivery of certificates for,
the Firm Shares shall be made at the offices of Coudert Brothers, or at such
other place as shall be agreed upon by you and the Company, at ____ A.M. on the
third or fourth business day (as permitted under Rule 15c6-1 under the Exchange
Act) (unless postponed in accordance with the provisions of Section 9 hereof)
following the date of the effectiveness of the Registration Statement (or, if
the Company has elected to rely upon Rule 430A of the Regulations, the third or
fourth business day (as permitted under Rule 15c6-1 under the Exchange Act)
after the determination of the initial public offering price of the Shares), or
such other time not later than ten business days after such date as shall be
agreed upon by you and the Company (such time and date of payment and delivery
being herein called the "Closing Date"). Payment shall be made to the Company by
wire transfer of immediately available funds, against delivery to you for the
respective accounts of the Underwriters of certificates for the Firm Shares to
be purchased by them. Certificates for the Firm Shares shall be registered in
such name or names and in such authorized denominations as you may request in
writing at least two full business days prior to the Closing Date. The Company
will permit you to examine and package such certificates for delivery at least
one full business day prior to the Closing Date. As used herein, the term
"business day" means any day other than a day on which banks are permitted or
required to be closed in New York City.

    (c)  In addition, the Company hereby grants to the Underwriters the option
to purchase up to _______ Additional Shares at the same purchase price per share
to be paid by the Underwriters to the Company for the Firm Shares as set forth
in this Section 2, for the sole purpose of covering over-allotments in the sale
of Firm Shares by the Underwriters. This option may be exercised at any time, in
whole or in part, on or before the thirtieth day following the date of the
Prospectus, by written notice by you to the Company. Such notice shall set forth
the aggregate number of Additional Shares as to which the option is being
exercised and the date and time, as reasonably determined by you, when the
Additional Shares are to be delivered (such date and time being herein sometimes
referred to as the "Additional Closing Date"); provided, however, that the
                                               --------  -------
Additional Closing Date shall not be earlier than the Closing Date or earlier
than the second full business day after the date on which the option shall have
been exercised nor later than the eighth full business day after the date on
which the option shall have been exercised (unless such time and date are
postponed in accordance with the provisions of Section 9 hereof). Certificates
for the Additional Shares shall be registered in such name or names and in such
authorized denominations as you may request in writing at least two full
business days prior to the Additional Closing Date. The Company will permit you
to examine and package such certificates for delivery at least one full business
day prior to the Additional Closing Date.

    (d)  The number of Additional Shares to be sold to each Underwriter shall be
the number which bears the same ratio to the aggregate number of Additional
Shares being purchased as the number of Firm Shares set forth opposite the name
of such Underwriter in Schedule I hereto (or such number increased as set forth
in Section 9 hereof) bears to the total

                                       10
<PAGE>

number of Firm Shares being purchased from the Company, subject, however, to
such adjustments to eliminate any fractional shares as you in your sole
discretion shall make.

    (e)  Payment of the purchase price for the Additional Shares shall be made
by wire transfer of immediately available funds at the offices of Coudert
Brothers, or such other place as shall be agreed upon by you and the Company,
upon delivery of the certificates for the Additional Shares to you for the
respective accounts of the Underwriters.

3.  Offering.

    (a)  Upon your authorization of the release of the Firm Shares, the
Underwriters propose to offer the Shares for sale to the public upon the terms
set forth in the Prospectus.

    (b)  The Company and the Underwriters hereby agree that up to five percent
(5%) of the Firm Shares to be purchased by the Underwriters (the "Directed
Shares") shall be reserved for sale by the Underwriters to certain eligible
employees of, and certain persons designated by, the Company (the "Directed
Shares Purchasers") as part of the distribution of the Shares by the
Underwriters, subject to the terms of this Agreement, the applicable rules,
regulations and interpretations of the National Association of Securities
Dealers, Inc. and all other applicable laws, rules and regulations, provided,
                                                                    --------
however, that under no circumstances will Bear, Stearns & Co. Inc. or any other
-------
Underwriter be liable to the Company or to any of the Directed Shares Purchasers
for any action taken or omitted in good faith in connection with transactions
effected with regard to the Directed Shares Purchasers. To the extent that such
Directed Shares are not orally confirmed for purchase by such persons by the end
of the first day after the date of this Agreement, such Directed Shares will be
offered to the public as part of the offering contemplated hereby.

4.  Covenants of the Company.  The Company covenants and agrees with the
Underwriters that:

    (a)  If the Registration Statement has not yet been declared effective the
Company will use its best efforts to cause the Registration Statement and any
amendments thereto to become effective as promptly as possible, and if Rule 430A
is used or the filing of the Prospectus is otherwise required under Rule 424(b)
or Rule 434, the Company will file the Prospectus (properly completed if Rule
430A has been used) pursuant to Rule 424(b) or Rule 434 within the prescribed
time period and will provide evidence satisfactory to you of such timely filing.
If the Company elects to rely on Rule 434, the Company will prepare and file a
term sheet that complies with the requirements of Rule 434.

     The Company will notify you immediately (and, if requested by you, will
confirm such notice in writing) (i) when the Registration Statement and any
amendments thereto become effective, (ii) of any request by the Commission for
any amendment of or supplement to the Registration Statement or the Prospectus
or for any additional information, (iii) of the mailing or the delivery to the
Commission for filing of any amendment of or supplement to the Registration
Statement or the Prospectus, (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or any post-
effective amendment

                                       11
<PAGE>

thereto or of the initiation, or the threatening, of any proceedings therefor
and (v) of the receipt of any comments from the Commission. If the Commission
shall propose or enter a stop order at any time, the Company will make every
reasonable effort to prevent the issuance of any such stop order and, if issued,
to obtain the lifting of such order as soon as possible. The Company will not
file any amendment to the Registration Statement, make any filing under Rule
462(b) of the Regulations or file any amendment of or supplement to the
Prospectus (including the prospectus required to be filed pursuant to Rule
424(b) or Rule 434) that differs from the prospectus on file at the time of the
effectiveness of the Registration Statement before or after the effective date
of the Registration Statement to which you shall reasonably object in writing
after being timely furnished in advance a copy thereof.

    (b)  The Company will comply with the Act and the Regulations so as to
permit the completion of the distribution of the Shares as contemplated in this
Agreement and the Prospectus. If at any time when a prospectus relating to the
Shares is required to be delivered under the Act any event shall have occurred
as a result of which the Prospectus as then amended or supplemented would, in
the judgment of the Underwriters or the Company, include an untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it shall be necessary at any
time to amend or supplement the Prospectus or Registration Statement to comply
with the Act or the Regulations, the Company will notify you promptly and
prepare and file with the Commission an appropriate amendment or supplement (in
form and substance reasonably satisfactory to you) which will correct such
statement or omission and will use its best efforts to have any amendment to the
Registration Statement declared effective as soon as possible.

    (c) The Company will promptly deliver to you three signed copies of the
Registration Statement, as initially filed with the Commission, and all
amendments thereto (including exhibits) and will maintain in the Company's files
manually signed copies of such documents for at least five years from the date
of filing. The Company will promptly deliver to each of the Underwriters such
number of copies of any preliminary prospectus, the Prospectus, the Registration
Statement, and all amendments of and supplements to such documents, if any, as
you may reasonably request, and the Company hereby consents to the use of such
copies for purposes permitted by the Act.

    (d)  The Company will endeavor in good faith, in cooperation with you, at or
prior to the time of effectiveness of the Registration Statement, to qualify the
Shares for offering and sale under the securities laws relating to the offering
or sale of the Shares of such jurisdictions as you may designate and to maintain
such qualification in effect for so long as required for the distribution
thereof; except that in no event shall the Company be obligated in connection
therewith to qualify as a foreign corporation or to execute a general consent to
service of process. The Company will promptly advise you of the receipt by the
Company of any notification with respect to suspension of the qualification of
the Shares for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose and will use every reasonable effort to obtain the
withdrawal of any order of suspension as soon as possible.

                                       12
<PAGE>

    (e)  The Company will make generally available (within the meaning of
Section 11(a) of the Act) to its security holders and to you as soon as
practicable, but not later than 45 days after the end of its fiscal quarter in
which the first anniversary date of the effective date of the Registration
Statement occurs, an earning statement (in form complying with the provisions of
Rule 158 of the Regulations) covering a period of at least twelve consecutive
months beginning after the effective date of the Registration Statement.

    (f)  During the period of 180 days from the date of the Prospectus, (i) the
Company will not, without the prior written consent of Bear, Stearns & Co. Inc.
on behalf of the Underwriters, directly or indirectly, issue, sell, offer or
agree to sell, grant any option, warrant or other right to purchase or otherwise
sell or dispose of (or announce any offer of sale, contract of sale, sale, grant
of any option, warrant or other right to purchase or other sale or disposition
of), pledge, make any short sale or maintain any short position, establish or
maintain a "put equivalent position" (within the meaning of Rule 16-a-1(h) under
the Exchange Act), enter into any swap, derivative transaction or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of the Common Stock (whether any such transaction is
to be settled by delivery of Common Stock, other securities, cash or other
consideration) or otherwise dispose of, any Common Stock (or any securities
convertible into, exercisable for or exchangeable for Common Stock) or interest
therein of the Company, except for the grant of options under, or the issuance
by the Company of shares of Common Stock pursuant to the exercise of options
outstanding under, its Equity Compensation Plans on the date hereof and
disclosed in the Registration Statement and the Prospectus (provided that the
Company shall only so grant options or so issue shares during such 180 days to
persons who are not, at the time of the closing of the sale of the Firm Shares
on the Closing Date, and who do not become during such 180 days, officers or
directors of the Company or stockholders having beneficial ownership of at least
1% of the outstanding Common Stock of the Company, unless such persons have
agreed not to engage in any of the aforementioned transactions prior to the
expiration of the period of 180 days from the date of the Prospectus), and (ii)
the Company will obtain the undertaking of each of its officers and directors
and all of its stockholders having beneficial ownership of at least 1% of the
outstanding Common Stock of the Company, as of the time of the closing of the
sale of the Firm Shares hereunder on the Closing Date, not to engage in any of
the aforementioned transactions on their own behalf, other than the Company's
sale of Shares hereunder. Notwithstanding anything to the contrary herein, the
foregoing restrictions shall not apply to the Company's issuance of shares of
Common Stock in connection with any acquisition of, or strategic relationship
with, another company if (x) the terms of such issuance provide that such other
company shall not engage in any of the aforementioned transactions prior to the
expiration of the period of 180 days from the date of the Prospectus and (y) the
value of the total consideration to be paid for such acquisitions or strategic
relationships does not exceed $20 million with respect to any single transaction
or $40 million with respect to all transactions during the 180 days from the
date of the Prospectus; in the event that the value of any such transaction or
transactions exceeds the immediately foregoing limits, the Company will be
required to obtain the consent of Bear, Stearns & Co. Inc. on behalf of the
Underwriters, which consent shall not be unreasonably withheld.

    (g)  During a period of three years from the date of the Prospectus, the
Company will furnish to you and, upon request, to each of the other Underwriters
(i) copies of any reports or other communications that the Company shall send to
its stockholders or shall

                                       13
<PAGE>

from time to time publish or publicly disseminate, (ii) copies of all reports,
financial statements and proxy or information statements filed by the Company
with the Commission or any national securities exchange or automated quotation
system, and (iii) such other reasonably available information as you may
reasonably request regarding the Company.

    (h)  The Company will apply the proceeds from the sale of the Shares as set
forth under "Use of Proceeds" in the Prospectus.

    (i)  The Company will use its best efforts to cause the Shares to be
included in the National Association of Securities Dealers Automated Quotation
National Market System and to maintain such quotation so long as any of the
Shares are outstanding.

    (j)  The Company will file with the Commission in its periodic reports
pursuant to Section 13 or 15 of the Exchange Act such information as may be
required pursuant to Rule 463 of the Regulations.

    (k)  The Company, during the period when the Prospectus is required to be
delivered under the Act or the Exchange Act, will file all documents
required to be filed with the Commission pursuant to Section 13, 14 or 15
of the Exchange Act within the time periods required by the Exchange Act
and the rules and regulations thereunder.

    (l)  The Company hereby agrees that it will ensure that the Directed Shares
are restricted as required by the National Association of Securities Dealers,
Inc. rules from sale, transfer, assignment, pledge or hypothecation for a period
of three months following the date of this Agreement. The Underwriters will
notify the Company as to which persons will need to be so restricted. At the
request of the Underwriters, the Company will direct the transfer agent to place
a stop transfer restriction upon such securities for such a period of time.
Should the Company release, or seek to release, from such restrictions any of
the Directed Shares, the Company agrees to reimburse the Underwriters for any
reasonable expenses (including without limitation legal expenses) they incur in
connection with such release.

    (m)  The Company will use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by the
Company prior to or after the Closing Date or any Additional Closing Date, as
the case may be, and to satisfy all conditions precedent to the delivery of the
Shares.

5.  Payment of Expenses.  Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Company hereby
agrees to pay all costs and expenses incident to the performance of the
obligations of the Company hereunder, including those in connection with (i)
preparing, printing, duplicating, filing and distributing the Registration
Statement, as originally filed and all amendments thereof (including all
exhibits thereto), any preliminary prospectus, the Prospectus and any amendments
or supplements thereto (including, without limitation, fees and expenses of the
Company's accountants and counsel), the underwriting documents (including this
Agreement, the Master Agreement Among Underwriters and the Master Selling
Agreement) and all other documents related to the public offering of the Shares
(including those supplied to the Underwriters in quantities as hereinabove
stated), (ii) the issuance, transfer and delivery of the Shares to the
Underwriters, including any transfer or other

                                       14
<PAGE>

taxes payable thereon, (iii) the qualification of the Shares under state or
foreign securities or Blue Sky laws or regulations, including the costs of
printing and mailing a preliminary and final "Blue Sky Survey" and the fees of
counsel for the Underwriters and such counsel's disbursements in relation
thereto, (iv) quotation of the Shares on the National Association of Securities
Dealers Automated Quotation National Market System, (v) filing fees of the
Commission and the National Association of Securities Dealers, Inc., (vi) the
cost of printing certificates representing the Shares, (vii) the cost and
charges of any transfer agent or registrar for the Shares and (viii) all costs
and expenses of the Underwriters, including the fees and disbursements of
counsel for the Underwriters, in connection with matters related to the Directed
Shares which are designated by the Company for sale to Directed Share
Purchasers.

6.  Conditions of Underwriters' Obligations.  The obligations of the
Underwriters to purchase and pay for the Firm Shares and the Additional Shares,
as provided herein, shall be subject to the accuracy of the representations and
warranties of the Company herein contained, as of the date hereof and as of the
Closing Date (for purposes of this Section 6 "Closing Date" shall refer to the
Closing Date for the Firm Shares and any Additional Closing Date, if different,
for the Additional Shares), to the absence from any certificates, opinions,
written statements or letters furnished to you or to Coudert Brothers
("Underwriters' Counsel") pursuant to this Section 6 of any misstatement or
omission, to the performance by the Company of its obligations hereunder, and to
the following additional conditions:

    (a)  The Registration Statement, including any Rule 462(b) Registration
Statement, shall have become effective and all necessary approvals of the
National Association of Securities Dealers Automated Quotation National Market
System shall have been received, not later than, if pricing pursuant to Rule
430A, 5:30 P.M., New York time, on the date of this Agreement, if pricing
pursuant to a pricing amendment, 12:00 Noon, New York time, on the date an
amendment to the Registration Statement containing the public offering price has
been filed with the Commission, or at such later time and date as shall have
been consented to in writing by you; if the Company shall have elected to rely
upon Rule 430A or Rule 434 of the Regulations, the Prospectus shall have been
filed with the Commission in a timely fashion in accordance with Section 4(a)
hereof; and, at or prior to the Closing Date, no stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
thereof shall have been issued and no proceedings therefor shall have been
initiated or threatened by the Commission.

    (b)  At the Closing Date you shall have received the opinion of Morgan,
Lewis & Bockius L.L.P., counsel for the Company, dated the date of such Closing
Date addressed to the Underwriters and in the form previously agreed with the
Underwriters' Counsel.

    (c)  At the Closing Date, you shall have received the opinion of Sterne,
Kessier, Goldstein & Fox, patent counsel for the Company, dated the Closing Date
addressed to the Underwriters and in the form previously agreed with the
Underwriters' Counsel.

    (d)  All proceedings taken in connection with the sale of the Firm Shares
and the Additional Shares as herein contemplated shall be satisfactory in form
and substance to you and to Underwriters' Counsel, and the Underwriters shall
have received from said Underwriters' Counsel a favorable opinion, dated as of
the Closing Date with respect to the issuance and sale of

                                       15
<PAGE>

the Shares, the Registration Statement and the Prospectus and such other related
matters as you may reasonably require, and the Company shall have furnished to
Underwriters' Counsel such documents as they may reasonably request for the
purpose of enabling them to pass upon such matters.

    (e)  At the Closing Date you shall have received a certificate of the Chief
Executive Officer and Chief Financial Officer of the Company, dated the Closing
Date, to the effect that (i) the condition set forth in subsection (a) of this
Section 6 has been satisfied, (ii) as of the date hereof and as of the Closing
Date the representations and warranties of the Company set forth in Section 1
hereof are true and correct, (iii) as of the Closing Date the obligations of the
Company to be performed hereunder on or prior thereto have been duly performed
and (iv) subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, the Company and its subsidiaries
have not sustained any loss or interference with their businesses or properties
from fire, flood, hurricane, accident or other calamity, whether or not covered
by insurance, or from any labor dispute or any legal or governmental proceeding,
and there has not been any Material Adverse Change, or any development involving
a Material Adverse Effect, except in each case as described in or contemplated
by the Prospectus.

    (f)  At the time this Agreement is executed and at the Closing Date, you
shall have received a letter from Richard Eisner & Company, independent public
accountants for the Company, dated, respectively, as of the date of this
Agreement and as of the Closing Date addressed to the Underwriters and in form
and substance satisfactory to you, stating that: (i) they are independent
certified public accountants with respect to the Company within the meaning of
the Act and the Regulations; (ii) in their opinion, the financial statements and
schedules of the Company included in the Registration Statement and the
Prospectus and covered by their opinion therein comply as to form in all
material respects with the applicable accounting requirements of the Act and the
applicable published rules and regulations of the Commission thereunder; (iii)
on the basis of procedures consisting of a reading of the latest available
unaudited interim financial statements of the Company and of the latest
available unaudited monthly financial statements of the Company (which, in the
case of the letter delivered on the Closing Date, shall be at least as of
______, 2000), a reading of the minutes of meetings and consents of the
stockholders and board of directors of the Company and the committees of such
board subsequent to December 31, 1999, inquiries of officers and other employees
of the Company who have responsibility for financial and accounting matters of
the Company with respect to transactions and events subsequent to December 31,
1999 and other specified procedures and inquiries to a date not more than five
days prior to the date of such letter (provided that the letter delivered on the
Closing Date shall use a "cut-off" date not earlier than the date hereof),
nothing has come to their attention that would cause them to believe that: (A)
the unaudited financial statements and schedules of the Company presented in the
Registration Statement and the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the Act and the
applicable published rules and regulations of the Commission thereunder or that
such unaudited financial statements are not in conformity with generally
accepted accounting principles applied on a basis substantially consistent with
that of the audited financial statements included in the Registration Statement
and the Prospectus; (B) with respect to the period subsequent to March 31, 2000
there were, as of the date of the most recent available monthly financial
statements of the Company, if any, and as of a specified date not more than five
days

                                       16
<PAGE>

prior to the date of such letter (provided that the letter delivered on the
Closing Date shall use a "cut-off" date not earlier than the date hereof), any
changes in the capital stock or long-term indebtedness of the Company or any
decrease in the net current assets or increase in the capital deficiency of the
Company, in each case as compared with the amounts shown in the most recent
balance sheet presented in the Registration Statement and the Prospectus, except
for changes or decreases which the Registration Statement and the Prospectus
disclose have occurred or may occur or which are set forth in such letter; or
(C) that during the period from April 1, 2000 to the date of the most recent
available monthly financial statements of the Company, if any, and to a
specified date not more than five days prior to the date of such letter
(provided that the letter delivered on the Closing Date shall use a "cut-off"
date not earlier than the date hereof), there was any decrease, as compared with
the corresponding period in the prior fiscal year, in revenues, or increase in
net loss, except for decreases or increases, as the case may be, which the
Registration Statement and the Prospectus disclose have occurred or may occur or
which are set forth in such letter; and (iv) stating that they have compared
specific dollar amounts, numbers of shares, percentages of revenues and
earnings, and other financial information pertaining to the Company set forth in
the Registration Statement and the Prospectus, which have been specified by you
prior to the date of this Agreement, to the extent that such amounts, numbers,
percentages, and information may be derived from the general accounting and
financial records of the Company or from schedules furnished by the Company, and
excluding any questions requiring an interpretation by legal counsel, with the
results obtained from the application of specified readings, inquiries, and
other appropriate procedures specified by you set forth in such letter, and
found them to be in agreement.

    (g)  Prior to the Closing Date the Company shall have furnished to you such
further information, certificates and documents as you may reasonably request.

    (h)  You shall have received from each person who is a director or officer
of the Company or stockholder beneficially owning at least 1% of the outstanding
Common Stock of the Company, as of the time of the closing of the sale of the
Firm Shares hereunder at the Closing Date, an agreement (a "Lock-up Agreement")
to the effect that such person will not, directly or indirectly, without the
prior written consent of Bear, Stearns & Co. Inc. on behalf of the Underwriters,
during the period commencing on the date of the Prospectus and ending 180 days
thereafter, (1) issue, sell, offer or agree to sell, grant any option for the
sale of, pledge, make any short sale or maintain any short position, establish
or maintain a "put equivalent position" (within the meaning of Rule 16-a-1(h)
under the Exchange Act), enter into any swap, derivative transaction or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of Common Stock (whether any such transaction is to be
settled by delivery of shares of Common Stock, other securities, cash or other
consideration) or otherwise dispose of any Common Stock (or any securities
convertible into, exercisable for or exchangeable for Common Stock) or interest
therein of the Company or (2) make any demand for, or exercise his, her or its
rights, if any, to require the Company to register its Common Stock and to
receive notice thereof. Notwithstanding the foregoing, (i) if any such person
executing a Lock-up Agreement is a partnership, the partnership may transfer any
shares of Common Stock (or any securities convertible into, exercisable for, or
exchangeable for Common Stock) to a partner of such partnership; and (ii) if any
such person is an individual, he or she may transfer shares of Common Stock (or
any securities convertible into, exercisable for, or exchangeable for Common
Stock) by gift, will, or intestate succession to his or her immediate family or
to a trust

                                       17
<PAGE>

the beneficiaries of which are exclusively himself, herself and/or a member or
members of his or her immediate family (for purposes of this paragraph,
"immediate family" shall mean spouse, lineal descendant, father, mother, brother
or sister of the transferor); provided, however, that in any such case it shall
                              --------  -------
be a condition to the transfer that (i) each transferee execute an agreement
stating that the transferee is receiving and holding the shares of Common Stock
(or any securities convertible into, exercisable for, or exchangeable for Common
Stock) subject to the provisions of the transferor's Lock-up Agreement, and
there shall be no further transfer of such shares of Common Stock (or any
securities convertible into, exercisable for, or exchangeable for Common Stock)
except in accordance with the transferor's Lock-up Agreement, and (ii) that each
transferee certifies in writing to Bear, Stearns & Co. Inc. that such transferee
is in compliance with the terms of the transferor's Lock-up Agreement as if such
transferee had been bound by the transferor's Lock-up Agreement from the
original date of the transferor's Lock-up Agreement.

    (i)  At the Closing Date, the Shares shall have been quoted on the National
Association of Securities Dealers Automated Quotation National Market System.

     If any of the conditions specified in this Section 6 shall not have been
fulfilled when and as required by this Agreement, or if any of the certificates,
opinions, written statements or letters furnished to you or to Underwriters'
Counsel pursuant to this Section 6 shall not be in all material respects
reasonably satisfactory in form and substance to you and to Underwriters'
Counsel, all obligations of the Underwriters hereunder may be cancelled by you
at, or at any time prior to, the Closing Date and the obligations of the
Underwriters to purchase the Additional Shares may be cancelled by you at, or at
any time prior to, the Additional Closing Date.  Notice of such cancellation
shall be given to the Company in writing, or by telephone, facsimile, telex or
telegraph, confirmed in writing.

7.  Indemnification.

    (a)  The Company agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act, against any and all losses,
liabilities, claims, damages and expenses whatsoever as incurred (including but
not limited to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or otherwise, insofar as such
losses, liabilities, claims, damages or expenses (or actions in respect thereof)
arise out of or are based upon (i)(A) any untrue statement or alleged untrue
statement of a material fact contained in the registration statement for the
registration of the Shares, as originally filed, or any amendment thereof, or
any related preliminary prospectus or the Prospectus, or in any supplement
thereto or amendment thereof, or (B) the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading; or (ii)(A) the violation of any applicable
laws or regulations of foreign jurisdictions where Directed Shares have been
offered or (B) any untrue statement or alleged untrue statement of a material
fact included in the supplement or prospectus wrapper material distributed in
connection with the reservation and sale of the Directed Shares to Directed
Share Purchasers or the omission or alleged omission therefrom of a material
fact necessary to make the statements therein, when considered in

                                       18
<PAGE>

conjunction with the Prospectus or preliminary prospectus, not misleading;
provided, however, that the Company will not be liable in any such case to the
--------  -------
extent but only to the extent that any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of any Underwriter through you expressly for use therein. This indemnity
agreement will be in addition to any liability which the Company may otherwise
have including under this Agreement.

    (b)  Each Underwriter severally, and not jointly, agrees to indemnify and
hold harmless the Company, each of the directors of the Company, each of the
officers of the Company who shall have signed the Registration Statement, and
each other person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, against any losses,
liabilities, claims, damages and expenses whatsoever as incurred (including but
not limited to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or otherwise, insofar as such
losses, liabilities, claims, damages or expenses (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the registration statement for the registration
of the Shares, as originally filed, or any filed amendment thereof, or any
related preliminary prospectus or the Prospectus, or any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of any Underwriter through you expressly for use therein; provided,
                                                                 --------
however, that in no case shall any Underwriter be liable or responsible for any
-------
amount in excess of the underwriting discount and commission applicable to the
Shares purchased by such Underwriter hereunder. This indemnity will be in
addition to any liability which any Underwriter may otherwise have including
under this Agreement. The Company acknowledges that the statements set forth in
the last paragraph of the cover page and in the third, twelfth, thirteenth and
fourteenth paragraphs and the list of Underwriters and the number of shares
listed opposite their respective names in the first paragraph under the caption
"Underwriting" in the Prospectus constitute the only information furnished in
writing by or on behalf of any Underwriter expressly for use in the registration
statement for the registration of the Shares, as originally filed, or any filed
amendment thereof, or any related preliminary prospectus or the Prospectus, or
any amendment thereof or supplement thereto, as the case may be.

    (c)  In connection with the offer and sale of the Directed Shares, the
Company agrees, promptly upon a request in writing, to indemnify and hold
harmless the Underwriters from and against any and all losses, liabilities,
claims, damages and expenses incurred by it as a result of (i) the failure of
the Directed Shares Purchasers to pay for and accept delivery of the Directed
Shares which, by the end of the day following the date of this Agreement, were
subject to a properly confirmed agreement to purchase such Directed Shares or
(ii) the refusal of any

                                       19
<PAGE>

Directed Shares Purchasers that are also employees of the Company properly to
confirm their respective agreements to purchase the Directed Shares that they
had agreed to purchase by the end of the first day after the date of this
Agreement.

    (d)  Promptly after receipt by an indemnified party under subsection (a),
(b) or (c) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but the
failure so to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 7). In case any such action is
brought against any indemnified party, and it notifies an indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel satisfactory to
such indemnified party. Notwithstanding the foregoing, the indemnified party or
parties shall have the right to employ its or their own counsel in any such
case, but the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless (i) the employment of such counsel shall
have been authorized in writing by one of the indemnifying parties in connection
with the defense of such action, (ii) the indemnifying parties shall not have
employed counsel to have charge of the defense of such action within a
reasonable time after notice of commencement of the action, or (iii) such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them which are different from or additional to those
available to one or all of the indemnifying parties (in which case the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
such fees and expenses shall be borne by the indemnifying parties. Anything in
this subsection to the contrary notwithstanding, an indemnifying party shall not
be liable for any settlement of any claim or action effected without its written
consent; provided, however, that such consent was not unreasonably withheld.
         --------  -------

8.  Contribution.  In order to provide for contribution in circumstances in
which the indemnification provided for in Section 7 hereof is applicable by its
terms but for any reason held to be unavailable from any indemnifying party or
is insufficient to hold harmless a party indemnified thereunder, the Company and
the Underwriters shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by such indemnification
provision (including any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claims asserted, but after deducting in the case of losses,
claims, damages, liabilities and expenses suffered by the Company any
contribution received by the Company from persons, other than the Underwriters,
who may also be liable for contribution, including persons who control the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, officers of the Company who signed the Registration Statement and
directors of the Company) as incurred to which the Company and one or more of
the Underwriters may be subject, in such proportions as is appropriate to
reflect the relative benefits received by the Company and the Underwriters from
the offering of the Shares or, if such allocation is not permitted by applicable
law or indemnification is not available as a result of the indemnifying party
not having received notice as provided in Section 7 hereof, in such proportion
as is appropriate to reflect not only the relative benefits referred to above
but also the relative fault of

                                       20
<PAGE>

the Company and the Underwriters in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations. The relative benefits received
by the Company and the Underwriters shall be deemed to be in the same proportion
as (x) the total proceeds from the offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company and (y) the
underwriting discounts and commissions received by the Underwriters,
respectively, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Company and of the Underwriters shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission or any
violation of the nature referred to in Section 7(a)(ii). The Company and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 8 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to above. Notwithstanding the provisions of this Section 8, (i) in no
case shall any Underwriter be liable or responsible for any amount in excess of
the underwriting discount and commission applicable to the Shares purchased by
such Underwriter hereunder, and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. Notwithstanding the provisions of this Section 8 and the
preceding sentence, no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares underwritten
by it and distributed to the public were offered to the public exceeds the
amount of any damages that such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. For purposes of this Section 8, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act shall have the same rights to contribution as such Underwriter, and
each person, if any, who controls the Company within the meaning of Section 15
of the Act or Section 20(a) of the Exchange Act, each officer of the Company who
shall have signed the Registration Statement and each director of the Company
shall have the same rights to contribution as the Company, subject in each case
to clauses (i) and (ii) of this Section 8. Any party entitled to contribution
will, promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties, notify each party or parties from whom
contribution may be sought, but the omission to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any obligation it or they may have under this Section 8 or otherwise. No party
shall be liable for contribution with respect to any action or claim settled
without its consent; provided, however, that such consent was not unreasonably
withheld.

9.  Default by an Underwriter.

    (a)  If any Underwriter or Underwriters shall default in its or their
obligation to purchase Firm Shares or Additional Shares hereunder, and if the
Firm Shares or Additional Shares with respect to which such default relates do
not (after giving effect to arrangements, if any, made by you pursuant to
subsection (b) below) exceed in the aggregate 10% of the number of Firm Shares
or Additional Shares, the Firm Shares or Additional Shares to which the default
relates shall be purchased by the non-defaulting Underwriters in proportion to
the respective proportions which the numbers

                                       21
<PAGE>

of Firm Shares set forth opposite their respective names in Schedule I hereto
bear to the aggregate number of Firm Shares set forth opposite the names of the
non-defaulting Underwriters.

    (b)  In the event that such default relates to more than 10% of the Firm
Shares or Additional Shares, as the case may be, you may in your discretion
arrange for yourself or for another party or parties (including any non-
defaulting Underwriter or Underwriters who so agree) to purchase such Firm
Shares or Additional Shares, as the case may be, to which such default relates
on the terms contained herein. In the event that within five calendar days after
such a default you do not arrange for the purchase of the Firm Shares or
Additional Shares, as the case may be, to which such default relates as provided
in this Section 9, this Agreement or, in the case of a default with respect to
the Additional Shares, the obligations of the Underwriters to purchase and of
the Company to sell the Additional Shares shall thereupon terminate, without
liability on the part of the Company with respect thereto (except in each case
as provided in Sections 5, 7(a) and 8 hereof) or the Underwriters, but nothing
in this Agreement shall relieve a defaulting Underwriter or Underwriters of its
or their liability, if any, to the other Underwriters and the Company for
damages occasioned by its or their default hereunder.

    (c)  In the event that the Firm Shares or Additional Shares to which the
default relates are to be purchased by the non-defaulting Underwriters, or are
to be purchased by another party or parties as aforesaid, you or the Company
shall have the right to postpone the Closing Date or Additional Closing Date, as
the case may be, for a period, not exceeding five business days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus or in any other documents and arrangements, and the
Company agrees to file promptly any amendment or supplement to the Registration
Statement or the Prospectus which, in the opinion of Underwriters' Counsel, may
thereby be made necessary or advisable. The term "Underwriter" as used in this
Agreement shall include any party substituted under this Section 9 with like
effect as if it had originally been a party to this Agreement with respect to
such Firm Shares and Additional Shares.

10.  Survival of Representations and Agreements.  All representations and
warranties, covenants and agreements of the Underwriters and the Company
contained in this Agreement, including the agreements contained in Section 5,
the indemnity agreements contained in Section 7 and the contribution agreements
contained in Section 8, shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any Underwriter or any
controlling person thereof or by or on behalf of the Company, any of its
officers and directors or any controlling person thereof, and shall survive
delivery of and payment for the Shares to and by the Underwriters.  The
representations contained in Section 1 and the agreements contained in Sections
5, 7, 8 and 11(d) hereof shall survive the termination of this Agreement,
including termination pursuant to Section 9 or 11 hereof.

11.  Effective Date of Agreement; Termination.

    (a)  This Agreement shall become effective upon the later of when (i) you
and the Company shall have received notification of the effectiveness of the
Registration Statement

                                       22
<PAGE>

or (ii) the execution of this Agreement. If either the
initial public offering price or the purchase price per Share has not been
agreed upon prior to 5:00 P.M., New York time, on the sixth full business day
after the Registration Statement shall have become effective, this Agreement
shall thereupon terminate without liability to the Company or the Underwriters
except as herein expressly provided. Until this Agreement becomes effective as
aforesaid, it may be terminated by the Company by notifying you or by you by
notifying the Company. Notwithstanding the foregoing, the provisions of this
Section 11 and of Sections 1, 5, 7 and 8 hereof shall at all times be in full
force and effect.

    (b)  You shall have the right to terminate this Agreement at any time prior
to the Closing Date or the obligations of the Underwriters to purchase the
Additional Shares at any time prior to the Additional Closing Date, as the case
may be, if (A) any domestic or international event or act or occurrence has
materially disrupted, or in your opinion will in the immediate future materially
disrupt, the market for the Company's securities or securities in general; or
(B) if trading on the New York or American Stock Exchanges or on NASDAQ shall
have been suspended, or minimum or maximum prices for trading shall have been
fixed, or maximum ranges for prices for securities shall have been required, on
the New York or American Stock Exchanges or on NASDAQ by the New York or
American Stock Exchanges or NASDAQ or by order of the Commission or any other
governmental authority having jurisdiction; or (C) if a banking moratorium has
been declared by a state or federal authority or if any new restriction
materially adversely affecting the distribution of the Firm Shares or the
Additional Shares, as the case may be, shall have become effective; or (D) (i)
if the United States becomes engaged in hostilities or there is an escalation of
hostilities involving the United States or there is a declaration of a national
emergency or war by the United States or (ii) if there shall have been such
change in political, financial or economic conditions, if the effect of any such
event in (i) or (ii) in your judgment makes it impracticable or inadvisable to
proceed with the offering, sale and delivery of the Firm Shares or the
Additional Shares, as the case may be, on the terms contemplated by the
Prospectus.

    (c)  Any notice of termination pursuant to this Section 11 shall be by
telephone, facsimile, telex, or telegraph, confirmed in writing by letter.

    (d)  If this Agreement shall be terminated pursuant to any of the provisions
hereof (otherwise than pursuant to (i) notification by you as provided in
Section 11(a) hereof or (ii) Section 9(b) or 11(b) hereof), or if the sale of
the Shares provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth herein is not satisfied or because of
any refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof, the Company will, subject
to demand by you, reimburse the Underwriters for all out-of-pocket expenses
(including the fees and expenses of their counsel) incurred by the Underwriters
in connection herewith.

12.  Notices.  All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing and, if sent to any
Underwriter, shall be mailed, delivered, sent by facsimile, telex or telegraph
and confirmed in writing, to such Underwriter c/o Bear, Stearns & Co. Inc., 245
Park Avenue, New York, NY 10167, Attention: Equity Syndicate; facsimile number
(212) 272-3485; if sent to the Company, shall be mailed, delivered, sent by
facsimile, telex or telegraph and confirmed in writing to the Company, Eagleview
Corporate

                                       23
<PAGE>

Center, Suite 104, 665 Stockton Drive, Exton, PA 19341, Attention: Chief
Financial Officer; facsimile number (610) 458-8258.

13.  Parties.  This Agreement shall inure solely to the benefit of, and shall be
binding upon, the Underwriters and the Company and the controlling persons,
directors, officers, employees and agents referred to in Sections 7 and 8, and
their respective successors and assigns, and no other person shall have or be
construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained.
The term "successors and assigns" shall not include a purchaser, in its capacity
as such, of Shares from any of the Underwriters.

14.  Governing Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, but without regard to
principles of conflicts of law.

15.  Counterparts.  This Agreement may be signed in two or more counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.

16.  Headings.  The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.



                            [Signature Page Follows]

                                       24
<PAGE>

  If the foregoing correctly sets forth the understanding between you and the
Company, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among us.

                                  Very truly yours,

                                  3-DIMENSIONAL PHARMACEUTICALS, INC.


                                  By
                                     -----------------------
                                     Name:
                                     Title:

Accepted as of the date first above written

BEAR, STEARNS & CO. INC.
U.S. BANCORP PIPER JAFFRAY INC.
CHASE SECURITIES INC.

By BEAR, STEARNS & CO. INC.



  By
    --------------------
    Name:
    Title:

On behalf of themselves and the other
Underwriters named in Schedule I hereto.

<PAGE>

                                   SCHEDULE I


                                 Number of Firm
Name of Underwriter              Shares to be Purchased
-------------------              ----------------------

Bear, Stearns & Co. Inc.

U.S. Bancorp Piper Jaffray Inc.

Chase Securities Inc.


Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


<PAGE>

                                  SCHEDULE II

                                  Subsidiaries
                                  ------------

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.3
<SEQUENCE>3
<FILENAME>0003.txt
<DESCRIPTION>FORM OF EIGHTH RESTATED CERTIFICATE
<TEXT>

<PAGE>

                 EIGHTH RESTATED CERTIFICATE OF INCORPORATION
                                      OF
                      3-DIMENSIONAL PHARMACEUTICALS, INC.

          3-DIMENSIONAL PHARMACEUTICALS, INC. (the "Corporation"), a corporation
organized and existing under and by virtue of the General Corporation Law of the
State of Delaware (the "General Corporation Law"), hereby certifies as follows:

          FIRST:    The name of the Corporation is 3-Dimensional
Pharmaceuticals, Inc. The Certificate of Incorporation of the Corporation was
originally filed by the Corporation with the Secretary of State of the State of
Delaware on March 11, 1993, a Certificate of Amendment to the Certificate of
Incorporation was filed by the Corporation with the Secretary of State of
Delaware on September 29, 1993 and a Restated Certificate of Incorporation (the
"First Restated Certificate of Incorporation") was filed by the Corporation with
the Secretary of State of Delaware on October 13, 1993. Certificates of
Amendment to the First Restated Certificate of Incorporation were filed with the
Secretary of State of Delaware on December 13, 1993, April 21, 1994, December
12, 1994, May 16, 1995, May 26, 1995, August 14, 1995, December 12, 1995,
December 27, 1995, February 8, 1996, June 20, 1996 and September 25, 1996. A
Second Restated Certificate of Incorporation was filed by the Corporation with
the Secretary of State of Delaware on October 11, 1996. A Third Restated
Certificate of Incorporation was filed by the Corporation with the Secretary of
State of Delaware on March 12, 1997. A Fourth Restated Certificate of
Incorporation was filed by the Corporation with the Secretary of State of
Delaware on June 12, 1997. Certificates of Amendment to the Fourth Restated
Certificate of Incorporation were filed with the Secretary of State of Delaware
on August 6, 1997 and November 14, 1997. The Fifth Restated Certificate of
Incorporation was filed by the Corporation with the Secretary of State of
Delaware on December 31, 1997. Certificates of Amendment to the Fifth Restated
Certificate of Incorporation were filed on October 12, 1999 and November 18,
1999. The Sixth Restated Certificate of Incorporation was filed by the
Corporation with the Secretary of State of Delaware on March 31, 2000. The
Seventh Restated Certificate of Incorporation was filed by the Corporation with
the Secretary of State of Delaware on May 17, 2000.

          SECOND:   This Eighth Restated Certificate of Incorporation restates
and integrates and further amends the Certificate of Incorporation of the
Corporation. This Eighth Restated Certificate of Incorporation was duly adopted
in accordance with the provisions of Sections 242 and 245 and was approved by
written consent of the stockholders of the Corporation given in accordance with
the provisions of Section 228 of the General Corporation Law (prompt notice of
such action having been given to those stockholders who did not consent in
writing).

          THIRD:    The text of the Certificate of Incorporation of the
Corporation is hereby restated and amended to read in its entirety as follows:

                                 ARTICLE FIRST
                                 -------------

                                     Name
                                     ----
<PAGE>

      The name of the Corporation is 3-Dimensional Pharmaceuticals, Inc.

                                       2
<PAGE>

                                ARTICLE SECOND
                                --------------

                               Registered Agent
                               ----------------

          The address of the registered office of the Corporation in the State
of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle, Delaware 19801. The name of its registered
agent at such address is The Corporation Trust Company.

                                 ARTICLE THIRD
                                 -------------

                                    Purpose
                                    -------

          The Corporation is organized to engage in any lawful act or activity
for which a corporation may be organized under the General Corporation Law.

                                ARTICLE FOURTH
                                --------------

                                 Capital Stock
                                 -------------

          The Corporation shall have the authority to issue 97,994,126 shares of
all classes of stock, consisting of 6,926,461 shares of Series A-1 Preferred
Stock, $.001 par value (formerly denominated the Series A Preferred Stock) (the
"Series A-1 Preferred Stock"), 4,333,990 shares of Series A-2 Preferred Stock,
$.001 par value (the "Series A-2 Preferred Stock"), 10,304,264 shares of Series
A-3 Preferred Stock, $.001 par value (the "Series A-3 Preferred Stock"),
4,000,000 shares of Series A-4 Preferred Stock, $.001 par value (the "Series A-4
Preferred Stock," 9,572,248 shares of Series A-5 Preferred Stock, $.001 par
value, (the "Series A-5 Preferred Stock" and collectively with the Series A-1
Preferred Stock, Series A-2 Preferred Stock, Series A-3 Preferred Stock and
Series A-4 Preferred Stock, the "Series A Preferred Stock"), 1,000,000 shares of
Series B Preferred Stock, $.001 par value (the "Series B Preferred Stock"),
5,000,000 shares of Series C Preferred Stock, $.001 par value (the "Series C
Preferred Stock,"), 625,000 shares of Series D Preferred Stock, $.001 par value
(the "Series D Preferred Stock," and collectively with the Series A Preferred
Stock, the Series B Preferred Stock, and the Series C Preferred Stock, the
"Preferred Stock"), and 56,232,163 shares of Common Stock, $.001 par value (the
"Common Stock").

          Unless otherwise provided, all Section references in this Article
Fourth shall refer to Sections of this Article Fourth.

          Effective as of the date of the filing of this Eighth Restated
Certificate (the "Effective Date") each share of Common Stock of the Company
issued and outstanding immediately prior to 5:00 p.m. on the Effective Date (the
"Effective Time"), shall be automatically, without further action by the Company
or any holder or any person having the right to acquire such shares, be
reclassified into 0.3571 shares of Common Stock of the Company (the "Reverse
Stock Split").  No fractional shares of Common Stock shall be issued or issuable
in connection with the Reverse Stock Split and any interest in a fraction of a
share issuable to holders of record at the Effective Time of Common Stock,

                                       3
<PAGE>

shall be converted into the right to receive, upon the surrender of the
instruments formerly representing the right to shares of Common Stock, an amount
in cash equal to the current fair market value as determined by the Board of
Directors in good faith, at the Effective Time, of the interest in such fraction
of a share.


A.   SERIES A PREFERRED STOCK
     ------------------------

          The Series A Preferred Stock shall have the following designations,
powers, preferences, relative, participating, optional or other special rights,
qualifications, limitations and restrictions:

     1.  Dividends

          a.  Dividends are payable on the Series A Preferred Stock, when, as
and if declared by the Board of Directors.

          b.  So long as any Series A Preferred Stock is outstanding the
Corporation shall not declare or pay any dividend or make any distribution
(whether in cash, shares of capital stock of the Corporation or other property)
on shares of its Common Stock unless prior thereto or simultaneously therewith
(A) all dividends and distributions previously declared on the Series A
Preferred Stock and (B) any cumulative dividends in accordance with Section
A.1(d) shall have been paid or the Corporation shall have irrevocably deposited
or set aside cash or obligations the payment of which is backed by the full
faith and credit of the United States ("United States Obligations") sufficient
for the payment thereof.

          c.  If the Board of Directors declares dividends or other
distributions (other than on Liquidation (as hereinafter defined in Section
A.2(a))) on the Common Stock in cash, property or securities (including Common
Stock) of the Corporation (or subscription or other rights to purchase or
acquire securities (including Common Stock) of the Corporation), the Board of
Directors shall simultaneously declare a dividend or distribution at the same
rate and in the same form on the Series A Preferred Stock, so that the Series A
Preferred Stock participates equally with the Common Stock in such dividend or
distribution. For purposes of determining its proportional share of the dividend
or distribution, each share of the Series A Preferred Stock shall be deemed to
be that number of shares of Common Stock into which such share of Series A
Preferred Stock is then convertible, rounded to the nearest one-tenth of a
share.

          d.  From and after (i) with respect to the Series A-1 Preferred Stock,
October 14, 1998, (ii) with respect to the Series A-2 Preferred Stock, the fifth
anniversary of the Original Series A-2 Issuance Date (as hereinafter defined in
Section A.5(d)(i)), (iii) with respect to the Series A-3 Preferred Stock, the
fifth anniversary of the Original Series A-3 Issuance Date (as hereinafter
defined in Section A.5(d)(i)), (iv) with respect to

                                       4
<PAGE>

the Series A-4 Preferred Stock, the fifth anniversary of the Original Series A-4
Issuance Date (as hereinafter defined in Section A.5(d)(i)), and (v) with
respect to the Series A-5 Preferred Stock, the fifth anniversary of the Original
Series A-5 Issuance Date (as hereinafter defined in Section A.5(d)(i), the
applicable Series A Preferred Stock will be entitled to dividends at the rate of
ten (10%) per share per annum (or such greater amount of dividends as such
Series A Preferred Stock would be entitled to if such Series A Preferred Stock
were converted into Common Stock), of the applicable Original Series A Purchase
Price (as hereinafter defined in Section A.2(a)), as adjusted for any
combinations or divisions or similar recapitalization affecting the Series A
Preferred Stock after the applicable Original Series A Issuance Date (as
hereinafter defined in Section A.5(d)(i)), payable in equal quarterly
installments on the first day of January, April, July and October (and any
dividends payable to holders of Series A Preferred Stock which are not paid
shall be cumulative). If less then the full dividend is declared on all of the
shares of Series A Preferred Stock which are then entitled to dividends, then a
dividend must be declared ratably on the Series A-1 Preferred Stock, the Series
A-2 Preferred Stock, the Series A-3 Preferred Stock, the Series A-4 Preferred
Stock and the Series A-5 Preferred Stock. Nothing in this Section A.1(d) shall
be deemed to limit the rights of the Series A Preferred Stock under Sections
A.1(b) and A.1(c).

     2.  Rights on Liquidation, Dissolution, Winding-Up.
         ----------------------------------------------

          a.  In the event of any liquidation, dissolution or winding-up of the
affairs of the Corporation (collectively, a "Liquidation"), whether voluntary or
involuntary, before any payment of cash or distribution of other property shall
be made to the holders of the Common Stock (the "Common Stockholders") or any
other class or series of stock ranking on Liquidation junior to the Series A
Preferred Stock, the holders of Series A Preferred Stock ("Series A Preferred
Stockholders"), shall be entitled to receive out of the assets of the
Corporation legally available for distribution to its stockholders, an amount
equal to the applicable Original Series A Purchase Price (as defined below) per
share (as appropriately adjusted for any combinations or divisions or similar
recapitalization affecting the Series A Preferred Stock after the applicable
Original Series A Issuance Date) (the "Liquidation Preference"), whether from
capital, surplus or earnings, plus an amount equal to any accrued but unpaid
cumulative dividends thereon and any declared but unpaid dividends thereon. As
used herein, the "Original Series A Purchase Price" for the Series A-1 Preferred
Stock is $1.00 per share, the "Original Series A Purchase Price" for the Series
A-2 Preferred Stock is $1.25 per share, the "Original Series A Purchase Price"
for the Series A-3 Preferred Stock is $1.21309 per share, the "Original Series A
Purchase Price" for the Series A-4 Preferred Stock is $2.60 per share and the
"Original Series A Purchase Price" for the Series A-5 Preferred Stock at $3.00
per share.

          b.  If, upon any Liquidation, the assets of the Corporation available
for distribution to its stockholders shall be insufficient to pay the Series A
Preferred Stockholders, the holders of the Series B Preferred Stock (the "Series
B Preferred Stockholders"), the holders of the Series C Preferred Stock (the
"Series C Preferred

                                       5
<PAGE>

Stockholders") and the holders of the Series D Preferred Stock (the "Series D
Preferred Stockholders") the full amounts to which they shall be entitled, the
Series A Preferred Stockholders, the Series B Preferred Stockholders, the Series
C Preferred Stockholders and the Series D Preferred Stockholders shall share
ratably in any distribution of assets in proportion to the respective amounts
which would be payable to them in respect of the shares held by them if all
amounts payable to them in respect of such were paid in full pursuant to Section
A.2(a), Section B.2(a), Section C.2(a) and Section D.2(a).

          c.  In the event of any Liquidation, after payment shall have been
made to the Series A Preferred Stockholders, the Series B Preferred
Stockholders, the Series C Preferred Stockholders and the Series D Preferred
Stockholders of the full amount to which each shall be entitled pursuant to
Section A.2(a), Section B.2(a), Section C.2(a) and Section D.2(a), respectively,
with respect to each other class or series of capital stock (other than Common
Stock) ranking on Liquidation junior to the Series A Preferred Stock (in
descending order of seniority), the Series A Preferred Stockholders, as a class,
shall be entitled to receive an amount equal (and in like kind) to the aggregate
preferential amount fixed for each such junior class or series of capital stock,
which amount shall be distributed among the Series A Preferred Stockholders
based on the number of shares of Common Stock into which such shares of Series A
Preferred Stock are then convertible. If, upon any Liquidation, the assets of
the Corporation available for distribution to its stockholders shall be
insufficient to pay the Series A Preferred Stockholders and a class or series of
capital stock (other than the Common Stock) junior to the Series A Preferred
Stock the full amounts to which they shall be entitled pursuant to the
immediately preceding sentence, the holders of the Series A Preferred Stock and
such other class or series of capital stock shall share ratably in any
distribution of assets according to the respective preferential amounts fixed
for the Series A Preferred Stock (pursuant to Section A.2(a)) and such junior
class or series of capital stock which would be payable in respect of the shares
held by them upon such distribution if all amounts payable on or with respect to
such shares were paid in full.

          d.  In the event that after payment of the full amount to which the
holders of Series A Preferred Stock shall be entitled as aforesaid, cash or
other property remains, such remaining proceeds shall be distributed pro rata
among the Series A Preferred Stock, the Series B Preferred Stock, the Series C
Preferred Stock, the Series D Preferred Stock and the Common Stock. For purposes
of determining its proportional share of the cash or other property, each share
of the Series A Preferred Stock shall be deemed to be that number of shares of
Common Stock into which such share of Series A Preferred Stock is then
convertible, rounded to the nearest one-tenth of a share.

     3.  Merger, Consolidation, etc.
         ---------------------------

          In the event the Corporation shall sell, lease or otherwise dispose of
all or substantially all of the assets of the Corporation or merge or
consolidate another corporation into or with the Corporation (other than a
merger or consolidation in which

                                       6
<PAGE>

the Series A Preferred Stockholders receive securities of the surviving
corporation having substantially similar rights to the Series A Preferred Stock
and in which the stockholders of the Corporation immediately prior to such a
transaction are holders of at least a majority of the voting securities of the
surviving corporation immediately thereafter), then the proceeds of or any
property deliverable from such transaction shall be distributed among the
holders of the Series A Preferred Stock, the Series B Preferred Stock, the
Series C Preferred Stock, the Series D Preferred Stock and the Common Stock
according to the provisions of Section A.2 as if such transaction were a
Liquidation, unless the treatment of such a transaction as a Liquidation
pursuant to this Section A.3 is waived in writing by the Series A Preferred
Stockholders of record that hold at least two-thirds of the outstanding Series A
Preferred Stock. Such waiver by the Series A Preferred Stockholders shall be
binding upon the holders of the Series B Preferred Stock, Series C Preferred
Stock, the Series D Preferred Stock and Common Stock.

     4.  Voting.
         ------

          a.  General. In addition to the rights otherwise provided for herein
              -------
or by law, the Series A Preferred Stockholders shall be entitled to vote,
together with the Series B Preferred Stockholders, Series C Preferred
Stockholders, the Series D Preferred Stock and Common Stockholders, as one class
on all matters submitted to a vote of stockholders, in the same manner and with
the same effect as the Common Stockholders. In any such vote, each share of
Series A Preferred Stock shall entitle the holder thereof to one vote per share
for each share of Common Stock (including fractional shares) into which each
share of Series A Preferred Stock is then convertible, rounded to the nearest
one-tenth of a share.

          b.  Election of Board of Directors.

              (i)   (A)  In addition to the rights specified in Section A.4(a),
the holders of a majority in voting power of the Series A-1 Preferred Stock,
Series A-2 Preferred Stock, Series A-4 Preferred Stock and Series A-5 Preferred
Stock, voting together as a separate class, shall have the exclusive right to
elect to the Board of Directors of the Corporation that number of directors
which shall be equal to a majority of the total number of directors on the Board
of Directors (the "Series A-1/A-2/A-4/A-5 Directors"). In any election of Series
A-1/A-2/A-4/A-5 Directors pursuant to this Section A.4(b), each outstanding
share of Series A-1 Preferred Stock, Series A-2 Preferred Stock, Series A-4
Preferred Stock and Series A-5 Preferred Stock shall entitle the holder thereof
to the number of votes per share that equals the number of shares of Common
Stock (including fractional shares) into which each such share is then
convertible, rounded up to the nearest one-tenth of a share. The voting rights
of the holders of Series A-1 Preferred Stock, Series A-2 Preferred Stock, Series
A-4 Preferred Stock and Series A-5 Preferred Stock contained in this Section
A.4(b) may be exercised at a special meeting of the holders of Series A-1
Preferred Stock, Series A-2 Preferred Stock, Series A-4 Preferred Stock and
Series A-5 Preferred Stock called as provided in accordance with the By-laws of
the Corporation, at any annual or special meeting of the stockholders of the
Corporation, or by written consent of the holders of Series A-1 Preferred Stock,
Series A-2 Preferred Stock, Series A-4 Preferred Stock and Series A-5 Preferred
Stock in lieu of a

                                       7
<PAGE>

meeting. The Series A-1/A-2/A-4/A-5 Directors elected pursuant to this Section
A.4(b) shall serve from the date of their election and qualification until their
successors have been duly elected and qualified.

               (B)  In addition to the rights specified in Section A.4(a), the
holders of a majority in voting power of the Series A-3 Preferred Stock, voting
together as a separate class, shall have the exclusive right to elect two
directors to the Board of Directors of the Corporation (the "Series A-3
Directors"), one of which Series A-3 Directors shall be nominated by Rho
Management Trust II and one of which shall be nominated by Abingworth
Bioventures SICAV. In any election of Series A-3 Directors pursuant to this
Section A.4(b), each share of Series A-3 Preferred Stock shall entitle the
holder thereof to the number of votes per share that equals the number of shares
of Common Stock (including fractional shares) into which each such share is then
convertible, rounded up to the nearest one-tenth of a share. The voting rights
of the holders of Series A-3 Preferred Stock contained in this Section A.4(b)
may be exercised at a special meeting of the holders of Series A-3 Preferred
Stock called as provided in accordance with the By-laws of the Corporation, at
any annual or special meeting of the stockholders of the Corporation, or by
written consent of the holders of Series A-3 Preferred Stock in lieu of a
meeting. The Series A-3 Directors elected pursuant to this Section A.4(b) shall
serve from the date of their election and qualification until their successors
have been duly elected and qualified.

          (ii) A vacancy in the directorships to be elected pursuant to Section
A.4(b)(i) (including any vacancy created on account of an increase in the number
of directors on the Board of Directors) may be filled only by vote at a meeting
called in accordance with the By-laws of the Corporation or written consent in
lieu of a meeting in accordance with Section A.4(b)(i).

     c.   Protective Provisions.  So long as any Series A Preferred Stock is
          ---------------------
outstanding, the Corporation shall not, without the written consent in lieu of a
meeting, or the affirmative vote at a meeting called for such purpose, of Series
A Preferred Stockholders of record that hold at least a majority of the
outstanding Series A Preferred Stock, voting as a separate class:

          (i)  authorize, issue or agree to authorize or issue any shares of
capital stock of the Corporation, any right or options to receive any capital
stock, or any security convertible into or exchangeable for capital stock,
except in each case, pursuant to the Equity Compensation Plan of the
Corporation;

          (ii) change as a whole, by subdivision or combination in any manner,
the number of shares of the Common Stock then outstanding into a different
number of shares, with or without par value, without making the identical change
as a whole in the number of shares of Series A Preferred Stock then outstanding;

                                       8
<PAGE>

          (iii)  amend, alter or repeal, in any manner whatsoever, the
designations, powers, preferences, relative, participating, optional or other
special rights, qualifications, limitations and restrictions of the Series A
Preferred Stock;

          (iv)   sell, abandon, transfer, lease or otherwise dispose of all or
substantially all of the properties or assets of the Corporation or any of its
subsidiaries;

          (v)    declare or pay any dividend or make any distribution (whether
in cash, shares of capital stock of the Corporation, or other property) on
shares of its capital stock other than the Series A Preferred Stock;

          (vi)   merge or consolidate with or into, or permit any subsidiary of
the Corporation to merge or consolidate with or into, any other corporation,
corporations or other entity or entities, or effect any transaction or series of
related transactions in which more than 50% of the voting power of the
Corporation is transferred;

          (vii)  voluntarily dissolve, liquidate or wind-up or carry out any
partial liquidation or distribution or transaction in the nature of a partial
liquidation or distribution;

          (viii) increase the number of shares of any series of Preferred Stock
of the Corporation authorized to be issued;

          (ix)   reclassify any shares of the Corporation's capital stock as
shares ranking senior to or on parity with the Series A Preferred Stock with
respect to rights on Liquidation, redemption or for the payment of any dividend
or distribution other than in Liquidation;

          (x)    amend, alter or repeal any provision of the Certificate of
Incorporation of the Corporation;

          (xi)   amend or repeal any provisions of the By-laws of the
Corporation so as to adversely affect the rights of the holders of the Series A
Preferred Stock; or

          (xii)  directly or indirectly, redeem, purchase or otherwise acquire
for value (including through an exchange), or set apart money or other property
for any mandatory purchase or other analogous fund for the redemption, purchase
or acquisition of, any shares of Common Stock, except pursuant to (A) Section
A.6 hereof,

                                       9
<PAGE>

or (B) the terms of any grant made under the Equity Compensation Plan of the
Corporation or other stock compensation plans for employees and others who
render services to the Corporation.

     5.   Conversion.
          ----------

          a.  Right to Convert
              ----------------
              (i)   Any Series A Preferred Stockholder shall have the right, at
any time or from time to time, prior to the closing date (the "Closing Date") of
the Company's first Public Offering (as hereinafter defined) to convert any or
all of its shares of Series A Preferred Stock into that number of fully paid and
nonassessable shares of Common Stock for each share of Series A Preferred Stock
equal to the quotient of the Liquidation Preference divided by the applicable
Series A Preferred Conversion Price for that share (as defined in Section
A.5(d)) (as last adjusted and then in effect) rounded to the nearest one-tenth
of a share.

              (ii)  (A)  Any Series A Preferred Stock that remains unconverted
on the Closing Date shall be automatically converted without notice and without
any action on the part of the holder thereof into shares of Common Stock on the
Closing Date in accordance with the preceding sentence. After the Closing Date
all rights of holders of shares of Series A Preferred Stock with respect to
Series A Preferred Stock, except the right to receive shares of Common Stock in
accordance with this Section, shall cease and the shares of Series A Preferred
Stock shall no longer be deemed to be outstanding, whether or not the
Corporation has received the certificates representing such shares.

                    (B)  A Public Offering is defined as an Underwritten
Offering (as hereinafter defined) by the Corporation of authorized but unissued
shares of Common Stock resulting in gross proceeds to the Company (before
deducting underwriting commissions and expenses of the offering) of not less
than $15,000,000 or such greater amount as is required to meet applicable
listing standards; provided that, with respect to the automatic conversion of
the Series A Preferred Stock, a Public Offering shall be at a price per share of
not less than $3.75 (as adjusted for stock splits, stock combinations, stock
dividends and similar transactions). An Underwritten Offering is defined as a
firm commitment offering by one or more underwriters in an offering registered
under the Securities Act of 1933, as amended (the "Securities Act").

                    (C)  The Corporation shall promptly send by first-class
mail, postage prepaid, to each Series A Preferred Stockholder at such holder's
address appearing on the Corporation's records a copy of (i) each registration
statement filed by the Corporation under the Securities Act and each amendment
thereof and each exhibit and schedule thereto and (ii) each order of the
Securities and Exchange Commission declaring any such registration statement to
be effective.

                    (D)  Holders of Series A Preferred Stock converted into
shares of Common Stock pursuant to this Section A.5 shall be entitled to payment
of any

                                       10
<PAGE>

accrued but unpaid cumulative dividends and any declared but unpaid dividends
payable with respect to such shares of Series A Preferred Stock, up to and
including the Series A Conversion Date (as hereinafter defined in Section
A.5(b)) or the Closing Date, as the case may be.

          b.   Mechanics of Conversion
               -----------------------

               (i)    Any Series A Preferred Stockholder that exercises its
right to convert its shares of Series A Preferred Stock into Common Stock shall
deliver the certificate(s) for the shares to be converted ("Series A Preferred
Certificate"), duly endorsed or assigned in blank to the Corporation, during
regular business hours, at the office of the transfer agent of the Corporation,
if any, at the principal place of business of the Corporation or at such other
place as may be designated by the Corporation.

               (ii)   Each Series A Preferred Certificate shall be accompanied
by written notice stating that such holder elects to convert such shares and
stating the name or names (with address) in which the certificate(s) for the
shares of Common Stock ("Common Certificate") are to be issued. Such conversion
shall be deemed to have been effected on the date when the aforesaid delivery is
made ("Series A Conversion Date").

               (iii)  As promptly as practicable thereafter, the Corporation
shall issue and deliver to or upon the written order of such holder, at the
place designated by such holder, a Common Certificate(s) for the number of full
shares of Common Stock to which such holder is entitled and a check or cash for
any fractional interest in a share of Common Stock, as provided in Section
A.5(c) below, and for any accrued but unpaid cumulative dividends and any
declared but unpaid dividends, payable with respect to the converted shares of
Series A Preferred Stock, up to and including the Series A Conversion Date or
the Closing Date, as the case may be.

               (iv)   The person in whose name each Common Certificate is to be
issued shall be deemed to have become a stockholder of record of Common Stock on
the applicable Series A Conversion Date or the Closing Date, as the case may be,
unless the transfer books of the Corporation are closed on that date, in which
event such holder shall be deemed to have become a stockholder of record on the
next succeeding date on which the transfer books are open; provided, that the
                                                           --------
Series A Preferred Conversion Price shall be that in effect on the Series
A Conversion Date or the Closing Date, as the case may be.

               (v)    Upon conversion of only a portion of the shares covered by
a Series A Preferred Certificate, the Corporation, at its own expense, shall
issue and deliver to or upon the written order of the holder of such Series A
Preferred Certificate, a new Series A Preferred Certificate representing the
number of unconverted shares of Series A Preferred Stock from the Series A
Preferred Certificate so surrendered.

                                       11
<PAGE>

          c.   Issuance of Common Stock on Conversion
               --------------------------------------

               (i)    If a Series A Preferred Stockholder shall surrender more
than one Series A Preferred Certificate for conversion at any one time, the
number of such shares of Common Stock issuable upon conversion thereof shall be
computed on the basis of the aggregate number of shares of Series A Preferred
Stock so surrendered.

               (ii)   No fractional shares of Common Stock shall be issued upon
conversion of shares of Series A Preferred Stock. The Corporation shall pay a
cash adjustment for such fractional interest in an amount equal to the then
Current Market Price (as hereinafter defined) of a share of Common Stock
multiplied by such fractional interest.

          d.   Conversion Price; Adjustment. The Series A Preferred Conversion
               ----------------------------
Price for the Series A-1 Preferred Stock, the Series A-2 Preferred Stock, the
Series A-3 Preferred Stock, the Series A-4 Preferred Stock or Series A-5
Preferred Stock, as the case may be, shall initially be equal to the Liquidation
Preference for such series and shall be subject to adjustment from time to time
as follows:

               (i)    If the Corporation shall at any time or from time to time
after the date of original issuance of the first share of the Series A-1
Preferred Stock (the "Original Series A-1 Issuance Date"), the date of original
issuance of the first share of the Series A-2 Preferred Stock (the "Original
Series A-2 Issuance Date"), the date of original issuance of the first share of
the Series A-3 Preferred Stock (the "Original Series A-3 Issuance Date"), the
date of original issuance of the first share of the Series A-4 Preferred Stock
(the "Original Series A-4 Issuance Date") or the date of original issuance of
the first share of Series A-5 Preferred Stock (the "Original Series A-5 Issuance
Date") (each of the Original Series A-1 Issuance Date, the Original Series A-2
Issuance Date, the Original Series A-3 Issuance Date, the Original Series A-4
Issuance Date and the Original Series A-5 Issuance Date are sometimes referred
to as an "Original Series A Issuance Date") issue any shares of Additional Stock
(as hereinafter defined in Section A.5 (d)(ii)), without consideration or for a
consideration per share of Common Stock or underlying Common Stock, as the case
may be, less than the applicable Series A Preferred Conversion Price in effect
for such Series A Preferred Stock immediately prior to such issue, the Series A
Preferred Conversion Price in effect for such series of Series A Preferred Stock
immediately prior to each such issue shall be adjusted to a price for such
series of Series A Preferred Stock determined by multiplying the applicable
Series A Preferred Conversion Price by a fraction, the numerator of which shall
be the number of shares of Common Stock outstanding immediately prior to such
issue plus the number of shares of Common Stock which the aggregate
consideration received by the Corporation for all such Additional Stock so
issued would purchase at such Series A Preferred Conversion Price in effect
immediately prior to the issuance of such Additional Stock, and the denominator
of which shall be the number of shares of Common Stock outstanding immediately
prior to such issue plus the number of shares of such Additional Stock; provided
                                                                        --------
that, for the purpose of this clause (i), all shares of Common Stock
----

                                       12
<PAGE>

(except as otherwise provided in this clause (i)) issuable upon conversion of
all outstanding shares of Series A Preferred Stock shall be deemed to be
outstanding, and immediately after any shares of Additional Stock are deemed to
be issued pursuant to paragraph (C) of this clause (i), such shares of
Additional Stock shall be deemed to be outstanding. For the purposes of any
adjustment of the Series A Preferred Conversion Price pursuant to this clause
(i), the following provisions shall be applicable:

                    (A)  In the case of the issuance of Common Stock in whole or
in part for cash, the consideration shall be deemed to be the amount of cash
paid therefor, plus the value of any property other than cash received by the
Corporation as provided in paragraph (B) of this clause (i), less any discounts,
commissions or other expenses allowed, paid or incurred by the Corporation for
any underwriting or otherwise in connection with the issuance and sale thereof.

                    (B)  In the case of the issuance of Common Stock for
consideration in whole or in part in property or consideration other than cash,
the value of such property or consideration other than cash shall be deemed to
be the fair market value thereof as determined in good faith by the Board of
Directors of the Corporation, irrespective of any accounting treatment;
provided, however, that such fair market value shall not exceed the aggregate
--------  -------
Current Market Price of the shares of Common Stock being issued, less any cash
consideration paid for such shares.

                    (C)  In the case of the issuance of (I) options to purchase
or rights to subscribe for Common Stock, (II) securities convertible into or
exchangeable for Common Stock or (III) options to purchase or rights to
subscribe for such convertible or exchangeable securities:

                         (1)  the aggregate maximum number of shares of Common
Stock deliverable upon exercise of such options to purchase, or rights to
subscribe for Common Stock shall be deemed to have been issued at the time such
options or rights were issued and for a consideration equal to the consideration
(determined in the manner provided in paragraphs (A) and (B) above), if any,
received by the Corporation upon the issuance of such options or rights plus the
minimum purchase price provided in such options or rights for the Common Stock
covered thereby;

                         (2)  the aggregate maximum number of shares of Common
Stock deliverable upon conversion of, or in exchange for, any such convertible
or exchangeable securities or upon the exercise of options to purchase, or
rights to subscribe for, such convertible or exchangeable securities and
subsequent conversion or exchange thereof shall be deemed to have been issued at
the time such securities were issued or such options or rights were issued and
for a consideration equal to the consideration received by the Corporation for
any such securities and related options or rights (excluding any cash received
on account of accrued interest or accrued dividends),

                                       13
<PAGE>

plus the additional consideration, if any, to be received by the Corporation
upon the conversion or exchange of such securities or the exercise of any
related options or rights (determined in the manner provided in paragraphs (A)
and (B) above); and

                         (3)  if there is any decrease in the conversion or
exercise price of, or any increase in the number of shares to be received upon
exercise, conversion or exchange of any such options, rights or convertible or
exchangeable securities (other than a change resulting from the antidilution
provisions thereof), the applicable Series A Preferred Conversion Price shall be
automatically lowered to reflect such change.

               (ii)  "Additional Stock" shall mean any shares of Common Stock,
other than Excluded Stock (as hereinafter defined), or any shares of preferred
stock or other securities convertible into, exchangeable for or exercisable for
shares of Common Stock, other than Excluded Stock.

               (iii)  "Excluded Stock" shall mean

                      (A)  The Series A Preferred Stock and Common Stock issued
upon conversion of any shares of Series A Preferred Stock;

                      (B)  Securities issued pursuant to the acquisition of
another corporation, partnership, joint venture, trust or other entity by the
Corporation by merger, consolidation, stock acquisition, reorganization, or
otherwise whereby the Corporation, or its stockholders of record immediately
prior to the effectiveness of such transaction, directly or indirectly own at
least the majority of the voting power of such other entity or the resulting or
surviving corporation immediately after such transaction;

                      (C)  Common Stock issued to employees, consultants or
others who provide services to the Corporation, pursuant to any options to
purchase or rights to subscribe for such Common Stock granted pursuant to the
Equity Compensation Plan of the Corporation or other stock compensation plans
for employees and others who render services to the Corporation, as approved by
the Corporation's Board of Directors, giving effect to appropriate adjustment to
prevent dilution thereof;

                      (D)  Warrants issued pursuant to (1) the Loan Agreement
entered into among the Corporation as borrower and certain Series A Preferred
Stockholders as lenders in December 1994, (2) the Loan Agreement entered into
among the Corporation as borrower and certain Series A Preferred Stockholders as
lenders in August 1995, (3) the Loan Agreement entered into among the
Corporation as borrower and certain Series A Preferred Stockholders as lenders
in December 1995, (4) the Loan Agreement entered into among the Corporation as
borrower and certain Series A Preferred Stockholders as lenders in February
1996, (5) the Loan Agreement entered

                                       14
<PAGE>

into among the Corporation as borrower and certain Series A Preferred
Stockholders as lenders in June 1996 and (6) the Loan Agreement entered into
among the Corporation as borrower and certain Series A Preferred Stockholders as
lenders in September 1996, and Common Stock issued upon exercise of such
warrants;

                    (E)  The Series B Preferred Stock and Common Stock issued
upon conversion of any shares of Series B Preferred Stock;

                    (F)  The Series C Preferred Stock and Common Stock issued
upon conversion of any shares of Series C Preferred Stock;

                    (G)  The Series D Preferred Stock and Common Stock issued
upon conversion of any shares of Series D Preferred Stock; Warrants issued in
connection with the Master Lease Agreement entered into between the Corporation
as borrower and Transamerica Business Credit Corporation as lender in June 1997
and Common Stock issued upon exercise of such warrants; and

                    (I)  Securities authorized by the affirmative vote of at
least 75% of the Corporation's Board of Directors then in office to be issued in
connection with (x) bridge loan financings from institutional and/or other
accredited investors or (y) corporate partnering transactions or other strategic
alliances with pharmaceutical or other companies related to the Corporation's
business.

               (iv) If the Corporation shall at any time after the applicable
Original Series A Issuance Date fix a record date for the subdivision or split-
up of shares of Common Stock, then, following the record date fixed for the
determination of holders of Common Stock entitled to receive such subdivision or
split-up (or the date of such subdivisions or split-up, if no record date is
fixed), the applicable Series A Preferred Conversion Price shall be
appropriately decreased so that the number of shares of Common Stock issuable on
conversion of each share of the Series A Preferred Stock shall be increased in
proportion to such increase in outstanding shares.

               (v)  If, at any time after the applicable Original Series A
Issuance Date, the number of shares of Common Stock outstanding is decreased by
a combination of the outstanding shares of Common Stock, then, following the
record date fixed for such combination (or the date of such combination, if no
record date is fixed), the applicable Series A Preferred Conversion Price shall
be appropriately increased so that the number of shares of Common Stock issuable
on conversion of each share of

                                       15
<PAGE>

Series A Preferred Stock shall be decreased in proportion to such decrease in
outstanding shares.


               (vi)    If, at any time after the applicable Original Series A
Issuance Date, there shall be any capital reorganization, or any
reclassification of the capital stock of the Corporation (other than a change in
par value or from par value to no par value or from no par value to par value or
as a result of a stock dividend or subdivision, split-up or combination of
shares), or the consolidation or merger of the Corporation with or into another
corporation (other than a consolidation or merger described in Section A.3
hereof or in which the Corporation is the continuing corporation and which does
not result in any change in the powers, designations, preferences and rights (or
the qualifications, limitations or restrictions, if any) of the Series A
Preferred Stock) (an "Extraordinary Transaction"), the applicable Series A
Preferred Conversion Price with respect to the Series A Preferred Stock
outstanding after the Extraordinary Transaction shall be adjusted to provide
that the shares of Series A Preferred Stock outstanding immediately prior to the
effectiveness of the Extraordinary Transaction shall be convertible into the
kind and number of shares of stock or other securities or property of the
Corporation or of the corporation resulting from or surviving such Extraordinary
Transaction which the holder of the number of shares of Common Stock deliverable
(immediately prior to the effectiveness of the Extraordinary Transaction) upon
conversion of such Series A Preferred Stock would have been entitled to receive
upon such Extraordinary Transaction. The provisions of this Section A.5(d)(vi)
shall similarly apply to successive Extraordinary Transactions.

               (vii)   All calculations under this Section A.5(d) shall be made
to the nearest one-tenth of a cent ($.001) or to the nearest one-tenth of a
share, as the case may be.

               (viii)  As used herein, the "Current Market Price" at any date of
one share of Common Stock shall be deemed to be the average of the daily closing
prices for the thirty (30) consecutive business days ending on the fifth (5th)
business day before the day in question (as adjusted for any stock dividend,
split-up, combination or reclassification that took effect during such thirty
(30) business day period) as follows:

                       (A)  If the Common Stock is listed or admitted for
trading on a national securities exchange, the closing price for each day shall
be the last reported sales price regular way or, in case no such reported sales
took place on such day, the average of the last reported bid and asked prices
regular way, in either case, on the principal national securities exchange on
which the Common Stock is listed or admitted to trading.

                       (B)  If the Common Stock is not at the time listed or
admitted for trading on any such exchange, then such price as shall be equal to
the last

                                       16
<PAGE>

reported sale price, or, if there is no such sale price, the average of the last
reported bid and asked prices, as reported by the National Association of
Securities Dealers Automated Quotations System ("NASDAQ") on such day.

                       (C)  If, on any day in question, the security shall not
be listed or admitted to trading on a national securities exchange or quoted on
the NASDAQ, then such price shall be equal to the last reported bid and asked
prices on such day as reported by the National Quotation Bureau, Inc. or any
similar reputable quotation and reporting service, if such quotation is not
reported by the National Quotation Bureau, Inc.

                       (D)  If the Common Stock is not traded in such manner
that the quotations referred to in this clause (viii) are available for the
period required hereunder, the Current Market Price shall be determined by the
Board of Directors of the Corporation.

               (ix)    In any case in which the provisions of this Section
A.5(d) shall require that an adjustment shall become effective immediately after
a record date for an event, the Corporation may defer until the occurrence of
that event (A) issuing to the holder of any share of Series A Preferred Stock
converted after such record date and before the occurrence of such event the
additional shares of capital stock issuable upon such conversion by reason of
the adjustment required by such event over and above the shares of capital stock
issuable upon such conversion before giving effect to such adjustment and (B)
paying to such holder any amount in cash in lieu of a fractional share of
capital stock pursuant to Section A.5(c) above; provided, however, that the
                                                --------  -------
Corporation shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such additional shares, in
such case, upon the occurrence of the event requiring such adjustment.

          e.   Notice of Adjustments
               ---------------------

               (i)  Whenever the Series A Preferred Conversion Price shall be
adjusted as provided in Section A.5(d) above, the Corporation shall file, at its
principal office, at the office of the transfer agent for the Series A Preferred
Stock, if any, or at such other place as may be designated by the Corporation, a
statement, signed by its President and by its Chief Financial Officer, showing
in detail the facts requiring such adjustment and the Series A Preferred
Conversion Price that shall be in effect after such adjustment. The Corporation
shall also cause a copy of such statement to be sent by first-class, certified
mail, return receipt requested, postage prepaid, to each Series A Preferred
Stockholder at such holder's address appearing on the Corporation's records.
Where appropriate, such copy may be given in advance and may be included as part
of a notice required to be mailed under the provisions of clause (ii) below.

                                       17
<PAGE>

               (ii) In the event the Corporation shall propose to file a
registration statement under the Securities Act for a Public Offering or to take
any action of the types described in clauses (i), (iv), (v) or (vi) of Section
A.5(d) above, the Corporation shall give notice to each Series A Preferred
Stockholder, in the manner set forth in Section A.5(e)(i) above, which shall
specify the record date, if any, with respect to any such action and the date on
which such action is to take place. The notice shall also set forth such facts
as are reasonably necessary to indicate the effect of such action (to the extent
such effect may be known at the date of such notice) on the Series A Preferred
Conversion Price and the number, kind or class of shares or other securities or
property which shall be deliverable or purchasable upon the occurrence of such
action or deliverable upon conversion of shares of Series A Preferred Stock. In
the case of any action which would require the fixing of a record date, such
notice shall be given at least ten (10) days prior to the date so fixed, and in
case of all other action, such notice shall be given at least fifteen (15) days
prior to the taking of such proposed action. Failure to give such notice, or any
defect therein, shall not affect the legality or validity of any such action.

          f.   Transfer Taxes. The Corporation shall pay all documentary, stamp
               --------------
or other transactional taxes (excluding income taxes) attributable to the
issuance or delivery of shares of capital stock of the Corporation upon
conversion of any shares of Series A Preferred Stock; provided, however, that
                                                      --------  -------
the Corporation shall not be required to pay any taxes which may
be payable in respect of any transfer involved in the issuance or delivery of
any certificate for such shares in a name other than that of the holder of the
shares of Series A Preferred Stock in respect of which such shares are being
issued.

          g.   Reservation of Common Stock. The Corporation shall at all times
               ---------------------------
reserve, free from preemptive rights, out of its authorized but unissued shares
of Common Stock, solely for the purpose of effecting the conversion of the
shares of Series A Preferred Stock, sufficient shares of Common Stock to provide
for the conversion of all outstanding shares of Series A Preferred Stock.

          h.   Status of Common Stock. All shares of Common Stock which may be
               ----------------------
issued in connection with the conversion provisions set forth herein will, upon
issuance by the Corporation, be validly issued, fully paid and nonassessable,
free from preemptive rights and free from all taxes, liens or charges with
respect thereto created or imposed by the Corporation.

     6.   Redemption.
          ----------

          a.   (i) At the request of the holders of a majority of the Series A
Preferred Stock, excluding the Series A-5 Preferred Stockholders, then
outstanding (each, a "Holder" and collectively, the "Holders") made, from time
to time, at any date after March 12, 2002, the fifth anniversary of the Original
Series A-3 Issuance Date ("Fifth Anniversary Date") (the date fixed for any such
redemption, as determined pursuant to

                                       18
<PAGE>

Section A.6(b) hereof, being a "Redemption Date"), the Corporation shall redeem
(unless otherwise prevented by law), at a redemption price per share equal to
the Liquidation Preference, plus an amount equal to any accrued but unpaid
cumulative dividends thereon and any declared but unpaid dividends thereon, up
to 25% of the shares of Series A Preferred Stock held by the Holders on the
Fifth Anniversary Date (the "Holders' Shares"), and after each of the sixth,
seventh and eighth anniversaries of the Original Series A-3 Issuance Date, the
foregoing redemption rights and obligations shall extend to an additional 25% of
the Holders' Shares. If any Holder transfers shares of the Series A Preferred
Stock after the Fifth Anniversary Date, the foregoing redemption rights, to the
extent not previously exercised by the Holder, shall be allocated by the
Corporation among the transferor and transferees of such Holder's Shares, pro
rata, each being entitled to redeem 25% of the shares of the Series A Preferred
Stock then held by such transferor or transferee. The payment to be made to each
Holder on the Redemption Date is hereinafter referred to as the "Redemption
Payment."

               (ii) At the request of the holders of a majority of the Series A-
5 Preferred Stock then outstanding made, from time to time, at any date after
the fifth anniversary of the Original Series A-5 Issuance Date ("Fifth A-5
Anniversary Date"), the Corporation shall redeem (unless otherwise prevented by
law), at a redemption price per share equal to the Liquidation Preference, plus
an amount equal to any accrued but unpaid cumulative dividends thereon and any
declared but unpaid dividends thereon, up to 25% of the shares of Series A-5
Preferred Stock held by the holders on the Fifth A-5 Anniversary Date (the "A-5
Holders' Shares"), and after each of the sixth, seventh and eighth anniversaries
of the Original Series A-3 Issuance Date, the foregoing redemption rights and
obligations shall extend to an additional 25% of the A-5 Holders' Shares. If any
holder transfers shares of the Series A-5 Preferred Stock after the Fifth
Anniversary Date, the foregoing redemption rights, to the extent not previously
exercised by the holder, shall be allocated by the Corporation among the
transferor and transferees of such A-5 Holder's Shares, pro rata, each being
entitled to redeem 25% of the shares of the Series A-5 Preferred Stock then held
by such transferor or transferee.

          b.   (i)  Promptly after receipt of any such request, the Company
shall fix a date for redemption (the "Redemption Date") which shall be not less
than 60 days after the notice from the Holders requesting redemption. On and
after the Redemption Date, all rights of any Series A Preferred Stockholder with
respect to the shares of Series A Preferred Stock redeemed on that Redemption
Date, except the right to receive the Redemption Payment as provided herein,
shall cease, and such shares shall no longer be deemed to be outstanding,
whether or not the Corporation has received the certificates representing such
shares, on the condition that the Corporation pays or irrevocably deposits or
sets aside cash in an amount equal to, the Redemption Payment.

               (ii) Notice of the redemption of any shares of the Series A
Preferred Stock shall be mailed by first-class mail to each holder of record of
such shares at the address for such holder shown on the Corporation records, not
less than 30 nor more than 60 days prior to the Redemption Date; provided,
                                                                 --------
however, that neither the
-------

                                       19
<PAGE>

failure to mail any such notice nor any defects contained in any such notice
shall affect the validity of the proceedings for the redemption of any of the
shares to be redeemed. If less than all the shares owned by a Holder are to be
redeemed, the notice shall specify the number of shares and the certificate
numbers thereof which are to be redeemed.

          c.   Notwithstanding anything to the contrary contained in this
Section A.6, the Corporation shall not be obligated to acquire any shares on any
Redemption Date to the extent that the acquisition thereof would violate any
law, statute, rule, regulation, policy or guideline promulgated by any federal,
state, local or foreign governmental authority applicable to the Corporation,
provided that the Corporation shall use all legally permissible methods in the
reduction of capital and revaluation of assets, including appraisal, in order to
obtain a legal source of funds with which to pay the Redemption Payment and
shall acquire such shares as soon as permitted by applicable laws, statutes,
rules, regulations, policies and guidelines.

     7. Miscellaneous.
        -------------

          a.   Shares of Series A Preferred Stock are not subject to or entitled
to the benefit of a sinking fund.

          b.   Redeemed shares of Series A Preferred Stock shall not be reissued
but shall be retired. Upon the retirement of redeemed shares the capital of the
Corporation shall be reduced.

          c.   The shares of the Series A Preferred Stock shall not have any
preferences, voting powers or relative, participating, optional, preemptive or
other special rights except as set forth above in this Certificate of
Incorporation of the Corporation, as amended from time to time.

B.  SERIES B PREFERRED STOCK
    ------------------------

          The Series B Preferred Stock shall have the following designations,
powers, preferences, relative, participating, optional or other special rights,
qualifications, limitations and restrictions:

    1.    Dividends.
          ---------

          a.   Dividends are payable on the Series B Preferred Stock, when, as
and if declared by the Board of Directors.

          b.   So long as any Series B Preferred Stock is outstanding the
Corporation shall not declare or pay any dividend or make any distribution
(whether in cash, shares of capital stock of the Corporation or other property)
on shares of its

                                       20
<PAGE>

Common Stock unless prior thereto or simultaneously therewith any dividends and
distributions previously declared on the Series B Preferred Stock shall have
been paid or the Corporation shall have irrevocably deposited or set aside cash
or United States Obligations sufficient for the payment thereof.

          c.   If the Board of Directors declares dividends or other
distributions (other than on Liquidation) on the Common Stock in cash, property
or securities (including Common Stock) of the Corporation (or subscription or
other rights to purchase or acquire securities (including Common Stock) of the
Corporation), the Board of Directors shall simultaneously declare a dividend or
distribution at the same rate and in the same form on the Series B Preferred
Stock so that the Series B Preferred Stock participates equally with the Series
A Preferred Stock, the Series C Preferred Stock, the Series D Preferred Stock
and the Common Stock in such dividend or distribution. For purposes of
determining its proportional share of the dividend or distribution, each share
of the Series B Preferred Stock shall be deemed to be that number of shares of
Common Stock into which such share of Series B Preferred Stock is then
convertible, rounded to the nearest one-tenth of a share.

     2.   Rights on Liquidation, Dissolution, Winding-up.
          ----------------------------------------------

          a.   In the event of any Liquidation, whether voluntary or
involuntary, before any payment of cash or distribution of other property shall
be made to the Common Stockholders or any other class or series of stock ranking
on Liquidation junior to the Series B Preferred Stock, the Series B Preferred
Stockholders, subject to the rights of any series of preferred stock ranking
senior to the Series A Preferred Stock and the Series B Preferred Stock, shall
be entitled to receive out of the assets of the Corporation legally available
for distribution to its stockholders, $2.25 per share (as appropriately adjusted
for any combinations or divisions or similar recapitalizations affecting the
Series B Preferred Stock after the Original Series B Issuance Date (as
hereinafter defined)) (the "Series B Liquidation Preference"), whether from
capital, surplus or earnings, plus an amount equal to any declared but unpaid
dividends thereon. Upon the occurrence of a Liquidation, the Series B Preferred
Stock shall rank pari passu with the Series A Preferred Stock, the Series C
                 ---- -----
Preferred Stock, the Series D Preferred Stock and any other series of
preferred stock hereinafter created which ranks pari passu with the Series A
                                                ---- -----
Preferred Stock (the "Pari Passu Preferred Stock").
                      ---- -----

          b.   If, upon any Liquidation, the assets of the Corporation available
for distribution to its stockholders shall be insufficient to pay the Series A
Preferred Stockholders, the Series B Preferred Stockholders, the Series C
Preferred Stockholders, the Series D Preferred Stockholders and the holders of
Pari Passu Preferred Stock the full amounts to which they shall be entitled, the
---- -----
Series A Preferred Stockholders, the Series B Preferred Stockholders, the Series
C Preferred Stockholders, the Series D Preferred Stockholders and the holders of
Pari Passu Preferred Stock shall share ratably in any
---- -----

                                       21
<PAGE>

distribution of assets in proportion to the amounts payable to them if all
amounts payable with respect to such shares on Liquidation were paid in full.

          c.   In the event of any Liquidation, so long as the Series A
Preferred Stockholders are entitled to distributions pursuant to Section A.2(c)
and such distributions have been paid in full, and after payment shall have been
made to the Series A Preferred Stockholders, the Series B Preferred
Stockholders, the Series C Preferred Stockholders, the Series D Preferred
Stockholders and the holders of Pari Passu Preferred Stock of the full amount to
                                ---- -----
which they shall be entitled pursuant to Section B.2(a), with respect to each
other class or series of capital stock (other than Common Stock) ranking on
Liquidation junior to the Series A Preferred Stock, the Series B Preferred
Stock, the Series C Preferred Stock, the Series D Preferred Stockholders and the
Pari Passu Preferred Stock (in descending order of seniority), the Series A
---- -----
Preferred Stockholders, the Series B Preferred Stockholders, the Series C
Preferred Stockholders, the Series D Preferred Stockholders and the holders of
Pari Passu Preferred Stock, as a class, shall be entitled to receive an amount
---- -----
equal (and in like kind) to the aggregate preferential amount fixed for each
such junior class or series of capital stock, which amount shall be distributed
among the Series A Preferred Stockholders, the Series B Preferred Stockholders,
the Series C Preferred Stockholders, the Series D Preferred Stockholders and the
holders of Pari Passu Preferred Stock in an equal amount per share of the
           ---- -----
Series A Preferred Stock, the Series B Preferred Stock, the Series C Preferred
Stock, the Series D Preferred Stockholders and the Pari Passu Preferred Stock
                                                   ---- -----
then outstanding. If, upon any Liquidation, the assets of the Corporation
available for distribution to its stockholders shall be insufficient to pay the
Series A Preferred Stockholders, the Series B Preferred Stockholders, the Series
C Preferred Stockholders, the Series D Preferred Stockholders and the holders of
Pari Passu Preferred Stock and a class or series of capital stock (other than
---- -----
the Common Stock) junior to the Series A Preferred Stock, the Series B Preferred
Stock, the Series C Preferred Stock, the Series D Preferred Stockholders and the
Pari Passu Preferred Stock the full amounts to which they shall be entitled
---- -----
pursuant to the immediately preceding sentence, the Series A Preferred
Stockholders, the Series B Preferred Stockholders, the Series C Preferred
Stockholders, the Series D Preferred Stockholders and the holders of Pari Passu
                                                                     ---- -----
Preferred Stock and such other class or series of capital stock shall share
ratably in any distribution of assets according to the respective preferential
amounts fixed for the Series A Preferred Stock, the Series B Preferred Stock,
the Series C Preferred Stock, the Series D Preferred Stockholders and the Pari
                                                                          ----
Passu Preferred Stock and such junior class or series of capital stock which
-----
would be payable in respect of the shares held by them upon such distribution if
all amounts payable on or with respect to such shares were paid in full.

          d.   In the event that after payment of the full amount to which the
Series A Preferred Stockholders, the Series B Preferred Stockholders, the Series
C Preferred Stockholders, the Series D Preferred Stockholders and the holders of
Pari Passu Preferred Stock shall be entitled as aforesaid, cash or other
---- -----
property remains, such remaining proceeds shall be distributed pro rata among
                                                               --- ----
the Series A Preferred Stock, the Series B Preferred Stock, the Series C
Preferred Stock, the Series D Preferred

                                       22
<PAGE>

Stockholders, the Pari Passu Preferred Stock and the Common Stock.  For purposes
                  ---- -----
of determining its proportional share of the cash or other property, each share
of the Series B Preferred Stock shall be deemed to be that number of shares of
Common Stock into which such share of Series B Preferred Stock is then
convertible, rounded to the nearest one-tenth of a share.

     3.   Voting.
          ------

          a.   General.  In addition to the rights otherwise provided for
               -------
herein or by law, the Series B Preferred Stockholders shall be entitled to vote,
together with the Series A Preferred Stockholders, the Series C Preferred
Stockholders, the Series D Preferred Stockholders the holders of any other class
or series entitled to vote on such matters and the Common Stockholders, as one
class on all matters submitted to a vote of stockholders, in the same manner and
with the same effect as the Series A Preferred Stockholders, the Series C
Preferred Stockholders, the Series D Preferred Stockholders and the Common
Stockholders. In any such vote, each share of Series B Preferred Stock shall
entitle the holder thereof to one vote per share for each share of Common Stock
(including fractional shares) into which each share of Series B Preferred Stock
is then convertible, rounded to the nearest one-tenth of a share.

          b.   Protective Provision.  So long as any Series B Preferred Stock is
               --------------------
outstanding, the Corporation shall not, without the written consent in lieu of a
meeting, or the affirmative vote at a meeting called for such purpose, of Series
B Preferred Stockholders of record that hold at least a majority of the
outstanding Series B Preferred Stock, voting as a separate class, amend, alter
or repeal, in any manner whatsoever, the designations, powers, preferences,
relative, participating, optional or other special rights, qualifications,
limitations and restrictions of the Series B Preferred Stock.

     4.   Conversion.
          ----------
          a.   Right to Convert.
               ----------------
               (i)  Any Series B Preferred Stockholder shall have the right, at
any time or from time to time, prior to the Closing Date of the Corporation's
first Underwritten Offering in which all of the then outstanding shares of
Series A Preferred Stock are converted in connection therewith, to convert any
or all of its shares of Series B Preferred Stock into that number of fully paid
and nonassessable shares of Common Stock for each share of Series B Preferred
Stock equal to the quotient of the Series B Liquidation Preference divided by
the Series B Preferred Conversion Price for that share (as defined in Section
B.4(d)) (as last adjusted and then in effect) rounded to one-tenth of a share.

               (ii) (A) Any Series B Preferred Stock that remains unconverted on
the Closing Date shall be automatically converted without notice and without any
action on the part of the holder thereof into shares of Common Stock on the
Closing Date in accordance with Section B.4(a)(i). After the Closing Date all
rights of

                                       23
<PAGE>

holders of shares of Series B Preferred Stock with respect to Series B Preferred
Stock, except the right to receive shares of Common Stock in accordance with
this Section B.4, shall cease and the shares of Series B Preferred Stock shall
no longer be deemed to be outstanding, whether or not the Corporation has
received the certificates representing such shares.

                    (B)  The Corporation shall promptly send by first-class
mail, postage prepaid, to each Series B Preferred Stockholder at such holder's
address appearing on the Corporation's records a copy of (i) each registration
statement filed by the Corporation under the Securities Act and each amendment
thereof and each exhibit and schedule thereto and (ii) each order of the
Securities and Exchange Commission declaring any such registration statement to
be effective.

                    (C)  Holders of Series B Preferred Stock converted into
shares of Common Stock pursuant to this Section B.4 shall be entitled to payment
of any declared but unpaid dividends payable with respect to such shares of
Series B Preferred Stock, up to and including the Series B Conversion Date (as
defined in Section B.4(b) below) or the Closing Date, as the case may be.

          b.   Mechanics of Conversion.
               -----------------------
               (i)   Any Series B Preferred Stockholder that exercises its right
to convert its shares of Series B Preferred Stock into Common Stock shall
deliver the certificate(s) for the shares to be converted ("Series B Preferred
Certificate"), duly endorsed or assigned in blank to the Corporation, during
regular business hours, at the office of the transfer agent of the Corporation,
if any, at the principal place of business of the Corporation or at such other
place as may be designated by the Corporation.

               (ii)  Each Series B Preferred Certificate shall be accompanied by
written notice stating that such holder elects to convert such shares and
stating the name or names (with address) in which the Common Certificates are to
be issued. Such conversion shall be deemed to have been effected on the date
when the aforesaid delivery is made ("Series B Conversion Date").

               (iii) As promptly as practicable thereafter, the Corporation
shall issue and deliver to or upon the written order of such holder, at the
place designated by such holder, a Common Certificate(s) for the number of full
shares of Common Stock to which such holder is entitled and a check or cash for
any fractional interest in a share of Common Stock, as provided in Section
B.4(c) below, and for any declared but unpaid dividends, payable with respect to
the converted shares of Series B Preferred Stock, up to and including the Series
B Conversion Date or the Closing Date, as the case may be.

               (iv)  The person in whose name each Common Certificate is to be
issued shall be deemed to have become a stockholder of record of Common Stock on

                                       24
<PAGE>

the applicable Series B Conversion Date or the Closing Date, as the case may be,
unless the transfer books of the Corporation are closed on that date, in which
event such holder shall be deemed to have become a stockholder of record on the
next succeeding date on which the transfer books are open; provided, that the
                                                           --------
Series B Preferred Conversion Price shall be that in effect on the Series B
Conversion Date or the Closing Date, as the case may be.

               (v)   Upon conversion of only a portion of the shares covered by
a Series B Preferred Certificate, the Corporation, at its own expense, shall
issue and deliver to or upon the written order of the holder of such Series B
Preferred Certificate, a new Series B Preferred Certificate representing the
number of unconverted shares of Series B Preferred Stock from the Series B
Preferred Certificate so surrendered.

                                       25
<PAGE>

          c.   Issuance of Common Stock on Conversion.
               --------------------------------------
               (i)  If a Series B Preferred Stockholder shall surrender more
than one Series B Preferred Certificate for conversion at any one time, the
number of such shares of Common Stock issuable upon conversion thereof shall be
computed on the basis of the aggregate number of shares of Series B Preferred
Stock so surrendered.

               (ii) No fractional shares of Common Stock shall be issued upon
conversion of shares of Series B Preferred Stock. The Corporation shall pay a
cash adjustment for such fractional interest in an amount equal to the then
Current Market Price of a share of Common Stock multiplied by such fractional
interest.

          d.   Conversion Price; Adjustment.  The Series B Preferred Conversion
               ----------------------------
Price shall initially be equal to the Series B Liquidation Preference and shall
be subject to adjustment from time to time as follows:

               (i)   If the Corporation shall at any time after the original
issuance of the first share of Series B Preferred Stock (the "Original Series B
Issuance Date") fix a record date for the subdivision or split-up of shares of
Common Stock, then, following the record date fixed for the determination of
holders of Common Stock entitled to receive such subdivision or split-up (or the
date of such subdivisions or split-up, if no record date is fixed), the Series B
Preferred Conversion Price shall be appropriately decreased so that the number
of shares of Common Stock issuable on conversion of each share of the Series B
Preferred Stock shall be increased in proportion to such increase in outstanding
shares.

               (ii)  If, at any time after the Original Series B Issuance Date,
the number of shares of Common Stock outstanding is decreased by a combination
of the outstanding shares of Common Stock, then, following the record date fixed
for such combination (or the date of such combination, if no record date is
fixed), the Series B Preferred Conversion Price shall be appropriately increased
so that the number of shares of Common Stock issuable on conversion of each
share of Series B Preferred Stock shall be decreased in proportion to such
decrease in outstanding shares.

               (iii) If, at any time after the Original Series B Issuance Date,
there shall be any Extraordinary Transaction, the Series B Preferred Conversion
Price with respect to the Series B Preferred Stock outstanding after the
Extraordinary Transaction shall be adjusted to provide that the shares of Series
B Preferred Stock outstanding immediately prior to the effectiveness of the
Extraordinary Transaction shall be convertible into the kind and number of
shares of stock or other securities or property of the Corporation or of the
corporation resulting from or surviving such Extraordinary Transaction which the
holder of the number of shares of Common Stock deliverable (immediately prior to
the effectiveness of the Extraordinary Transaction) upon conversion of such
Series B Preferred Stock would have been entitled to receive upon

                                       26
<PAGE>

such Extraordinary Transaction. The provisions of this Section B.4(d)(iii) shall
similarly apply to successive Extraordinary Transactions.


               (iv) All calculations under this Section B.4(d) shall be made to
the nearest one-tenth of a cent ($.001) or to the nearest one-tenth of a share,
as the case may be.

               (v)  In any case in which the provisions of this Section B.4(d)
shall require that an adjustment shall become effective immediately after a
record date for an event, the Corporation may defer until the occurrence of that
event (A) issuing to the holder of any share of Series B Preferred Stock
converted after such record date and before the occurrence of such event the
additional shares of capital stock issuable upon such conversion by reason of
the adjustment required by such event over and above the shares of capital stock
issuable upon such conversion before giving effect to such adjustment and (B)
paying to such holder any amount in cash in lieu of a fractional share of
capital stock pursuant to Section B.4(c) above; provided, however, that the
                                                --------  -------
Corporation shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such additional shares, in
such case, upon the occurrence of the event requiring such adjustment.

          e.   Notice of Adjustments.
               ---------------------
               (i)  Whenever the Series B Preferred Conversion Price shall be
adjusted as provided in Section B.4(d) above, the Corporation shall file, at its
principal office, at the office of the transfer agent for the Series B Preferred
Stock, if any, or at such other place as may be designated by the Corporation, a
statement, signed by its President and by its Chief Financial Officer, showing
in detail the facts requiring such adjustment and the Series B Preferred
Conversion Price that shall be in effect after such adjustment. The Corporation
shall also cause a copy of such statement to be sent, by first-class, certified
mail, return receipt requested, postage prepaid, to each Series B Preferred
Stockholder at such holder's address appearing on the Corporation's records.
Where appropriate, such copy may be given in advance and may be included as part
of a notice required to be mailed under the provisions of clause (ii) below.

               (ii) In the event the Corporation shall propose to file a
registration statement under the Securities Act for a Public Offering or to take
any action of the types described in clauses (i), (ii) or (iii) of Section
B.4(d) above, the Corporation shall give notice to each Series B Preferred
Stockholder, in the manner set forth in Section B.4(e)(i) above, which shall
specify the record date, if any, with respect to any such action and the date on
which such action is to take place. The notice shall also set forth such facts
as are reasonably necessary to indicate the effect of such action (to the extent
such effect may be known at the date of such notice) on the Series B Preferred
Conversion Price and the number, kind or class of shares or other securities or
property which shall be deliverable or purchasable upon the occurrence of such
action or deliverable upon conversion of shares of Series B Preferred Stock. In
the case of any

                                       27
<PAGE>

action which would require the fixing of a record date, such notice shall be
given at least ten (10) days prior to the date so fixed, and in case of all
other action, such notice shall be given at least fifteen (15) days prior to the
taking of such proposed action. Failure to give such notice, or any defect
therein, shall not affect the legality or validity of any such action.

          f.   Transfer Taxes.  The Corporation shall pay all documentary,
               --------------
stamp or other transactional taxes (excluding income taxes) attributable to the
issuance or delivery of shares of capital stock of the Corporation upon
conversion of any shares of Series B Preferred Stock; provided, however, that
                                                      --------  -------
the Corporation shall not be required to pay any taxes which may be payable in
respect of any transfer involved in the issuance or delivery of any certificate
for such shares in a name other than that of the holder of the shares of Series
B Preferred Stock in respect of which such shares are being issued.

          g.   Reservation of Common Stock.  The Corporation shall at all
               ---------------------------
times reserve, free from preemptive rights, out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the conversion of
the shares of Series B Preferred Stock, sufficient shares of Common Stock to
provide for the conversion of all outstanding shares of Series B Preferred
Stock.

          h.   Status of Common Stock.  All shares of Common Stock which may
               ----------------------
be issued in connection with the conversion provisions set forth herein will,
upon issuance by the Corporation, be validly issued, fully paid and
nonassessable, free from preemptive rights and free from all taxes, liens or
charges with respect thereto created or imposed by Corporation.

     5.   Miscellaneous.
          -------------
          a.   Shares of Series B Preferred Stock are not subject to or entitled
to redemption or the benefit of a sinking fund.

          b.   Converted shares of Series B Preferred Stock shall not be
reissued but shall be retired. Upon the retirement of converted shares the
capital of the Corporation shall be reduced.

          c.   The shares of the Series B Preferred Stock shall not have any
preferences, voting powers or relative, participating, optional, preemptive or
other special rights except as set forth above in this Certificate of
Incorporation of the Corporation, as amended from time to time.

                                       28
<PAGE>

C.   SERIES C PREFERRED STOCK
     ------------------------

          The Series C Preferred Stock shall have the following designations,
powers, preferences, relative, participating, optional or other special rights,
qualifications, limitations and restrictions:

     1.   Dividends.
          ---------
          a.   Dividends are payable on the Series C Preferred Stock, when, as
and if declared by the Board of Directors.

          b.   So long as any Series C Preferred Stock is outstanding the
Corporation shall not declare or pay any dividend or make any distribution
(whether in cash, shares of capital stock of the Corporation or other property)
on shares of its Common Stock unless prior thereto or simultaneously therewith
any dividends and distributions previously declared on the Series C Preferred
Stock shall have been paid or the Corporation shall have irrevocably deposited
or set aside cash or United States Obligations sufficient for the payment
thereof.

          c.   If the Board of Directors declares dividends or other
distributions (other than on Liquidation) on the Common Stock in cash, property
or securities (including Common Stock) of the Corporation (or subscription or
other rights to purchase or acquire securities (including Common Stock) of the
Corporation), the Board of Directors shall simultaneously declare a dividend or
distribution at the same rate and in the same form on the Series C Preferred
Stock so that the Series C Preferred Stock participates equally with the Series
A Preferred Stock, the Series B Preferred Stock and the Common Stock in such
dividend or distribution. For purposes of determining its proportional share of
the dividend or distribution, each share of the Series C Preferred Stock shall
be deemed to be that number of shares of Common Stock into which such share of
Series C Preferred Stock is then convertible, rounded to the nearest one-tenth
of a share.

     2.   Rights on Liquidation, Dissolution, Winding-up.
          ----------------------------------------------

          a.   In the event of any Liquidation, whether voluntary or
involuntary, before any payment of cash or distribution of other property shall
be made to the Common Stockholders or any other class or series of stock ranking
on Liquidation junior to the Series C Preferred Stock, the Series C Preferred
Stockholders, subject to the rights of any series of preferred stock ranking
senior to the Series A Preferred Stock and the Series C Preferred Stock, shall
be entitled to receive out of the assets of the Corporation legally available
for distribution to its stockholders, $2.50 per share (as appropriately adjusted
for any combinations or divisions or similar recapitalizations affecting the
Series C Preferred Stock after the Original Series C Issuance Date (as
hereinafter defined)) (the "Series C Liquidation Preference"), whether from
capital, surplus or earnings, plus an amount equal to any declared but unpaid
dividends thereon. Upon the occurrence of a

                                       29
<PAGE>

Liquidation, the Series C Preferred Stock shall rank pari passu with the Series
                                                     ---- -----
A Preferred Stock, the Series B Preferred Stock and the Pari Passu Preferred
                                                        ---- -----
Stock.

          b.   If, upon any Liquidation, the assets of the Corporation available
for distribution to its stockholders shall be insufficient to pay the Series A
Preferred Stockholders, the Series B Preferred Stockholders, the Series C
Preferred Stockholders and the holders of Pari Passu Preferred Stock the full
                                          ---- -----
amounts to which they shall be entitled, the Series A Preferred Stockholders,
the Series B Preferred Stockholders, the Series C Preferred Stockholders and the
holders of Pari Passu Preferred Stock shall share ratably in any distribution of
           ---- -----
assets in proportion to the amounts payable to them if all amounts payable with
respect to such shares on Liquidation were paid in full.

          c.   In the event of any Liquidation, so long as the Series A
Preferred Stockholders are entitled to distributions pursuant to Section A.2(c)
and such distributions have been paid in full, and after payment shall have been
made to the Series A Preferred Stockholders, the Series B Preferred
Stockholders, the Series C Preferred Stockholders and the holders of Pari Passu
                                                                     ---- -----
Preferred Stock of the full amount to which they shall be entitled pursuant to
Section C.2(a), with respect to each other class or series of capital stock
(other than Common Stock) ranking on Liquidation junior to the Series A
Preferred Stock, the Series B Preferred Stock, the Series C Preferred Stock and
the Pari Passu Preferred Stock (in descending order of seniority), the Series
    ---- -----
A Preferred Stockholders, the Series B Preferred Stockholders, the Series C
Preferred Stockholders and the holders of Pari Passu Preferred Stock, as a
                                          ---- -----
class, shall be entitled to receive an amount equal (and in like kind) to the
aggregate preferential amount fixed for each such junior class or series of
capital stock, which amount shall be distributed among the Series A Preferred
Stockholders, the Series B Preferred Stockholders, the Series C Preferred
Stockholders and the holders of Pari Passu Preferred Stock in an equal amount
                                ---- -----
per share of the Series A Preferred Stock, the Series B Preferred Stock, the
Series C Preferred Stock and the Pari Passu Preferred Stock then outstanding.
                                 ---- -----
If, upon any Liquidation, the assets of the Corporation available for
distribution to its stockholders shall be insufficient to pay the Series A
Preferred Stockholders, the Series B Preferred Stockholders, the Series C
Preferred Stockholders and the holders of Pari Passu Preferred Stock and  a
                                          ---- -----
class or series of capital stock (other than the Common Stock) junior to the
Series A Preferred Stock, the Series B Preferred Stock, the Series C Preferred
Stock and the Pari Passu Preferred Stock the full amounts to which they shall be
              ---- -----
entitled pursuant to the immediately preceding sentence, the Series A Preferred
Stockholders, the Series B Preferred Stockholders, the Series C Preferred
Stockholders and the holders of Pari Passu Preferred Stock and such other class
                                ---- -----
or series of capital stock shall share ratably in any distribution of assets
according to the respective preferential amounts fixed for the Series A
Preferred Stock, the Series B Preferred Stock, the Series C Preferred Stock and
the Pari Passu Preferred Stock and such junior class or series of capital stock
    ---- -----
which would be payable in respect of the shares held by them upon such
distribution if all amounts payable on or with respect to such shares were paid
in full.

                                       30
<PAGE>

          d.  In the event that after payment of the full amount to which the
Series A Preferred Stockholders, the Series B Preferred Stockholders, the Series
C Preferred Stockholders and the holders of Pari Passu Preferred Stock shall be
                                            ---- -----
entitled as aforesaid, cash or other property remains, such remaining proceeds
shall be distributed pro rata among the Series A Preferred Stock, the Series B
Preferred Stock, the Series C Preferred Stock, the Pari Passu Preferred Stock
                                                   ---- -----
and the Common Stock.  For purposes of determining its proportional share of the
cash or other property, each share of the Series C Preferred Stock shall be
deemed to be that number of shares of Common Stock into which such share of
Series C Preferred Stock is then convertible, rounded to the nearest one-tenth
of a share.

     3.   Voting.
          ------

          a.  General.  In addition to the rights otherwise provided for herein
              -------
or by law, the Series C Preferred Stockholders shall be entitled to vote,
together with the Series A Preferred Stockholders, the Series B Preferred
Stockholders, the holders of any other class or series entitled to vote on such
matters and the Common Stockholders, as one class on all matters submitted to a
vote of stockholders, in the same manner and with the same effect as the Series
A Preferred Stockholders, the Series B Preferred Stockholders and the Common
Stockholders. In any such vote, each share of Series C Preferred Stock shall
entitle the holder thereof to one vote per share for each share of Common Stock
(including fractional shares) into which each share of Series C Preferred Stock
is then convertible, rounded to the nearest one-tenth of a share.

          b.  Protective Provision.  So long as any Series C Preferred Stock is
              --------------------
outstanding, the Corporation shall not, without the written consent in lieu of a
meeting, or the affirmative vote at a meeting called for such purpose, of Series
C Preferred Stockholders of record that hold at least a majority of the
outstanding Series C Preferred Stock, voting as a separate class, amend, alter
or repeal, in any manner whatsoever, the designations, powers, preferences,
relative, participating, optional or other special rights, qualifications,
limitations and restrictions of the Series C Preferred Stock.

     4.   Conversion.
          ----------
          a.  Right to Convert.
              ----------------
              (i)  Any Series C Preferred Stockholder shall have the right, at
any time or from time to time, prior to the Closing Date of the Corporation's
first Underwritten Offering in which all of the then outstanding shares of
Series A Preferred Stock are converted in connection therewith, to convert any
or all of its shares of Series C Preferred Stock into that number of fully paid
and nonassessable shares of Common Stock for each share of Series C Preferred
Stock equal to the quotient of the Series C Liquidation Preference divided by
the Series C Preferred Conversion Price for that share (as defined in Section
C.4(d)) (as last adjusted and then in effect) rounded to one-tenth of a share.

                                       31
<PAGE>

              (ii)  (A) Any Series C Preferred Stock that remains unconverted on
the Closing Date shall be automatically converted without notice and without any
action on the part of the holder thereof into shares of Common Stock on the
Closing Date in accordance with Section C.4(a)(i). After the Closing Date all
rights of holders of shares of Series C Preferred Stock with respect to Series C
Preferred Stock, except the right to receive shares of Common Stock in
accordance with this Section C.4, shall cease and the shares of Series C
Preferred Stock shall no longer be deemed to be outstanding, whether or not the
Corporation has received the certificates representing such shares.

                    (B) The Corporation shall promptly send by first-class mail,
postage prepaid, to each Series C Preferred Stockholder at such holder's address
appearing on the Corporation's records a copy of (i) each registration statement
filed by the Corporation under the Securities Act and each amendment thereof and
each exhibit and schedule thereto and (ii) each order of the Securities and
Exchange Commission declaring any such registration statement to be effective.

                    (C) Holders of Series C Preferred Stock converted into
shares of Common Stock pursuant to this Section C.4 shall be entitled to payment
of any declared but unpaid dividends payable with respect to such shares of
Series C Preferred Stock, up to and including the Series C Conversion Date (as
defined in Section C.4(b) below) or the Closing Date, as the case may be.

     b.  Mechanics of Conversion.
         -----------------------
              (i)   Any Series C Preferred Stockholder that exercises its right
to convert its shares of Series C Preferred Stock into Common Stock shall
deliver the certificate(s) for the shares to be converted ("Series C Preferred
Certificate"), duly endorsed or assigned in blank to the Corporation, during
regular business hours, at the office of the transfer agent of the Corporation,
if any, at the principal place of business of the Corporation or at such other
place as may be designated by the Corporation.

              (ii)  Each Series C Preferred Certificate shall be accompanied by
written notice stating that such holder elects to convert such shares and
stating the name or names (with address) in which the Common Certificates are to
be issued. Such conversion shall be deemed to have been effected on the date
when the aforesaid delivery is made ("Series C Conversion Date").

              (iii) As promptly as practicable thereafter, the Corporation shall
issue and deliver to or upon the written order of such holder, at the place
designated by such holder, a Common Certificate(s) for the number of full shares
of Common Stock to which such holder is entitled and a check or cash for any
fractional interest in a share of Common Stock, as provided in Section C.4(c)
below, and for any declared but unpaid

                                       32
<PAGE>

dividends, payable with respect to the converted shares of Series C Preferred
Stock, up to and including the Series C Conversion Date or the Closing Date, as
the case may be.

              (iv)  The person in whose name each Common Certificate is to be
issued shall be deemed to have become a stockholder of record of Common Stock on
the Series C Conversion Date or the Closing Date, as the case may be, unless the
transfer books of the Corporation are closed on that date, in which event such
holder shall be deemed to have become a stockholder of record on the next
succeeding date on which the transfer books are open; provided, that the Series
                                                      --------
C Preferred Conversion Price shall be that in effect on the Series C Conversion
Date or the Closing Date, as the case may be.

              (v)   Upon conversion of only a portion of the shares covered by a
Series C Preferred Certificate, the Corporation, at its own expense, shall issue
and deliver to or upon the written order of the holder of such Series C
Preferred Certificate, a new Series C Preferred Certificate representing the
number of unconverted shares of Series C Preferred Stock from the Series C
Preferred Certificate so surrendered.

       c.  Issuance of Common Stock on Conversion.
           --------------------------------------
              (i)   If a Series C Preferred Stockholder shall surrender more
than one Series C referred Certificate for conversion at any one time, the
number of such shares of Common Stock issuable upon conversion thereof shall be
computed on the basis of the aggregate number of shares of Series C Preferred
Stock so surrendered.

              (ii)  No fractional shares of Common Stock shall be issued upon
conversion of shares of Series C Preferred Stock. The Corporation shall pay a
cash adjustment for such fractional interest in an amount equal to the then
Current Market Price of a share of Common Stock multiplied by such fractional
interest.

       d.  Conversion Price; Adjustment.  The Series C Preferred Conversion
           ----------------------------
Price shall initially be equal to the Series C Liquidation Preference and shall
be subject to adjustment from time to time as follows:

              (i)   If the Corporation shall at any time or from time to time
after the date of original issuance of the first share of the Series C Preferred
Stock (the "Original Series C Issuance Date") issue any shares of Additional
Stock, without consideration or for a consideration per share of Common Stock or
underlying Common Stock, as the case may be, less than the Series C Preferred
Conversion Price in effect for such Series C Preferred Stock immediately prior
to such issue, the Series C Preferred Conversion Price in effect for the Series
C Preferred Stock immediately prior to each such issue shall be adjusted to a
price for the Series C Preferred Stock determined by multiplying the Series C
Preferred Conversion Price by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding immediately prior to

                                       33
<PAGE>

such issue plus the number of shares of Common Stock which the aggregate
consideration received by the Corporation for all such Additional Stock so
issued would purchase at such Series C Preferred Conversion Price in effect
immediately prior to the issuance of such Additional Stock, and the denominator
of which shall be the number of shares of Common Stock outstanding immediately
prior to such issue plus the number of shares of such Additional Stock; provided
that, for the purpose of this clause (i), all shares of Common Stock (except as
otherwise provided in this clause (i)) issuable upon conversion of all
outstanding shares of Series C Preferred Stock shall be deemed to be
outstanding, and immediately after any shares of Additional Stock are deemed to
be issued pursuant to paragraph (C) of this clause (i), such shares of
Additional Stock shall be deemed to be outstanding. For the purposes of any
adjustment of the Series C Preferred Conversion Price pursuant to this clause
(i), the following provisions shall be applicable:

                    (A)  In the case of the issuance of Common Stock in whole or
in part for cash, the consideration shall be deemed to be the amount of cash
paid therefor, plus the value of any property other than cash received by the
Corporation as provided in paragraph (B) of this clause (i), less any discounts,
commissions or other expenses allowed, paid or incurred by the Corporation for
any underwriting or otherwise in connection with the issuance and sale thereof.

                    (B)  In the case of the issuance of Common Stock for
consideration in whole or in part in property or consideration other than cash,
the value of such property or consideration other than cash shall be deemed to
be the fair market value thereof as determined in good faith by the Board of
Directors of the Corporation, irrespective of any accounting treatment;
provided, however, that such fair market value shall not exceed the aggregate
--------  -------
Current Market Price of the shares of Common Stock being issued, less any cash
consideration paid for such shares.

                    (C)  In the case of the issuance of (I) options to purchase
or rights to subscribe for Common Stock, (II) securities convertible into or
exchangeable for Common Stock or (III) options to purchase or rights to
subscribe for such convertible or exchangeable securities:

                              (1)  the aggregate maximum number of shares of
Common Stock deliverable upon exercise of such options to purchase, or rights to
subscribe for Common Stock shall be deemed to have been issued at the time such
options or rights were issued and for a consideration equal to the consideration
(determined in the manner provided in paragraphs (A) and (B) above), if any,
received by the Corporation upon the issuance of such options or rights plus the
minimum purchase price provided in such options or rights for the Common Stock
covered thereby;

                                       34
<PAGE>

                              (2)  the aggregate maximum number of shares of
Common Stock deliverable upon conversion of, or in exchange for, any such
convertible or exchangeable securities or upon the exercise of options to
purchase, or rights to subscribe for, such convertible or exchangeable
securities and subsequent conversion or exchange thereof shall be deemed to have
been issued at the time such securities were issued or such options or rights
were issued and for a consideration equal to the consideration received by the
Corporation for any such securities and related options or rights (excluding any
cash received on account of accrued interest or accrued dividends), plus the
additional consideration, if any, to be received by the Corporation upon the
conversion or exchange of such securities or the exercise of any related options
or rights (determined in the manner provided in paragraphs (A) and (B) above);
and

                              (3)  if there is any decrease in the conversion or
exercise price of, or any increase in the number of shares to be received upon
exercise, conversion or exchange of any such options, rights or convertible or
exchangeable securities (other than a change resulting from the antidilution
provisions thereof), the Series C Preferred Conversion Price shall be
automatically lowered to reflect such change .

               (ii)  In the event that the price per share to the public of the
Common Stock (the "Series C Per Share Price") in the Corporation's first firm
commitment offering by one or more underwriters of authorized but unissued
shares of Common Stock registered under the Securities Act is less than $2.50
per share (as adjusted for stock splits, stock combinations, stock dividends and
similar transactions), the Series C Preferred Conversion Price for the Series C
Preferred Stock shall be adjusted on the Closing Date to the Series C Per Share
Price (and thereafter subject to further adjustment pursuant to Section
C.4(d)(i) above).

               (iii) If the Corporation shall at any time after the Original
Series C Issuance Date fix a record date for the subdivision or split-up of
shares of Common Stock, then, following the record date fixed for the
determination of holders of Common Stock entitled to receive such subdivision or
split-up (or the date of such subdivisions or split-up, if no record date is
fixed), the Series C Preferred Conversion Price shall be appropriately decreased
so that the number of shares of Common Stock issuable on conversion of each
share of the Series C Preferred Stock shall be increased in proportion to such
increase in outstanding shares.

               (iv)  If, at any time after the Original Series C Issuance Date,
the number of shares of Common Stock outstanding is decreased by a combination
of the outstanding shares of Common Stock, then, following the record date fixed
for such combination (or the date of such combination, if no record date is
fixed), the Series C Preferred Conversion Price shall be appropriately increased
so that the number of shares of Common Stock issuable on conversion of each
share of Series C Preferred Stock shall be decreased in proportion to such
decrease in outstanding shares.

                                       35
<PAGE>

               (v)   If, at any time after the Original Series C Issuance Date,
there shall be any Extraordinary Transaction, the Series C Preferred Conversion
Price with respect to the Series C Preferred Stock outstanding after the
Extraordinary Transaction shall be adjusted to provide that the shares of Series
C Preferred Stock outstanding immediately prior to the effectiveness of the
Extraordinary Transaction shall be convertible into the kind and number of
shares of stock or other securities or property of the Corporation or of the
corporation resulting from or surviving such Extraordinary Transaction which the
holder of the number of shares of Common Stock deliverable (immediately prior to
the effectiveness of the Extraordinary Transaction) upon conversion of such
Series C Preferred Stock would have been entitled to receive upon such
Extraordinary Transaction. The provisions of this Section C.4(d)(v) shall
similarly apply to successive Extraordinary Transactions.

               (vi)  All calculations under this Section C.4(d) shall be made to
the nearest one-tenth of a cent ($.001) or to the nearest one-tenth of a share,
as the case may be.

               (vii) In any case in which the provisions of this Section C.4(d)
shall require an adjustment shall become effective immediately after a record
date for an the Corporation may defer until the occurrence of that event (A)
issuing to the holder of any share of Series C Preferred Stock converted after
such record date and before the occurrence of such event the additional shares
of capital stock issuable upon such conversion by reason of the adjustment
required by such event over and above the shares of capital stock issuable upon
such conversion before giving effect to such adjustment and (B) paying to such
holder any amount in cash in lieu of a fractional share of capital stock
pursuant to Section C.4(c) above; provided, however, that the Corporation shall
deliver to such holder a due bill or other appropriate instrument evidencing
such holder's right to receive such additional shares, in such case, upon the
occurrence of the event requiring such adjustment.

          e.   Notice of Adjustments.
               ---------------------
               (i)  Whenever the Series C Preferred Conversion Price shall be
adjusted as provided in Section C.4(d) above, the Corporation shall file, at its
principal office, at the office of the transfer agent for the Series C Preferred
Stock, if any, or at such other place as may be designated by the Corporation, a
statement, signed by its President and by its Chief Financial Officer, showing
in detail the facts requiring such adjustment and the Series C Preferred
Conversion Price that shall be in effect after such adjustment. The Corporation
shall also cause a copy of such statement to be sent, by first-class, certified
mail, return receipt requested, postage prepaid, to each Series C Preferred
Stockholder at such holder's address appearing on the Corporation's records.
Where appropriate, such copy may be given in advance and may be included as part
of a notice required to be mailed under the provisions of clause (ii) below.

                                       36
<PAGE>

               (ii) In the event the Corporation shall propose to file a
registration statement under the Securities Act for a Public Offering or to take
any action of the types described in clauses (i), (iii), (iv) or (v) of Section
C.4(d) above, the Corporation shall give notice to each Series C Preferred
Stockholder, in the manner set forth in Section C.4(e)(i) above, which shall
specify the record date, if any, with respect to any such action and the date on
which such action is to take place. The notice shall also set forth such facts
as are reasonably necessary to indicate the effect of such action (to the extent
such effect may be known at the date of such notice) on the Series C Preferred
Conversion Price and the number, kind or class of shares or other securities or
property which shall be deliverable or purchasable upon the occurrence of such
action or deliverable upon conversion of shares of Series C Preferred Stock. In
the case of any action which would require the fixing of a record date, such
notice shall be given at least ten (10) days prior to the date so fixed, and in
case of all other action, such notice shall be given at least fifteen (15) days
prior to the taking of such proposed action. Failure to give such notice, or any
defect therein, shall not affect the legality or validity of any such action.

          f.   Transfer Taxes.  The Corporation shall pay all documentary,
               --------------
stamp or other transactional taxes (excluding income taxes) attributable to the
issuance or delivery of shares of capital stock of the Corporation upon
conversion of any shares of Series C Preferred Stock; provided, however, that
                                                      --------  -------
the Corporation shall not be required to pay any taxes which may be payable in
respect of any transfer involved in the issuance or delivery of any certificate
for such shares in a name other than that of the holder of the shares of Series
C Preferred Stock in respect of which such shares are being issued.

           g.  Reservation of Common Stock.  The Corporation shall at all times
               ---------------------------
reserve, free from preemptive rights, out of its authorized but unissued shares
of Common Stock, solely for the purpose of effecting the conversion of the
shares of Series C Preferred Stock, sufficient shares of Common Stock to provide
for the conversion of all outstanding shares of Series C Preferred Stock.

           h.  Status of Common Stock.  All shares of Common Stock which may be
               ----------------------
issued in connection with the conversion provisions set forth herein will, upon
issuance by the Corporation, be validly issued, fully paid and nonassessable,
free from preemptive rights and free from all taxes, liens or charges with
respect thereto created or imposed by Corporation.

     5.  Miscellaneous.
         -------------
            a.  Shares of Series C Preferred Stock are not subject to or
entitled to redemption or the benefit of a sinking fund.

                                       37
<PAGE>

          b.  Converted shares of Series C Preferred Stock shall not be reissued
but shall be retired. Upon the retirement of converted shares the capital of the
Corporation shall be reduced.

          c.  The shares of the Series C Preferred Stock shall not have any
preferences, voting powers or relative, participating, optional, preemptive or
other special rights except as set forth above in this Certificate of
Incorporation of the Corporation, as amended from time to time.

D.  SERIES D PREFERRED STOCK
    ------------------------

          The Series D Preferred Stock shall have the following designations,
powers, preferences, relative, participating, optional or other special rights,
qualifications, limitations and restrictions:

     1.  Dividends.
         ---------
         a.  Dividends are payable on the Series D Preferred Stock, when, as and
if declared by the Board of Directors.

         b.  So long as any Series D Preferred Stock is outstanding the
Corporation shall not declare or pay any dividend or make any distribution
(whether in cash, shares of capital stock of the Corporation or other property)
on shares of its Common Stock unless prior thereto or simultaneously therewith
any dividends and distributions previously declared on the Series D Preferred
Stock shall have been paid or the Corporation shall have irrevocably deposited
or set aside cash or United States Obligations sufficient for the payment
thereof.

         c.  If the Board of Directors declares dividends or other distributions
(other than on Liquidation) on the Common Stock in cash, property or securities
(including Common Stock) of the Corporation (or subscription or other rights to
purchase or acquire securities (including Common Stock) of the Corporation), the
Board of Directors shall simultaneously declare a dividend or distribution at
the same rate and in the same form on the Series D Preferred Stock so that the
Series D Preferred Stock participates equally with the Series A Preferred Stock,
the Series B Preferred Stock, the Series C Preferred Stock and the Common Stock
in such dividend or distribution. For purposes of determining its proportional
share of the dividend or distribution, each share of the Series D Preferred
Stock shall be deemed to be that number of shares of Common Stock into which
such share of Series D Preferred Stock is then convertible, rounded to the
nearest one-tenth of a share.

                                       38
<PAGE>

     2.   Rights on Liquidation, Dissolution, Winding-up.
          ----------------------------------------------

          a.  In the event of any Liquidation, whether voluntary or involuntary,
before any payment of cash or distribution of other property shall be made to
the Common Stockholders or any other class or series of stock ranking on
Liquidation junior to the Series D Preferred Stock, the Series D Preferred
Stockholders, subject to the rights of any series of preferred stock ranking
senior to the Series A Preferred Stock and the Series D Preferred Stock, shall
be entitled to receive out of the assets of the Corporation legally available
for distribution to its stockholders, $8.00 per share (as appropriately adjusted
for any combinations or divisions or similar recapitalizations affecting the
Series D Preferred Stock after the Original Series D Issuance Date (as
hereinafter defined)) (the "Series D Liquidation Preference"), whether from
capital, surplus or earnings, plus an amount equal to any declared but unpaid
dividends thereon. Upon the occurrence of a Liquidation, the Series D Preferred
Stock shall rank pari passu with the Series A Preferred Stock, the Series B
                 ---- -----
Preferred Stock of the Series C Preferred Stock and the Pari Passu Preferred
                                                        ---- -----
Stock.

          b.  If, upon any Liquidation, the assets of the Corporation available
for distribution to its stockholders shall be insufficient to pay the Series A
Preferred Stockholders, the Series B Preferred Stockholders, the Series C
Preferred Stockholders, the Series D Preferred Stockholders and the holders of
Pari Passu Preferred Stock the full amounts to which they shall be entitled, the
---- -----
Series A Preferred Stockholders, the Series B Preferred Stockholders, the Series
C Preferred Stockholders, the Series D Preferred Stockholders and the holders of
Pari Passu Preferred Stock shall share ratably in any distribution of assets in
---- -----
proportion to the amounts payable to them if all amounts payable with respect to
such shares on Liquidation were paid in full.

          c.  In the event of any Liquidation, so long as the Series A Preferred
Stockholders are entitled to distributions pursuant to Section A.2(c) and such
distributions have been paid in full, and after payment shall have been made to
the Series A Preferred Stockholders, the Series B Preferred Stockholders, the
Series C Preferred Stockholders, the Series D Preferred Stockholders and the
holders of Pari Passu Preferred Stock of the full amount to which they shall be
           ---- -----
entitled pursuant to Section D.2(a), with respect to each other class or series
of capital stock (other than Common Stock) ranking on Liquidation junior to the
Series A Preferred Stock, the Series B Preferred Stock, the Series C Preferred
Stock, the Series D Preferred Stock and the Pari Passu Preferred Stock (in
                                            ---- -----
descending order of seniority), the Series A Preferred Stockholders, the Series
B Preferred Stockholders, the Series C Preferred Stockholders, the Series D
Preferred Stockholders and the holders of Pari Passu Preferred Stock, as a
                                          ---- -----
class, shall be entitled to receive an amount equal (and in like kind) to the
aggregate preferential amount fixed for each such junior class or series of
capital stock, which amount shall be distributed among the Series A Preferred
Stockholders, the Series B Preferred Stockholders, the Series C Preferred
Stockholders, the Series D Preferred Stockholders and the holders of Pari Passu
                                                                     ---- -----
Preferred Stock in an equal amount per share of the Series A Preferred Stock,
the Series B Preferred Stock, the Series C Preferred Stock, the Series D
Preferred Stockholders and

                                       39
<PAGE>

the Pari Passu Preferred Stock then outstanding.  If, upon any Liquidation, the
    ---- -----
assets of the Corporation available for distribution to its stockholders shall
be insufficient to pay the Series A Preferred Stockholders, the Series B
Preferred Stockholders, the Series C Preferred Stockholders, the Series D
Preferred Stockholders and the holders of Pari Passu Preferred Stock and a
                                          ---- -----
class or series of capital stock (other than the Common Stock) junior to the
Series A Preferred Stock, the Series B Preferred Stock, the Series C Preferred
Stock, the Series D Preferred Stockholders and the Pari Passu Preferred Stock
                                                   ---- -----
the full amounts to which they shall be entitled pursuant to the immediately
preceding sentence, the Series A Preferred Stockholders, the Series B Preferred
Stockholders, the Series C Preferred Stockholders, the Series D Preferred
Stockholders and the holders of Pari Passu Preferred Stock and such other class
                                ---- -----
or series of capital stock shall share ratably in any distribution of assets
according to the respective preferential amounts fixed for the Series A
Preferred Stock, the Series B Preferred Stock, the Series C Preferred Stock, the
Series D Preferred Stockholders and the Pari Passu Preferred Stock and such
                                        ---- -----
junior class or series of capital stock which would be payable in respect of the
shares held by them upon such distribution if all amounts payable on or with
respect to such shares were paid in full.

          d.  In the event that after payment of the full amount to which the
Series A Preferred Stockholders, the Series B Preferred Stockholders, the Series
C Preferred Stockholders, the Series D Preferred Stockholders and the holders of
Pari Passu Preferred Stock shall be entitled as aforesaid, cash or other
---- -----
property remains, such remaining proceeds shall be distributed pro rata among
the Series A Preferred Stock, the Series B Preferred Stock, the Series C
Preferred Stock, the Series D Preferred Stockholders, the Pari Passu Preferred
                                                          ---- -----
Stock and the Common Stock.  For purposes of determining its proportional share
of the cash or other property, each share of the Series D Preferred Stock shall
be deemed to be that number of shares of Common Stock into which such share of
Series D Preferred Stock is then convertible, rounded to the nearest one-tenth
of a share.

     3.   Voting.
          ------

          a.  General.  In addition to the rights otherwise provided for herein
              -------
or by law, the Series D Preferred Stockholders shall be entitled to vote,
together with the Series A Preferred Stockholders, the Series B Preferred
Stockholders, the Series C Preferred Stockholders and the holders of any other
class or series entitled to vote on such matters and the Common Stockholders, as
one class on all matters submitted to a vote of stockholders, in the same manner
and with the same effect as the Series A Preferred Stockholders, the Series B
Preferred Stockholders, the Series C Preferred Stockholders and the Common
Stockholders. In any such vote, each share of Series D Preferred Stock shall
entitle the holder thereof to one vote per share for each share of Common Stock
(including fractional shares) into which each share of Series D Preferred Stock
is then convertible, rounded to the nearest one-tenth of a share.

                                       40
<PAGE>

          b.   Protective Provision.  So long as any Series D Preferred Stock is
               --------------------
outstanding, the Corporation shall not, without the written consent in lieu of a
meeting, or the affirmative vote at a meeting called for such purpose, of Series
D Preferred Stockholders of record that hold at least a majority of the
outstanding Series D Preferred Stock, voting as a separate class, amend, alter
or repeal, in any manner whatsoever, the designations, powers, preferences,
relative, participating, optional or other special rights, qualifications,
limitations and restrictions of the Series D Preferred Stock.

     4.   Conversion.
          ----------

          a.   Right to Convert.
               ----------------
               (i)   Any Series D Preferred Stockholder shall have the right, at
any time or from time to time, prior to the Closing Date of the Corporation's
first Underwritten Offering in which all of the then outstanding shares of
Series A Preferred Stock are converted in connection therewith, to convert any
or all of its shares of Series D Preferred Stock into that number of fully paid
and nonassessable shares of Common Stock for each share of Series D Preferred
Stock equal to the quotient of the Series D Liquidation Preference divided by
the Series D Preferred Conversion Price for that share (as defined in Section
D.4(d)) (as last adjusted and then in effect) rounded to one-tenth of a share.

               (ii)  (A)  Any Series D Preferred Stock that remains unconverted
on the Closing Date shall be automatically converted without notice and without
any action on the part of the holder thereof into shares of Common Stock on the
Closing Date in accordance with Section D.4(a)(i).  After the Closing Date all
rights of holders of shares of Series D Preferred Stock with respect to Series D
Preferred Stock, except the right to receive shares of Common Stock in
accordance with this Section D.4, shall cease and the shares of Series D
Preferred Stock shall no longer be deemed to be outstanding, whether or not the
Corporation has received the certificates representing such shares.

                     (B)  The Corporation shall promptly send by first-class
mail, postage prepaid, to each Series D Preferred Stockholder at such holder's
address appearing on the Corporation's records a copy of (i) each registration
statement filed by the Corporation under the Securities Act and each amendment
thereof and each exhibit and schedule thereto and (ii) each order of the
Securities and Exchange Commission declaring any such registration statement to
be effective.

                     (C)  Holders of Series D Preferred Stock converted into
shares of Common Stock pursuant to this Section D.4 shall be entitled to payment
of any declared but unpaid dividends payable with respect to such shares of
Series D Preferred Stock, up to and including the Series D Conversion Date (as
defined in Section D.4(b) below) or the Closing Date, as the case may be.

                                       41
<PAGE>

          b.   Mechanics of Conversion.
               -----------------------
               (i)     Any Series D Preferred Stockholder that exercises its
right to convert its shares of Series D Preferred Stock into Common Stock shall
deliver the certificate(s) for the shares to be converted ("Series D Preferred
Certificate"), duly endorsed or assigned in blank to the Corporation, during
regular business hours, at the office of the transfer agent of the Corporation,
if any, at the principal place of business of the Corporation or at such other
place as may be designated by the Corporation.

               (ii)    Each Series D Preferred Certificate shall be accompanied
by written notice stating that such holder elects to convert such shares and
stating the name or names (with address) in which the Common Certificates are to
be issued. Such conversion shall be deemed to have been effected on the date
when the aforesaid delivery is made ("Series D Conversion Date").

               (iii)   As promptly as practicable thereafter, the Corporation
shall issue and deliver to or upon the written order of such holder, at the
place designated by such holder, a Common Certificate(s) for the number of full
shares of Common Stock to which such holder is entitled and a check or cash for
any fractional interest in a share of Common Stock, as provided in Section
D.4(c) below, and for any declared but unpaid dividends, payable with respect to
the converted shares of Series D Preferred Stock, up to and including the Series
D Conversion Date or the Closing Date, as the case may be.

               (iv)    The person in whose name each Common Certificate is to be
issued shall be deemed to have become a stockholder of record of Common Stock on
the Series D Conversion Date or the Closing Date, as the case may be, unless the
transfer books of the Corporation are closed on that date, in which event such
holder shall be deemed to have become a stockholder of record on the next
succeeding date on which the transfer books are open; provided, that the Series
D Preferred Conversion Price shall be that in effect on the Series D Conversion
Date or the Closing Date, as the case may be.

               (v)     Upon conversion of only a portion of the shares covered
by a Series D Preferred Certificate, the Corporation, at its own expense, shall
issue and deliver to or upon the written order of the holder of such Series D
Preferred Certificate, a new Series D Preferred Certificate representing the
number of unconverted shares of Series D Preferred Stock from the Series D
Preferred Certificate so surrendered.

          c. Issuance of Common Stock on Conversion.
             --------------------------------------
               (i)     If a Series D Preferred Stockholder shall surrender more
than one Series D Preferred Certificate for conversion at any one time, the
number of such shares of Common Stock issuable upon conversion thereof shall be
computed on the basis of the aggregate number of shares of Series D Preferred
Stock so surrendered.

                                       42
<PAGE>

               (ii)    No fractional shares of Common Stock shall be issued upon
conversion of shares of Series D Preferred Stock.  The Corporation shall pay a
cash adjustment for such fractional interest in an amount equal to the then
Current Market Price of a share of Common Stock multiplied by such fractional
interest.

          d.   Conversion Price; Adjustment.  The Series D Preferred Conversion
               ----------------------------
Price shall initially be equal to the Series D Liquidation Preference and shall
be subject to adjustment from time to time as follows:

               (i)     If the Corporation shall at any time after the date of
original issuance of the first share of Series D Preferred Stock (the "Original
Series D Issuance Date") fix a record date for the subdivision or split-up of
shares of Common Stock, then, following the record date fixed for the
determination of holders of Common Stock entitled to receive such subdivision or
split-up (or the date of such subdivisions or split-up, if no record date is
fixed), the Series D Preferred Conversion Price shall be appropriately decreased
so that the number of shares of Common Stock issuable on conversion of each
share of the Series D Preferred Stock shall be increased in proportion to such
increase in outstanding shares.

               (ii)    If, at any time after the Original Series D Issuance
Date, the number of shares of Common Stock outstanding is decreased by a
combination of the outstanding shares of Common Stock, then, following the
record date fixed for such combination (or the date of such combination, if no
record date is fixed), the Series D Preferred Conversion Price shall be
appropriately increased so that the number of shares of Common Stock issuable on
conversion of each share of Series D Preferred Stock shall be decreased in
proportion to such decrease in outstanding shares.

               (iii)   If, at any time after the Original Series D Issuance
Date, there shall be any Extraordinary Transaction, the Series D Preferred
Conversion Price with respect to the Series D Preferred Stock outstanding after
the Extraordinary Transaction shall be adjusted to provide that the shares of
Series D Preferred Stock outstanding immediately prior to the effectiveness of
the Extraordinary Transaction shall be convertible into the kind and number of
shares of stock or other securities or property of the Corporation or of the
corporation resulting from or surviving such Extraordinary Transaction which the
holder of the number of shares of Common Stock deliverable (immediately prior to
the effectiveness of the Extraordinary Transaction) upon conversion of such
Series D Preferred Stock would have been entitled to receive upon such
Extraordinary Transaction. The provisions of this Section D.4(d)(v) shall
similarly apply to successive Extraordinary Transactions.

               (iv)    All calculations under this Section D.4(d) shall be made
to the nearest one-tenth of a cent ($.001) or to the nearest one-tenth of a
share, as the case may be.

                                       43
<PAGE>

               (v)     In any case in which the provisions of this Section
D.4(d) shall require that an adjustment shall become effective immediately after
a record date for an event, the Corporation may defer until the occurrence of
that event (A) issuing to the holder of any share of Series D Preferred Stock
converted after such record date and before the occurrence of such event the
additional shares of capital stock issuable upon such conversion by reason of
the adjustment required by such event over and above the shares of capital stock
issuable upon such conversion before giving effect to such adjustment and (B)
paying to such holder any amount in cash in lieu of a fractional share of
capital stock pursuant to Section D.4(c) above; provided, however, that the
                                                --------  -------
Corporation shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such additional shares, in
such case, upon the occurrence of the event requiring such adjustment.

          e.   Notice of Adjustments.
               ---------------------
               (i)     Whenever the Series D Preferred Conversion Price shall be
adjusted as provided in Section D.4(d) above, the Corporation shall file, at its
principal office, at the office of the transfer agent for the Series D Preferred
Stock, if any, or at such other place as may be designated by the Corporation, a
statement, signed by its President and by its Chief Financial Officer, showing
in detail the facts requiring such adjustment and the Series D Preferred
Conversion Price that shall be in effect after such adjustment. The Corporation
shall also cause a copy of such statement to be sent, by first-class, certified
mail, return receipt requested, postage prepaid, to each Series D Preferred
Stockholder at such holder's address appearing on the Corporation's records.
Where appropriate, such copy may be given in advance and may be included as part
of a notice required to be mailed under the provisions of clause (ii) below.

               (ii)    In the event the Corporation shall propose to file a
registration statement under the Securities Act for a Public Offering or to take
any action of the types described in clauses (i), (ii) or (iii) of Section
D.4(d) above, the Corporation shall give notice to each Series D Preferred
Stockholder, in the manner set forth in Section D.4(e)(i) above, which shall
specify the record date, if any, with respect to any such action and the date on
which such action is to take place. The notice shall also set forth such facts
as are reasonably necessary to indicate the effect of such action (to the extent
such effect may be known at the date of such notice) on the Series D Preferred
Conversion Price and the number, kind or class of shares or other securities or
property which shall be deliverable or purchasable upon the occurrence of such
action or deliverable upon conversion of shares of Series D Preferred Stock. In
the case of any action which would require the fixing of a record date, such
notice shall be given at least ten (10) days prior to the date so fixed, and in
case of all other action, such notice shall be given at least fifteen (15) days
prior to the taking of such proposed action. Failure to give such notice, or any
defect therein, shall not affect the legality or validity of any such action.

                                       44
<PAGE>

          f.   Transfer Taxes.  The Corporation shall pay all documentary,
               --------------
stamp or other transactional taxes (excluding income taxes) attributable to the
issuance or delivery of shares of capital stock of the Corporation upon
conversion of any shares of Series D Preferred Stock; provided, however, that
                                                      --------  -------
the Corporation shall not be required to pay any taxes which may be payable in
respect of any transfer involved in the issuance or delivery of any certificate
for such shares in a name other than that of the holder of the shares of Series
D Preferred Stock in respect of which such shares are being issued.

          g.   Reservation of Common Stock.  The Corporation shall at all times
               ---------------------------
reserve, free from preemptive rights, out of its authorized but unissued shares
of Common Stock, solely for the purpose of effecting the conversion of the
shares of Series D Preferred Stock, sufficient shares of Common Stock to provide
for the conversion of all outstanding shares of Series D Preferred Stock.

          h.   Status of Common Stock.  All shares of Common Stock which may be
               ----------------------
issued in connection with the conversion provisions set forth herein will, upon
issuance by the Corporation, be validly issued, fully paid and nonassessable,
free from preemptive rights and free from all taxes, liens or charges with
respect thereto created or imposed by Corporation.

     5.   Miscellaneous.
          -------------
          a.   Shares of Series D Preferred Stock are not subject to or entitled
to redemption or the benefit of a sinking fund.

          b.   Converted shares of Series D Preferred Stock shall not be
reissued but shall be retired.  Upon the retirement of converted shares the
capital of the Corporation shall be reduced.

          c.   The shares of the Series D Preferred Stock shall not have any
preferences, voting powers or relative, participating, optional, preemptive or
other special rights except as set forth above in this Certificate of
Incorporation of the Corporation, as amended from time to time.

E.   COMMON STOCK
     ------------

     1. Voting.
        ------

          Series A Preferred Stockholders, Series B Preferred Stockholders,
Series C Preferred Stockholders, Series D Preferred Stockholders, any other
class or series of capital stock entitled to vote and Common Stockholders shall
vote together as one class on all matters submitted to a vote of stockholders,
except that Series A Preferred Stockholders are entitled, in addition, to vote
as a separate class on the matters described in Section A.4(b) and (c), and
except further that Series B Preferred Stockholders, Series C Preferred
Stockholders and Series D Preferred Stockholders are entitled, in addition,

                                       45
<PAGE>

to vote as a separate class on the matters described in Section B.3(b), Section
C.3(b) and in Section D.3(b), respectively. Each Common Stockholder shall be
entitled to one vote for each share of Common Stock held on all matters as to
which Common Stockholders shall be entitled to vote. The number of authorized
shares of Common Stock may be increased or decreased (but not below the number
of shares thereof then outstanding) by the affirmative vote of the holders of a
majority of the Common Stock, the Series A Preferred Stock, the Series B
Preferred Stock, the Series C Preferred Stock, Series D Preferred Stockholders
and any other class or series of capital stock entitled to vote, irrespective of
the provisions of Section 242(b)(2) of Title 8 of the Delaware Code.

     2.   Other Rights.
          ------------

          Subject to the foregoing, the Common Stock shall have all rights of
common stock under Title 8 of the Delaware Code, as the same shall be amended
from time to time.

                                 ARTICLE FIFTH
                                 -------------

                                   Directors
                                   ---------

          The number of directors of the Corporation shall be such number as
from time to time shall be fixed by, or in the manner provided in, the By-laws
of the Corporation.  Unless and except to the extent that the By-laws of the
Corporation otherwise require, the election of directors of the Corporation need
not be by written ballot.

                                 ARTICLE SIXTH
                                 -------------

                                    By-Laws
                                    -------

          The Board of Directors of the Corporation is expressly authorized and
empowered, in addition to the stockholders of the Corporation, to adopt, amend
and repeal the By-laws of the Corporation.

                                ARTICLE SEVENTH
                                ---------------

                         Compromises and Arrangements
                         ----------------------------

          Whenever a compromise or arrangement is proposed between the
Corporation and its creditors or any class of them and/or between the
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of the Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for the Corporation under
Section 291 of the General Corporation Law or on the application of trustees in
dissolution or of any receiver or receivers appointed for the Corporation under

                                       46
<PAGE>

Section 279 of the General Corporation Law, order a meeting of creditors or
class of creditors, and/or of the stockholders or class of stockholders of the
Corporation, as the case may be, to be summoned in such manner as such court
directs.  If a majority in number representing three-fourths in value of the
creditors or class of creditors, and/or of the stockholders or class of
stockholders of the Corporation, as the case may be, agree to any compromise or
arrangement and to any reorganization of the Corporation as a consequence of
such compromise or arrangement, then such compromise or arrangement and such
reorganization shall, if sanctioned by the court to which such application has
been made, be binding on all the creditors or class of creditors, and/or on all
of the stockholders or class of stockholders of the Corporation, as the case may
be, and also on the Corporation.

                                ARTICLE EIGHTH
                                --------------

                            Limitation of Liability
                            -----------------------

          No director of the Corporation shall be liable to the Corporation or
its stockholders for monetary damages for breach of fiduciary duty as a
director; provided, however, that nothing contained in this ARTICLE EIGHTH shall
          --------  -------
eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under section 174 of the General Corporation
Law, or (iv) for any transaction from which the director derived an improper
personal benefit.  No amendment to or repeal of this ARTICLE EIGHTH shall apply
to or have any effect on the liability or alleged liability of any director of
the Corporation for or with respect to any acts or omissions of such director
occurring prior to such amendment or repeal.

                                 ARTICLE NINTH
                                 -------------

                             Amendments and Repeal
                             ---------------------

          The Corporation reserves the right at any time, and from time to time,
to amend, alter, change or repeal any provision contained in this Certificate of
Incorporation in accordance with this Certificate of Incorporation.  All rights
conferred upon the stockholders of the Corporation are granted subject to this
reservation.

                                       47
<PAGE>


          IN WITNESS WHEREOF, said Board of Directors of 3-Dimensional
Pharmaceuticals, Inc. has caused this Eighth Restated Certificate of
Incorporation to be signed by its Chief Executive Officer, this _______ day
of ______, 2000.


                              3-DIMENSIONAL PHARMACEUTICALS, INC.


                              By:___________________________________
                                 David C. U'Prichard
                                 Chief Executive Officer

                                       48
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.4
<SEQUENCE>4
<FILENAME>0004.txt
<DESCRIPTION>FORM OF NINTH RESTATED CERTIFICATE
<TEXT>

<PAGE>

                  NINTH RESTATED CERTIFICATE OF INCORPORATION

                                      OF

                      3-DIMENSIONAL PHARMACEUTICALS, INC.

     3-DIMENSIONAL PHARMACEUTICALS, INC. (the "Corporation"), a corporation
organized and existing under and by virtue of the General Corporation Law of the
State of Delaware, does hereby certify as follows:

     1.  The name of the Corporation is 3-Dimensional Pharmaceuticals, Inc.  The
Certificate of Incorporation of the Corporation was originally filed by the
Corporation with the Secretary of State of the State of Delaware on March 11,
1993, a Certificate of Amendment to the Certificate of Incorporation was filed
by the Corporation with the Secretary of State of Delaware on September 29, 1993
and a Restated Certificate of Incorporation (the "First Restated Certificate of
Incorporation") was filed by the Corporation with the Secretary of State of
Delaware on October 13, 1993.  Certificates of Amendment to the First Restated
Certificate of Incorporation were filed with the Secretary of State of Delaware
on December 13, 1993, April 21, 1994, December 12, 1994, May 16, 1995, May 26,
1995, August 14, 1995, December 12, 1995, December 27, 1995, February 8, 1996,
June 20, 1996 and September 25, 1996.  A Second Restated Certificate of
Incorporation was filed by the Corporation with the Secretary of State of
Delaware on October 11, 1996.  A Third Restated Certificate of Incorporation was
filed by the Corporation with the Secretary of State of Delaware on March 12,
1997.  A Fourth Restated Certificate of Incorporation was filed by the
Corporation with the Secretary of State of Delaware on June 12, 1997.
Certificates of Amendment to the Fourth Restated Certificate of Incorporation
were filed with the Secretary of State of Delaware on August 6, 1997 and
November 14, 1997.  The Fifth Restated Certificate of Incorporation was filed by
the Corporation with the Secretary of State of Delaware on December 31, 1997.
Certificates of Amendment to the Fifth Restated Certificate of Incorporation
were filed on October 12, 1999 and November 18, 1999.  The Sixth Restated
Certificate of Incorporation was filed by the Corporation with the Secretary of
State of Delaware on March 31, 2000.  The Seventh Restated Certificate of
Incorporation was filed by the Corporation with the Secretary of State of
Delaware on May 17, 2000. The Eighth Restated Certificate of Incorporation was
filed by the Corporation with the Secretary of State of Delaware on _______,
2000.

     2.   This Ninth Restated Certificate of Incorporation  restates and
integrates and further amends the Eighth Restated Certificate of Incorporation
of the Corporation.  This Certificate of Incorporation was duly adopted in
accordance with the provisions of Sections 242 and 245 and was approved by
written consent of the stockholders of the Corporation given in accordance with
the provisions of Section 228 of the General Corporation Law (prompt notice of
such action having been given to those stockholders who did not consent in
writing).

     3.   This Ninth Restated Certificate of Incorporation shall not become
effective upon its filing date, but rather, shall become effective at [closing
date and time to be inserted].

     3.  The text of the Certificate of Incorporation of the Corporation is
hereby restated
<PAGE>

and amended to read in its entirety, as of the effective time, as follows:

                                       2
<PAGE>

          FIRST:  The name of the Corporation is 3-Dimensional Pharmaceuticals,
Inc.

          SECOND:  The registered office of the Corporation is to be located at
Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, in the
County of New Castle, in the State of Delaware.  The name of its registered
agent at such address is The Corporation Trust Company.

          THIRD:  The purpose of the Corporation is to engage in any lawful act
or activity for which a corporation may be organized under the General
Corporation Law of the State of Delaware.

          FOURTH:  The aggregate number of shares of all classes of capital
stock which the Corporation shall have authority to issue is fifty million
(50,000,000) shares, consisting of forty-five million (45,000,000) shares of
Common Stock, par value $.001 per share ("Common Stock"), and five million
(5,000,000) shares of Preferred Stock, par value $.001 per share ("Preferred
Stock").

   (A) Common Stock.
       ------------

          1.  General.  The voting, dividend and liquidation rights of the
              -------
holders of the Common Stock are subject to and qualified by the rights of the
holders of the Preferred Stock of any series as may be designated by the Board
of Directors upon any issuance of the Preferred Stock of any series.

          2.  Voting.  The holders of the Common Stock are entitled to one vote
              ------
for each share held at all meetings of stockholders. The number of authorized
shares of Common Stock may be increased or decreased (but not below the number
of shares thereof then outstanding) by the affirmative vote of the holders of a
majority of the stock of the Corporation entitled to vote, irrespective of the
provisions of Section 242(b)(2) of the General Corporation Law of the State of
Delaware.

          3.  Dividends.  Dividends may be declared and paid on the Common
              ---------
Stock from funds lawfully available therefor as and when determined by the Board
of Directors and subject to any preferential dividend rights of any then
outstanding Preferred Stock.

          4.  Liquidation.  Upon the dissolution or liquidation of the
              -----------
Corporation, whether voluntary or involuntary, holders of Common Stock will be
entitled to receive all assets of the Corporation available for distribution to
its stockholders, subject to any preferential rights of any then outstanding
Preferred Stock.

   (B)  Preferred Stock.
        ---------------

          Shares of Preferred Stock may be issued from time to time in one or
more series as may from time to time be determined by the Board of Directors,
each of said series to be distinctly designated in one or more certificates of
designation (each a "Certificate of Designation").  The voting powers,
preferences and relative, optional and other special rights, and the
qualifications, limitations or restrictions thereof, if any, of each such series
may differ from those of any and all other series of Preferred Stock at any time
outstanding, and the Board

                                       3
<PAGE>

of Directors is hereby expressly granted authority to fix, by resolution or
resolutions and filing of a Certificate of Designation, or alter the
designation, number, voting powers, preferences and relative, participating,
optional and other special rights, and the qualifications, limitations and
restrictions thereof, of each series, including but without limiting the
generality of the foregoing, the following:

          1.  The distinctive designation of such series and the number of
shares to constitute such series, which number (except as set forth in the
Certificate of Designation with respect to such series) may be increased or
decreased (but not below the number of shares of such series then outstanding)
from time to time by the Board of Directors;

          2.  The rights in respect of dividends, if any, on the shares of such
series, the extent of the preference or relation, if any, of such dividends to
the dividends payable on any other class or series of stock of the Corporation,
and whether such dividends shall be cumulative or accruing;

          3.  The right or obligation, if any, of the Corporation to redeem
shares of the particular series of Preferred Stock and, if redeemable, the
price, terms, conditions and manner of such redemption;

          4.  The special and relative rights and preferences, if any, and the
amount or amounts per share, which the shares of such series of Preferred Stock
shall be entitled to receive upon any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation or in the event of any merger or
consolidation of or sale of assets by the Corporation;

          5.  The right, if any, of the holders of such series of Preferred
Stock to convert the same into, or exchange the same for, shares of any other
class or series of stock of the Corporation, and the terms and conditions of
such conversion or exchange, including the price or prices or the rate or rates
of conversion or exchange and the terms of adjustment, if any;

          6.  The terms of any sinking fund or redemption or repurchase or
purchase account, if any, the obligation, if any, of the Corporation to retire,
redeem, repurchase or purchase shares of such series pursuant to such fund or
account, and the terms and conditions of such obligation;

          7.  The voting powers, if any, of the holders of such series of
Preferred Stock generally or with respect to any particular matter, which may be
less than, equal to or greater than one vote per share, and which may, without
limiting the generality of the foregoing, include the right, voting as a series
by itself or together with the holders of any other series of Preferred Stock or
all series of Preferred Stock as a class, to elect one or more directors of the
Corporation generally or under such specific circumstances and on such
conditions as shall be provided in the Certificate of Designation, including,
without limitation, in the event there shall have been a default in the payment
of dividends on or redemption of any one or more series of Preferred Stock;

          8.  Limitations, if any, on the issuance of additional shares of such
series or any shares of any other class or series of stock of the Corporation;
and

                                       4
<PAGE>

          9.  Such other preferences, powers, and special, participating,
optional, relative or other rights, and the qualifications, limitations and
restrictions thereof, as the Board of Directors shall determine.

          The number of authorized shares of Preferred Stock may be increased
but not decreased (but not below the number of shares then outstanding) by the
affirmative vote of the holders of a majority of the voting power of all of the
then outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors (the "Voting Stock"), voting together as
a single class, without a separate vote of the holders of the Preferred Stock,
or any series thereof, unless a vote of any such holders is required pursuant to
any Certificate of Designation for such series.

          FIFTH:  For the management of the business and for the conduct of the
affairs of the Corporation, and in further definition, limitation and regulation
of the powers of the Corporation, of its directors and of its stockholders or
any class thereof, as the case may be, it is further provided that:

   (A)  Number of Directors.  Subject to the rights of the holders of any
        -------------------
series of Preferred Stock to elect additional directors under specified
circumstances, the number of directors shall be fixed from time to time
exclusively by the Board of Directors pursuant to a resolution adopted by a
majority of the total number of directors which the Corporation would have if
there were no vacancies (the "Whole Board").

   (B)  Election and Term of Directors.  Elections of directors need not be by
        ------------------------------
written ballot, except as and to the extent provided in the Bylaws of the
Corporation. Stockholders of the Corporation shall not have the right to
cumulate their votes for the election of directors of the Corporation.  Subject
to the rights of the holders of any series of Preferred Stock to elect
additional directors under specified circumstances, the Board of Directors shall
be classified, with respect to the time for which the directors severally hold
office, into three classes, as nearly equal as possible in number of directors,
as determined by the Board of Directors, one class to be originally elected in
2000 for a term expiring at the annual meeting of stockholders to be held in
2001, another class to be originally elected in 2000 for a term expiring at the
annual meeting of stockholders to be held in 2002, and another class to be
originally elected in 2000 for a term expiring at the annual meeting of
stockholders to be held in 2003, with each class to hold office until its
successors is elected and qualified.  At each annual meeting of the stockholders
of the Corporation, the successors of the class of directors whose term expires
at that annual meeting of stockholders shall be elected to hold office for a
term expiring at the annual meeting of stockholders held in the third year
following the year of their election.  Notwithstanding the foregoing provisions
of this section, each director shall serve until his or her successor shall have
been duly elected and qualified or until such director's earlier death,
resignation or removal.

   (C)  Newly Created Directorships and Vacancies.  Subject to the rights of
          -----------------------------------------
any holders of any series of Preferred Stock to elect additional directors under
specified circumstances, and unless the Board of Directors otherwise determines,
newly created directorships resulting from any increase in the authorized number
of directors or any vacancies of the Board of Directors resulting from death,
resignation, retirement, disqualification, removal from office or other causes
shall be filled only by a majority vote of the directors then in office, though
less than a

                                       5
<PAGE>

and directors so chosen shall hold office for a term for the remainder of the
full term of the class of directors in which the vacancy occurred or in which
the new directorship was created and until such director's successor shall have
been duly elected and qualified. No decrease in the numbers of authorized
directors constituting the entire Board of Directors shall shorten the term of
any incumbent director.

     (D)  Removal of Directors.  Subject to the rights of holders of any series
          --------------------
of Preferred Stock to elect additional directors under specified circumstances,
any director, or the entire Board of Directors, may be removed from office at
any time, but only for cause.

     (E)  Stockholder Nomination of Director Candidates and Introduction of
          -----------------------------------------------------------------
Business.  Advance notice of stockholder nominations for the election of
--------
directors and of business to be brought by stockholders before any meeting of
the stockholders of the Corporation shall be given in the manner provided in the
Bylaws of the Corporation.

     (F)  No Action Without Annual or Special Meeting.  Subject to the rights of
          -------------------------------------------
the holders of any series of Preferred Stock with respect to such series, (A)
any action required or permitted by the General Corporation Law of the State of
Delaware to be taken by the stockholders of the Corporation must be effected at
an annual or special meeting of the stockholders and may not be effected by any
consent in writing in lieu of a meeting by such stockholders; and (B) special
meetings of the stockholders may be called only by the Chairman of the Board or
by a majority of the Whole Board.

     (G)  Alteration, Amendment or Repeal.  Notwithstanding any other provisions
          -------------------------------
of this Certificate of Incorporation or any provision of law which might
otherwise permit a lesser vote or no vote, but in addition to any affirmative
vote of the holders of any particular class or series of the capital stock of
the Corporation required by law, this Certificate of Incorporation or any
Certificate of Designation for any series of Preferred Stock, the affirmative
vote of the holders of at least 80 percent of the voting power of all of the
then-outstanding shares of the Voting Stock of the Corporation, voting together
as a single class, shall be required in order for the stockholders to alter,
amend or repeal this Article FIFTH.

          SIXTH:  In furtherance and not in limitation of the powers conferred
by law, the Board of Directors of the Corporation is expressly authorized and
empowered to make, alter, amend and repeal the Bylaws of the Corporation,
subject to the power of the holders of the capital stock of the Corporation to
make, alter, amend or repeal the Bylaws; provided, however, that,
                                         -----------------
notwithstanding any other provisions of this Certificate of Incorporation, the
Bylaws or any provision of law which might otherwise permit a lesser vote or no
vote, but in addition to any affirmative vote of the holders of any particular
class or series of the capital stock of the Corporation required by law, this
Certificate of Incorporation, any Certificate of Designation for any series of
Preferred Stock, or the Bylaws, the affirmative vote of the holders of at least
80 percent of the voting power of all of the then-outstanding shares of the
Voting Stock of the Corporation, voting together as a single class, shall be
required to alter, amend or repeal this ARTICLE SIXTH or in order for the
stockholders to alter, amend or repeal any provision of the Bylaws of the
Corporation or to adopt any additional bylaws.

                                       6
<PAGE>

          SEVENTH:  A director of the Corporation shall not be personally liable
to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders; (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (iii) under Section 174 of the General Corporation Law
of the State of Delaware, or (iv) for any transaction from which the director
derived an improper personal benefit.  If the General Corporation Law of the
State of Delaware is amended to authorize corporate action further eliminating
or limiting the liability of directors, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent permitted by
the General Corporation Law of the State of Delaware, as so amended.  Any
amendment, alteration, change or repeal of this Article SEVENTH by the
stockholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the time of such repeal
or modification.

     EIGHTH:  (A)  Right to Indemnification.  The Corporation shall indemnify
                   ------------------------
and hold harmless, to the fullest extent permitted by applicable law as it
presently exists or may hereafter be amended, any person (an "Indemnitee") who
was or is made or is threatened to be made a party or is otherwise involved in
any action, suit or proceeding, whether civil, criminal, administrative or
investigative (a "proceeding"), by reason of the fact that he, or a person for
whom he is the legal representative, is or was a director or officer of the
Corporation or, while a director or officer of the Corporation, is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or nonprofit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses (including
attorneys' fees) reasonably incurred by such Indemnitee.  Notwithstanding the
preceding sentence, except as otherwise provided in Section (C) of this Article
EIGHTH, the Corporation shall be required to indemnify an Indemnitee in
connection with a proceeding (or part thereof) commenced by such Indemnitee only
if the commencement of such proceeding (or part thereof) by the Indemnitee was
authorized by the Board of Directors of the Corporation.

     (B)  Prepayment of Expenses.  The Corporation shall pay the expenses
          ----------------------
(including attorneys' fees) incurred by an Indemnitee in defending any
proceeding in advance of its final disposition, provided, however, that, to the
                                                --------  -------
extent required by law, such payment of expenses in advance of the final
disposition of the proceeding shall be made only upon receipt of an undertaking
by the Indemnitee to repay all amounts advanced if it should be ultimately
determined that the Indemnitee is not entitled to be indemnified under this
Article EIGHTH or otherwise.

     (C)  Claims.  If a claim for indemnification or payment of expenses under
          ------
this Article EIGHTH is not paid in full within sixty days after a written claim
therefor by the Indemnitee has been received by the Corporation, the Indemnitee
may file suit to recover the unpaid amount of such claim and, if successful in
whole or in part, shall be entitled to be paid the expense of prosecuting such
claim.  In any such action the Corporation shall have the burden of proving that
the Indemnitee is not entitled to the requested indemnification or payment of
expenses under applicable law.

                                       7
<PAGE>

     (D)  Nonexclusivity of Rights.  The rights conferred on any Indemnitee by
          ------------------------
this Article EIGHTH shall not be exclusive of any other rights which such
Indemnitee may have or hereafter acquire under any statute, provision of this
Certificate of Incorporation, Bylaws, agreement, vote of stockholders or
disinterested directors or otherwise.

     (E)  Other Sources.  The Corporation's obligation, if any, to indemnify or
          -------------
to advance expenses to any Indemnitee who was or is serving at its request as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust, enterprise or nonprofit entity shall be reduced by any amount
such Indemnitee may collect as indemnification or advancement of expenses from
such other corporation, partnership, joint venture, trust, enterprise or
nonprofit enterprise.

     (F)  Amendment or Repeal.  Any repeal or modification of the foregoing
          -------------------
provisions of this Article EIGHTH shall not adversely affect any right or
protection hereunder of any Indemnitee in respect of any act or omission
occurring prior to the time of such repeal or modification.

     (G)  Other Indemnification and Prepayment of Expenses.  This Article EIGHTH
          ------------------------------------------------
shall not limit the right of the Corporation, to the extent and in the manner
permitted by law, to indemnify and to advance expenses to persons other than
Indemnitees when and as authorized by appropriate corporate action.

          NINTH:  The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation, and any
other provisions authorized by the laws of the State of Delaware at the time in
force may be added or inserted, in the manner now or hereafter provided herein
or by statute, and all rights, preferences and privileges of whatsoever nature
conferred upon stockholders, directors or any other persons whomsoever by and
pursuant to this Certificate of Incorporation in its present form or as amended
are granted subject to the rights reserved in this Article NINTH.

                                       8
<PAGE>

     IN WITNESS WHEREOF, the Corporation has caused this Ninth Restated
Certificate of Incorporation to be signed by its Chief Executive Officer this
_____ day of _____________, 2000.


                                        3-DIMENSIONAL PHARMACEUTICALS, INC.



                                        By:___________________________________
                                             David C. U'Prichard
                                             Chief Executive Officer

                                       9
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.5
<SEQUENCE>5
<FILENAME>0005.txt
<DESCRIPTION>FORM OF AMENDED AND RESTATED BYLAWS
<TEXT>

<PAGE>

                             AMENDED AND RESTATED
                                    BYLAWS
                                      OF
                      3-DIMENSIONAL PHARMACEUTICALS, INC.

             Incorporated under the Laws of the State of Delaware

                                   ARTICLE I

                              OFFICES AND RECORDS

     Section 1.1  Delaware Office.  The principal office of the Corporation in
the State of Delaware shall be located in the City of Wilmington, County of New
Castle, and the name and address of its registered agent is The Corporation
Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington,
Delaware.

     Section 1.2  Other Offices.  The Corporation may have such other offices,
either within or without the State of Delaware, as the Board of Directors may
designate or as the business of the Corporation may from time to time require.

     Section 1.3  Books and Records.  The books and records of the Corporation
may be kept at the Corporation's headquarters in Exton, Pennsylvania or at such
other locations within or outside the State of Delaware as may from time to time
be designated by the Board of Directors.

                                  ARTICLE II

                                 STOCKHOLDERS

     Section 2.1  Annual Meeting.  The annual meeting of the stockholders of the
Corporation shall be held at such date, place and time as may be fixed by
resolution of the Board of Directors.

     Section 2.2  Special Meeting.  Subject to the rights of the holders of any
series of preferred stock, par value $.00l per share, of the Corporation (the
"Preferred Stock") or any other series or class of stock as set forth in the
Certificate of Incorporation to elect additional directors under specified
circumstances, special meetings of the stockholders may be called only by the
Chairman of the Board or by the Board of Directors pursuant to a resolution
adopted by a majority of the total number of directors which the Corporation
would have if there were no vacancies (the "Whole Board").

                                      -1-
<PAGE>

     Section 2.3  Place of Meeting.  The Board of Directors may designate the
place of meeting for any meeting of the stockholders.  If no designation is made
by the Board of Directors, the place of meeting shall be the principal office of
the Corporation.

     Section 2.4  Notice of Meeting.  Written or printed notice, stating the
place, day and hour of the meeting and the purpose or purposes for which the
meeting is called, shall be prepared and delivered by the Corporation not less
than ten days nor more than sixty days before the date of the meeting, either
personally, or by mail, to each stockholder of record entitled to vote at such
meeting.  If mailed, such notice shall be deemed to be delivered when deposited
in the United States mail with postage thereon prepaid, addressed to the
stockholder at his address as it appears on the stock transfer books of the
Corporation.  Such further notice shall be given as may be required by law.
Meetings may be held without notice if all stockholders entitled to vote are
present (except as otherwise provided by law), or if notice is waived by those
not present.  Any previously scheduled meeting of the stockholders may be
postponed and (unless the Certificate of Incorporation otherwise provides) any
special meeting of the stockholders may be canceled, by resolution of the Board
of Directors upon public notice given prior to the time previously scheduled for
such meeting of stockholders.

     Section 2.5  Quorum and Adjournment.  Except as otherwise provided by law
or by the Certificate of Incorporation, the holders of a majority of the voting
power of the outstanding shares of the Corporation entitled to vote generally in
the election of directors (the "Voting Stock"), represented in person or by
proxy, shall constitute a quorum at a meeting of stockholders, except that when
specified business is to be voted on by a class or series voting separately as a
class or series, the holders of a majority of the voting power of the shares of
such class or series shall constitute a quorum for the transaction of such
business.  The chairman of the meeting or a majority of the shares of Voting
Stock so represented may adjourn the meeting from time to time, whether or not
there is such a quorum (or, in the case of specified business to be voted on by
a class or series, the chairman or a majority of the shares of such class or
series so represented may adjourn the meeting with respect to such specified
business).  No notice of the time and place of adjourned meetings need be given
except as required by law.  The stockholders present at a duly organized meeting
may continue to transact business until adjournment, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum.

     Section 2.6  Proxies.  At all meetings of stockholders, a stockholder may
vote by proxy executed in writing by the stockholder or as may be permitted by
law, or by his duly authorized attorney-in-fact.  Such proxy must be filed with
the Secretary of the Corporation or his representative at or before the time of
the meeting.

     Section 2.7  Notice of Stockholder Business and Nominations.

     (A) Annual Meetings of Stockholders

                                      -2-
<PAGE>

          (1) Nominations of persons for election to the Board of Directors of
     the Corporation and the proposal of business to be considered by the
     stockholders may be made at an annual meeting of stockholders (a) pursuant
     to the Corporation's notice of meeting delivered pursuant to Section 2.4 of
     these Bylaws, (b) by or at the direction of the Chairman of the Board or
     the Board of Directors or (c) by any stockholder of the Corporation who is
     entitled to vote at the meeting, who complied with the notice procedures
     set forth in clauses (2) and (3) of this paragraph (A) of this Bylaw and
     who was a stockholder of record at the time such notice is delivered to the
     Secretary of the Corporation.

          (2) For nominations or other business to be properly brought before an
     annual meeting by a stockholder pursuant to clause (c) of paragraph (A)(1)
     of this Bylaw, the stockholder must have given timely notice thereof in
     writing to the Secretary of the Corporation and such other business must
     otherwise be a proper matter for stockholder action.  To be timely, a
     stockholder's notice shall be delivered to the Secretary at the principal
     executive offices of the Corporation not less than sixty days nor more than
     ninety days prior to the first anniversary of the preceding year's annual
     meeting; provided, however, that in the event that the date of the annual
     meeting is advanced by more than twenty days, or delayed by more than sixty
     days, from such anniversary date, notice by the stockholder to be timely
     must be so delivered not earlier than the ninetieth day prior to such
     annual meeting and not later than the close of business on the later of the
     sixtieth day prior to such annual meeting or the tenth day following the
     day on which public announcement of the date of such meeting is first made.
     Such stockholder's notice shall set forth (a) as to each person whom the
     stockholder proposes to nominate for election or reelection as a director
     all information relating to such person that is required to be disclosed in
     solicitations of proxies for election of directors in an election contest,
     or is otherwise required, in each case pursuant to Regulation 14A under the
     Securities Exchange Act of 1934, as amended (the "Exchange Act") and Rule
     14a-11 thereunder, including such person's written consent to being named
     in the proxy statement as a nominee and to serving as a director if
     elected; (b) as to any other business that the stockholder proposes to
     bring before the meeting, a brief description of the business desired to be
     brought before the meeting, the reasons for conducting such business at the
     meeting and any material interest in such business of such stockholder and
     the beneficial owner, if any, on whose behalf the proposal is made; and (c)
     as to the stockholder giving the notice and the beneficial owner, if any,
     on whose behalf the nomination or proposal is made (i) the name and address
     of such stockholder, as they appear on the Corporation's books, and of such
     beneficial owner and (ii) the class and number of shares of the Corporation
     which are owned beneficially and of record by such stockholder and such
     beneficial owner.  In no event shall the public announcement of an
     adjournment of an annual

                                      -3-
<PAGE>

     meeting commence a new time period for the giving of a stockholder's notice
     as described above.

          (3) Notwithstanding anything in the second sentence of paragraph
     (A)(2) of this Bylaw to the contrary, in the event that the number of
     directors to be elected to the Board of Directors of the Corporation is
     increased and there is no public announcement naming all of the nominees
     for director or specifying the size of the increased Board of Directors
     made by the Corporation at least seventy days prior to the first
     anniversary of the preceding year's annual meeting, a stockholder's notice
     required by this Bylaw shall also be considered timely, but only with
     respect to nominees for any new positions created by such increase, if it
     shall be delivered to the Secretary at the principal executive offices of
     the Corporation not later than the close of business on the tenth day
     following the day on which such public announcement is first made by the
     Corporation.

     (B) Special Meetings of Stockholders.  Only such business shall be
conducted at a special meeting of stockholders as shall have been brought before
the meeting pursuant to the Corporation's notice of meeting pursuant to Section
2.4 of these Bylaws.  Nominations of persons for election to the Board of
Directors may be made at a special meeting of stockholders at which directors
are to be elected pursuant to the Corporation's notice of meeting (a) by or at
the direction of the Board of Directors or (b) by any stockholder of the
Corporation who is entitled to vote at the meeting, who complies with the notice
procedures set forth in this Bylaw and who is a stockholder of record at the
time such notice is delivered to the Secretary of the Corporation.  In the event
the Corporation calls a special meeting of stockholders for the purpose of
electing one or more directors to the Board of Directors, any such stockholder
may nominate a person or persons (as the case may be), for election to such
position(s) as are specified in the Corporation's Notice of Meeting, if the
stockholder's notice as required by paragraph (A)(2) of this Bylaw shall be
delivered to the Secretary at the principal executive offices of the Corporation
not earlier than the ninetieth day prior to such special meeting and not later
than the close of business on the later of the sixtieth day prior to such
special meeting or the tenth day following the day on which public announcement
is first made of the date of the special meeting and of the nominees proposed by
the Board of Directors to be elected at such meeting.  In no event shall the
public announcement of an adjournment of a special meeting commence a new time
period for the giving of a stockholders notice as described above.

     (C)  General.

          (1) Only persons who are nominated in accordance with the procedures
     set forth in this Bylaw shall be eligible to serve as directors and only
     such business shall be conducted at a meeting of stockholders as shall have
     been brought before the meeting in accordance with the procedures set forth
     in this Bylaw.  Except as

                                      -4-
<PAGE>

     otherwise provided by law, the Certificate of Incorporation or these
     Bylaws, the chairman of the meeting shall have the power and duty to
     determine whether a nomination or any business proposed to be brought
     before the meeting was made in accordance with the procedures set forth in
     this Bylaw and, if any proposed nomination or business is not in compliance
     with this Bylaw, to declare that such defective proposal or nomination
     shall be disregarded.

          (2) For purposes of this Bylaw, "public announcement" shall mean
     disclosure in a press release reported by the Dow Jones News Service,
     Associated Press or comparable national news service or in a document
     publicly filed by the Corporation with the Securities and Exchange
     Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.

          (3) Notwithstanding the foregoing provisions of this Bylaw, a
     stockholder shall also comply with all applicable requirements of the
     Exchange Act and the rules and regulations thereunder with respect to the
     matters set forth in this Bylaw.  Nothing in this Bylaw shall be deemed to
     affect any rights of stockholders to request inclusion of proposals in the
     Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange
     Act.

     Section 2.8  Procedure for Election of Directors.  Election of directors at
all meetings of the stockholders at which directors are to be elected shall be
by written ballot, and, except as otherwise set forth in the Certificate of
Incorporation with respect to the right of the holders of any series of
Preferred Stock or any other series or class of stock to elect additional
directors under specified circumstances, a plurality of the votes cast thereat
shall elect directors.  Except as otherwise provided by law, the Certificate of
Incorporation or these Bylaws, all matters other than the election of directors
submitted to the stockholders at any meeting shall be decided by the affirmative
vote of a majority of the voting power of the outstanding Voting Stock present
in person or represented by proxy at the meeting and entitled to vote thereon.

     Section 2.9  Inspectors of Elections; Opening and Closing the Polls.

     (A) The Board of Directors by resolution shall appoint one or more
inspectors, which inspector or inspectors may include individuals who serve the
Corporation in other capacities, including, without limitation, as officers,
employees, agents or representatives of the Corporation, to act at the meeting
and make a written report thereof.  One or more persons may be designated as
alternate inspectors to replace any inspector who falls to act.  If no inspector
or alternate has been appointed to act, or if all inspectors or alternates who
have been appointed are unable to act, at a meeting of stockholders, the
chairman of the meeting shall appoint one or more inspectors to act at the
meeting.  Each inspector, before discharging his or her duties, shall take and
sign an oath faithfully to execute the duties of inspector with strict

                                      -5-
<PAGE>

impartiality and according to the best of his or her ability. The inspectors
shall have the duties prescribed by the General Corporation Law of the State of
Delaware.

     (B) The chairman of the meeting shall fix and announce at the meeting the
date and time of the opening and the closing of the polls for each matter upon
which the stockholders will vote at a meeting.

     Section 2.10  No Action Without Annual or Special Meeting.  Subject to the
rights of the holders of any series of Preferred Stock or any other series or
class of stock as set forth in the Certificate of Incorporation with respect to
such series or class, any action required or permitted by the General
Corporation Law of the State of Delaware to be taken by the stockholders of the
Corporation must be effected at an annual or special meeting of the stockholders
and may not be effected by any consent in writing in lieu of a meeting by such
stockholders.


                                  ARTICLE III

                              BOARD OF DIRECTORS

     Section 3.1  General Powers.  The business and affairs of the Corporation
shall be managed by or under the direction of its Board of Directors.  In
addition to the powers and authorities by these Bylaws expressly conferred upon
them, the Board of Directors may exercise all such powers of the Corporation and
do all such lawful acts and things as are not by law, by the Certificate of
Incorporation or by these Bylaws required to be exercised or done by the
stockholders.

     Section 3.2  Number, Tenure and Qualifications.  Subject to the rights of
the holders of any series of Preferred Stock, or any other series or class of
stock as set forth in the Certificate of Incorporation, to elect additional
directors under specified circumstances, the number of directors shall be fixed
from time to time exclusively by the Board of Directors pursuant to a resolution
adopted by a majority of the Whole Board.  Subject to the rights of the holders
of any series of Preferred Stock, or any other series or class of stock as set
forth in the Certificate of Incorporation, to elect additional directors under
specified circumstances, the Board of Directors shall be classified, with
respect to the time for which the directors severally hold office, into three
classes, as nearly equal as possible in number of directors, as determined by
the Board of Directors, one class to be originally elected in 2000 for a term
expiring at the annual meeting of stockholders to be held in 2001, another class
to be originally elected in 2000 for a term expiring at the annual meeting of
stockholders to be held in 2002, and another class to be originally elected in
2000 for a term expiring at the annual meeting of stockholders to be held in
2003, with each class to hold office until its successors is elected and
qualified.  At each annual meeting of the stockholders of the Corporation, the

                                      -6-
<PAGE>

successors of the class of directors whose term expires at that annual meeting
of stockholders shall be elected to hold office for a term expiring at the
annual meeting of stockholders held in the third year following the year of
their election.  Notwithstanding the foregoing provisions of this section, each
director shall serve until his or her successor shall have been duly elected and
qualified or to his earlier death, resignation or removal.

     Section 3.3  Regular Meetings.  A regular meeting of the Board of Directors
shall be held without notice other than this Bylaw immediately after, and at the
same place as, each annual meeting of stockholders.  The Board of Directors may,
by resolution, provide the time and place for the holding of additional regular
meetings without notice other than such resolution.

     Section 3.4  Special Meetings.  Special meetings of the Board of Directors
shall be called at the request of the Chairman of the Board, the President or a
majority of the Board of Directors.  The person or persons authorized to call
special meetings of the Board of Directors may fix the place and time of the
meetings.

     Section 3.5  Notice.  Notice of any special meeting shall be given to each
director at his business or residence in writing or by telephone communication.
If mailed, such notice shall be deemed adequately delivered when deposited in
the United States mails so addressed, with postage thereon prepaid, at least
five days before such meeting.  If by facsimile transmission, such notice shall
be transmitted at least twenty-four hours before such meeting.  If by telephone,
the notice shall be given at least twelve hours prior to the time set for the
meeting.  Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be specified in the
notice of such meeting, except for amendments to these Bylaws as provided under
Section 8.1 of Article VIII hereof.  A meeting may be held at any time without
notice if all the directors are present (except as otherwise provided by law) or
if those not present waive notice of the meeting in writing, either before or
after such meeting.

     Section 3.6  Conference Telephone Meetings.  Members of the Board of
Directors, or any committee thereof, may participate in a meeting of the Board
of Directors or such committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and such participation in a meeting shall
constitute presence in person at such meeting.

     Section 3.7  Quorum.  A whole number of directors equal to at least a
majority of the Whole Board shall constitute a quorum for the transaction of
business, but if at any meeting of the Board of Directors there shall be less
than a quorum present, a majority of the directors present may adjourn the
meeting from time to time without further notice.  The act of the majority of
the directors present at a meeting at which a quorum is present shall be the act
of the Board of Directors.

                                      -7-
<PAGE>

     Section 3.8  Newly Created Directorships and Vacancies.  Subject to the
rights of any holders of any series of Preferred Stock, or any other series or
class of stock as set forth in the Certificate of Incorporation, to elect
additional directors under specified circumstances, and unless the Board of
Directors otherwise determines, newly created directorships resulting from any
increase in the authorized number of directors or any vacancies of the Board of
Directors resulting from death, resignation, retirement, disqualification,
removal from office or other causes shall be filled only by a majority vote of
the directors then in office, though less than a quorum, and directors so chosen
shall hold office for a term for the remainder of the full term of the class of
directors in which the vacancy occurred or in which the new directorship was
created and until such director's successor shall have been duly elected and
qualified.  No decrease in the numbers of authorized directors constituting the
entire Board of Directors shall shorten the term of any incumbent director.

     Section 3.9  Committees.

     (A) The Board of Directors may designate one or more committees, each
committee to consist of one or more of the directors of the Corporation.  The
Board of Directors may designate one or more directors as alternate members of
any committee, who may replace any absent or disqualified member at any meeting
of the committee.  In the absence or disqualification of a member of the
committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in place of any such absent or disqualified member.  Any such committee,
to the extent permitted by law and to the extent provided in the resolution of
the Board of Directors, shall have and may exercise all the powers and authority
of the Board of Directors in the management of the business and affairs of the
corporation, and may authorize the seal of the Corporation to be affixed to all
papers which may require it.

     (B) Unless the Board of Directors otherwise provides, each committee
designated by the Board of Directors may make, alter and repeal rules for the
conduct of its business.  In the absence of such rules each committee shall
conduct its business in the same manner as the Board of Directors conducts its
business pursuant to these Bylaws.

     Section 3.10  Removal.  Subject to the rights of the holders of any series
of Preferred Stock, or any other series or class of stock as set forth in the
Certificate of Incorporation, to elect additional directors under specified
circumstances, any director, or the entire Board of Directors, may be removed
from office at any time, but only for cause.

                                  ARTICLE IV

                                   OFFICERS

                                      -8-
<PAGE>

     Section 4.1  Elected Officers.  The elected officers of the Corporation
shall be a Chairman of the Board, a President, a Secretary, a Treasurer, and
such other officers as the Board of Directors from time to time may deem proper.
The Chairman of the Board shall be chosen from the directors.  All officers
chosen by the Board of Directors shall each have such powers and duties as
generally pertain to their respective offices, subject to the specific
provisions of this Article IV.  Such officers shall also have powers and duties
as from time to time may be conferred by the Board of Directors or by any
committee thereof.

     Section 4.2  Election and Term of Office.  The elected officers of the
Corporation shall be elected annually by the Board of Directors at the regular
meeting of the Board of Directors held after each annual meeting of the
stockholders.  If the election of officers shall not be held at such meeting,
such election shall be held as soon thereafter as convenient.  Subject to
Section 4.7 of these Bylaws, each officer shall hold office until his successor
shall have been duly elected and shall have qualified or until his death or
until he shall resign.

     Section 4.3  Chairman of the Board.  The Chairman of the Board shall
preside at all meetings of the stockholders and of the Board of Directors.  The
Chairman of the Board shall be responsible for the general management of the
affairs of the Corporation and shall perform all duties incidental to his office
which may be required by law and all such other duties as are properly required
of him by the Board of Directors.  Except where by law the signature of the
President is required, the Chairman of the Board shall possess the same power as
the President to sign all certificates, contracts, and other instruments of the
Corporation which may be authorized by the Board of Directors.  He shall make
reports to the Board of Directors and the stockholders, and shall perform all
such other duties as are properly required of him by the Board of Directors.  He
shall see that all orders and resolutions of the Board of Directors and of any
committee thereof are carried into effect.

     Section 4.4  President.  The President shall act in a general executive
capacity and shall assist the Chairman of the Board in the administration and
operation of the Corporation's business and general supervision of its policies
and affairs.  The President shall, in the absence of or because of the inability
to act of the Chairman of the Board, perform all duties of the Chairman of the
Board and preside at all meetings of stockholders and of the Board of Directors.
The President may sign, alone or with the Secretary, or an Assistant Secretary,
or any other proper officer of the Corporation authorized by the Board of
Directors, certificates, contracts, and other instruments of the Corporation as
authorized by the Board of Directors.

     Section 4.5  Secretary.  The Secretary shall give, or cause to be given,
notice of all meetings of stockholders and directors and all other notices
required by law or by these Bylaws, and in case of his absence or refusal or
neglect so to do, any such notice may be given by any person thereunto directed
by the Chairman of the Board or the President, or by the Board of Directors,
upon whose request the meeting is called as provided in these Bylaws.

                                      -9-
<PAGE>

He shall record all the proceedings of the meetings of the Board of Directors,
any committees thereof and the stockholders of the Corporation in a book to be
kept for that purpose, and shall perform such other duties as may be assigned to
him by the Board of Directors, the Chairman of the Board or the President. He
shall have the custody of the seal of the Corporation and shall affix the same
to all instruments requiring it, when authorized by the Board of Directors, the
Chairman of the Board or the President, and attest to the same.

     Section 4.6  Treasurer.  The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate receipts and
disbursements in books belonging to the Corporation.  The Treasurer shall
deposit all moneys and other valuables in the name and to the credit of the
Corporation in such depositories as may be designated by the Board of Directors.
The Treasurer shall disburse the funds of the Corporation as may be ordered by
the Board of Directors, the Chairman of the Board, or the President, taking
proper vouchers for such disbursements.  The Treasurer shall render to the
Chairman of the Board, the President and the Board of Directors, whenever
requested, an account of all his transactions as Treasurer and of the financial
condition of the Corporation.  If required by the Board of Directors, the
Treasurer shall give the Corporation a bond for the faithful discharge of his
duties in such amount and with such surety as the Board of Directors shall
prescribe.

     Section 4.7  Removal.  Any officer elected by the Board of Directors may be
removed by the Board of Directors whenever, in their judgment, the best
interests of the Corporation would be served thereby.  No elected officer shall
have any contractual rights against the Corporation for compensation by virtue
of such election beyond the date of the election of his successor, his death,
his resignation or his removal, whichever event shall first occur, except as
otherwise provided in an employment contract or an employee plan.

     Section 4.8  Vacancies.  A newly created office and a vacancy in any office
because of death, resignation, or removal may be filled by the Board of
Directors for the unexpired portion of the term at any meeting of the Board of
Directors.

                                   ARTICLE V

                       STOCK CERTIFICATES AND TRANSFERS

     Section 5.1  Certificates and Transfers.

     (A) The interest of each stockholder of the Corporation shall be evidenced
by certificates for shares of stock in such form as the appropriate officers of
the Corporation may from time to time prescribe.  The shares of the stock of the
Corporation shall be transferred on the books of the Corporation by the holder
thereof in person or by his attorney, upon surrender for cancellation of
certificates for at least the same number of shares, with an assignment and
power of transfer endorsed thereon or attached thereto, duly executed, and

                                      -10-
<PAGE>

with such proof of the authenticity of the signature as the Corporation or its
agents may reasonably require.

     (B) The certificates of stock shall be signed, countersigned and registered
in such manner as the Board of Directors may by resolution prescribe, which
resolution may permit all or any of the signatures on such certificates to be in
facsimile.  In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate has ceased to be
such officer, transfer agent or registrar before such certificate is issued, it
may be issued by the Corporation with the same effect as if he were such
officer, transfer agent or registrar at the date of issue.


                                  ARTICLE VI

                                INDEMNIFICATION

     Section 6.1  Right to Indemnification.  The Corporation shall indemnify and
hold harmless, to the fullest extent permitted by applicable law as it presently
exists or may hereafter be amended, any person (an "Indemnitee") who was or is
made or is threatened to be made a party or is otherwise involved in any action,
suit or proceeding, whether civil, criminal, administrative or investigative (a
"Proceeding"), by reason of the fact that he, or a person for whom he is the
legal representative, is or was a director or officer of the Corporation or,
while a director or officer of the Corporation, is or was serving at the request
of the Corporation as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust, enterprise or nonprofit
entity, including service with respect to employee benefit plans, against all
liability and loss suffered and expenses (including attorneys' fees) reasonably
incurred by such Indemnitee.  Notwithstanding the preceding sentence, except as
otherwise provided in Section 6.3, the Corporation shall be required to
indemnify an Indemnitee in connection with a proceeding (or part thereof)
commenced by such Indemnitee only if the commencement of such proceeding (or
part thereof) by the Indemnitee was authorized by the Board of Directors of the
Corporation.

     Section 6.2  Prepayment of Expenses.  The Corporation shall pay the
expenses (including attorneys' fees) incurred by an Indemnitee in defending any
proceeding in advance of its final disposition, provided, however, that, to the
                                                --------  -------
extent required by law, such payment of expenses in advance of the final
disposition of the proceeding shall be made only upon receipt of an undertaking
by the Indemnitee to repay all amounts advanced if it should be ultimately
determined that the Indemnitee is not entitled to be indemnified under this
Article VI or otherwise.

     Section 6.3  Claims.  If a claim for indemnification or payment of expenses
under this Article VI is not paid in full within sixty days after a written
claim therefor by the

                                      -11-
<PAGE>

Indemnitee has been received by the Corporation, the Indemnitee may file suit to
recover the unpaid amount of such claim and, if successful in whole or in part,
shall be entitled to be paid the expense of prosecuting such claim. In any such
action the Corporation shall have the burden of proving that the Indemnitee is
not entitled to the requested indemnification or payment of expenses under
applicable law.

     Section 6.4  Nonexclusivity of Rights.  The rights conferred on any
Indemnitee by this Article VI shall not be exclusive of any other rights which
such Indemnitee may have or hereafter acquire under any statute, provision of
the Certificate of Incorporation, these Bylaws, agreement, vote of stockholders
or disinterested directors or otherwise.

     Section 6.5  Other Sources.  The Corporation's obligation, if any, to
indemnify or to advance expenses to any Indemnitee who was or is serving at its
request as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust, enterprise or nonprofit entity shall be
reduced by any amount such Indemnitee may collect as indemnification or
advancement of expenses from such other corporation, partnership, joint venture,
trust, enterprise or nonprofit enterprise.

     Section 6.6  Amendment or Repeal.  Any repeal or modification of the
foregoing provisions of this Article VI shall not adversely affect any right or
protection hereunder of any Indemnitee in respect of any act or omission
occurring prior to the time of such repeal or modification.

     Section 6.7  Other Indemnification and Prepayment of Expenses.  This
Article VI shall not limit the right of the Corporation, to the extent and in
the manner permitted by law, to indemnify and to advance expenses to persons
other than Indemnitees when and as authorized by appropriate corporate action.


                                  ARTICLE VII

                           MISCELLANEOUS PROVISIONS

     Section 7.1  Fiscal Year.  The fiscal year of the Corporation shall begin
on the first day of January and end on the thirty-first day of December of each
year.

     Section 7.2  Dividends.  The Board of Directors may from time to time
declare, and the Corporation may pay, dividends on its outstanding shares in the
manner and upon the terms and conditions provided by law and its Certificate of
Incorporation.

                                      -12-
<PAGE>

     Section 7.3  Seal.  The corporate seal shall have inscribed the name of the
Corporation thereon and shall be in such form as may be approved from time to
time by the Board of Directors.

     Section 7.4  Waiver of Notice.  Whenever any notice is required to be given
to any stockholder or director of the Corporation under the provisions of the
General Corporation Law of the State of Delaware, a waiver thereof in writing,
signed by the person or persons entitled to such notice, whether before or after
the time stated therein, shall be deemed equivalent to the giving of such
notice.  Neither the business to be transacted at, nor the purpose of, any
annual or special meeting of the stockholders of the Board of Directors need be
specified in any waiver of notice of such meeting.

     Section 7.5  Audits.  The accounts, books and records of the Corporation
shall be audited upon the conclusion of each fiscal year by an independent
certified public accountant selected by the Board of Directors, and it shall be
the duty of the Board of Directors to cause such audit to be made annually.

     Section 7.6  Resignations.  Any director or any officer, whether elected or
appointed, may resign at any time by serving written notice of such resignation
on the Chairman of the Board, the President or the Secretary, and such
resignation shall be deemed to be effective as of the close of business on the
date said notice is received by the Chairman of the Board, the President, or the
Secretary or at such later date as is stated therein.  No formal action shall be
required of the Board of Directors or the stockholders to make any such
resignation effective.

     Section 7.7  Contracts.  Except as otherwise required by law, the
Certificate of Incorporation or these Bylaws, any contracts or other instruments
may be executed and delivered in the name and on the behalf of the Corporation
by such officer or officers of the Corporation as the Board of Directors may
from time to time direct.  Such authority may be general or confined to specific
instances as the Board may determine.  The Chairman of the Board, the President
or any Vice President may execute bonds, contracts, deeds, leases and other
instruments to be made or executed for or on behalf of the Corporation.  Subject
to any restrictions imposed by the Board of Directors or the Chairman of the
Board, the President or any Vice President of the Corporation may delegate
contractual powers to others under his jurisdiction, it being understood,
however, that any such delegation of power shall not relieve such officer of
responsibility with respect to the exercise of such delegated power.

     Section 7.8  Proxies.  Unless otherwise provided by resolution adopted by
the Board of Directors, the Chairman of the Board, the President or any Vice
President may from time to time appoint an attorney or attorneys or agent or
agents of the Corporation, in the name and on behalf of the Corporation, to cast
the votes which the Corporation may be entitled to cast as the holder of stock
or other securities in any other corporation or other entity, any of whose

                                      -13-
<PAGE>

stock or other securities may be held by the Corporation, at meetings of the
holders of the stock or other securities of such other corporation or other
entity, or to consent in writing, in the name of the Corporation as such holder,
to any action by such other corporation or other entity, and may instruct the
person or persons so appointed as to the manner of casting such votes or giving
such consent, and may execute or cause to be executed in the name and on behalf
of the Corporation and under its corporate seal or otherwise, all such written
proxies or other instruments as he may deem necessary or proper in the premises.


                                 ARTICLE VIII

                                  AMENDMENTS

     Section 8.1  Amendments.  These Bylaws may be amended, altered, added to,
rescinded or repealed at any meeting of the Board of Directors or of the
stockholders, provided notice of the proposed change was given in the notice of
the meeting and, in the case of a meeting of the Board of Directors, in a notice
given no less than twenty-four hours prior to the meeting; provided, however,
that, notwithstanding any other provisions of the Certificate of Incorporation,
these Bylaws or any provision of law which might otherwise permit a lesser vote
or no vote, but in addition to any affirmative vote of the holders of any
particular class or series of the capital stock of the Corporation required by
law, the Certificate of Incorporation, any Certificate of Designation for any
series of Preferred Stock, or these Bylaws, the affirmative vote of the holders
of at least 80 percent of the voting power of all of the then-outstanding shares
of the Voting Stock of the Corporation, voting together as a single class, shall
be required in order for stockholders to alter, amend or repeal any provision of
these Bylaws or to adopt any additional bylaws.

                                      -14-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.15
<SEQUENCE>6
<FILENAME>0006.txt
<DESCRIPTION>SETTLEMENT AGMNT BTWN THE COMPANY & SCRIPTGEN
<TEXT>

<PAGE>

                                                                   EXHIBIT 10.15



                              SETTLEMENT AGREEMENT


     This is a Settlement Agreement entered into March 7, 2000 (the "Effective
Date") by and between:

     Scriptgen Pharmaceuticals, Inc., a Delaware corporation having a principal
place of business at 610 Lincoln Street, Waltham, MA 02451 ("Scriptgen"); and

     3-Dimensional Pharmaceuticals, Inc., a Delaware corporation having a
principal place of business at 665 Stockton Drive, Exton, PA 19341 ("3DP").

     WHEREAS, Scriptgen is the owner of U.S. Patent 5,585,277 ("the `277
patent'"), and U.S. Patent No. 5,679,582 ("the `582 patent'");

     WHEREAS on October 13, 1998, Scriptgen filed an action in the United States
District Court for the District of Delaware, captioned Scriptgen
Pharmaceuticals, Inc. v. 3-Dimensional Pharmaceuticals, Inc., Civil Action No.
98-583-GMS, in which Scriptgen has asserted claims against 3DP for infringement
of the `277 patent and the `582 patent and 3DP has asserted defenses and
counterclaims against Scriptgen including the non-infringement, invalidity, and
unenforceability of the `277 patent and the `582 patent ("the Action"); and

     WHEREAS Scriptgen and 3DP desire to settle all claims that have been raised
in the Action and wish to avoid any further controversy between them as set
forth herein.

     NOW THEREFORE, in consideration of the mutual covenants and undertakings of
the parties, Scriptgen and 3DP agree as follows:

1.   DEFINITIONS

1.1  "Affiliate" shall mean an entity that directly, or indirectly through one
     or more intermediaries, controls, or is controlled by, or is under common
     control with, 3DP or Scriptgen, as applicable; provided further that
     "control(s)(led)" as used in this Section shall mean ownership by a third
     party, not including a venture capital fund or group of venture capital
     funds, of at least fifty percent (50%) of the equity capital of such
     entity.

1.2  "Atlas Technology" shall mean the methods and processes generally disclosed
     in the specifications and claims of the `277 patent, the `582 patent and/or
     Scriptgen International Application No. PCT/US96/19698.

1.3  "Calendar Quarter" shall mean each three month period, or any portion
     thereof, ending on March 31, June 30, September 30 and December 31.

1.4  "Development Compound" shall mean a compound that has entered pre-clinical
     regulatory drug safety studies conducted under good laboratory practice
     (GLP) guidelines.
<PAGE>

1.5  "Hepatitis C Virus Field" shall mean any program(s) whose intent is to
     discover or develope a drug that exerts a therapeutic effect in Hepatitis C
     Virus Infection.

1.6  "Infection" shall mean the field of treatment with, research on, and/or
     development of drugs whose principal aim is to treat or cure infectious
     disease in humans.
1.7  "Method Claims" shall mean any claim in a patent or application to a
     process or method and shall not include any claim to a product or
     apparatus.

1.8  "Net Revenues" shall mean the revenues actually received by a party from
     the offering or provision of drug screening services or from the sale of
     drug compounds, after allowing deductions for sales, use and other similar
     taxes (excluding taxes based on such party's income or revenues), the legal
     incidence of which is on such party, returns and other credits.

1.9  "Restriction Period" shall mean the period of time beginning from the
     Effective Date and ending on the third (3rd) anniversary of the Effective
     Date.

1.10 "Scriptgen" shall mean Scriptgen Pharmaceuticals, Inc., its present and
     future Affiliates, and any entity in which Scriptgen Pharmaceuticals, Inc.
     owns or controls a majority interest.

1.11 "ThermoFluor Deal" shall mean a business arrangement between 3DP and a
     third party collaborator, for any duration of time, involving the use of
     3DP's ThermoFluor(R) Screening Technology at one or more research sites
     anywhere in the world and operated by 3DP and/or such third party
     collaborating with 3DP.

1.12 "ThermoFluor Screening Technology" shall mean the methods, processes and
     apparatus generally disclosed in the specifications and claims of U.S.
     Patent No. 6,020,141 and/or allowed U.S. Patent Application Serial no.
     08/853,459.

1.13 "3DP" shall mean 3-Dimensional Pharmaceuticals, Inc., its present and
     future Affiliates, and any entity in which 3-Dimensional Pharmaceuticals,
     Inc. owns or controls a majority interest.

1.14 "3DP Internal Program(s)" shall mean drug discovery and/or development
     program(s) in any therapeutic field conducted for and by 3DP on-site at a
     3DP facility.

2.   FINANCIAL PAYMENT AND RELEASE

2.1  In order to reimburse Scriptgen for legal fees and expenses incurred by
     Scriptgen in the Action, 3DP agrees to make a non-refundable payment to
     Scriptgen of five hundred thousand United States dollars ($500,000) on
     each of the following dates: (a) the Effective Date; (b) six (6) months
     after the Effective Date; and (3) the first (1st) anniversary of the
     Effective Date.

2.2  Each payment shall be by wire transfer to [**]. A letter confirming the
     transfer shall be delivered to Scriptgen's counsel, DARBY & DARBY, PC, 805
     Third Avenue, New York, NY 10022, by overnight courier.


**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed separately with the Commission.

                                      -2-
<PAGE>

2.3  Upon full execution of this Agreement by the parties and receipt by
     Scriptgen of the initial non-refundable payment specified in Section 2.1(a)
     above, Scriptgen for itself and for its shareholders, officers, directors,
     agents, representatives and all persons and entities claiming under or
     through it, releases 3DP, and its shareholders, employees, agents,
     officers, directors, representatives, customers, suppliers, manufacturers,
     partners and distributors, from any and all claims of infringement of the
     `277 patent and the `582 patent, and from all injuries and damages which
     may have resulted therefrom, whether now known, unforeseen, unanticipated
     or latent which Scriptgen ever had, now has, or hereafter can, shall or may
     have, by reason of any act, omission or occurrence prior to the Effective
     Date.

2.4  3DP, for itself and for its shareholders, officers, directors, agents,
     representatives and all persons and entities claiming under or through it,
     releases Scriptgen and its shareholders, employees, agents, officers,
     directors, representatives, customers, suppliers, manufacturers, partners
     and distributors, from any and all claims of any kind and from all injuries
     and damages which may have resulted therefrom, whether now known,
     unforeseen, unanticipated or latent which 3DP ever had, now has, or
     hereafter can, shall or may have, by reason of any act, omission or
     occurrence prior to the Effective Date with respect to the subject matter
     of the Action.

2.5  The parties will direct their attorneys to sign the Stipulated Order of
     Dismissal attached hereto as Exhibit A simultaneously with signing this
     Agreement and to cause their respective attorneys to file the signed
     Stipulated Order of Dismissal with the Court in the Action within five (5)
     days after the full execution of this Agreement and the receipt by
     Scriptgen of the initial non-refundable payment specified in Section 2.1(a)
     above.

2.6  The parties each agree that within sixty (60) days after entry of the
     Stipulated Order of Dismissal, they will each return to the other party, in
     accordance with paragraph sixteen (16) of the Stipulation and Order
     Governing the Protection and Exchange of Confidential Material in the
     Action, dated March 23, 1999, or certify the destruction of, all
     confidential documents that were produced by the other party during the
     course of the Action.

3.   LICENSE GRANT BY SCRIPTGEN TO 3DP

3.1  In settlement of the Action, Scriptgen hereby grants to 3DP beginning on
     the Effective Date, and subject to Sections 3.2 through 3.11, a perpetual,
     non-exclusive, worldwide, fully-paid license, with the right to sub-
     license, under the `277 patent, the `582 patent, and any patents issuing
     from Scriptgen International Application No. PCT/US96/19698, any and all
     continuing applications, divisional applications, continuation-in-part
     applications, reissues, extensions, renewals and reexaminations thereof,
     and any U.S. and foreign counterparts thereof. In addition, Scriptgen
     agrees not to file any future patent infringement actions against 3DP for
     3DP's use of ThermoFluor Screening Technology that is consistent with the
     terms of this Agreement.

                                      -3-
<PAGE>

3.2  3DP shall not have the right to assign the license granted herein
     except as part of the sale of its ThermoFluor Screening Technology or
     business, the sale of substantially all the capital stock or assets of the
     corporation, or the merger or consolidation of the corporation.

3.3  During the Restriction Period, 3DP shall be permitted to enter into only
     one (1) ThermoFluor Deal, including the right to sub-license, and including
     unrestricted sales of ThermoFluor Screening Technology instruments, where
     the principal focus of such business arrangement is Infection, provided
     however that such ThermoFluor Deal may not involve the Hepatitis C Virus
     Field, nor involve more than three (3) other anti-viral targets.

3.4  3DP shall be able to freely secure any partnerships or other business
     arrangements involving ThermoFluor Screening Technology, except that during
     the Restriction Period the principal focus may not be Infection and 3DP
     shall not grant any sublicenses for Infection during the Restriction
     Period, except as permitted under Sections 3.3 and 3.10 of this Agreement.
     In the event that a partner or other third party requests that 3DP screen,
     during the Restriction Period, multiple targets which include Intended
     Infection targets, 3DP shall inform such party that it cannot screen such
     Infection targets, but shall disclose that such screening can be conducted
     by Scriptgen. Scriptgen shall pay to 3DP [**] of all Net Revenues received
     during the first year of an agreement which demonstrably resulted from such
     an introduction by 3DP.

3.5  During the Restriction Period, Scriptgen may refer to 3DP any third parties
     that have requested that Scriptgen screen multiple targets to identify
     leads or drugs that are effective in any field other than Infection. In
     such event, 3DP shall pay to Scriptgen [**] of all Net Revenues received
     during the first year of an agreement which demonstrably resulted from such
     an introduction by Scriptgen, if such third party or its Affiliates were
     not previously contacted by 3DP.

3.6  3DP shall be free to use ThermoFluor Screening Technology without
     restriction in any 3DP Internal Program, except in the Hepatitis C Virus
     Field during the Restriction Period, and to license or transfer, in any
     manner, any compounds discovered or optimized through such use of
     ThermoFluor Screening Technology. 3DP shall not use ThermoFluor Screening
     Technology in the Hepatitis C Virus Field during the Restriction Period.

3.7  In the event that 3DP uses ThermoFluor Screening Technology in a 3DP
     Internal Program that leads to the designation, during the Restriction
     Period, of a Development Compound that leads to a drug in Infection, 3DP
     shall pay to Scriptgen a sliding-scale royalty based on 3DP's Net Revenues
     from the sale of such drug by 3DP, as follows:


**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed separately with the Commission.

                                      -4-
<PAGE>

                            Category                                Royalty
                            --------                                -------

All anti-infectives, except anti-virals:

[**]                                                                  [**]

[**]                                                                  [**]

All anti-virals                                                       [**]


Nothing in this Section 3.7 shall be construed as giving 3DP the right to use
ThermoFluor Screening Technology in the Hepatitis C Virus field during the
Restriction Period.

3.8  The maximum aggregate amount of all royalty payments made under Section
     3.7, on a cumulative basis including all such 3DP Internal Programs, shall
     not exceed five million United States dollars ($5,000,000).

3.9  In the event that 3DP uses ThermoFluor Screening Technology, in a 3DP
     Internal Program that leads to the designation, during the Restriction
     Period, of a Development Compound that leads to a drug in Infection, and
     3DP subsequently licenses or sells the rights to such drug to a third
     party, 3DP shall pay to Scriptgen [**] in the case of anti-infectives
     (excluding anti-virals), or [**] in the case of anti-virals, of the up-
     front cash payments or sales price received by 3DP from such transaction.
     The maximum amount of all such payments in aggregate shall not exceed two
     million United States dollars ($2,000,000). Notwithstanding the foregoing,
     if any such up-front payments are in the form of an investment in equity
     securities of 3DP, the amount of such investment, calculated on a per share
     basis, that is in excess of [**] of the amount per share paid in the last
     3DP equity financing (or, if 3DP is public, [**] of the closing price
     immediately prior to the transaction) shall be deemed to be an "up-front
     payment" for purposes of this calculation.

3.10 There shall be no limitations on sales, licenses (including the right to
     grant sublicenses limited to use of the ThermoFluor Screening Technology
     instruments), or leases of ThermoFluor Screening Technology instruments,
     except that during the Restriction Period, in the therapeutic field of
     Infection, 3DP may only sell, license (including the right to grant
     sublicenses limited to use of ThermoFluor Screening Technology
     instruments), or lease ThermoFluor Screening Technology instruments as part
     of the permitted ThermoFluor Deal in Infection specified in Section 3.3
     above.

3.11 The license of Section 3.1 shall not be deemed to grant a license,
     directly, or by implication or otherwise, under any know-how, copyright,
     trademark, or other intellectual property right.


**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed separately with the Commission.

                                      -5-
<PAGE>

4.   THE RESTRICTION PERIOD

4.1  The restrictions of Sections 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 3.9 and 3.10 on
     the perpetual, nonexclusive, worldwide, fully-paid license granted by
     Scriptgen in Section 3.1 above, shall terminate on the earlier of:

     (a)  The end of the Restriction Period; or

     (b)  Any finding of invalidity or unenforceability of claims 1 and 17 of
          the 277 patent and claims 1, 3, 5, 20, 23 and 26 of the 582 patent by
          the USPTO or by a court of competent jurisdiction from either of which
          an appeal can no longer be taken.

5.  LICENSE GRANT BY 3DP TO SCRIPTGEN

5.1  (a)  In settlement of the Action, 3DP hereby grants to Scriptgen beginning
          on the Effective Date a perpetual, non-exclusive, worldwide, fully
          paid license, under any Method Claims found in: (a) U.S. Patent No.
          6,020,141; (b) any U.S. patents issuing from allowed U.S. Patent
          Application Serial No. 08/853,459; (c) any patents issuing from any
          and all continuing applications, divisional applications,
          continuation-in-part applications of said `141 patent, said `459
          application and/or the application on which said `141 patent was
          granted, and any reissues, extensions, renewals and reexaminations of
          such patents or patent applications; and/or (d) any foreign
          counterparts of the patents in (a), (b) and (c). The license granted
          to Scriptgen herein shall include the right to sublicense solely in
                                                                    ------
          the field of Infection. In addition, 3DP agrees not to file any future
          patent infringement actions against Scriptgen for Scriptgen's use of
          Atlas Technology that is consistent with the terms of this Agreement.

     (b)  During the first three years after the Effective Date, screening
          collaborations conducted by Scriptgen on behalf of third parties
          outside the field of Infection shall be conducted on-site at a
          Scriptgen facility only and shall not exceed ten (10) such screening
          collaborations; provided however that this limitation shall expire at
          the end of the three-year period.

5.2  The license of Section 5.1 shall not be deemed to grant a license, directly
     or by implication or otherwise, under any know-how, copyright, trademark,
     or any other intellectual property right.

5.3  Scriptgen shall not have the right to assign the license granted herein
     except as part of the sale of its Atlas Technology or business, the sale of
     substantially all the capital stock or assets of the corporation, or the
     merger or consolidation of the corporation.

6.  ROYALTY PAYMENTS, RECORDS AND INSPECTION

6.1  All payments based upon Net Revenues payable hereunder ("Royalty" or
     "Royalties") which have accrued in any Calendar Quarter shall be made
     within forty-five (45) days after the end of such Calendar Quarter.

                                       6
<PAGE>

6.2  Each party shall keep accurate records and books of account in sufficient
     detail to enable all Royalty payments to be determined. A written report
     shall accompany each Royalty payment setting forth in reasonable detail,
     for the applicable Calendar Quarter, the total Royalties that are to be
     paid to a party hereunder and the other party's calculation thereof.

6.3  Upon ten (10) days' prior written notice to a party and during normal
     business hours, but not more frequently than annually, an independent
     auditor of nationally recognized standing agreed to by both parties and
     paid for by the other party may inspect such books and records of such
     party for the one-year period immediately preceding the date of inspection
     to verify the correctness of the reports given to the other party under
     this Section 6. If a material discrepancy is found in such books and
     records, the right of inspection shall extend to books and records for
     periods prior to such one-year period. Each party shall pay any deficiency,
     plus interest thereon from the date each payment was due, calculated at the
     prime rate of Citibank of New York, within thirty (30) days of the date of
     any notice of such discrepancy. If the deficiency for any year is greater
     than ten percent (10%), the reasonable costs of the audit shall be paid by
     such party. All information learned in the course of any examination of
     each party's books and records hereunder, except when it is necessary to
     reveal such information in order to enforce any rights under this Agreement
     in court, or similar dispute resolution or enforcement proceeding or
     action, shall be treated as confidential information.

7.   PRESS RELEASES AND CONFIDENTIALITY

7.1  Upon executing this Agreement, the parties shall issue a joint press
     release as appearing in Exhibit B.

7.2  Upon entering the permitted ThermoFluor Deal in Infection specified in
     Section 3.3 above, 3DP shall issue a press release which identifies
     Scriptgen as part (i.e., a contributing licensor) of the collaboration
     agreement and states that Scriptgen maintains exclusivity under its
     intellectual property rights regarding future Infection collaborations.

7.3  The parties agree that except as provided in Sections 7.1 and 7.2 above,
     the terms and provisions contained herein shall be confidential. It shall
     not be a breach of this Agreement, however, for any party to: (a) disclose
     this Agreement to its outside counsel, or the financial effect hereof to
     its own accountants, auditors, creditors, investors, potential investors,
     merger partners or potential merger partners, provided that such recipients
     are directed to keep the terms confidential; or (b) make any disclosure
     necessary to comply with the financial, public disclosure or other
     reporting requirements under any applicable laws.

8.  NOTICES

8.1  Under this Agreement, all required notices or communications shall be in
     writing and deemed effective upon receipt if sent by first class mail
     (postage prepaid), courier, or facsimile, and addressed as follows:

                                       7
<PAGE>

     For Scriptgen:      Mark T. Weedon
                         President & CEO
                         Scriptgen Pharmaceuticals, Inc.
                         610 Lincoln Street
                         Waltham, MA 02451
                         Telephone: (781) 768-3400
                         Facsimile: (781) 768-5628

     For 3DP:            David C. U'Prichard, Ph.D.
                         Chief Executive Officer
                         3-Dimensional Pharmaceuticals, Inc.
                         Eagleview Corporate Center
                         665 Stockton Drive, Suite 104
                         Exton, Pa 19341
                         Telephone: (610) 458-8959
                         Facsimile: (610) 458-8258

8.2  The address of either party may be changed by notice duly given to the
     other party.

9.   GENERAL PROVISIONS

9.1  This Agreement is executed voluntarily and without any duress or undue
     influence on the parties or their officers, employees, agents, or
     attorneys. Neither party is relying on any inducements, promises, or
     representations not contained herein made by the other party or any of its
     officers, employees, agents, or attorneys.

9.2  If any legal action or other proceeding is brought to enforce the terms of
     this Agreement, the prevailing party shall be entitled to recover its
     reasonable attorneys' fees and other costs incurred in bringing such action
     or proceeding, in addition to any other relief to which such party may be
     entitled.

9.3  Any provision of this Agreement which is invalid, illegal, or unenforceable
     in any jurisdiction shall, as to that jurisdiction, be ineffective only to
     the extent of such invalidity, illegality, or unenforceability, and shall
     not in any manner affect the remaining provisions hereof in such
     jurisdiction or render any other provision of this Agreement invalid,
     illegal, or unenforceable in any other jurisdiction.

9.4  This Agreement shall be governed by and interpreted in accordance with the
     laws of the State of Delaware, United States of America, without regard to
     the conflict of laws principles thereof.

9.5  The headings used herein are for reference and convenience only, and shall
     not enter into the interpretation of this Agreement. This Agreement
     contains the entire agreement between the parties as to the subject matter
     hereof. This Agreement may not be modified or amended except by a written
     amendment signed by an officer of each party.

                                       8
<PAGE>

9.6  Subject to Sections 3.2 and 5.3, this Agreement shall inure to the benefit
     of and be binding on any and all successors in interest to the parties
     hereto.

9.7  It shall not be a breach of this Agreement for either party to fail to
     perform its obligations under this Agreement on account of any act of God
     or other cause beyond the control of the affected party, subject to such
     party performing such obligation as soon as possible thereafter.

9.8  A breach of any provision of this Agreement may only be waived in writing
     and the waiver of such breach shall not operate or be construed as a waiver
     of any subsequent breach.

9.9  Each party represents and warrants that it has the full and unencumbered
     right, power and authority to enter into this Agreement, to grant the
     license rights granted hereunder, and otherwise to carry out its
     obligations thereunder.

9.10 In making and performing this Agreement, the parties hereto are acting and
     shall act as independent contractors. Neither party is, nor will be deemed
     to be, an agent, legal representative, joint venturer or partner of the
     other party for any purpose. Neither party will be entitled to bind the
     other party without prior written approval, and each party shall bear its
     own expenses and costs in connection with performing its obligations under
     this Agreement.

9.11 This Agreement may be executed originally or by facsimile signature in
     multiple counterparts, each of which shall be deemed an original and all of
     which together shall constitute one instrument, provided however, that this
     Agreement shall not be binding upon either of the parties until such time
     it is actually executed by duly authorized officers of both parties.

IN WITNESS WHEREOF, the parties hereto have caused duplicate originals of this
Settlement Agreement to be executed by their duly authorized officers on the
date(s) set forth below:

Scriptgen Pharmaceuticals, Inc.              3-Dimensional Pharmaceuticals, Inc.



By: /s/ Mark T. Weedon                       By: /s/ David C. U'Prichard
    --------------------------------             -------------------------------
Printed Name: Mark T. Weedon
Title: President & Chief Executive Officer   Printed Name:  David C. U'Prichard
Date: March 7, 2000                          Title:  Chief Executive Officer

                                       9

<PAGE>

                                      10
<PAGE>

                                                                       Exhibit A
                                                                       ---------


                      IN THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF DELAWARE

SCRIPTGEN PHARMACEUTICALS, INC.,              :

               Plaintiff,                     :

     v.                                       :       C.A. No. 98-583 (GMS)

3-DIMENSIONAL PHARMACEUTICALS, INC.,          :

                                              :

               Defendant.                     :


                         STIPULATED ORDER OF DISMISSAL
                         -----------------------------

     Pursuant to Fed. R.Civ.P. 41(a)(1), it is hereby stipulated by the parties,
subject to the approval of the Court, that this action, including all claims and
counterclaims, is dismissed, with each party to bear its own costs.


                                    POTTER ANDERSON & CORROON LLP



                                    -------------------------------
                                    Richard L. Horwitz (#2246)
                                    Joanne Ceballos (#2854)
                                    Hercules Plaza
                                    P.O. Box 951
                                    Wilmington, Delaware 19899-0951
                                    (302) 984-6000

                                    Attorneys for Plaintiff
                                    Scriptgen Pharmaceuticals, Inc.
<PAGE>

                                    MORRIS, NICHOLS, ARSHT &
                                    TUNNELL



                                    -------------------------------
                                    Jack B. Blumenfeld (#1014)
                                    Julia Heaney (#3052)
                                    1201 N. Market Street
                                    P.O. Box 1347
                                    Wilmington, DE 19899-1347
                                    (302) 658-9200

                                    Attorneys for Defendant
                                    3-Dimensional Pharmaceuticals, Inc.

SO ORDERED this _ day of

__________________, 2000


_____________________________
United States District Judge
<PAGE>

                                                         Exhibit B
                                                         ---------
Contacts:

For Scriptgen:
  Mark T. Weedon                                  Gretchen L.P. Schwaltzer
  Chief Executive Officer                         Feinstein Kean Healthcare
  (781) 768-3400                                  (617) 577-8110

For 3-Dimensional Pharmaceuticals, Inc.
  Michael J. Wassil                               Jerry Parrott
  Chief Financial Officer                         Jerry Parrott & Associates
   (610) 458-6073                                 (212) 472-1244

For Immediate Release
---------------------

                    Scriptgen and 3DP Settle Patent Dispute

        Companies Cross-License High Throughout Screening - Technologies
                           To Advance Drug Discovery

Waltham, Massachusetts, and Exton, Pennsylvania, January XX, 2000 - Scriptgen
Pharmaceuticals, Inc. and 3-Dimensional Pharmaceuticals, Inc. (3DP) announced
today a mutually beneficial settlement of their dispute over Intellectual
property.  3DP has agreed to purchase a limited, non-exclusive worldwide license
to current and pending patents relating to Scriptgen's ATLAS(R) (Any Target
Ligand Affinity Screen) assay technology - a system for identifying compounds
that are drug candidates.  3DP will grant Scriptgen a limited, non-exclusive
worldwide license to pending patents relating to 3DP's ThermoFluor(R) assay
technology.  Under the agreement, both companies can utilize their respective
assay technologies for the identification of novel drugs in a broad range of
therapeutic areas, however, Scriptgen does maintain a preferential position in
the area of anti-infectives.  Financial terms were not disclosed.

Scriptgen Pharmaceuticals, Inc. (http://www.scriptgen.com) is a leader in the
discovery of drugs to control the expression of genes.  Current programs in the
anti-infective area have identified multiple new drug targets and lead compounds
effective against drug-resistant bacterial, fungal and viral pathogens.
Scriptgen's products include GATH, a family of high-throughput target.
Identification and validation technologies and ATLAS and SCAN, high-throughput
screening technologies for proteins and RNA targets, respectively.

3-Dimensional Pharmaceuticals, Inc. is a drug discovery company using
DiscoverWorks(TM), a proprietary technology platform, to reduce the costs and
improve the quality of drugs entering clinical trials.  DiscoverWorks(TM)
uniquely integrates high-throughput screening, combinatorial chemistry and
structure-based drug design for efficient drug discovery using targets from
genome sequencing.  3DP uses DiscoverWorks(TM) in its own drug discovery
programs and to provide discovery services to pharmaceutical and agrochemical
partners.  The company's
<PAGE>

internal research programs are focused on the discovery of orally active small-
molecule pharmaceuticals for the treatment of cardiovascular disease and cancer.
(http://www.3dp.com).
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.16
<SEQUENCE>7
<FILENAME>0007.txt
<DESCRIPTION>RESEARCH AGMT BTWN THE COMPANY & BIOCRYST PHARM.
<TEXT>

<PAGE>

                                                                   Exhibit 10.16


                       RESEARCH COLLABORATION AGREEMENT

     This RESEARCH COLLABORATION AGREEMENT (the "Agreement"), effective as of
October 18, 1996 (the "Effective Date"), is made by and between 3-Dimensional
Pharmaceuticals, Inc. ("3DP"), a Delaware corporation, having a principal place
of business at 665 Stockton Drive, Suite 104, Exton, Pennsylvania 19341, and
BIOCRYST Pharmaceuticals, Inc. ("BIOCRYST"), a Delaware corporation, having a
principal place of business at 2190 Parkway Lake Drive, Birmingham, Alabama
35244.

                                  BACKGROUND

     WHEREAS, 3DP has rights to certain compound libraries and to certain
synthesis and screening technologies (including the DirectedDiversity
technology and the ThermoFluor technology) which, when applied, may reduce the
time and expense of identifying and developing potentially useful compounds for
use in the prevention, treatment, diagnosis and monitoring of diseases, states
and conditions in humans;

     WHEREAS, BIOCRYST has identified certain compounds that are inhibitors of
enzymes or proteins in the Complement System through structure-based drug
design, has conducted extensive research and analysis of the Complement
System, and has certain discoveries, inventions, know-how and technologies
related to the identification, development and optimization of compounds that
are active as inhibitors of the Complement System;

     WHEREAS, subject to the terms and conditions of this Agreement, 3DP
and BIOCRYST desire to have access to each other's technologies, discoveries and
inventions and conduct a joint research program to attempt to identify and
optimize compounds that act as inhibitors of proteins and enzymes in the
Complement System.

     NOW, THEREFORE, for and in consideration of the foregoing premises, and the
covenants, conditions, and undertakings set forth herein, the receipt and
sufficiency of which the parties hereby acknowledge, it is agreed by and between
the parties as follows:

                                   ARTICLE 1
                                  DEFINITIONS

     For purposes of this Agreement the following terms shall have the following
meanings:

     1.1       "3DP Compound" shall mean a compound contained in a 3DP Library
                ------------
and/or any other compound synthesized by 3DP independently of the Research
Program for activity outside the Field excluding BIOCRYST Compounds and any
compound contained in a Focused Library.

     1.2       "3DP Library" shall mean any chemical compound library developed
                -----------
by or on behalf of 3DP independently of the Research Program for activity
outside the Field using the 3DP Technology and excluding Focused Libraries.

     1.3       "3DP Technology" shall mean the patented and proprietary
                --------------
technology developed, licensed or acquired by 3DP prior to the Effective Date or
developed, licensed or acquired by 3DP after the Effective Date either
independently of the Research Program or by 3DP alone without any assistance or
contribution from BIOCRYST as part of the Research Program, which is useful for
the creation of custom combinatorial chemical libraries as well as


**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed separately with the Commission.
<PAGE>

the chemical synthesis of compounds contained in such libraries, including
without limitation the screening technologies known as DirectedDiversity and
ThermoFluor.

     1.4       "Affiliate" shall mean any corporation, firm, partnership or
                ---------
other entity which during the term of this Agreement controls, is directly or
indirectly owned by or controlled by or is under common control with 3DP or
BIOCRYST, respectively, but only for so long as such entity controls, is
directly or indirectly owned by or controlled by, or is under common control
with 3DP or BIOCRYST. For this purpose, control means the possession of the
power to direct or cause the direction of the management and the policies of an
entity whether through ownership, either directly or indirectly, of over fifty
percent (50%) of the stock entitled to vote, or in the case of a non-corporate
entity, the right to receive over fifty percent (50%) of either the profits or
the assets upon dissolution or if not meeting the preceding requirements, any
company owned or controlled by or owning or controlling 3DP or BIOCRYST at the
maximum control or ownership right permitted in the country where such company
exists.

     1.5       "BIOCRYST Compounds" shall mean (i) the compounds and classes of
                ------------------
compounds specified on Exhibit A attached hereto, which have been identified by
                       ---------
BIOCRYST prior to the Effective Date as having activity (or potential activity)
as an inhibitor of enzymes or proteins in the Complement System and (ii) any
derivatives of the compounds specified in  Exhibit A that are
                                           ---------
"obvious" to scientists skilled in the art of compound structure or drug design.
For purposes of this definition, "obvious" shall have the meaning ascribed to
such term by the Federal Patent Laws of the United States of America.

     1.6       "BIOCRYST Compound Derivative" shall mean a compound that (i)
                ----------------------------
has been synthesized in the course of the Research Program and demonstrates
activity within the Field, (ii) is not a BIOCRYST Compound but (iii) is a non-
obvious derivative of a BIOCRYST Compound. For purposes of this definition,
"obvious" shall have the meaning ascribed to such term by the Federal Patent
Laws of the United States of America.

     1.7       "BIOCRYST Technology" shall mean BIOCRYST's structure based drug
                -------------------
design technologies developed, licensed or acquired by BIOCRYST prior to the
Effective Date or developed, licensed or acquired by BIOCRYST after the
Effective Date either independently of the Research Program or by BIOCRYST alone
without any assistance or contribution from 3DP as part of the Research Program.

     1.8       "Complement System" shall mean the system of plasma proteins
                -----------------
that work to eliminate microorganisms and other antigens from tissues and
blood. This task is achieved either by complement components alone or by
complement components in conjunction with antibodies and/or cells that express
complement receptors.

     1.9       "Confidential Information" means all non-public, proprietary or
                ------------------------
otherwise confidential information, now owned, licensed or controlled or
hereafter acquired, developed, owned, licensed or controlled by a disclosing
party or any of its Affiliates during the Term of this Agreement. Confidential
Information shall include, but not be limited to: (i) BIOCRYST Compounds and
BIOCRYST Technology; (ii) the 3DP Libraries, the 3DP Compounds and the 3DP
Technology; (iii) Focused Libraries and Research Results; (iv) Lead Compounds,
BIOCRYST Compound Derivatives, Optimized Lead Compounds, and Development
Candidates; and (v) Products prior to their first commercial sale.



**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed separately with the Commission.

                                       2
<PAGE>

     1.10      "Consultant" shall mean any Third Party that has been retained by
                ----------
either party to assist such party in performing any of its research obligations
under this Agreement, and, in the case of BIOCRYST, includes, without
limitation, the University of Alabama at Birmingham.

     1.11      "Development Candidate" shall mean a Lead Compound, BIOCRYST
                ---------------------
Compound Derivative or an Optimized Lead Compound identified in the course of
the Research Program that meets the criteria for full preclinical development of
such compound into a drug for human use (i) as set forth in the Research Plan or
(ii) as otherwise agreed by the parties.

     1.12      "Field" shall mean inhibitors of the Complement System enzymes
                -----
and proteins specified in Exhibit B attached hereto, and all uses and
applications thereof; provided, however, that the Field may be broadened to
                      --------  -------
include other Complement System enzymes and proteins by mutual agreement of
both parties in writing.

     1.13      "Focused Assay" shall mean a test or trial developed specifically
                -------------
for screening against Focused Libraries in the course of the Research Program,
to identify Lead Compounds, BIOCRYST Compound Derivatives or Optimized Lead
Compounds that have activity in the Field, including, without limitation,
ThermoFluor technology.

     1.14      "Focused Library" shall mean any chemical compound library that
                ---------------
has been synthesized by or on behalf of 3DP specifically for use by or on behalf
of 3DP or BIOCRYST in the course of the Research Program.

     1.15      "Interest" shall mean a party's right, title and interest in any
                --------
Jointly Owned Right.

     1.16      "Invention" shall mean any invention or discovery, whether or not
                ---------
patented or patentable, including, but not limited to, discoveries,
compositions, know-how, procedures, technical information, and any process,
method, device, formula, protocol, technique, design, drawing, methodology, and
biological or chemical material.

     1.17      "Jointly Owned Rights" shall have the meaning ascribed to such
                --------------------
term in Section 5.2 hereto.

     1.18      "Lead Compound" shall mean a chemically defined compound that
                -------------
has been synthesized in the course of the Research Program, has activity in the
Field and which meets the criteria set forth in the Research Plan to be fit for
optimization, but excluding BIOCRYST Compounds and BIOCRYST Compound
Derivatives.

     1.19      "License Income" shall mean the gross amount actually received by
                --------------
either party or its Affiliates for or on account of authorized licenses of
rights to any Development Candidate or any Product containing such Development
Candidate, including upfront license fees, milestone payments and royalties (the
amount of the gross royalties being determined by the terms of the agreement
with the authorized licensee, which may take into account factors such as
combination sales) without deduction of any kind, but excluding the following:



**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed separately with the Commission.

                                       3
<PAGE>

               (a)  Payments received by either party or its Affiliate solely
          for performance of research and development, including but not limited
          to milestone payments for achievement of objectives in research and
          development, only to the extent that such payments cover the actual
          cost of the research and development work.

               (b)  Investments made by a licensee in either party or its
          Affiliates to the extent that such investments are made at current
          market value, including but not limited to, any payments or other
          consideration representing the current market value of shares in such
          party or its Affiliates.

               (c)  Payments made to either party or its Affiliate solely to the
          extent that they cover the actual costs of conducting clinical testing
          and other activities in connection with obtaining regulatory approval
          for a Product.

               (d)  Reimbursed expenses of either party or its Affiliates.

          For purposes of Subparagraph (b) above, the "current market value" of
the investment shall be determined as follows: (i) it shall be determined as at
the earlier of (a) the date when the investment is made or (b) the day prior to
the date when the investment is first publicly disclosed on the Dow Jones News
                                                                --------------
Wire (the "Determination Date"); (ii) if there is no public market for the
----
party's securities that are being purchased by the licensee, then the current
market value shall be determined by that party's Board of Directors in good
faith, and if the other party disputes such determination, the current market
value shall be determined by an independent investment banker whose fees shall
be shared by the parties; (iii) if there is a public market for such party's
securities that are being purchased by the licensee, then the current market
value shall be determined using the average of the closing price quoted on any
exchange on which the securities are listed as published in The Wall Street
                                                            ---------------
Journal for the ten (10) trading days prior to the Determination Date.
-------
Notwithstanding the foregoing, in the event the licensee is purchasing a party's
securities in connection with such party's initial public offering of such
securities, the current market value shall be determined using the offering
price of such securities to the public in such party's initial public offering.
                                                                              -

     1.20 "Net Sales" shall mean the gross invoice price of a Product sold by
           ---------
3DP, BIOCRYST or their Affiliates ("Selling Party") to Third Parties, less, to
the extent included in such invoice price, the total of: (i) ordinary and
customary trade discounts actually allowed; (ii) credits, rebates and returns;
(iii) freight, postage, and duties paid for and separately identified on the
invoice or other documentation maintained in the ordinary course of business;
and (iv) excise taxes, sales taxes, value added taxes, and duties actually paid
and separately identified on the invoice or other documentation maintained in
the ordinary course of business. Net Sales shall also include the amount or fair
market value of all other considerations received by the Selling Party from
Third Parties in respect of a Product, whether such consideration is in cash,
payment in kind, exchange, or another form. Sales between or among 3DP or
BIOCRYST and their respective Affiliates or authorized licensees shall be
excluded from the computation of Net Sales, except where such Affiliates or
authorized licensees are end users of the Product, in which case such sales
shall be deemed to have been made for cash at a price equal to the amount that
would

                                       4
<PAGE>

be charged to a Third Party at such time, in an arms-length transaction for a
similar quantity of the Product. A "sale" of a Product is deemed to occur upon
the earlier of invoicing, shipment or transfer of title in the Product to a
Third Party, unless a party's Affiliate or licensee is an end user of the
Product, in which case the sale shall occur upon the transfer of the Product to
the Affiliate or licensee that is the end user. In the event that a Product is
sold or distributed for use in combination with or as a component of other
products, the calculation of "Net Sales" from such combination product shall be
determined (i) by agreement of the parties acting reasonably in good faith or
(ii) if agreement cannot be reached within six (6) months after commencement of
negotiations, by arbitration in accordance with Article 10 hereof, in either
case considering the relative importance and proprietary protection of the
various products and components involved.

     1.21      "Optimized Lead Compound" shall mean a Lead Compound or a
                -----------------------
BIOCRYST Compound Derivative which, through a process of optimization,
demonstrates a specified level of activity in the Field (i) as set forth in the
Research Plan or (ii) as otherwise agreed by the parties.

     1.22      "Patent Rights" shall mean patent applications and issued
                -------------
patents, in the United States or any other country or jurisdiction, as well as
any divisions, continuations, continuations-in-part, reissues, reexaminations,
patents of addition, extensions or other governmental actions which extend any
of the subject matter of such patent application or patent, and any
substitutions, confirmations, registrations, or revalidation of any of the
foregoing.

     1.23      "Product" shall mean any product containing a Development
                -------
Candidate.

     1.24      "Proprietary Rights" shall mean Patent Rights, copyrights, trade
                ------------------
secret rights, trademarks and similar rights.

     1.25      "Research Committee" or "RC" shall mean the research organization
                ------------------      --
comprising representatives of 3DP and BIOCRYST as described in Article 3 hereof.

     1.26      "Research Plan" shall mean the written overall plan prepared by
                -------------
the RC for the Research Program the parties will conduct in the Field during the
Term.

     1.27      "Research Program" shall mean the program of collaborative
                ----------------
research in the Field to be carried out by the parties in accordance with the
Research Plan and the terms and conditions of this Agreement.

     1.28      "Research Program Invention" shall mean an Invention first
                --------------------------
conceived, identified, isolated, created or first reduced to practice by the
parties, either independently or jointly, in the course of the Research Program
excluding any improvement to 3DP's DirectedDiversity, BIOCRYST Technology and
either party's assay technologies.

     1.29      "Research Results" shall mean all data and information arising
                ----------------
from either party's performance of its obligations under the Research Plan in
the course of the Research Program.

                                       5
<PAGE>

     1.30      "Term" shall mean the period commencing on the Effective Date and
                ----
terminating in accordance with Article II hereof.

     1.31      "Third Party" shall mean any person, business or entity other
                -----------
than 3DP, BIOCRYST, and their respective Affiliates.

     1.32      "Third Party Obligation" shall mean any contractual or other
                ----------------------
obligation of a party or any of its Affiliates to a Third Party, including,
without limitation, an obligation to make payments to a Third Party for a
license to technology or in respect of a Third Party's Proprietary Rights.

     1.33      "Unresolved Dispute" shall mean a dispute or disagreement that
                ------------------
has arisen between the parties in connection with the validity, construction,
meaning, enforceability, or performance of this Agreement or in connection with
any aspect of the arrangements under this Agreement, that has been submitted for
resolution to the RC, and to the senior officers of each party in accordance
with Section 3.4 hereof, and remains unresolved after taking such steps.

                                   ARTICLE 2
                        COLLABORATIVE RESEARCH PROGRAM

     2.1       Preparation of Research Plan.  Promptly after execution of this
               -----------------------------
Agreement, the parties' representatives on the RC shall commence preparation of
a detailed research plan which shall set forth the parties' respective
obligations and responsibilities in connection with the Research Program. Once
the RC has prepared the proposed research plan, it shall submit the proposed
research plan to the appropriate members of management of both parties for their
review. Once the parties mutually agree that the proposed research plan is in an
acceptable form, the proposed research plan shall become the Research Plan for
purposes of this Agreement once it has been executed and delivered by a duly
authorized representative of each party.

     2.2       Research Program Activities.  Once the Research Plan has been
               ----------------------------
completed and executed and delivered, subject to the terms and conditions set
forth herein, the parties shall carry out the Research Program in accordance
with the Research Plan with the goal of identifying Lead Compounds and Optimized
Lead Compounds. The RC shall review the Research Plan on an ongoing basis and
may revise the Research Plan periodically or as necessary by agreement of the RC
in accordance with Article 3 hereto.

               2.2.1     BIOCRYST's Responsibilities.  BIOCRYST shall have the
                         ---------------------------
following responsibilities, which shall be carried out in accordance with the
Research Plan in the Field:

                         (a)  providing results of its research, structural
               knowledge of compounds and information regarding Research
               Program Inventions, all within the Field;

                         (b)  through its participation in the RC, designing
               Lead Compounds based in part on the structural knowledge,
               discoveries, Research Program Inventions, research results and
               expertise described in Section 2.2.1(a) above;

                                       6
<PAGE>

                         (c)  conducting optimization of Lead Compounds or
               BIOCRYST Compound Derivatives either independently or jointly
               with 3DP;

                         (d)  conducting preliminary preclinical
               pharmacological analyses of Lead Compounds and Optimized Lead
               Compounds to evaluate potency, efficacy and selectivity;

                         (e)  presenting Lead Compounds, Optimized Lead
               Compounds and the Research Results in relation thereto to the RC;

                         (f)  providing adequate reagents for screening;

                         (g)  screening assays as appropriate to validate and
               confirm Focused Assay results; and

                         (h)  performing such other responsibilities set forth
               in this Agreement or that the parties may mutually agree upon
               in writing.

               2.2.2     3DP's Responsibilities. 3DP shall have the following
                         -----------------------
responsibilities, which shall be carried out in accordance with the Research
Plan in the Field:

                         (a)  preparing Focused Libraries;

                         (b)  preparing Focused Assays;

                         (c)  screening the Focused Libraries using the Focused
               Assays of its DirectedDiversity technology and ThermoFluor
               technology, conducting chemical synthesis of the compounds in
               the Focused Library which have activity in the Field discovered
               by such screening, identifying Lead Compounds and providing
               Research Results in relation thereto to the RC;

                         (d)  conducting optimization of Lead Compounds or
               BIOCRYST Compound Derivatives either independently or jointly
               with BIOCRYST;

                         (e)  presenting Lead Compounds, Optimized Lead
               Compounds and Research Results in relation thereto to the RC; and

                         (f)  performing such other responsibilities set forth
               in this Agreement or that the parties may mutually agree upon in
               writing.

               2.2.3     Research Licenses.  Subject to all the terms and
                         ------------------
conditions of this Agreement, and only to the limited extent necessary for the
purposes of this Agreement, each party (the "Licensor") hereby grants to the
other party (the "Licensee") under its Proprietary Rights, a royalty free, non-
transferable, non-sublicensable, license to conduct the Licensee's research
responsibilities under the Research Plan for the Term of this Agreement.

                                       7
<PAGE>

               2.2.4     Disclosure of Research Results and Research Program
                         ---------------------------------------------------
Inventions. Each party shall promptly disclose in writing to the chief
----------
scientific officer of the other party and to the RC, all Research Results and
Research Program Inventions it develops, conceives or first reduces to practice
in the course of the Research Program.

     2.3  Access to Focused Libraries and Screening.  BIOCRYST shall have direct
          ------------------------------------------
access to the Focused Libraries during the Research Program, as is necessary for
purposes of the Research Program.

     2.4  BIOCRYST Compounds and BIOCRYST Technology.  3DP acknowledges that (i)
          --------------------------------------------
BIOCRYST has previously expended substantial financial and research resources in
relation to its work in the Field and the BIOCRYST Technology that exists as of
the Effective Date, (ii) has identified the BIOCRYST Compounds and (iii) has an
on-going research, development and commercialization program in relation to the
BIOCRYST Compounds in the Field which BIOCRYST shall be conducting independently
of the arrangements under this Agreement. Notwithstanding any other provision of
this Agreement to the contrary, the parties agree that BIOCRYST shall be free to
(a) conduct its independent research, development and commercialization program
in the Field in relation to BIOCRYST Compounds using the BIOCRYST Technology,
(b) research, develop and commercialize BIOCRYST Compounds and any product or
service based thereon in the Field, without restriction, reference or payment to
3DP, (c) conduct any independent research, development and commercialization
program outside the Field in relation to BIOCRYST Compounds and BIOCRYST
Technology and (d) research, develop and commercialize BIOCRYST Compounds,
BIOCRYST Technology and any product or service based thereon outside the Field,
without restriction, reference or payment to 3DP.

     2.5  3DP Compounds, 3DP Libraries and 3DP Technology.  BIOCRYST
          -------------------------------------------------
acknowledges that 3DP (i) has previously expended substantial financial and
research resources in relation to the 3DP Compounds, the 3DP Libraries and the
3DP Technology that exist as of the Effective Date and (ii) has an on-going
research, development and commercialization program in relation to the 3DP
Compounds, the 3DP Libraries and the 3DP Technology outside the Field which 3DP
shall be conducting independently of the arrangements under this Agreement.
Notwithstanding any other provision of this Agreement to the contrary, the
parties agree that 3DP shall be free to (a) conduct its independent research,
development and commercialization program outside the Field in relation to the
3DP Compounds, the 3DP Libraries and the 3DP Technology, (b) research, develop
and commercialize such 3DP Compounds, 3DP Libraries, the 3DP Technology and any
product or service based thereon outside the Field, without restriction,
reference or payment to BIOCRYST and (c) test within the Field any 3DP Compounds
which have activity outside the Field solely to establish the potential for
side-effects.

     2.6  Records.  3DP, BIOCRYST and their Affiliates shall maintain records of
          --------
their own activities and conduct in the course of the Research Program (or cause
such records to be maintained) in sufficient detail and in good scientific
manner as will properly reflect all work done and results achieved in the
performance of the Research Program (including, but not limited to, all data in
the form required under any applicable governmental regulations and as

                                       8
<PAGE>

directed by the RC). Each party shall allow the other party, at the other
party's sole cost, to have reasonable access to all pertinent materials and data
generated by or on behalf of such party in connection with the Research Program.

     2.7  Expenditures.
          -------------

          2.7.1     BIOCRYST Expenditures.  BIOCRYST shall bear all costs and
                    ----------------------
expenses (other than 3DP's costs of participating in the RC and reviewing the
Research Results from BIOCRYST's work) related to (i) performance of its
obligations under Section 2.2.1 hereof and (ii) performance of all its other
obligations under the Research Plan.

          2.7.2     3DP Expenditures.  3DP shall bear all costs and expenses
                    -----------------
(other than BIOCRYST's costs of participating in the RC and reviewing the
Research Results from 3DP's work) related to (i) performance of its obligations
under Section 2.2.2 hereof and (ii) performance of all its other obligations
under the Research Plan.

          2.7.3     Third Party Obligations.  Each party shall be responsible
                    ------------------------
for its own Third Party Obligations in connection with the Research Program,
this Agreement and any further development and commercialization of a
Development Candidate and any Product containing such Development Candidate. In
the event that it is necessary for either party to acquire any new Third Party
Obligations (i.e., a Third Party Obligation not existing as of the Effective
             ----
Date) for the conduct of its duties and obligations under the Research Program,
the party acquiring such license shall be solely responsible for such Third
Party Obligations, unless the parties mutually agree in writing to alternative
arrangements.

          2.7.4     After determination of a Development Candidate. After the
                    -----------------------------------------------
date on which the RC determines that an Optimized Lead Compound is a Development
Candidate, the parties shall no longer be responsible individually for
expenditures in relation to such Development Candidate. All such post-
determination expenditures shall be borne in accordance with the arrangements
set forth in Sections 2.9 and 2.10 hereof and any other arrangements the parties
mutually agree upon in writing.

     2.8  Development Candidates.
          ----------------------

          2.8.1     Determination of Development Candidates. The RC shall have
                    ---------------------------------------
responsibility for determining if an Optimized Lead Compound meets the criteria
specified in the Research Plan for a Development Candidate. If the RC determines
that an Optimized Lead Compound is a Development Candidate, it shall promptly
give written notice of its decision to each of the parties (a "Development
Candidate Notice"). The RC shall also prepare a written report of the Research
Results in relation to such Development Candidate and deliver a copy of such
report to each of the parties as soon as possible after giving each party the
Development Candidate Notice.

          2.8.2     Joint Notice.  Provided that a Development Candidate Notice
                    -------------
and Research Results report have been delivered to each party in accordance with
Section 2.8.1 hereof, if within sixty (60) days of the date of the determination
of a Development Candidate by

                                       9
<PAGE>

the RC each party gives written notice to the other that it desires to fund
development and commercialization of the Development Candidate, the parties
shall promptly after receipt of the later of the two notices enter into good
faith negotiations in accordance with Section 2.9 hereof.

          2.8.3     Single Notice.  Provided that a Development Candidate
                    --------------
Notice and Research Results report have been delivered to each party in
accordance with Section 2.8.1 hereof, if within sixty (60) days of the date of
the determination of a Development Candidate by the RC, only one party (the
"Electing Party") gives written notice to the other that it desires to fund
development and commercialization of the Development Candidate, the Electing
Party shall have exclusive rights to develop and commercialize the Development
Candidate at its sole expense in accordance with Section 2.10 hereof.

     2.9  Joint Development and Commercialization.  In the event that both
          ----------------------------------------
parties elect to develop and commercialize a Development Candidate in accordance
with Section 2.8.2 hereof, the parties shall promptly, after such election,
begin good faith negotiations as to the arrangements and terms and conditions
for further development and commercialization of such Development Candidate,
including without limitation, the following:

          2.9.1     Funding Commitments.  The parties shall determine the
                    --------------------
funding commitments and arrangements for the development and commercialization
of each Development Candidate. Such funding commitments and arrangements shall
include, without limitation, the cost of providing research scientists,
administration and management staff, research facilities, animal studies,
clinical trials, and manufacturing. The parties shall also determine a written
budget for the short term funding commitments. If the parties agree to share
equally the funding commitments for the development and commercialization of the
Development Candidate, the parties shall also share equally in any income from
the commercialization of any resulting products or services. If the parties
agree to unequal funding commitments for the development and commercialization
of such Development Candidate, any income from resulting products or services
shall be shared in proportion to the funding commitments made by the parties.
The funding commitments and arrangements, reallocation of interests in a
Development Candidate in the event of failure to meet funding commitments and
the arrangements for sharing of income from the commercialization of any Product
containing the Development Candidate shall be dealt with in a written agreement
between the parties (a "Development and Commercialization Agreement").

          2.9.2     Development.  The Development and Commercialization
                    ------------
Agreement shall also identify the party or parties and/or any Third Parties that
shall be responsible for carrying out the development and commercialization of
the Development Candidate into a Product.

          2.9.3     Licenses.  The Development and Commercialization Agreement
                    ---------
shall also specify the terms of the grant of any necessary licenses or
assignments of rights to the Development Candidate, Research Results, and
Proprietary Rights in relation thereto.

          2.9.4     Third parties.  BIOCRYST and 3DP may also consider
                    --------------
reasonable proposals for development and commercialization of the Development
Candidate by one or more Third Parties, with or without any participation by
BIOCRYST and/or 3DP.

                                       10
<PAGE>

     2.10 Independent Development and Commercialization.  The parties agree that
          ----------------------------------------------
a party shall be an "Independently Developing Party" in respect of a Development
Candidate if (i) such party is the Electing Party pursuant to Section 2.8.3
hereof, (ii) the parties agree in writing that such party will be solely
responsible for the future funding of the development and commercialization of a
Development Candidate, or (iii) the other party has paid less than its agreed
share of the funding for the development and commercialization of the
Development Candidate for a period in excess of six (6) months. If a party
becomes an Independently Developing Party, the other party shall thereafter be
referred to as the "Non-Developing Party" in respect of such Development
Candidate. Each party agrees that if the other party becomes an Independently
Developing Party, it, as the Non-Developing Party with respect to such
Development Candidate, shall and hereby does grant the Independently Developing
Party, in respect of the subject Development Candidate and limited to the Field,
an exclusive, worldwide, fully sublicensable, irrevocable license, under all of
its Proprietary Rights relating in any way to the Development Candidate and any
Product containing the Development Candidate, to develop, improve, modify, make,
have made, use and sell the Development Candidate and any Product containing the
Development Candidate, subject to the terms and conditions of this Agreement.
The Independently Developing Party shall indemnify, defend and hold harmless the
Non-Developing Party and its employees and agents (the "Non-Developing Party
Indemnitee"), against any and all causes of action, liability, damage, loss or
expense (including, but not limited to, reasonable fees and disbursements of
counsel incurred by the Non-Developing Party Indemnitee in any action or
proceeding between the Independently Developing Party and the Non-Developing
Party Indemnitee or between the Non-Developing Indemnitee and any third party or
otherwise) arising from (a) any product liability or other lawsuit, claim,
demand or other action brought with respect to the subject Development Candidate
or any Product based thereon, or (b) the death of or injury to any person or
persons, damage to property, or any other claim, proceeding, demand, expense and
liability of any kind whatsoever resulting from the design, testing (including,
without limitation, clinical trials), production, manufacture, shipping,
handling, use (in commerce or otherwise), sale, lease, consumption, promotion or
advertisement of the subject Development Candidate or any Product based thereon.
The foregoing indemnity shall be subject to the procedures set forth in Section
9.3 hereof.  The parties also agree to negotiate in good faith as to any other
terms and conditions as are necessary in relation to the independent development
of a Development Candidate by an Independently Developing Party. If the Non-
Developing Party has made no or nominal funding payments for the development and
commercialization of the subject Development Candidate, the Minimum Royalty as
described in Section 2.11 hereto shall be the only payment due to the Non-
Developing Party for the subject Development Candidate, the license granted to
the Independently Developing Party in respect of the Development Candidate under
this Section 2.10, and the Non-Developing Party's contribution to the
identification and optimization of the Development Candidate as part of the
Research Program. In the event that the Non-Developing Party has made some
funding payments in respect of the Development Candidate, the Non-Developing
Party shall be entitled to the payments specified by the applicable Development
and Commercialization Agreement, which shall not be less than the Minimum
Royalty unless the parties otherwise agree in writing.


     2.11 Minimum Royalty for Non-Developing Party.  Unless the parties
          -----------------------------------------
otherwise agree in writing, a Non-Developing Party shall be entitled to a
minimum payment in respect of the subject Development Candidate and any
Product containing such Development Candidate, on a country-by-country basis,
equal to [**] of the Net Sales of such Product by the Independently Developing
Party and its Affiliates in the particular country and/or [**] of License
Income received by the Independently Developing Party and its Affiliates in
relation to such Development Candidate and any Product containing such
Development Candidate in the particular country; provided that such payments
shall only be due if, at the time of the sale, the Development Candidate or
Product is claimed in (i) a pending claim contained in a patent application in
such country, or (ii) a valid and unexpired claim contained in a patent in
such country (the "Minimum Royalty").


**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed separately with the Commission.

                                       11
<PAGE>

                                   ARTICLE 3
                                  MANAGEMENT

     3.1  Research Committee.  The parties shall establish a Research Committee
          ------------------
("RC") which shall be in existence for the Term of this Agreement, to oversee,
review and coordinate the conduct of the Research Program.  The responsibilities
of the RC shall include without limitation:

          3.1.1     drafting the Research Plan promptly after the execution of
                    this Agreement;

          3.1.2     determining the research and manpower commitments to be
                    made by the parties pursuant to the Research Plan;

          3.1.3     determining criteria for Lead Compounds, Optimized Lead
                    Compounds and Development Candidates;

          3.1.4     reviewing the Research Results, choosing Lead Compounds for
                    optimization and reporting research progress towards the
                    Research Program's objectives to each of the parties;

          3.1.5     ensuring open and frequent exchange between both parties of
                    biological, chemical, screening and other technological
                    advances and Research Program Inventions;

          3.1.6     reviewing the Research Program's objectives, and proposing
                    appropriate changes to the Research Plan as necessary;

          3.1.7     reviewing all patent applications for Research Program
                    Inventions and coordinating all other patent related
                    activities resulting from the Research Program in
                    accordance with the terms of this Agreement; and

          3.1.8     taking such other actions as the parties may mutually
                    agree, from time to time, during the Term of this Agreement.

     3.2  Membership of Research Committee.  The RC shall be comprised of three
          --------------------------------
representatives from each of 3DP and BIOCRYST.  Each party's representatives
shall be selected solely by that party, but must be appropriately technically
qualified.  The initial representatives of each party on the RC are listed on
Exhibit C attached hereto.  3DP and BIOCRYST may replace their respective RC
---------
representatives at any time, upon written notice to the other party.  The RC
shall be chaired as agreed by the members of the RC.  From time to time, the RC
may establish subcommittees to oversee particular projects or activities, and
such subcommittees will be constituted as the RC agrees.

     3.3  RC Meetings.  During the Term of this Agreement, the RC shall meet at
          -----------
least four (4) times per year either in person or by telephone or video
conference, at regular intervals, or more often as agreed by the parties, at
alternate or such other mutually agreed locations and times as the parties
agree.  With the consent of the parties, other representatives of 3DP or

                                       12
<PAGE>

BIOCRYST or their Affiliates may attend RC meetings as non-voting observers.
Each party shall be responsible for all of its own expenses in connection with
the RC, including without limitation, compensation, if any, for its
representatives to the RC.

     3.4  Decision Making.  Each party shall be entitled to one vote
          ---------------
irrespective of the actual number of each such party's representatives on the RC
present at the relevant RC meeting, provided, however, that at least one (1)
                                    --------  -------
representative of each party is present at such meeting.  In the event that a
decision is not achieved within the RC, the dispute will be referred to 3DP's
Chief Scientific Officer (or designee of similar rank) and BIOCRYST's Chief
Scientific Officer (or designee of similar rank), who shall promptly meet and
endeavor to resolve the dispute in a timely manner. In the event such
individuals are unable to resolve such dispute, the matter shall be referred to
the respective Chief Executive Officers ("CEOs") of 3DP and BIOCRYST, who shall
promptly meet and endeavor to resolve the dispute. In the event that the
respective CEOs of 3DP and BIOCRYST are unable to resolve such dispute, the
dispute shall be deemed an "Unresolved Dispute" and shall be submitted to
binding arbitration decision in accordance with Article 10 hereof.

     3.5  Reports.  Within twenty (20) days following each RC meeting during the
          -------
Term of this Agreement, the RC shall prepare and provide to each party a
reasonably detailed written summary report which shall (i) summarize all matters
discussed by the RC, (ii) state any determinations of the RC regarding any
matters discussed by the RC described in clause (i) above including, but not
limited to, any determinations regarding any Lead Compounds, Optimized Lead
Compounds, Development Candidates, Research Results, and Patent Rights and (iii)
summarize the reasons for each determination described in clause (ii) above.

                                   ARTICLE 4

                                  EXCLUSIVITY

     4.1  3DP's Exclusivity Commitment.  3DP agrees that during the Term of this
          -----------------------------
Agreement, it shall conduct research within the Field only with BIOCRYST and as
part of the Research Program.  3DP further agrees that, during the Term of this
Agreement, other than in the course of the Research Program, it shall not (i)
knowingly design, develop, use, make or synthesize compounds or chemical
compound libraries for itself, any Affiliate or any Third Party specifically for
screening within the Field or (ii) perform screening or DirectedDiversity? or
ThermoFluor? for itself, any Affiliate or any Third Party within the Field.
Notwithstanding any of the foregoing, testing solely to establish the potential
for side effects of 3DP Compounds that have activity outside the Field will not
be deemed to constitute screening within the Field.

     4.2  BIOCRYST's Exclusivity Commitment.  Except in relation to BIOCRYST
          ----------------------------------
Compounds, BIOCRYST agrees that during the Term of this Agreement it shall
conduct research within the Field only with 3DP and as part of the Research
Program.

     4.3  Use of Consultants.  Nothing in this Agreement shall be construed as
          -------------------
restricting either party's right to conduct research within the Field with any
Consultant in furtherance of the Research Program; provided, however, that such
                                                   --------  -------
party shall require each Consultant to sign (i) a non-disclosure agreement the
provisions of which shall be substantially similar to those of Article 7 of this
Agreement and (ii) an agreement which provides for the assignment of all

                                       13
<PAGE>

Proprietary Rights to the Consultants' work product and Inventions made for the
hiring party, to the hiring party (who is in turn subject to the ownership
provisions contained herein).  Unless 3DP and BIOCRYST otherwise agree in
writing, Consultants shall not participate in the commercialization of any
Development Candidate or Product.

                                   ARTICLE 5

                                   OWNERSHIP

     5.1  Retained Rights.  The parties agree that they shall each separately
          ----------------
retain all their respective rights, title and interest in relation to any
Invention, technology, know-how, compound, product, process, information or
Proprietary Right which they either (i) held prior to the Effective Date or (ii)
they conceive, identify, isolate' create, first reduce to practice, license or
acquire entirely independently of the Research Program (which shall be subject
to reasonable documented verification). Nothing contained herein shall be deemed
to create a license or right under any of the foregoing for purposes outside the
scope of the Research Program, including without limitation, the development and
commercialization of Development Candidates. The parties specifically agree
that, subject to the licenses granted herein, (i) BIOCRYST shall retain all
right, title and interest (including, but not limited to, any Proprietary
Rights) that BIOCRYST holds in relation to BIOCRYST Compounds and BIOCRYST
Technology and (ii) 3DP shall retain all right, title and interest (including,
but not limited to, any Proprietary Rights) that 3DP holds in relation to the
3DP Compounds, 3DP Libraries and 3DP Technology. The Focused Libraries will not
include any 3DP Compounds. In the event that 3DP desires to include a 3DP
Compound in a Focused Library, 3DP shall give prior written notice to BIOCRYST
of its intention and the parties shall negotiate in good faith as to the terms
and conditions for use of such 3DP Compound in the course of the Research
Program. In the event no such prior notice is given, any compound contained
within a Focused Library may not thereafter qualify as a 3DP Compound for
purposes of this Agreement. Notwithstanding the foregoing, 3DP shall retain full
right, title and interest in any 3DP Compounds that have activity outside the
Field which have been tested within the Field solely to establish the potential
of side-effects.

     5.2  Ownership of Result from the Research Program.  3DP and BIOCRYST shall
          ----------------------------------------------
jointly own in equal shares all right, title and interest to any Lead Compounds,
Optimized Lead Compounds, BIOCRYST Compound Derivatives, Research Results,
Research Program Inventions or any other results from the Research Program
(including, but not limited to, the utility of the foregoing both within and
outside the Field) that may be conceived, identified, isolated, created or first
reduced to practice by the parties, either independently (subject to Sections
1.3 and 1.7 hereof) or jointly, during the Term of this Agreement or within
twelve (12) months of the effective date of termination or expiration of this
Agreement; provided, however, that the foregoing shall not apply to any
compounds that might have utility outside the Field and that have not been
synthesized during the course of the Research Program ("Jointly Owned Rights").

     5.3  Ownership of Proprietary Rights resulting from the Research Program.
          --------------------------------------------------------------------
3DP and BIOCRYST shall also jointly own in equal shares all right, title and
interest to any and all Proprietary Rights that arise in relation to any Jointly
Owned Rights. Each party hereby represents that all employees and other persons
acting on its behalf in performing its obligations

                                       14
<PAGE>

under this Agreement shall be obligated under a binding written agreement to
assign to such party, or as such party shall direct, all Lead Compounds,
Optimized Lead Compounds, BIOCRYST Compound Derivatives, Research Program
Inventions and Research Results made or developed by such employees or other
persons.

     5.4  Assignment.  The parties hereby make any assignments necessary to
          ----------
accomplish the joint ownership provisions set forth in Sections 5.2 and 5.3
hereof. A party being assigned any Proprietary Right or any interest therein
under this Agreement will have the right, at such party's expense, to require
that the assigning party assist such party in every proper way (including,
without limitation, becoming a nominal party) to evidence, record and perfect
the assignment and to apply for and obtain recordation of and from time to time
enforce, maintain, and defend such Proprietary Right.

     5.5  Buyout.  Either party may initiate, at any time during the Term or at
          -------
any stage during the development and commercialization of any Development
Candidates, discussions to buy out the other party's Interest, or to sell its
own Interest, to the other, or to sell both parties' Interests to a Third Party.
In the event either party initiates such discussions, both parties will
negotiate such a buyout or sale, as the case may be, in good faith; provided,
however, that neither party will be obligated to sell or buy any such Interest.

     5.6  Commercialization of Jointly Owned Rights.  Except as set forth in
          -------------------------------------------
Section 2.9 hereof and for the purposes of the Research Plan, neither 3DP nor
BIOCRYST shall have the right to use or commercialize any Jointly Owned Right or
any Proprietary Rights in relation thereto, either inside the Field or outside
the Field, during the Term of this Agreement or at any time thereafter, without
the prior written consent or agreement of the other party.

                                   ARTICLE 6

                      PATENT PROSECUTION AND ENFORCEMENT

     6.1  Prosecution.  The RC shall determine, from time to time, the party or
          ------------
parties that (i) shall be responsible for preparing, filing, prosecuting and
maintaining in such countries the RC deems appropriate, patent applications and
patents relating to Research Program Inventions, (ii) shall be responsible for
conducting any interferences, reexaminations, reissues and oppositions relating
to such Research Program Inventions. The parties shall bear in equal shares the
costs arising under this Section 6. 1.

     6.2  Cooperation.  Each of BIOCRYST and 3DP shall keep the other fully
          -----------
informed as to the status of patent matters described in this Article 6,
including without limitation, by providing the other the opportunity to fully
review and comment on any substantive documents (i.e., documents affecting the
                                                 ----
scope of the Research Program Invention) which will be filed in any patent
office as far in advance of filing dates as practicable, and providing the other
with copies of any substantive documents that such party receives from such
patent offices promptly after receipt, including notice of all interferences,
reissues, re-examinations, oppositions or requests for patent term extensions.
Upon request by BIOCRYST and 3DP, the other party shall provide copies of any
patent documents in addition to those described in the preceding sentence.
BIOCRYST and 3DP shall each reasonably cooperate with and assist the other in
connection with such activities, at the other party's request. Patent counsel
designated by the RC will meet at

                                       15
<PAGE>

least on a semi-annual basis, unless otherwise agreed in writing, during (i) the
Term and (ii) the pendency of any patent applications claiming Research Program
Inventions, to coordinate, discuss, review and implement patent filing and
prosecution strategy.

     6.3  Failure to Prosecute or Pay.  In the event that a party declines to
          ----------------------------
file or, having filed, fails to further prosecute or maintain any jointly owned
Patent Right, or conduct any interferences, re-examinations, reissues, or
oppositions relating thereto, or pay its share of any of the expenses in
relation to any of the foregoing, then the other party shall have the right to
prepare, file, prosecute and maintain such Patent Right, and conduct any
interferences, re-examinations, reissues or oppositions relating thereto at its
sole expense.  In such event, the funding party shall thereafter be the sole
owner of the subject Patent Right and the non-funding party shall make any
assignment necessary to achieve such ownership position, in accordance with the
provisions of the second sentence of Section 5.4 hereof.

     6.4  Enforcement.  The RC shall determine, from time to time, the party or
          -------------
parties (i) responsible for the enforcement of Patent Rights arising under this
Agreement, and (ii) that shall bear the costs arising under this Section 6.4.

     6.5  Infringement Claims.  If the manufacture, sale or use of any Jointly
          --------------------
Owned Rights or any of the parties' respective technologies results in any
claim, suit or proceeding alleging patent infringement against 3DP or BIOCRYST
(or their respective Affiliates), such party shall promptly notify the other
party hereto in writing setting forth the facts of such claim in reasonable
detail.  The party subject to such claim shall have the exclusive right and
obligation to defend and control the defense of any such claim, suit or
proceeding, at its own expense, using counsel of its own choice; provided,
                                                                ---------
however, such party shall not enter into any settlement which makes any
-------
admission or concession in relation to any Jointly Owned Rights or any of the
parties' respective technologies without the prior written consent of the other
party. The party subject to the claim shall keep the other party hereto
reasonably informed of all material developments in connection with any such
claim, suit or proceeding, and such other party shall cooperate with the party
subject to the claim in connection with such claim. If both parties are subject
to such claim, they shall each cooperate with the other in connection with
defending such claim.

                                   ARTICLE 7

                                CONFIDENTIALITY

     7.1  Confidential Information.  Except as otherwise expressly provided
          ------------------------
herein, the parties agree that a party receiving Confidential Information ("the
Receiving Party") from the other party (the "Disclosing Party") shall not,
except as expressly provided in this Article 7, disclose to any Third Party or
use for any purpose any Confidential Information furnished to it by the
Disclosing Party hereto pursuant to this Agreement, except to the extent that it
can be established by the Receiving Party by written records that such
information:

               (a)  was already known to the Receiving Party, other than under
          an obligation of confidentiality, at the time of disclosure;

                                       16
<PAGE>

               (b)  was generally available to the public or otherwise part of
          the public domain at the time of its disclosure to the Receiving
          Party;

               (c)  became generally available to the public or otherwise part
          of the public domain after its disclosure and other than through any
          act or omission of the Receiving Party in breach of this Agreement;

               (d)  was lawfully disclosed to the Receiving Party, other than
          under an obligation of confidentiality, by a Third Party who had no
          obligation to the Disclosing Party not to disclose such information to
          others;

               (e)  was independently developed by employees of the Receiving
          Party having no knowledge of such Confidential Information; or

               (f)  is required to be disclosed pursuant to applicable law,
          governmental rule or regulation or rule or regulation of any
          securities exchange, provided the Receiving Party uses reasonable
          efforts to limit disclosure and to obtain confidential treatment or a
          protective order and has allowed the Disclosing Party to participate
          in the proceedings

   7.2    Permitted Use and Disclosures.  Each party hereto may use or disclose
          ------------------------------
Confidential Information disclosed to it by the other party only to the extent
such use or disclosure is reasonably necessary and permitted in the exercise of
such rights granted hereunder and the other agreements contemplated hereby,
including without limitation in (i) conducting the Research Program internally
(including conducting the Research Program through Consultants), (ii) filing or
prosecuting patent applications, or prosecuting or defending litigation, (iii)
complying with applicable law, governmental regulation or court order, or (iv)
submitting information to tax or other governmental authorities; provided, that
if a party is required to make any such disclosure of another party's
Confidential Information, such party will give reasonable advance notice to the
other party of such disclosure and, save to the extent inappropriate in the case
of patent applications, will use its reasonable commercial efforts to secure
confidential treatment of such information in consultation with the other party
prior to its disclosure (whether through protective orders or otherwise) and
disclose only the minimum necessary to comply with such requirements.

   7.3    Nondisclosure of Terms.  Each of the parties hereto agrees not to
          -----------------------
disclose the terms of this Agreement to any Third Party (except any
Consultants,) without the prior written consent of the other party hereto, which
consent shall not be unreasonably withheld, except to such party's attorneys,
advisors, investors and others on a need to know basis under circumstances that
reasonably ensure the confidentiality thereof, or to the extent required by
applicable law. In addition, BIOCRYST and 3DP may make public statements
regarding the progress of the Research Program and other matters regarding the
Research Program (i) without the other party's prior consent to the extent
required by applicable law, rules or regulations, and (ii) otherwise following
consultation and mutual agreement with the other party, the consent of neither
party to be unreasonably withheld. In the event that either party is required to
file a copy of this Agreement with the Securities and Exchange Commission or
equivalent entity, such party

                                       17
<PAGE>

shall first provide the other party with an opportunity to review the form of
the copy of this Agreement which such party intends to file.

   7.4    Publication.  Any manuscript by 3DP or BIOCRYST or its Affiliates
          ------------
describing the Research Results or any other scientific results of the Research
Program to be published during the Term of this Agreement or within twelve (12)
months of the effective date of termination or expiration of this Agreement
shall be subject to the prior review of the parties at least ninety (90) days
prior to submission. Further, to avoid loss of Patent Rights as a result of
premature public disclosure of patentable information, the Receiving Party shall
notify the Disclosing Party in writing within thirty (30) days after receipt of
any disclosure whether the Receiving Party desires that the parties file a
patent application on any Research Program Invention disclosed in such Research
Results or other scientific results. In the event that the Receiving Party
desires that the parties file such a patent application, the Disclosing Party
shall withhold publication or disclosure of such Research Results or other
scientific results until the earlier of (i) a patent application is filed
thereon, or (ii) the parties determine after consultation that no patentable
invention exists, or (iii) one (1) year after receipt by the Disclosing Party of
the Receiving Party's written notice of the Receiving Party's desire that the
parties file such patent application, or such other period as is reasonable for
seeking patent protection. Further, if such Research Results or any other
scientific results contain information that is subject to use and nondisclosure
restrictions under this Article 7, the Disclosing Party agrees to remove such
information from the proposed publication or disclosure. Following the filing of
any patent application under this Agreement, in the eighteen (18) month period
prior to the publication of such a patent application neither party shall make
any public disclosure regarding any invention claimed in such patent application
without the prior consent of the other party.

   7.5    Survival.  The parties agree that the confidentiality obligations
          --------
under this Article 7 shall survive any termination or expiration of this
Agreement and shall remain in effect indefinitely.

                                   ARTICLE 8

                        REPRESENTATIONS AND WARRANTIES

   8.1    General.  Each party represents and warrants to the other party that
          -------
as of the Effective Date: (i) it has the legal right and authority to extend the
rights granted in this Agreement; (ii) it has the legal right and authority to
enter into this Agreement and to perform all of its obligations hereunder; (iii)
all consents, approvals and authorizations of all governmental authorities and
other persons required to be obtained by such party in connection with this
Agreement and its responsibilities and activities hereunder have been obtained;
(iv) its execution, delivery and performance of this Agreement does not and will
not conflict with, or constitute a breach or default under, or require the
consent of any Third Party under, its charter documents or any material license,
loan or other agreement, contract, commitment or instrument to which it is a
party or any of its assets are bound or violate any provision of law, statute,
rule or regulation or any ruling, writ, injunction, order, judgment or decree of
any court, administrative agency or other governmental body; (v) when executed
by both parties, this Agreement will constitute the valid and legally binding
obligation of such party and shall be enforceable against such party in
accordance with its terms; (vi) it has not previously granted, and during the
Term of this

                                       18
<PAGE>

Agreement will not make any Commitment of, or grant, any rights which in any way
conflict with the rights granted herein; and (vii) there are no existing or
threatened actions, suits or claims pending or, to the best of its knowledge
threatened against it that may affect the performance of its obligations under
the Agreement.

   8.2    Third Party Obligations.  Each party represents to the other that the
          ------------------------
Third Party Obligations set forth on Exhibit D is a full and complete list of
                                     ---------
such party's Third Party Obligations that are applicable to the Research Program
or development and commercialization of products and processes in the Field, and
that such party is not subject to any other Third Party Obligations that are
relevant to the Research Program.

   8.3    Disclaimer.
          ----------

          8.3.1   NEITHER BIOCRYST NOR 3DP MAKES ANY REPRESENTATION OR WARRANTY
OR GUARANTY THAT THE RESEARCH PROGRAM WILL BE SUCCESSFUL IN WHOLE OR IN PART.
THE FAILURE OF THE PARTIES TO SUCCESSFULLY IDENTIFY LEAD COMPOUNDS, OPTIMIZED
LEAD COMPOUNDS, BIOCRYST COMPOUND DERIVATIVES, DEVELOPMENT CANDIDATES OR
PRODUCTS WILL NOT CONSTITUTE A BREACH OF ANY REPRESENTATION OR WARRANTY OR OTHER
OBLIGATION UNDER THIS AGREEMENT.

          8.3.2   NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED AS A
REPRESENTATION MADE, OR WARRANTY GIVEN, BY EITHER PARTY THAT ANY PATENT WILL
ISSUE BASED UPON ANY PENDING PATENT APPLICATION, OR THAT ANY SUCH PATENT WHICH
ISSUES WILL BE VALID.

          8.3.3   EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, THE
PARTIES MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OR CONDITIONS OF ANY
KIND, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO FOCUSED LIBRARIES, 3DP
LIBRARIES, BIOCRYST COMPOUNDS, BIOCRYST TECHNOLOGY, 3DP COMPOUNDS, 3DP
TECHNOLOGY, BIOCRYST COMPOUND DERIVATIVES, LEAD COMPOUNDS, OPTIMIZED LEAD
COMPOUNDS, DEVELOPMENT CANDIDATES, PRODUCTS, RESEARCH RESULTS, OR INFORMATION
DISCLOSED HEREUNDER, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE.

                                   ARTICLE 9

                                INDEMNIFICATION

   9.1    BIOCRYST.  BIOCRYST agrees to indemnify, defend and hold 3DP and its
          --------
Affiliates and their directors, officers, employees and agents (the "3DP
Indemnitees") harmless from and against any losses, costs, claims, damages,
liabilities or expense (including without limitation, fees and disbursements of
counsel incurred by the 3DP Indemnitee in any action or proceeding between
BIOCRYST and the 3DP lndemnitee and the 3DP Indemnitee and any third party or
otherwise) (collectively, "Liabilities") arising out of or in connection with
Third Party claims relating to: (i) BIOCRYST's performance of its
responsibilities and activities under this

                                       19
<PAGE>

Agreement, including without limitation, the Research Program; (ii) any breach
by BIOCRYST of its representations and warranties made in Article 8 of this
Agreement, or (iii) any breach by BIOCRYST in the performance or observation of
any covenant, agreement, obligation or provision in this Agreement to be
performed or observed by BIOCRYST, except, in each case, to the extent such
Liabilities result from the gross negligence or intentional misconduct of 3DP.

   9.2    3DP.  3DP agrees to indemnify, defend and hold BIOCRYST and its
          ---
Affiliates and their directors, officers, employees and agents (the "BIOCRYST
Indemnitees") harmless from and against any losses, costs, claims, damages,
liabilities or expense (including without limitation, fees and disbursements of
counsel incurred by the BIOCRYST Indemnitee in any action or proceeding between
3DP and the BIOCRYST Indemnity and the BIOCRYST Indemnitee and any third party
or otherwise) (collectively, "Liabilities") arising out of or in connection with
Third Party claims relating to: (i) 3DP's performance of its responsibilities
and activities under the Research Program; (ii) any breach by 3DP of its
representations and warranties made in Article 8 of this Agreement, or (iii) any
breach by 3DP in the performance or observation of any covenant, agreement,
obligation or provision in this Agreement to be performed or observed by 3DP,
except, in each case, to the extent such Liabilities result from the gross
negligence or intentional misconduct of BIOCRYST.

   9.3    Procedure. A party (the "Indemnitee") that intends to claim
          ---------
indemnification under this Agreement shall promptly notify the other party (the
"Indemnitor") of any claim, demand, action or other proceeding for which the
Indemnitee intends to claim such indemnification, and the Indemnitor shall have
the right to participate in, and, to the extent the Indemnitor so desires, to
assume sole control of the defense thereof with counsel selected by the
Indemnitor; provided, however, that the Indemnitee shall have the absolute right
            --------  -------
to retain its own counsel, with the fees and expenses to be paid by the
Indemnitee. The indemnity obligations under this Agreement shall not apply to
amounts paid in settlement of any loss, claim, damage, liability or action if
such settlement is effected without the consent of the Indemnitor, which consent
shall not be unreasonably withheld or delayed. The failure to deliver notice to
the Indemnitor within a reasonable time after the commencement of any such
action, if prejudicial to Indemnitor's ability to defend such action, shall
relieve the Indemnitor of any liability to the Indemnitee under this Agreement,
but the omission to deliver such notice to the Indemnitor shall not relieve it
of any liability that it may have to the Indemnitee otherwise than under this
Agreement. The Indemnitee, its employees and agents, shall cooperate fully with
the Indemnitor and its legal representatives in the investigation of any action,
claim or liability covered by an indemnification from the Indemnitor. No
Indemnitor shall, without the prior written consent of the Indemnitee, effect
any settlement of any pending or threatened action, suit or proceeding in
respect of which any Indemnitee is or could have been a party and indemnity
could have been sought hereunder by such Indemnitee, unless such settlement
includes an unconditional release of such Indemnitee from all liability on
claims that are the subject matter of such action, suit or proceeding.

   9.4    Insurance.  3DP and BIOCRYST each shall maintain, through self
          ---------
insurance or otherwise, insurance with respect to its activities contemplated by
the Agreement, in such amount and for such term, as 3DP or BIOCRYST,
respectively, customarily maintains covering its similar activities.

                                       20
<PAGE>

                                  ARTICLE 10

                                  ARBITRATION

   10.1   General. Any Unresolved Dispute shall be finally settled at the
          --------
election of either party by final and binding arbitration, conducted in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association. There shall be three (3) arbitrators for each arbitration of an
Unresolved Dispute, unless the parties otherwise agree to only one arbitrator.
On commencement of an arbitration each party shall promptly select one (1)
arbitrator. Each party's selection of an arbitrator shall be in that party's
sole discretion, and such arbitrator may be from a list provided by the AAA or
may be any other person chosen by such party. A party's choice of arbitrator
shall not be subject to challenge by the other party. Within twenty (20) days of
the appointment of the second arbitrator, the two arbitrators shall appoint the
third arbitrator from a list of arbitrators provided by the AAA, who shall be an
attorney or a former judge unless an arbitrator so qualified is unavailable;
provided, however, that if the two existing arbitrators are unable to agree upon
--------  -------
the third arbitrator within such period, either party may request the AAA to
appoint the third arbitrator. The parties agree to use good faith efforts to
choose arbitrators with appropriate qualifications in relation to the Unresolved
Dispute in question. Such qualifications may include, but are not limited to,
expertise in patent law, medicinal chemistry, and/or pharmaceutical product
development (including clinical development and regulatory affairs). The
arbitration shall be held in New York City, unless the parties agree to conduct
the arbitration in another location, and at least one of the arbitrators shall
be an independent expert in pharmaceutical product development. The arbitrators
shall determine what discovery will be permitted, consistent with the goal of
limiting the cost and time which the parties must expend for discovery; provided
the arbitrators shall permit such discovery as they deem necessary to permit an
equitable resolution of the dispute. The arbitrators will apply the laws of the
State of New York in any arbitration, except in relation to patents or other
forms of Proprietary Rights, including but not limited to determination of
inventorship of inventions, or issues relating to interpretation, enforcement,
validity, or ownership of patents or other intellectual property rights, in
which case the arbitrators shall apply the Federal laws of the United States.

   10.2   Final Award and Costs.  In any arbitration pursuant to this Article
          ---------------------
10, the award of the arbitrators shall be final and binding upon the parties and
judgement upon the award may be entered in and enforced by any court of
competent jurisdiction. The costs of the arbitration, including administrative
and the third arbitrator's fees but excluding the fees of the two arbitrators
selected by the parties, shall be shared equally by the parties. Each party
shall bear its own costs and attorneys' and witness, fees and the fees of the
arbitrator that it has selected. A disputed performance or suspended performance
pending the resolution of the arbitration must be completed within thirty (30)
days following the final decision of the arbitrators or such other reasonable
period as the arbitrators determine in a written opinion. Any arbitration
subject to this Article 10 shall be completed, to the extent reasonably possible
in the light of all the circumstances, within one (1) year from the date of the
original filing of the demand for such arbitration with the AAA.

                                       21
<PAGE>

   10.3   Confidentiality.  All arbitration proceedings under this Article 10
          ---------------
shall be confidential and the arbitrators may issue appropriate protective
orders to safeguard the parties' Confidential Information. Except as required by
law, neither party shall make (or instruct any arbitrator to make) any public
announcement with respect to the proceedings or decisions of any arbitration
without the prior written consent of the other party. The existence of any
Unresolved Dispute, the submission of an Unresolved Dispute to arbitration
pursuant to this Article 10, and any award by the arbitrators, shall be kept in
confidence by the parties and the arbitrators, except as required in connection
with the enforcement of such award or implementation of such decisions, as
mutually agreed by the parties or as required by law.

   10.4   Interim Relief. This Article 10 shall not limit the rights of any
          --------------
party to seek in any court of competent jurisdiction interim relief, and only
such interim relief, as may be needed to maintain the status quo or otherwise
                                                      ------ ---
protect the subject matter of the Unresolved Dispute and the arbitration until
the arbitrators shall have been appointed and shall have had an opportunity to
act.

                                  ARTICLE 11

                             TERM AND TERMINATION

   11.1   Term of the Agreement.  The term of this Agreement shall begin as of
          ---------------------
the Effective Date and shall continue in force for a period of twelve (12)
months, extended annually for an additional twelve (12) months unless otherwise
terminated earlier pursuant to this Article 11.

   11.2   Failure to Agree on Research Plan.  If the parties fail to agree upon
          ---------------------------------
and execute a Research Plan within three (3) months from the Effective Date of
this Agreement, then either party may terminate this Agreement immediately by
giving written notice to the other party to such effect.

   11.3   Right to Terminate.  Either party has the right to terminate the
          ------------------
Agreement, with or without cause, upon providing sixty (60) days prior written
notice to the other party.

   11.4   Effect of Termination.
          ---------------------

          11.4.1    Accrued Rights and Obligations. Termination of this
                    ------------------------------
Agreement for any reason shall not release either party hereto from any
liability which, at the time of such termination, has already accrued to the
other party or which is attributable to a period prior to such termination, nor
preclude either party from pursuing any rights, indemnities and remedies it may
have hereunder or at law or in equity with respect to any breach of this
Agreement.

          11.4.2    Return of Materials. Upon any termination of this Agreement,
3DP and BIOCRYST shall promptly return to the other all Confidential Information
received from the other party (except one copy of which may be retained solely
for legal archival purposes, such copy to remain subject to the provisions of
Article 7 hereof).

                                       22
<PAGE>

          11.4.3    Survival. Articles 5, 6, 7, 8, 9, 10 and 2.11 and Sections
2.9, 2. 10 and 2.11 of this Agreement and any accrued rights of payment or
causes of action shall survive the expiration or termination of this Agreement
for any reason.


                                  ARTICLE 12

                                 MISCELLANEOUS

   12.1   Governing Laws.  Except as otherwise specified herein, this Agreement
          --------------
and any dispute arising from the performance or breach hereof shall be governed
by and construed and enforced in accordance with the laws of the state of New
York, without reference to conflict of laws principles thereof.

   12.2   No Implied Licenses.  Only the licenses granted pursuant to the
          -------------------
express terms of this Agreement shall be of any legal force or effect.  No other
license rights shall be created by implication, estoppel or otherwise.

   12.3   Waiver. It is agreed that no waiver by either party hereto of any
          ------
breach or default of any of the covenants or agreements herein set forth shall
be deemed a waiver as to any subsequent and/or similar breach or default.

   12.4   Assignment. This Agreement shall not be assignable by either party to
          ----------
any Third Party without the written consent of the other party hereto, except
either party may assign this Agreement, without such consent, to either (i) one
of its Affiliates, or (ii) an entity that acquires all or substantially all of
the business, assets or stock of such party to which this Agreement pertains,
whether by merger, reorganization, acquisition, sale, or otherwise, provided, in
each case, that the assignor remains liable for all of its obligations hereunder
and for performance by the assignee. This Agreement shall be binding upon and
accrue to the benefit of any permitted assignee, and any such assignee shall
agree to perform the obligations of the assignor.

   12.5   Independent Contractors. The parties expressly agree that the
          -----------------------
relationship between them is that of independent contractors. The parties hereto
shall not be deemed to be agents, partners or joint venturers of the other for
any purpose as a result of this Agreement or the transactions contemplated
hereby.

   12.6   Compliance. In connection with their respective activities under this
          ----------
Agreement, the parties and their Affiliates shall fully comply in all material
respects with the requirements of any and all applicable laws, regulations,
rules and orders of any governmental body having jurisdiction over the exercise
of right under this Agreement including, without limitations those applicable to
the research, discovery, development, patent prosecution, manufacture,
distribution, import and export and sale of any products pursuant to this
Agreement.

   12.7   Export Control. The parties agree not to remove or export from the
          --------------
United States or re-export from anywhere any part of the Lead Compounds,
BIOCRYST Compound Derivatives, Optimized Lead Compounds, Research Results,
Development Candidates, or any direct product thereof to Afghanistan, the
Peoples' Republic of China or any Group Q, S, W, Y

                                       23
<PAGE>

or Z country (as specified in Supplement No. I to Section 770 of the U.S. Export
Administration Regulations, or a successor thereto) or otherwise except in
compliance with and with all licenses and approvals required under applicable
export laws and regulations, including without limitation, those of the U.S.
Department of Commerce.

   12.8   Notices. All notices, reports, consents, requests and other
          --------
communications hereunder shall be in writing and shall be personally delivered,
sent by registered or certified mail, postage prepaid, or by facsimile (with
proof of receipt and a confirmation copy sent by registered or certified mail,
postage prepaid) or sent by overnight delivery service, in each case to the
respective address specified below, or such other address as may be specified in
writing to the other party hereto and shall be deemed to have been given upon
receipt:


If to 3DP:                    3-Dimensional Pharmaceuticals, Inc.
                              665 Stockton Drive, Suite 104
                              Exton, PA 19341
                              U.S.A.
                              Attn:  Chief Executive Officer
                              Fax No.:  (610) 458-8258

with a copy to:               Morgan Lewis & Bockius LLP
                              2000 One Logan Square
                              Philadelphia, PA 19103
                              Attn:  David R. King, Esq.
                              Fax No.:  (215) 963-5299

BIOCRYST:                     BioCryst Pharmaceuticals, Inc.
                              2190 Parkway Lake Drive
                              Birmingham, AL  35244
                              Attn: President
                              Fax No.:  (205) 444-4640


With a copy to:               Brobeck, Phleger & Harrison LLP
                              1301 Avenue of the Americas,
                              ---------------------------
                              New York, New York 10019
                              Attn:  Richard R. Plumridge, Esq.
                              Fax No.: (212) 586-7878

   12.9   Severability.  In the event that any provision of this Agreement
          -------------
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision, and the parties shall amend this

                                       24
<PAGE>

Agreement to the extent feasible to lawfully include the substance of the
excluded term to as fully as possible realize the intent of the parties and
their commercial bargain.

   12.10  SPECIAL, INCIDENTAL AND CONSEOUENTIAL DAMAGES. NEITHER PARTY WILL BE
          ----------------------------------------------
LIABLE UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER THEORY FOR ANY
SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES WITH RESPECT TO ANY SUBJECT MATTER
OF THIS AGREEMENT EXCEPT FOR A BREACH OF ARTICLE 7.

   12.11  Force Majeure.  Neither party shall lose any rights hereunder or be
          --------------
liable to the other party for damages or losses or be deemed to have defaulted
under or breached this Agreement on account of failure of performance by the
defaulting party if the failure is occasioned by war, acts of war (whether
declared or not), strike, insurrections, riots, civil commotions, fire, act of
god, earthquake, flood, lockout or other labor disturbances, embargo,
governmental acts or orders or restrictions, failure of suppliers, or any other
reason where failure to perform is beyond the reasonable control and not caused
by the negligence, intentional conduct or misconduct of the non-performing party
and such party has exerted all commercially reasonable efforts to avoid and
remedy such force majeure; provided, however, that in no event shall a party be
                           --------  -------
required to settle any labor dispute or disturbance.

   12.12  Entire Agreement.  This Agreement and the Exhibits attached hereto
          -----------------
constitute the entire agreement, both written and oral, between the parties with
respect to the subject matter hereof, and all prior agreements respecting the
subject matter hereof, either written or oral, expressed or implied, shall be
abrogated, canceled, and are null and void and of no effect. No amendment or
change hereof or addition hereto shall be effective or binding on either of the
parties hereto unless reduced to writing and executed by the respective duly
authorized representatives of the parties.

   12.13  Headings.  The captions to the several Articles and Sections hereof
          --------
are not a part of this Agreement, but are included merely for convenience of
reference and location only and shall not affect its meaning or interpretation.

   12.14  Counterparts.  This Agreement may be executed in two or more
          ------------
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.

                                       25
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Research
Collaboration Agreement to be duly executed by their authorized representatives
and delivered in duplicate originals as of the Effective Date.

3-DIMENSIONAL                         BIOCRYST
PHARMACEUTICALS, INC.                 PHARMACEUTICALS, INC.

By:/s/ Thomas P. Stagnaro             By:/s/ Charles E. Bugg
   --------------------------------      ------------------------------------
Name:        Thomas P. Stagnaro       Name:    Charles E. Bugg
     ------------------------------        ----------------------------------
Title: President and CEO              Title: Chairman, President and CEO
       ----------------------------          --------------------------------

                                       26
<PAGE>

                                                                  DRAFT 10/17/96
                                   EXHIBIT A


                                     [**]





**This entire page of this Exhibit and the next four pages of this Exhibit have
been omitted based upon a request for confidential treatment that has been filed
with the Commission. The omitted pages have been filed separately with the
Commission.

                                      A-1

<PAGE>

                                   EXHIBIT B


                                      [**]




**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      B-1
<PAGE>

                                   EXHIBIT C
               Initial Representatives on the Research Committee
               -------------------------------------------------

1.   Initial Representatives of 3DP:
     ------------------------------

     [**]

2.   Initial Representatives of BIOCRYST
     -----------------------------------

     [**]


**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      C-1
<PAGE>

                                   EXHIBIT D

                            Third Party Obligations
                            -----------------------

                                      [**]




**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      D-1
<PAGE>

                                   [Exhibit]


                                      [**]




**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

              Amendment No. 1 to Research Collaboration Agreement
              ---------------------------------------------------

     THIS IS AMENDMENT NO. 1 TO RESEARCH COLLABORATION AGREEMENT effective as of
October 18,1996 between 3-Dimensional Pharmaceuticals, Inc., a Delaware
corporation ("3DP"), and BIOCRYST Pharmaceuticals, Inc., a Delaware corporation
("BioCryst").

                                   Background
                                   ----------

     WHEREAS, 3DP and BioCryst are parties to a Research Collaboration Agreement
dated October 18, 1996 (the "Agreement"), and WHEREAS, the parties desire to
amend the Agreement as set forth below.

     NOW, THEREFORE, for and in consideration of the foregoing premises and the
mutual promises and covenants contained herein, the parties agree as follows:

                                     Terms
                                     -----

1.   Amendment of Agreement
     ----------------------

     1.1     The Agreement is hereby amended by adding Sections 1.6a, 1.10a,
2.2.1(i), 2.2.2(g), 3.6, 4.4 and 4.5 to read in full as follows:

             1.6a  "BIOCRYST Library" shall mean any chemical compound library
                    ----------------
             developed by or on behalf of BIOCRYST independently of the Research
             Program for activity outside the Field using BIOCRYST Technology
             and excluding Focused Libraries.

             1.10a "Counter Screening Targets" shall mean those enzymes and
                    -------------------------
             proteins set forth in Exhibit E, as amended from time to time in
             accordance with Section 4.5.

             2.2.1

                    (i)   at the sole discretion of BIOCRYST, selecting and
                    screening compounds contained in BIOCRYST Libraries to
                    discover Lead Compounds or to develop structure-activity
                    relationships.

             2.2.2

                    (g)   at the sole discretion of 3DP, selecting and screening
                    3DP Compounds to discover Lead Compounds or to develop
                    structure-activity relationships.

                                       1
<PAGE>

               3.6  Materials Transfer Agreement. Any 3DP Compounds which do
                    ----------------------------
               not meet the criteria for Lead Compounds, but which are
               identified by the Research Committee for further study to develop
               structure-activity relationships may, with 3DP's consent, be
               transferred to BIOCRYST for further study. Such transferred 3DP
               Compounds will be transferred and tested pursuant to the
               Materials Transfer Agreement in the form of Exhibit F hereto and
               executed by the parties herewith. Compounds contained in BioCryst
               Libraries which do not meet the criteria for Lead Compounds, but
               which are identified by the Research Committee for screening or
               for further study to develop structure-activity relationships
               may, with BioCryst's consent, be transferred from BIOCRYST to 3DP
               for further study. Such transferred compounds will be transferred
               and tested pursuant to the Materials Transfer Agreement in the
               form of Exhibit G hereto and executed by the parties herewith.

               4.4  Both parties agree that their respective research outside of
               the Field may identify compounds which also have activity within
               the Field and that such research does not violate the exclusivity
               commitment set forth in section 4.1 or 4.2.

               4.5  Either party may amend Exhibit E to add a new Counter
               Screening Target by written notice to the other, provided that
               such amendment shall have no effect on any rights under this
               Agreement which arose prior to such amendment, including without
               limitation any rights relating to any Research Results, Lead
               Compounds, Optimized Lead Compounds, BIOCRYST Compound
               Derivatives or Research Program Inventions that were conceived,
               identified, isolated, created or first reduced to practice prior
               to the date of such notice.

     1.2  The Agreement is hereby amended  by  adding  Exhibits  E,  F,  and  G
thereto  in  the form attached hereto.

     1.3  The Agreement is hereby amended by amending and restating Sections
1.9, 1.12, 2.4 and 5.1 to read in full as follows:

               1.9  "Confidential Information" means all non-public, proprietary
                     ------------------------
               or otherwise confidential information, now owned, licensed or
               controlled or hereafter acquired, developed, owned, licensed or
               controlled by a disclosing party or any of its Affiliates during
               the Term of this Agreement and which is disclosed in writing or
               (if disclosed orally) confirmed in writing and marked
               "confidential". Confidential Information shall include, but not
               be limited to: (i) BIOCRYST Libraries, BIOCRYST Compounds and
               BIOCRYST Technology; (ii) the 3DP Libraries, the 3DP Compounds
               and the 3DP Technology; (iii) Focused Libraries and Research
               Results; (iv) Lead Compounds, BIOCRYST Compound Derivatives,
               Optimized Lead Compounds, and Development Candidates; and (v)
               Products prior to their first commercial sale.

                                       2
<PAGE>


               1.12  "Field" Shall mean inhibitors of the Complement System
                      -----
               enzymes and proteins specified in Exhibit B, as amended and
               attached hereto, which inhibitors have [**] (or other applicable
               assays as agreed to by the Research Committee), provided that
               such inhibitors (i) with respect to the [**] (now or as hereafter
               amended) have [**] (or other applicable assays as agreed to by
               the Research Committee).


               2.4   BIOCRYST Compounds, BIOCRYST Libraries and BIOCRYST
                     ---------------------------------------------------
               Technology. 3DP acknowledges that BIOCRYST (i) has previously
               ----------
               expended substantial financial and research resources in relation
               to its work in the Field, the BIOCRYST Libraries and the BIOCRYST
               Technology that exists as of the Effective Date, (ii) has
               identified the BIOCRYST Compounds and (iii) has an on-going
               research, development and commercialization program in relation
               to the BIOCRYST Compounds in the FIELD which BIOCRYST shall be
               conducting independently of the arrangements under this
               Agreement.  Notwithstanding any other provisions of this
               Agreement to the contrary, the parties agree that BIOCRYST shall
               be free to (a) conduct its independent research, development and
               commercialization program in the FIELD in relation to BIOCRYST
               Compounds using BIOCRYST Technology, (b) research, develop and
               commercialize BIOCRYST Compounds and any product or service based
               thereon in the Field, without restriction, reference or payment
               to 3DP, (c) conduct any independent research, development and
               commercialization program outside the Field in relation to
               BIOCRYST Compounds, the BIOCRYST Libraries and BIOCRYST
               Technology and (d)  research, develop and commercialize BIOCRYST
               Compounds, the BIOCRYST Libraries and BIOCRYST Technology and any
               product or service based thereon outside the FIELD, without
               restriction, reference or payment to 3DP.


**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       3
<PAGE>

               5.1  Retained Rights.  The parties agree that they shall each
                    ---------------
               separately retain all their respective rights, title and interest
               in relation to any Invention, technology, know-how, compound,
               product, process, information or Proprietary Right which they
               either (i) held prior to the Effective Date or (ii) they
               conceive, identify, isolate, create, first reduce to practice,
               license or acquire entirely independently of the Research Program
               (which shall be subject to reasonable documented verification).
               Nothing contained herein shall be deemed to create a license or
               right under any of the foregoing for purposes outside the scope
               of the Research Program, including without limitation, the
               development and commercialization of Development Candidates.  The
               parties specifically agree that, subject to the licenses granted
               herein, (i) BIOCRYST shall retain all right, title and interest
               (including, but not limited to any Proprietary Rights) that
               BIOCRYST holds in relation to BIOCRYST Compounds, BIOCRYST
               Libraries and BIOCRYST Technology and (ii) 3DP shall retain all
               right, title and interest (including, but not limited to, any
               Proprietary Rights) that 3DP holds in relation to the 3DP
               Compounds, 3DP Libraries and 3DP Technology. 3DP shall retain
               full right, title and interest in any 3DP Compounds that have
               activity outside the Field which have been tested within the
               Field solely to establish the potential of side-effects.
               BIOCRYST shall retain full right, title and interest in any
               BioCryst Compounds having activity outside the Field which have
               been tested within the Field solely to establish the potential
               for side-effects.

     1.4  The Agreement is hereby amended by amending and restating Exhibit B in
the form attached hereto.

2.   Miscellaneous.
     -------------

     2.1  Governing Law; Parties in Interest.  This Amendment shall be governed
          ----------------------------------
by the laws of the State of Delaware, without regard to the conflicts of laws
thereof, and shall bind and inure to the benefit of the parties hereby and their
respective successors and assigns.

     2.2  Counterparts.  This Amendment may be executed simultaneously in two or
          ------------
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     2.3  Full Force and Effect.  Except as expressly set forth herein, the
          ---------------------
Agreement remains unchanged and in full force and effect.

                                       4
<PAGE>

IN WITNESS WHEREOF, the parties have executed and delivered this Agreement on
the date written below.

                              3-DIMENSIONAL PHARMACEUTICALS, INC.



                              By:    /s/ F. Raymond Salemme
                                 --------------------------------

                              Dated: June 18, 1999
                                    -----------------------------



                              BIOCRYST PHARMACEUTICALS, INC.


                              By:    /s/ Charles E. Bugg
                                   ------------------------------

                              Dated: June 18, 1999
                                    -----------------------------

                                       5
<PAGE>

                                   EXHIBIT B


                                     [**]





**This page and the next page of this Exhibit have been omitted based upon a
request for confidential treatment that has been filed with the Commission.
The omitted pages have been filed separately with the Commission.


                                      B-1
<PAGE>

                                   EXHIBIT E


                                     [**]




**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      E-1
<PAGE>

                                   EXHIBIT F

                         MATERIALS TRANSFER AGREEMENT
                         ----------------------------


     This MATERIALS TRANSFER AGREEMENT ("MTA"), is made by and between
3DIMENSIONAL PHARMACEUTICALS, INC. ("3DP"), a corporation having its principal
place of business at Eagleview Corporate Center, 665 Stockton Drive, Suite 104,
Exton, Pennsylvania 19341, and BIOCRYST PHARMACEUFICALS, INC. (THE RECIPIENT), A
Delaware corporation having a principal place of business at 2190 Parkway Lake
Drive, Birmingham, Alabama 35244.

                                   RECITALS
                                   --------


     WHEREAS, 3DP and RECIPIENT are parties to the Research Collaboration
Agreement dated October 18, 1996, as amended ("the Agreement").  WHEREAS the
parties desire to set forth herein the terms and conditions under which 3DP may
transfer to RECIPIENT certain 3DP compounds pursuant to Section 3.6 of the
Agreement.  Capitalized terms used herein without definition have the meaning
set forth in the Agreement.

                                   AGREEMENT
                                   ---------

     1.00 Definitions. As used in this Materials Transfer Agreement, the
          -----------
following terms shall have the following meanings:

     1.01 "Effective Date" means the date hereof.

     1.02 "Compound" means any 3DP Compound transferred to RECIPIENT by 3DP
          after June 1, 1999 pursuant to Section 3.6 of the Agreement and
          identified as such by 3DP in writing.

     1.03 "Experimental Tests" shall mean any test performed an a Compound by
          RECIPIENT. Such tests consist only of:

          a.   [**]

          b.   [**]

          c.   Other assays or experiments identified by the Research Committee.



**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately With the Commission.

                                      F-1
<PAGE>

Experimental tests performed by RECIPIENT shall be limited to those listed above
in this Section 1.03. Under no circumstances shall RECIPIENT conduct any other
Experimental Tests an a Compound, including, but not limited to, tests related
to determining the chemical composition of such Compound.

     1.04 "Technology" means all technical information, developments, data,
results, formulae and processes relating to any Compound that result from
RECIPIENT's tests of such Compound.

     2.00 Transfer of Material.  RECIPIENT agrees to protect the confidentiality
          --------------------
of any Compound and any Technology resulting from the testing of such Compound
as provided in Article 4.00.

     2.01 RECIPIENT agrees to return any and all of the remaining sample of any
Compounds upon termination of the Agreement.

     3.00 Data and Documents
          ------------------

     3.01 Access to Compound.  Access to the Compound will be limited and
controlled.  RECIPIENT shall provide to 3DP upon written request a list of the
names of all access to any such Compound and the dates of such access.

     3.02 Access to Documents Relating to Compound. Access to documents relating
to any Compound will be limited and controlled. Such documents will be clearly
marked m the face thereof with an appropriate indication of their confidential
status. As noted below in Paragraph 4.00, RECIPIENT may retain one copy of all
documents relating to such for archive purposes. The obligations specified in
this paragraph continue with respect to the archive copy of the documents
retained by RECIPIENT.

     3.03 Testing Relating to Compound.  RECIPIENT shall provide to 3DP a
summary of each experiment or test performed on any Compound, the person
performing such experiment or test, the date of such experiment or test, and the
quantities of such Compound used in the experiment or test. 3DP shall keep this
information confidential as provided in Article 4.00.

     3.04 Return of Compound and Documents Relating to Compound.  When this MTA
is terminated, RECIPIENT agrees to return all unused samples of Compound and all
documents relating to such Compound, including all copies of such documents, to
3DP, provided, however, that RECIPIENT may retain one copy of all documents
relating to such Compounds for archive purposes.  RECIPIENT agrees to continue
to maintain the confidentiality of the documents relating to any such Compounds
as provided by Article 4.00.

                                      F-2
<PAGE>

     4.00 Confidentiality and Ownership of Proprietary Information.
          --------------------------------------------------------
Notwithstanding anything to the contrary set forth herein, 3DP and RECIPIENT
agree to maintain the confidentiality of all of the other party's Confidential
Information, provided or generated in connection with this MTA and each party
will promptly return to the other party all copies of written materials, whether
secret or otherwise, which have been so provided or generated except for one
archive copy. 3DP and RECIPIENT further agree that they will not use such
information or disclose it to third parties, except within the scope of this
MTA.  Upon termination of this MTA, this obligation will continue for a period
of five (5) years from the date of termination.  For the purposes of this MTA,
Confidential Information shall mean all nonpublic, proprietary or otherwise
confidential information, now owned, licensed or controlled or hereafter
acquired, developed, owned, licensed or controlled by a disclosing party during
the term of this MTA and which is disclosed in writing or (if disclosed orally)
confirmed in writing and marked "Confidential".  Confidential Information may
include, but is not limited to: (i) chemical compounds; (ii) Technology; and
(iii) the existence and details of this MTA.  Ownership of all Technology and
related intellectual property rights created under this MTA shall be governed
the Terms of the Agreement.  Information will not be considered Confidential
Information hereunder that:

          a.   is publicly known when disclosed by the disclosing party;
          b.   later becomes publicly known without fault of the receiving
               party;
          c.   is known by the receiving party before disclosure by the
               disclosing party
          d.   is independently discovered by the receiving party without use of
               the confidential information; or
          e.   is required to be disclosed by court order or regulation.

     5.00 Warranty
          --------

     5.01 3DP warrants to RECIPIENT that it has the lawful right to transfer
samples of Compound.

     5.02 Nothing in this MTA:

          a.   is a warranty or representation that anything made, used, sold,
               or offered for sale under any license from 3DP is or will be free
               from infringement of patents of third parties;

          b.   is an obligation to bring or prosecute actions or  suits  against
               third  parties for patent infringement.

     6.00 Term and Termination of MTA
          ---------------------------

     6.01 The term of this MTA shall commence on the Effective Date.

     6.02 This MTA will terminate upon termination of the Agreement, provided
that the provisions of Section 3.04 and 4.00 will survive such termination.

                                      F-3
<PAGE>

     7.00 Miscellaneous
          -------------

     7.01 Notices
          -------

          (a)  All notices to, demands, consents, or communications which any
     party may desire or may be required to give to the other must be in
     writing, shall be effective upon receipt in the United States after having
     been sent by registered or certified mail or sent by facsimile
     transmission.  Receipt shall be presumed on the date of proper transmission
     as to facsimile transmissions and otherwise within three (3) days as to
     notices given within the United States.

          (b)  Any notice required or permitted by this MTA shall be addressed
     to the Party in question as follows:

               If to 3DP:          3-Dimensional Pharmaceuticals, Inc.
                                   Eagleview Corporate Center
                                   665 Stockton Drive, Suite 104
                                   Exton, PA 19341
                                   Attention: Chief Executive Officer

               If to RECIPIENT:    BioCryst Pharmaceuticals Inc.
                                   2190 Parkway Lake Drive
                                   Birmingham, AL 35244
                                   Attention: Chief Executive Officer

or to such other address or addresses as may from time to time be given in
writing by either party to the other pursuant to the terms hereof.

7.02 Sole Agreement.  This MTA constitutes and embodies the entire Agreement
     --------------
between the  Parties with respect to the subject matter hereof, and supersedes
all previous agreements, understandings, negotiations, discussions, offers and
acceptances with respect to such matter.  This MTA may not be modified except in
writing signed by authorized representatives of both parties and may not be
assigned by either party without the written consent of the other, which consent
shall not be unreasonably withheld or delayed.

7.03 Severability.  Any of the provisions of this MTA which are determined to be
     ------------
invalid or unenforceable in any jurisdiction shall be ineffective to the extent
of such invalidity or unenforceability in such jurisdiction, without rendering
invalid or unenforceable the remaining provisions hereof or affecting the
validity or unenforceability of any of the terms of the MTA in any other
jurisdiction.

7.04 No Third Party Benefits.  Nothing in this MTA, express or implied, is
     -----------------------
intended to confer on any person other than the parties hereto or their
permitted assigns, any benefits, rights or remedies.

7.05 Governing Law.  This MTA shall be governed by Delaware law.
     -------------

                                      F-4
<PAGE>

7.06 No Waiver.  A waiver by either party of a breach or violation of any
     ---------
provision of this MTA will not constitute or be construed as a waiver of any
subsequent breach or violation of that provision or as a waiver of any breach or
violation of any other provision of this MTA.

7.07 Headings.  Any headings and captions included herein are for convenience of
     --------
reference only and shall not be used to construe this MTA.

7.08 Consequential Damages.  Neither party shall be liable for any or damage
     ---------------------
arising out of or resulting from anything made available hereunder, or for the
exercise by the other party of any rights granted hereunder, nor be liable to
the other party for consequential damages under any circumstances.

7.09 Agency.  This MTA does not constitute either party hereto the agent of the
     ------
other party for any purpose whatsoever, nor does either party thereto have the
right or authority to assume, create, or incur any liability of any kind,
express, or implied, against or in the name or on behalf of the other party.

IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of
the date written below.

                                             3-DIMENSIONAL PHARMACEUTICALS, INC.



                                             By:   /s/ F. Raymond Salemme
                                                 -------------------------------

                                             Dated: June 18, 1999
                                                   -----------------------------



                                             BIOCRYST PHARMACEUTICALS, INC.


                                             By:   /s/ Charles E. Bugg
                                                 -------------------------------

                                             Dated: June 18, 1999
                                                   -----------------------------

                                      F-5
<PAGE>

                                   EXHIBIT G
                         MATERIALS TRANSFER AGREEMENT
                         ----------------------------

     This MATERIALS TRANSFER AGREEMENT ("MTA"), is made by and between, BIOCRYST
PHARMACELMCALS, INC. ("BIOCRYST"), a Delaware corporation having a principal
place of business at 2190 Parkway Lake Drive, Birmingham, Alabama 35244, and 3-
DIMENSIONAL PHARMACEUTICALS, INC. (THE RECIPIENT), a corporation having its
principal place of business at Eagleview Corporate Center, 665 Stockton Drive,
Suite 104, Exton, Pennsylvania 19341.

                                   RECITALS
                                   --------

     WHEREAS, BioCryst and RECIPIENT are parties to the Research Collaboration
Agreement dated October 18, 1996, as amended ("the Agreement"). WHEREAS the
parties desire to set forth herein the terms and conditions under which BioCryst
may transfer to RECIPIENT certain compounds pursuant to Section 3.6 of the
Agreement.  Capitalized terms used herein without definition have the meaning
set forth in the Agreement.

                                   AGREEMENT
                                   ---------

     1.00 Definitions.  As used in this Materials Transfer Agreement, the
          -----------
following terms shall have the following meanings:

     1.01 "Effective Date" means the date hereof.

     1.02 "Compound" means any compound transferred to RECIPIENT by BioCryst
after June 1, 1999 pursuant to Section 3.6 of the Agreement and identified as
such by BioCryst in writing.

     1.03 "Experimental Tests" shall mean any test performed an a Compound by
RECIPIENT.  Such tests consist only of:

          a.   [**]
          b.   [**]
          c.   Other assays or experiments identified by the Research Committee.

Experimental tests performed by RECIPIENT shall be limited to those listed above
in this Section 1.03. Under no circumstances shall RECIPIENT conduct any other
Experimental Tests on a Compound, including, but not limited to, tests related
to determining the chemical composition of such Compound.

     1.04 "Technology" means all technical information, developments, data,
results, formulae and processes relating to any Compound that result from
RECIPIENT's tests of such Compound.



**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately With the Commission.

                                      G-1
<PAGE>

     2.00 Transfer of Material.  RECIPIENT agrees to protect the confidentiality
          --------------------
of any Compound and any Technology resulting from the testing of such Compound
as provided in Article 4.00.

     2.01 RECIPIENT agrees to return any and all of the remaining sample of any
Compounds upon termination of the Agreement.

     3.00 Data and Documents
          ------------------

     3.01 Access to Compound.  Access to Compound will be limited and
controlled.  RECIPIENT shall provide to BIOCRYST upon written request a list of
the names of all persons having access to any such Compound and the dates of
such access.

     3.02 Access to Documents Relating to Compound.  Access to documents
relating to any Compound will be limited and controlled.  Such documents will be
clearly marked on the face thereof with an appropriate indication of their
confidential status.  As noted below in Paragraph 4.00, RECIPIENT may retain one
copy of all documents relating to such Compound for archive purposes.  The
obligations specified in this paragraph continue with respect to the archive
copy of the documents retained by RECIPIENT.

     3.03 Testing Relating to Compound.  RECIPIENT shall provide to BIOCRYST a
summary of each experiment or test performed on any Compound, the person
performing such experiment or test, the date of such experiment or test, and the
quantities of such Compound used in the experiment or test.  BIOCRYST shall keep
this information confidential as provided in Article 4.00.

     3.04 Return of Compound and Documents Relating to Compound.  When this MTA
is terminated, RECIPIENT agrees to return all unused samples of Compound and all
documents relating to such Compound, including all copies of such documents, to
BIOCRYST, provided, however, that RECIPIENT may retain one copy of all documents
relating to such Compounds for archive purposes. RECIPIENT agrees to continue to
maintain the confidentiality of the documents relating to such Compounds as
provided by Article 4.00.

                                      G-2
<PAGE>

     4.00 Confidentiality and Ownership of Proprietary Information.
          --------------------------------------------------------
Notwithstanding anything to the contrary set forth herein, BIOCRYST and
RECIPIENT agree to maintain the confidentiality of all of the other party's
Confidential Information, provided or generated in connection with this MTA and
each party will promptly return to the other party all copies of written
materials, whether secret or otherwise, which have been so provided or generated
except for one archive copy.  BIOCRYST and RECIPIENT further agree that they
will not use such information or disclose it to third parties, except within the
scope of this MTA.  Upon termination of this MTA, this obligation will continue
for a period of five (5) years from the date of termination.  For the purposes
of this MTA, Confidential Information shall mean all nonpublic, proprietary or
otherwise confidential information, now owned, licensed or controlled or
hereafter acquired, developed, owned, licensed or controlled by a disclosing
party during the term of this MTA and which is disclosed in writing or (if
disclosed orally) confirmed in writing and marked "Confidential".  Confidential
Information may include, but is not limited to: (i) chemical compounds; (ii)
Technology; and (iii) the existence and details of this MTA.  Ownership of all
Technology and related intellectual property rights created under this MFA shall
be governed by the Terms of the Agreement.  Information will not be considered
Confidential Information hereunder that:

          a.   is publicly known when disclosed by the disclosing party;
          b.   later becomes publicly known without fault of the receiving
               party;
          c.   is known by the receiving party before disclosure by the
               disclosing party
          d.   is independently discovered by the receiving party without use of
               the confidential information; or
          e.   is required to be disclosed by court order or regulation.

     5.00 Warranty
          --------

     5.01 BIOCRYST warrants to RECIPIENT that it has the lawful right to
transfer samples of Compound.

     5.02 Nothing in this MTA:

          a.   is a warranty or representation that anything made, used, sold,
               or offered for sale under any license from BIOCRYST is or win be
               free from infringement of patents of third parties;

          b.   is an obligation to bring or prosecute actions or suits against
               third parties for patent infringement.

     6.00 Term and Termination of MTA
          ---------------------------

     6.01 The term of this MTA shall commence on the Effective Date.

     6.02 This MTA will terminate upon termination of the Agreement, provided
that the provisions of Section 3.04 and 4.00 will survive such termination.

     7.00 Miscellaneous
          -------------

                                      G-3
<PAGE>

     7.01 Notices
          -------

          (a)  All notices to, demands, consents, or communications which any
party may desire or may be required to give to the other must be in writing,
shall be effective upon receipt in the United States after having been sent by
registered or certified mail or sent by facsimile transmission.  Receipt shall
be presumed on the date of proper transmission as to facsimile transmissions and
otherwise within three (3) days as to notices given within the United States.

          (b)  Any notice required or permitted by this MTA shall be addressed
to the Party in question as follows:

               If to BIOCRYST:    BioCryst Pharmaceuticals Inc.
                                  2190 Parkway Lake Drive
                                  Birmingham, AL 35244
                                  Attention: Chief Executive Officer

               If to RECIPIENT:   3-Dimensional Pharmaceuticals, Inc.
                                  Eagleview Corporate Center
                                  665 Stockton Drive, Suite 104
                                  Exton, PA 19341
                                  Attention: Chief Executive Officer:

or to such other address or addresses as may from time to time be given in
writing by either party to the other pursuant to the terms hereof.

          7.02 Sole Agreement.  This MTA constitutes and embodies the entire
               --------------
Agreement between the Parties with respect to the subject matter hereof, and
supersedes all previous agreements, understandings, negotiations, discussions,
offers and acceptances with respect to such subject matter.  This MTA may not be
modified except in writing signed by authorized representatives of both parties
and may not be assigned by either party without the written consent of the
other, which consent shall not be unreasonably withheld or delayed.

          7.03 Severability.  Any of the provisions of this MTA which are
               ------------
determined to be invalid or unenforceable in any jurisdiction shall be
ineffective to the extent of such invalidity or unenforceability in such
jurisdiction, without rendering invalid or unenforceable the remaining
provisions hereof or affecting the validity or unenforceability of any of the
terms of the MTA in any other jurisdiction.

          7.04 No Third Party Benefits.  Nothing in this MTA, express or
               -----------------------
implied, is intended to confer on any person other than the parties hereto or
their permitted assigns, any benefits, rights or remedies.

          7.05 Governing Law. This MTA shall be governed by Delaware law.
               -------------

          7.06 No Waiver.  A waiver by either party of a breach or violation of
               ---------
any provision of this MTA will not constitute or be construed as a waiver of any
subsequent breach

                                      G-4
<PAGE>

or violation of that provision or as a waiver of any breach or
violation of any other provision of this MTA.

          7.07 Headings.  Any headings and captions included herein are for
               --------
convenience of reference only and shall not be used to construe this MTA.

          7.08 Consequential Damages.  Neither party shall be liable for any
               ---------------------
consequence or damage arising out of or resulting from anything made available
hereunder, or for the exercise by the other party of any rights granted
hereunder, nor be liable to the other party for consequential damages under any
circumstances.

          7.09 Agency.  This MTA does not constitute either party hereto the
               ------
agent of the other party for any purpose whatsoever, nor does either party
thereto have the right or authority to assume, create, or incur any liability of
any kind, express, or implied, against or in the name or on behalf of the other
party.

IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of
the date written below.

                                             3-DIMENSIONAL PHARMACEUTICALS, INC.



                                             By:   /s/ F. Raymond Salemme
                                                  -----------------------------

                                             Dated: June 18, 1999
                                                    ---------------------------



                                             BIOCRYST PHARMACEUTICALS, INC.


                                             By:   /s/ Charles E. Bugg
                                                  -----------------------------

                                             Dated: June 18, 1999
                                                    ---------------------------

                                      G-5
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.17
<SEQUENCE>8
<FILENAME>0008.txt
<DESCRIPTION>DISCOVERY & LEAD OPTI AGRMT BTWN COMPANY & BOEHRIN
<TEXT>

<PAGE>

                                                                   EXHIBIT 10.17
                                  APPENDIX A

            COLLABORATIVE DISCOVERY AND LEAD OPTIMIZATION AGREEMENT

This Collaborative Discovery and Lead Optimization Agreement (the "Agreement')
is made and effective as of December 17, 1999 (the "Effective Date"), by and
between 3-Dimensional Pharmaceuticals, Inc., a corporation having its principal
place of business at Eagleview Corporate Center, 665 Stockton Drive, Suite 104,
Exton, PA 19341, U.S.A. ("3DP'), and Boehringer Ingelheim Pharmaceuticals, Inc.,
a corporation having its principal place of business at 900 Ridgebury Road,
Danbury, CT 06877, U.S.A. ("BIPI"). 3DP and BIPI may be referred to herein as a
"Party" or, collectively, as "Parties".

WHEREAS, 3DP is engaged in discovery research for a variety of biologically
active compounds and the development of technologies to facilitate such
research, and 3DP has patented systems for generating chemical compounds having
desired pharmaceutical properties;

WHEREAS, BIPI is engaged in research and development of human therapeutic
products;

WHEREAS, 3DP and BIPI desire to enter into a research and development
collaboration to identify qualified lead compounds active against selected
targets and suitable for medicinal chemistry optimization that may be developed
and commercialized by BIPI;

NOW, THEREFORE, in consideration of the various promises and undertakings set
forth herein, the Parties agree as follows:

1.   DEFINITIONS

Unless otherwise specifically provided herein, the following terms shall have
the following meanings, and may be used in the singular or plural, as indicated
by their context:

     1.1  "Active Compound" means a Qualified Lead Compound or a compound
          derived from a Qualified Lead Compound that has been formally selected
          by BIPI after recommendation by the Research Steering Committee for
          preclinical development as evidenced by initiation of a BIPI supported
          range finding toxicology study to be performed by the BIPI Toxicology
          Department or its designate.

     1.2  "Affiliate" of a Party means: (a) any corporation owning or directly
          or indirectly controlling at least fifty percent (50%) of the stock
          normally entitled to vote for election of directors of a party, and
          (b) any corporation owned or directly or indirectly controlled by a
          party, or by a corporation defined by subparagraph (a) above, through
          ownership of at least fifty percent (50%) of stock normally entitled
          to vote for election of directors.

     1.3  "Agreement" shall mean the present agreement including its appendices.

                                       1
<PAGE>

     1.4  "Confidential Information" means all information that has or could
          have commercial value or other utility In a Party's business, or the
          unauthorized disclosure of which could be detrimental to the Party's
          interests, including confidential information, inventions, know-how,
          data and materials relating to the Research Program or to the Licensed
          Products, and shall include without limitation research, technical,
          clinical development, manufacturing, marketing, financial, personnel
          and other business information and plans, whether in oral, written,
          graphic or electronic form.

     1.5  "Custom Accessible Libraries" means any DirectedDiversity(R) Chemical
          Library produced using 3DP DirectedDiversity(R) Technology and
          structure activity data provided by BIPI.

     1.6  "DirectedDiversity(R) Chemical Library" means a computer-generated
          library of compounds containing integrated structure-activity and
          synthesis data.

     1.7  "Effective Date" means the effective date of this Agreement as set
          forth in the first paragraph hereof.

     1.8  "Field" means human therapeutic and diagnostic uses of Qualified Lead
          Compounds or Active Compounds against Targets.

     1.9  "Licensed Product" means any commercial product containing an Active
          Compound.

     1.10 "Net Sales" means the gross invoiced sales price charged to third
          parties for all Licensed Products sold by BIPI and its Affiliates
          after deduction of the following items: (a) customary trade, quantity
          and case discounts, wholesaler-charge backs, or rebates (including
          rebates to governmental agencies); provided that such discounts,
          charge backs and rebates are not applied disproportionately with
          respect to particular products sold; (b) customary credits or
          allowances for rejection or return of previously sold Licensed
          Products; (c) any direct tax or government charge (other than an
          income tax) levied on the sale, transportation or delivery of a
          Licensed Product and borne by the seller thereof; and (d) any charge
          for freight or insurance if separately stated.

          Combination Products: Where Product is sold in the form of a
          combination product containing one or more active ingredients in
          addition to an Active Compound, Net Sales for such Combination Product
          will be calculated by multiplying actual Net Sales of such combination
          Product by the fraction A/(A+B) where A is the net invoice price of
          Product to an end use customer containing such Active Compound, if
          sold separately, and B is the net invoice price of a product to an end
          use customer containing any other component or components in the
          combination, if sold separately. If, on a country-by-country basis,
          the other active component or components in the combination are not
          sold separately in said country, Net Sales for the purpose of
          determining royalties on the Combination Product shall be calculated
          by multiplying actual Net Sales of

                                       2
<PAGE>

          such Combination Product by the fraction A/C where A is the invoice
          price of Product containing the Active Compound, if sold separately,
          and C is the invoice price of the Combination Product. If, on a
          country-by-country basis, neither the Product nor the other active
          component or components of the Combination Product is sold separately
          in said country, Net Sales for the purposes of determining royalties
          of the combination Product shall be reasonably allocated between the
          Product and the other active components based upon their relative
          value as determined by the Parties hereto in good faith.

     1.11 "Patents" means all U.S. patent applications or issued patents,
          including provisionals, divisionals, continuations, continuations-in-
          part, reissues and extensions derived therefrom, such as patent term
          restorations, supplementary protection certificates, etc., as well as
          all foreign patents and foreign patent counterparts to the foregoing.

     1.12 "Qualified Lead Compound" means a chemical compound produced in the
          course of the Program that satisfies criteria established by the
          Research Steering Committee. A "3DP Qualified Lead Compound" means a
          Qualified Lead Compound that is generated from a 3DP Accessible
          Library. A "BIPI Qualified Lead Compound" means a Qualified Lead
          Compound that is generated from a Custom Accessible Library.

     1.13 "Research Program" means the collaborative discovery and optimization
          activities of the Parties, as described in Article 2, that are
          intended to lead to the discovery of Active Compounds that have an
          agreed upon level of activity against a Target and are suitable for
          pre-clinical and commercial development by BIPI.

     1.14 "Research Program Patents" shall mean those Patents that claim
          discoveries or inventions made as a result of the Research Program and
          for a time period starting at the Effective Date through a period of
          one year following the termination of the Research Program, regardless
          of their ownership.

     1.15 "Research Steering Committee" or "RSC" means the committee to be
          formed pursuant to Article 3 of this Agreement.

     1.16 "Target" means a protein, to be selected by the Senior Vice President
          of R&D at BIPI, against which Qualified Lead Compounds and Active
          Compounds are to be developed. Notwithstanding the above, 3DP may
          reject a Target proposed by the Senior Vice President of R&D under the
          following circumstances: (a) 3DP has entered into a contractual
          relationship with a third party regarding the proposed Target or a
          substantially similar Target; (b) other reasonable legal grounds; or
          (c) 3DP has already selected the proposed Target or a substantially
          similar Target for its internal research and development program as
          may reasonably be demonstrated by 3DP.

                                       3
<PAGE>

     1.17 "Territory" means the entire world."3DP Accessible Libraries" means
          any DirectedDiversity(R) Chemical Library that is generated by 3DP
          outside of the Research Program.

     1.18 "3DP DirectedDiversity(R) Technology" means 3DP Patents and know-how
          in effect at the time of the Effective Date of this Agreement that
          relate to generating and utilizing a DirectedDiversity(R) Chemical
          Library, including but not limited to U.S. Patent Nos. 5,463,564,
          5,574,656, 5,684,711 and 5,901,069. This term also includes any
          discoveries, improvements, inventions and modifications made during
          the Research Program to the extent that they relate to 3DP
          DirectedDiversity(R) Technology. This term does not include the SAR
          models as described in Article 2 of this Agreement.

     1.19 "3DP Patents" means any Patents owned or controlled by 3DP other than
          Research Program Patents.

     1.20 "Valid Claim" means a claim of a Patent that has not lapsed or become
          abandoned or been declared invalid or unenforceable by a court or
          agency of competent jurisdiction from which no appeal can be or has
          been taken.

2.  RESEARCH PROGRAM

     2.1  General Project Description. The Parties contemplate that the Research
          Program will include the following steps and activities:

          (a)  BIPI will furnish to 3DP the structure and activity data on
               chemical compounds screened against a Target that BIPI feels are
               necessary for analysis of a Structure Activity Relationship
               ("SAR").

          (b)  3DP will use its DirectedDiversity(R) Technology to compute a
               chemical descriptor matrix to describe and map the compounds for
               which BIPI provides data. 3DP also will develop an SAR model
               based on this descriptor matrix for hits.

          (c)  3DP will compare the SAR model with compounds in 3DP Accessible
               Libraries, 3DP will identify [**] compounds to be synthesized by
               3DP and supplied to BIPI for testing. 3DP will supply between
               [**] milligrams of each such compound in 96 deep well plates
               (about 80 compounds per plate). These compounds will meet a
               minimum purity of 80% (resolved LCMSA/NMR) for 80% of the
               compounds provided. Upon request of BIPI, 3DP will provide
               additional quality control for individual compounds.

          (d)  3DP will provide BIPI with a secure internet based communication
               channel to provide activity or other compound related data to
               3DP.


**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       4
<PAGE>

          (e)  3DP will develop an improved SAR model based on the testing data
               provided by BIPI. This improved SAR will be used to perform
               iterative rounds of selection and synthesis of compounds from 3DP
               Accessible Libraries, and/or to develop Custom Libraries from
               which compounds will be selected and synthesized, and/or to
               perform medicinal chemistry optimization and synthesis. Such
               compounds will be supplied to BIPI for additional testing in
               furtherance of the Research Program.

     2.2  Development of Active Compounds. BIPI will conduct the preclinical and
          clinical tests as it deems appropriate for the commercial development
          in the Field of Active Compounds.

     2.3  Initial Term and Extension of Research Program. The initial term of
          the Research Program shall be two (2) years. BIPI may extend this
          Agreement on an annual basis by notifying 3DP in writing at least
          sixty (60) days prior to the end of the initial two (2) year term or
          any extended one-year term then in effect.

     2.4  Additional and Alternative Targets. BIPI, through the Research
          Steering Committee, shall have the option to bring forward a total of
          up to five (5) Targets at any one time or to change Targets upon
          thirty (30) days advance written notice to 3DP.

3.  RESEARCH PROGRAM GOVERNANCE

     3.1  Research Steering Committee. 3DP and BIPI agree to establish a
          Research Steering Committee of seven (7) people. BIPI shall designate
          four (4) members and 3DP shall designate three (3) members, each
          selected by their respective R&D management to form this Research
          Steering Committee. The Research Steering Committee shall be
          responsible for:

          (a)  Adopting, reviewing and amending the research plan to implement
               the Research Program, subject to the approval of the Vice
               President of Research at BIPI.

          (b)  Monitoring the progress of research in the Research Program.

          (c)  Reviewing initial Target and any subsequent Target selection.

          (d)  Recommending to the Vice President of Research at BIPI
               designation of a compound as an Active Compound.

          (e)  Reviewing and approving publications and other public disclosures
               related to the subject matter of the Research Program subject to
               the approval of the Vice President of Research at BIPI.

                                       5
<PAGE>

     3.2  Management of Matters Outside the Jurisdiction of the Research
          Steering Committee. Matters outside the scope of the Research Program
          and internal to each Party are not under the purview of the Research
          Steering Committee. Such matters include, but are not limited to the
          following: internal personnel policies and programs, budgeting,
          finance, commercial and marketing strategies, and business decisions.
          However, the Parties agree to communicate with each other promptly on
          those matters which, while outside the scope of the Research Program,
          nevertheless may reasonably be expected to influence the conduct or
          term of the Research Program or the intended commercialization of
          Active Compounds. Furthermore the RSC does not have responsibility for
          or the authorization to choose the number of FTEs assigned to the
          Research Program as set forth in Section 4.1 (b).

4.  FINANCIAL TERMS

     4.1  Technology Access and FTE Reimbursement Fees.


          (a) BIPI agrees to pay a nonrefundable technology access fee of [**]
              due within thirty (30) days of the Effective Date of this
              Agreement.

          (b) BIPI agrees to pay 3DP in advance, on a calendar quarterly
              basis, for the staff allocated by 3DP for the services to be
              provided under this Agreement. These services will be
              compensated by BIPI at a rate equivalent to the support for [**]
              Full Time Equivalents ("FTEs"). The quarterly payment for the
              initial term of the Research Program shall be [**]. Depending on
              the total number of Targets designated and the number of 3DP
              FTEs reasonably necessary to meet the objectives of this
              Agreement, BIPI and 3DP shall negotiate in good faith to provide
              additional compensation to 3DP in a form to be agreed upon by
              the Parties, such as a lump sum payment or support by BIPI for
              additional FTEs.


     4.2  Extended Term Fees. The level of reimbursement for FTEs in an extended
          term shall be negotiated in good faith by the Parties, and shall at
          least reflect an increase to the FTE support level of Section 4.1 (b)
          based on increases in the cost of living.

     4.3  Early Termination Fees. If BIPI terminates this Agreement prior to the
          end of the initial term or any extended term pursuant to Section 9.2,
          it agrees to pay the lesser of a termination fee of [**] or the
          remaining FTE reimbursement obligation for that term. No termination
          fee is due if BIPI terminates the Agreement as set forth in any of
          Sections 9.3 (a), 9.4 (a) or 9.6.

     4.4  Milestone Payments for Designation of Qualified Lead Compounds.  BIPI
          agrees to make milestone payments as set forth below:


          (a) [**] upon the selection by BIPI, pursuant to Section 1.1, of
              each Active Compound against a designated Target. This milestone
              payment will be paid for [**].

          (b) [**] upon the filing of the [**] Investigational New Drug
              Application (or its non-U.S. counterpart) for each Active
              Compound against a designated Target. This milestone payment
              will be paid for [**].

          (c) [**] upon the initiation of the [**] Phase II clinical trial (or
              its equivalent or non-U.S. counterpart) for each Active Compound
              against a designated Target. This milestone payment will be paid
              for [**].

          (d) [**] upon the initiation of the [**] Phase III clinical trial
              (or its equivalent or non-U.S. counterpart) for each Active
              Compound against a designated Target. This milestone payment
              will be paid for [**].

          (e) [**] upon the filing of the [**] New Drug Application (or its
              equivalent or non-U.S. counterpart) for each Active Compound
              against a designated Target. This milestone payment will be paid
              for [**].

          (f) [**] upon the [**] approval of a New Drug Application (or its
              equivalent or non-U.S. counterpart) for each Active Compound
              against a designated Target. This milestone payment will be paid
              for [**].


**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       6
<PAGE>


     4.5  Royalty on Net Sales of 3DP-Identified Active Compounds. BIPI agrees
          to pay a royalty based on Net Sales of any BIPI Qualified Lead
          Compounds and 3DP Qualified Lead Compounds that qualify as an Active
          Compound and that are developed by BIPI. The royalty rate on Net Sales
          of such compounds that are developed by BIPI without additional
          chemical optimization by BIPI shall be negotiated by the parties in
          good faith within ninety (90) days of the filing of a New Drug
          Application (or its equivalent or non-U.S. counterpart) and shall be
          between [**]. The royalty rate on Net Sales of such compounds that are
          developed by BIPI with additional chemical optimization by BIPI shall
          be negotiated by the parties in good faith within ninety (90) days of
          the filing of a New Drug Application (or its equivalent or non-U.S.
          counterpart) and shall be between [**].

     4.6  Mode of Payment.  All payments to 3DP hereunder shall be made by wire
          transfer of United States Dollars in the requisite amount to such bank
          account as 3DP may from time to time designate by notice to BIPI.
          Payments shall be free and clear of any taxes (other than withholding
          and other taxes imposed on 3DP), fees or charges, to the extent
          applicable. As to the royalty payments, the amount of net sales shall
          be converted into U.S. Dollars, by applying the buying rate for the
          applicable day of conversion as published by Wall Street Journal on
          the last business day of applicable payment period.

     4.7  Records Retention. With respect to any products for which royalties
          are due pursuant to Section 4.6, BIPI and its Affiliates and any
          sublicensees shall keep records, for two (2) years, of such sales in
          sufficient detail to confirm the accuracy of the royalty calculations
          hereunder. At the request of 3DP, BIPI shall permit an independent
          certified accountant appointed by 3DP, at reasonable times and upon
          reasonable notice, to examine these records solely to the extent
          necessary to verify such calculations. Such investigation shall be at
          the expense of 3DP unless it reveals a discrepancy in BIPI's favor of
          more than ten per cent (10%), in which event it shall be at BIPI's
          expense.

     4.8  Taxes. The Party receiving royalties and other payments under this
          Agreement shall pay any and all taxes levied on account of such
          payment. If any taxes are required to be withheld by the paying Party,
          it shall: (a) deduct such taxes from the remitting payment, (b) timely
          pay the taxes to the proper taxing authority, and (c) send proof of
          payment to the other Party and certify its receipt by the taxing
          authority within sixty (60) days following such payment.

5.   OWNERSHIP AND LICENSE OF RIGHTS

     5.1  Ownership of 3DP Accessible Libraries and 3DP Patents. 3DP shall own
          all 3DP Accessible Libraries. However, in case a Qualified Lead
          Compound, Active Compound or Licensed Product resulting from the
          Research Program, or a method for making or using such a Qualified
          Lead Compound, Active Compound or Licensed Product is covered by a
          patent or patent application of 3DP based on research outside of the
          Research Program, 3DP hereby grants to BIPI a fully paid up,
          worldwide, exclusive license, including the right to sublicense, in
          the Field under such patent to make, have made, use, sell, have sold,
          import and have imported Licensed Products, provided that 3DP is not
          contractually prohibited from granting such an exclusive license.



**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       7
<PAGE>

     5.2  Ownership of Custom Accessible Library Compounds. BIPI shall own
          Custom Accessible Libraries and the compounds they contain that are
          produced in the course of the Research Program. However, BIPI agrees
          to grant 3DP a license in order to use chemical processes developed
          for the synthesis of Custom Accessible Library compounds for 3DP
          discovery programs. Notwithstanding the above, 3DP is not licensed to
          produce Active Compounds, nor structurally related compounds to be
          tested against Targets.

     5.3  License to 3DP Outside of the Field.  After a period of five (5) years
          following the termination of the Research Program, BIPI agrees to
          negotiate in good faith to grant to 3DP a license to commercialize
          Qualified Lead Compounds, Active Compounds and Licensed Products
          outside of the Field under any applicable Research Program Patents
          owned or controlled by BIPI.

     5.4  Use of Compounds After Termination of the Research Program. After a
          period of five (5) years following termination of the Research
          Program, BIPI agrees to grant to 3DP a fully paid up, worldwide, non-
          exclusive license, including the right to sublicense, such that 3DP
          shall be able to conduct research and enter into relationships with
          third parties involving all compounds synthesized during and as a
          result of the Research Program that are not developed or under
          development by BIPI and all chemical processes developed for the
          synthesis of Custom Accessible Libraries. The license grant does not
          extend to BIPI patents filed after the termination of this Agreement.

     5.5  License Under All 3DP Research Program Patents. Subject to the
          provisions of Section 4.5, 3DP grants to BIPI a royalty-free, non-
          exclusive license in the Field under all Research Program Patents
          owned by 3DP to the extent such patents cover making, using, selling,
          offering for sale or importing a Qualified Lead Compound, an Active
          Compound or a Licensed Product.

6.   CONFIDENTIAL INFORMATION

     6.1  Confidentiality Obligations. The Parties agree that, for the term of
          this Agreement and for ten (10) years thereafter, the "Receiving
          Party" shall keep completely confidential and shall not publish or
          otherwise disclose and shall not use for any purpose (except as
          expressly permitted hereunder or set forth in Section 3.1 (d)) any
          Confidential Information furnished to it by the "Disclosing Party"
          pursuant to this Agreement (including without limitation, know-how),
          except to the extent that it can be established by the Receiving Party
          that such Confidential Information:

          (a)  was already known to the Receiving Party, other than under an
               obligation of confidentiality from the Disclosing Party at the
               time of disclosure;

          (b)  was generally available to the public or otherwise part of the
               public domain at the time of its disclosure to the Receiving
               Party;

                                       8
<PAGE>

          (c)  became generally available to the public or otherwise part of the
               public domain after its disclosure and other than through any act
               or omission of the Receiving Party in breach of this Agreement;

          (d)  was subsequently lawfully disclosed to the Receiving Party by a
               third party; or

          (e)  disclosure was compelled by governmental administrative agency or
               judicial requirements, provided, however, that the Receiving
               Party shall first have given advance notice to the Disclosing
               Party so as to permit the Disclosing Party to attempt to obtain a
               protective order or other appropriate remedy.

     6.2  Written Assurances. Each Party shall inform its employees and
          consultants who perform substantial work on the Research Program, of
          the obligations of confidentiality specified in Section 6.1 and all
          such persons shall be bound by the terms of confidentiality set forth
          therein. All employees and consultants who are inventors on any
          patents arising under work carried out under the Research Program
          shall assign to such Party or Parties all inventions made by such
          persons during the course of performing the Research Program. Each
          Party may disclose the other's Confidential Information to the extent
          such disclosure is reasonably necessary in filing or prosecuting
          patent applications, prosecuting or defending litigation, complying
          with applicable governmental regulations, making a permitted
          sublicense of its rights hereunder or otherwise in performing its
          obligations or exercising its rights hereunder, provided that if a
          Party is required to make any such disclosure of another Party's
          secret or Confidential Information it will give at least thirty (30)
          day written, advance notice to the latter Party of such disclosure
          requirement and, to the extent such disclosure is not required by law,
          shall provide the Party whose information is being disclosed, an
          opportunity to identify Confidential Information that shall not be
          disclosed.

     6.3  Permitted Disclosures for Business Development Purposes.
          Notwithstanding the foregoing, or any other provision in this
          Agreement to the contrary, 3DP may describe the financial terms of
          this Agreement in confidence, in connection with capital raising or
          due diligence activities. Furthermore, BIPI acknowledges that 3DP may
          be obligated to disclose terms of this Agreement and make public a
          copy of this Agreement in the event it becomes a public company as
          required by applicable U.S. law.

7.   PATENTS AND INTELLECTUAL PROPERTY

     7.1  Title to Patents. Subject to the other provisions of this Agreement,
          all Research Program Patents shall be owned by BIPI, to the extent
          that they claim: (a) Custom Accessible Libraries or other small
          molecules synthesized by 3DP under the Research Program; (b) Qualified
          Lead Compounds; (c) Active Compounds; or (d) Licensed Products. All
          Research Program Patents shall be owned by 3DP to the extent that they
          claim 3DP DirectedDiversity(R) Technology. All other Research

                                       9
<PAGE>

          Program Patents shall be individually or jointly owned, depending on
          the relative inventive contributions of each Party.

     7.2  Filing of Patent Applications and Expenses.

          (a)  BIPI has the right but not the obligation to pursue and maintain
               Research Program Patents that it owns, at its own cost. 3DP has
               the right but not the obligation to pursue and maintain Research
               Program Patents that it owns, at its own cost.

          (b)  Where there is co-ownership of any Research Program Patents, the
               Parties will decide who is in the best position to file and
               pursue patent applications, and shall regularly provide each
               other with copies of all filings and other material submissions
               and correspondence with the patent offices, in sufficient time to
               allow for review and comment. The costs of prosecuting and
               maintaining patent applications that are jointly owned shall be
               shared equally by the Parties.

     7.3  Enforcement of Patents.

          (a)  If either Party considers that a Valid Claim of any of the
               Research Program Patents claiming the manufacture, use or sale of
               a Licensed Product is being infringed by a third party, it shall
               notify the other Party and provide it with any evidence of such
               infringement which is reasonably available. BIPI shall have the
               right but not the obligation, at its own expense, to attempt to
               remove such infringement by commercially appropriate steps,
               including a lawsuit. If required by law, 3DP shall join such suit
               as a party, at BIPI's expense. In the event BIPI fails to take
               commercially appropriate steps with respect to such infringement
               within six (6) months following notice of such infringement, 3DP
               shall have the right to do so at its expense, provided that BIPI
               shall not be required to enforce such Research Program Patents
               against more than one entity or in more than one country at any
               one time. If 3DP enforces such Research Program Patents, BIPI
               agrees to join any suit as a party if required by law.

          (b)  Any amounts recovered by BIPI pursuant to subsection (a), above,
               whether by settlement or judgment shall be reported as Net Sales
               for the purpose of calculating any applicable royalties to 3DP,
               after deduction of BIPI's expenses in making such recovery. Any
               amounts recovered by 3DP shall be retained by 3DP.

          (c)  The Parties agree to discuss whatever steps may be appropriate to
               enforce Research Program Patents to the extent that they
               encompass the manufacture, use or sale of Active Compounds and
               Licensed Products outside of the Field.

                                       10
<PAGE>

          (d)  The Party not enforcing the Research Program Patents pursuant to
               subsection (a), above, shall provide reasonable assistance to the
               other Party, including providing access to relevant documents and
               other evidence and making its employees available, subject to the
               enforcing Party's reimbursement of any out-of-pocket expenses
               incurred by the other Party.

          (e)  If either Party considers that a Valid Claim of any of the
               jointly owned Research Program Patents other than those Research
               Program Patents covered by subsection (a), above, is being
               infringed by a third party, it shall notify the other Party and
               provide it with any evidence of such infringement which is
               reasonably available. The Parties agree to discuss in good faith
               the enforcement of any such jointly owned Research Program
               Patents. If such Patents are enforced by either Party, the Party
               not enforcing such Research Program Patents shall provide
               reasonable assistance to the other Party, including providing
               access to relevant documents and other evidence and making its
               employees available, subject to the enforcing Party's
               reimbursement of any out-of-pocket expenses incurred by the other
               Party.

     7.4  Third Party Patent Rights.  If any warning letter or other notice of
          infringement is received by a Party, or action, suit or proceeding is
          brought against a Party alleging infringement of a patent of any third
          party in the manufacture, use or sale of an Active Compound or
          Licensed Product or in the conduct of the Research Program, the
          Parties shall promptly discuss and decide the best way to respond.

8.   INDEMNIFICATION

     8.1  Indemnification by BIPI. BIPI shall indemnify, defend and hold 3DP and
          its agents, employees and directors (the "3DP Indemnitees") harmless
          from and against any and all liability, damage, loss, cost or expense
          (including reasonable attorneys' fees) arising out of third party
          claims or suits related to (a) BIPI's performance of its obligations
          under this Agreement; or (b) the manufacture, use or sale of Licensed
          Products by BIPI and its Affiliates, sublicensees, distributors and
          agents, except to the extent such claims or suits result from the
          breach of any of the provisions of this Agreement, negligence or
          willful misconduct of the 3DP Indemnitees. Upon the assertion of any
          such claim or suit, the 3DP Indemnitees shall promptly notify BIPI
          thereof and BIPI shall appoint counsel reasonably acceptable to the
          3DP Indemnitees to represent the 3DP Indemnitees with respect to any
          claim or suit for which indemnification is sought. The 3DP Indemnities
          shall not settle any such claim or suit without the prior written
          consent of BIPI, unless they shall have first waived their rights to
          indemnification hereunder.

     8.2  Indemnification By 3DP. 3DP shall indemnify, defend and hold BIPI and
          its agents, employees and directors (the "BIPI Indemnitees") harmless
          from and

                                       11
<PAGE>

          against any and all liability, damage, loss, cost or expense
          (including reasonable attorneys' fees) arising out of third party
          claims or suits related to (a) 3DP's performance to its obligations
          under this Agreement or (b) the manufacture, use, or sale of Licensed
          Products by 3DP and its Affiliates sublicensees, distributors and
          agents except to the extent that such claims or suits result from the
          breach of any of the provisions of this Agreement, negligence or
          willful misconduct of the BIPI Indemnitees. Upon the assertion of any
          such claim or suit, the BIPI Indemnitees shall promptly notify 3DP
          thereof and 3DP shall appoint counsel reasonably acceptable to the 3DP
          Indemnitees to represent the BIPI Indemnitees with respect to any
          claim or suit for which indemnification is sought. The BIPI
          Indemnitees shall not settle any such claim or suit without the prior
          written consent of 3DP, unless they shall have first waived their
          rights to indemnification hereunder.

9.   TERM AND TERMINATION

     9.1  Term. This Agreement shall commence upon the Effective Date. The term
          of the Research Program shall be two (2) years and may be extended as
          provided herein. This Agreement otherwise shall terminate upon
          expiration of the last Research Program Patent owned by BIPI that
          encompasses Active Compounds or Licensed Products.

     9.2  Termination. BIP1 may terminate the Research Program upon thirty (30)
          days advance written notice during the initial or any extended term.
          However, termination fees may be due as provided in Section 4.3.

     9.3  Breach

          (a)  Failure by a Party to comply with any of the material obligations
               contained herein shall entitle the Party not in default to give
               notice to have the default cured. If such default is not cured
               within sixty (60) days after the receipt of such notice, or
               diligent steps not taken to cure if by its nature such default
               could not be cured within sixty (60) days, the Party not in
               default shall be entitled, without prejudice to any of its other
               rights conferred on it by this Agreement, and in addition to any
               other remedies available to it by law or in equity, to terminate
               this Agreement, provided, however, that such right to terminate
               shall be stayed in the event that during such sixty (60) day
               period, the Party alleged to have been in default shall have: (i)
               initiated arbitration in accordance with Section 12.9, below,
               with respect to the alleged default, and (ii) diligently and in
               good faith cooperated in the prompt resolution of such
               arbitration proceedings.

          (b)  The right of a Party to terminate this Agreement, as hereinabove
               provided, shall not be affected in any way by its waiver or
               failure to take action with respect to any prior default.

     9.4  Insolvency or Bankruptcy.

                                       12
<PAGE>

          (a)  Either Party may, in addition to any other remedies available by
               law or in equity, terminate this Agreement by written notice to
               the other Party in the event the latter Party shall have become
               insolvent or bankrupt, or shall have an assignment for the
               benefit of its creditors, or there shall have been appointed a
               trustee or receiver of the other Party or for all or a
               substantial part of its property or any case or proceeding shall
               have been commenced or other action taken by or against the other
               Party in bankruptcy or seeking reorganization, liquidation,
               dissolution, winding-up, arrangement or readjustment of its debts
               or any other relief under any bankruptcy, insolvency,
               reorganization or other similar act or law of any jurisdiction
               now or hereafter in effect, or there shall have been issued a
               warrant of attachment, execution, distraint or similar process
               against any substantial part of the property of the other Party,
               and any such event shall have continued for ninety (90) days
               undismissed, unbonded and undischarged.

          (b)  All rights and licenses granted under or pursuant to this
               Agreement by BIPI or 3DP are, and shall otherwise be deemed to
               be, for purposes of Section 365(n) of the U.S. Bankruptcy Code,
               licenses of right to "Intellectual property" as defined under
               Section 101 of the U.S. Bankruptcy Code. The Parties agree that
               the Parties as licensees of such rights under this Agreement,
               shall retain and may fully exercise all of their rights and
               elections under the U.S. Bankruptcy Code. The Parties further
               agree that, in the event of the commencement of a bankruptcy
               proceeding by or against either Parties under the U.S. Bankruptcy
               Code, the Parties hereto which is not a party to such proceeding
               shall be entitled to a complete duplicate of (or complete access
               to, as appropriate) any such intellectual property and all
               embodiments of such intellectual property, and same, if not
               already in their possession, shall be promptly delivered to them
               (i) upon any such commencement of a bankruptcy proceeding upon
               their written request therefor, unless the Party subject to such
               proceedings elects to continue to perform all of their
               obligations under this Agreement or (ii) if not delivered under
               (i) above, upon the rejection of this Agreement by or on behalf
               of the Party subject to such proceeding upon written request
               therefor by a nonsubject Party.

     9.5  Consequences of Termination.  Upon termination or expiration of the
          Research Program portion of this Agreement, each Party shall promptly
          return all relevant records and materials in its possession or control
          containing the other Party's Confidential Information and to which the
          former Party does not retain rights hereunder.

     9.6  Change of Control or Ownership. BIPI shall have the right to terminate
          this Agreement if 3DP is acquired, merges with or otherwise combines
          with a company not a party to this Agreement. Termination under this
          clause does not require termination fee payments as set forth in
          Section 4.3. However, before

                                       13
<PAGE>

          terminating the Agreement pursuant to this Section, BIPI shall
          reasonably consider alternative steps as provided in Section 12.12.

10.  REGULATORY RESPONSIBILITIES

     10.1 Regulatory Approvals. BIPI shall be responsible for all regulatory
          filings and related submissions that are made in connection with the
          commercialization of Licensed Products and shall do at BIPI's sole
          discretion and expense.

11.  REPRESENTATIONS AND WARRANTIES

     11.1 Authority. Each Party represents and warrants that it has the full
          right, power and authority to execute, deliver and perform this
          Agreement.

     11.2 No Conflicts. Each Party represents and warrants that the execution,
          delivery and performance of this Agreement does not conflict with, or
          constitute a breach or default under any of its charter or
          organizational documents, any law, order, judgment or governmental
          rule or regulation applicable to it, or any material agreement,
          contract, commitment or instrument to which it is a party.

     11.3 No Existing Third Party Rights. The Parties represent and warrant that
          their obligations under this Agreement are not encumbered by any
          rights granted by either Party to any third parties.

     11.4 Continuing Representations. The representations and warranties of each
          Party contained in this Article 11 shall survive the execution and
          delivery of this Agreement and shall remain true and correct at all
          times during the term of this Agreement with the same effect as if
          made on and as of such later date.

     11.5 No Warranty as to Commercial Success. 3DP offers no warranty that use
          of the 3DP DirectedDiversity(R) Technology under this Agreement will
          result in the discovery or the successful commercialization of a
          Licensed Product for use against the Target in the Field.

12.  MISCELLANEOUS PROVISIONS

     12.1 Accrued Rights; Surviving Obligations.

          (a)  Termination, relinquishment or expiration of this Agreement for
               any reason shall be without prejudice to any rights which shall
               have accrued to the benefit of a Party prior to such termination,
               or expiration. Such termination, relinquishment or expiration
               shall not relieve a Party from obligations which are expressly
               indicated to survive termination or expiration of this Agreement.

                                       14
<PAGE>

          (b)  Without limiting the foregoing, Sections 4.3 to 4.8 and Articles
               5, 6, 7, 8 and 12 of this Agreement shall survive the expiration
               or termination of this Agreement.

     12.2 Further Actions. Each Party agrees to execute, acknowledge and deliver
          such further instruments and to do all such other acts as may be
          necessary or appropriate in order to carry out the purposes and intent
          of this Agreement.

     12.3 Force Majeure. The failure of a Party to perform any obligation under
          this Agreement by reason of acts of God, acts of governments, riots,
          wars, strikes, accidents or deficiencies in materials or
          transportation or other causes of a similar magnitude beyond its
          control shall not be deemed to be a breach of this Agreement.

     12.4 No Trademark Rights. No right, expressed or implied, is granted by
          this Agreement to a Party to use in any manner the name or any other
          trade name or trademark of a Party in connection with the performance
          of this Agreement.

     12.5 Public Announcements. The Parties shall consult with each other and
          reach mutual written agreement before making any public announcement
          concerning this Agreement or the subject matter hereof. The Parties
          agree to coordinate the dissemination of a joint press release to
          announce the signing of this Agreement. Notwithstanding the foregoing,
          the Parties may disclose the existence and general nature of this
          Agreement. However, neither Party shall use the name of the other
          Party for promotional purposes. BIPI shall have the right to review
          all filings, to the extent that they describe the terms of this
          Agreement or the arrangements with BIPI reflected herein, prior to
          their submittal by 3DP to the SEC, including all proposed redacted
          copies of this Agreement. 3DP shall give due respect to any reasonable
          and timely request by BIPI with respect thereto, including
          confidential treatment of selected portions of this Agreement.

     12.6 Entire Agreement of the Parties; Amendments. This Agreement and the
          exhibits hereto constitute and contain the entire understanding and
          agreement of the Parties respecting the subject matter hereof and
          cancels and supersedes any all prior negotiations, correspondence,
          understandings and agreements between the Parties, whether oral or
          written, regarding such subject matter. No waiver, modification or
          amendment of any provision of this Agreement shall be valid or
          effective unless made in writing and signed by a duly authorized
          officer of each Party. Notwithstanding the above, the "Bilateral
          Confidential Disclosure Agreement" executed on February 12, 1999 shall
          remain with full force and effect.

     12.7 Captions. The captions to this Agreement are for convenience only, and
          are to be of no force or effect in construing or interpreting any of
          the provisions of this Agreement.

                                       15
<PAGE>

     12.8  Applicable Law. This Agreement shall be governed by and interpreted
           in accordance with the laws of the State of Delaware without
           reference to its conflicts of law provisions.

     12.9  Disputes. Either Party may give the other Party written notice of a
           dispute not resolved in the normal course of business. Upon such
           notice, the Parties shall attempt in good faith to resolve any
           dispute arising out of or relating to this Agreement promptly by
           negotiation between executives who have the authority to settle the
           controversy and who are at a higher level of management than the
           persons with direct responsibility for administration of this
           Agreement. If the matter has not been resolved by these persons
           within thirty (30) days of a disputing party's notice, either Party
           may initiate mediation as provided herein. If the dispute has not
           been resolved by negotiation, the Parties shall endeavor to settle
           the dispute by mediation under the Center for Public Resources
           ("CPR") Model Procedure for Mediation of Business Disputes in effect
           on the Effective Date of this Agreement. Unless the Parties agree
           otherwise, a neutral mediator will be selected from a CPR Panel of
           Neutrals, with the assistance of CPR or, if the Parties agree, from
           the American Intellectual Property Law Association (AIPLA) Panel of
           Mediators.

     12.10 Notices and Deliveries. Any notice, request, delivery, approval or
           consent required or permitted to be given under this Agreement shall
           be in writing and shall be deemed to have been sufficiently given
           when it is received, whether delivered in person, transmitted by
           facsimile with contemporaneous confirmation of delivery by registered
           letter (or its equivalent) or delivery by certified overnight courier
           service, to the Party to which it is directed at its address shown
           below or such other address as such Party shall have last given by
           notice to the other Parties.

           If to BIPI:

           Boehringer Ingelheim Pharmaceuticals, Inc.
           900 Ridgebury Road
           P.O. Box 368
           Danbury, CT 06877-0368

           Attention: Senior Vice President, Research & Development

           with a copy to:

           Attention: Vice President, General Counsel

                                       16
<PAGE>

           If to 3DP:

           3-Dimensional Pharmaceuticals, Inc.

           Eagleview Corporate Center
           665 Stockton Drive, Suite 104
           Exton, PA 19341


           Attention: CEO

           with a copy to:

           Morgan, Lewis & Bockius LLP
           1701 Market Street
           Philadelphia, PA 19103-2921


           Attention: David R. King, Esq.

     12.11 No Consequential Damages. IN NO EVENT SHAI.L EITHER PARTY NOR ANY OF
           ITS RESPECTIVE AFFILIATES BE LIABLE TO THE OTHER PARTY OR ANY OF ITS
           AFFILIATES FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL
           DAMAGES, WHETHER IN CONTRACT, WARRANTY, TORT, NEGLIGENCE, STRICT
           LIABILITY OR OTHERWISE, including, but not limited to, loss of
           profits or revenue, or claims of customers of any of them or other
           third parties for such or other damages.

     12.12 Assignment. This Agreement may be assigned by either Party in
           connection with the sale or transfer of substantially all of its
           assets that relate to this Agreement. If 3DP acquires, is acquired
           by, merges with or otherwise combines with a company that has
           substantial activities related to Targets and is a competitor of
           BIPI, BIPI may require 3DP to take reasonable actions necessary to
           ensure that any of BIPI's Confidential Information, trade secrets or
           proprietary information is not disclosed to personnel within such
           company directly involved in such competitive activities.

     12.13 Independent Contractors. Both Parties are independent contractors
           under this Agreement. Nothing contained in this Agreement is intended
           nor is to be construed so as to constitute 3DP or BIPI as partners or
           joint ventures with respect to this Agreement. Neither Party shall
           have any express or implied right or authority to assume or create
           any obligations on behalf of or in the name of the other Party or to
           bind the other Party to any other contract, agreement, or undertaking
           with any Third Party.

     12.14 Advice of Counsel. BIPI and 3DP have each consulted with counsel of
           their choice regarding this Agreement, and each acknowledges and
           agrees that this

                                       17
<PAGE>

           Agreement shall not be deemed to have been drafted by one party or
           another and will be construed accordingly.

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their respective duly authorized officers as of the day and year first above
written, each copy of which shall for all purposes be deemed to be an original.



3 DIMENSIONAL                              BOEHRINGER INGELHEIM
PHARMACEUTICALS, INC.                      PHARMACEUTICALS, INC.



By:  /s/ David C. U'Prichard               By:  /s/ Prof. Dr. Peter Mueller
   ------------------------------------       ----------------------------------
Name: David C. U'Prichard, Ph.D.           Name: Prof. Dr. Peter Mueller
Title:CEO                                  Title:Sr. Vice President
                                                 Research & Development

                                       18
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.18
<SEQUENCE>9
<FILENAME>0009.txt
<DESCRIPTION>RESEARCH & LICENSE AGMNT BTW COMPANY & HOECHST
<TEXT>

<PAGE>

                                                                   EXHIBIT 10.18

                  COLLABORATIVE RESEARCH AND LICENSE AGREEMENT

     This Collaborative Research and License Agreement is made and effective as
of October 18, 1999 (the "Effective Date"), by and between 3-Dimensional
Pharmaceuticals, Inc., a corporation having its principal place of business at
Eagleview Corporate Center, 665 Stockton Drive, Suite 104, Exton, PA  19341,
U.S.A. ("3DP"), and Hoechst Schering AgrEvo GmbH, a corporation having its
principal place of business at Miraustr. 54, D-13509 Berlin, Germany ("AgrEvo").
3DP and AgrEvo may be referred to herein as a "Party" or, collectively as
Parties

     WHEREAS, 3DP is engaged in discovery research for a variety of biologically
active compounds and the development of technologies to facilitate such
research, and 3DP has developed patented and other proprietary systems for
generating chemical compounds having desired biological and other properties;

     WHEREAS, AgrEvo is engaged in research and development of biologically
active compounds and the development of technology for various agrochemical and
related purposes;

     WHEREAS, 3DP and AgrEvo desire to enter into a collaborative research and
development agreement to discover, identify, and evaluate compounds that have
certain biological and other properties, and AgrEvo may develop, own, patent,
manufacture, distribute, market and sell worldwide products containing one or
more of such compounds;

     NOW, THEREFORE in consideration of the various promises and understandings
set forth herein, the Parties agree as follows:


1.  DEFINITIONS
Unless otherwise specifically provided herein, the following terms shall have
the following meanings and may be used in the singular or plural, as indicated
by their context:

1.1  "Accessible Compound Library" means a computer database that is proprietary
to 3DP which describes small organic compounds that are generated using the
DirectedDiversity Software Tools and are not obtained from any public source.

1.2  "Active Compound" means a 3DP Screening Compound that has been synthesized
by 3DP and that has been selected by AgrEvo for development or optimization
according to Section 2.3.

1.3  "Affiliate" of a Party means: (i) any corporation or other business entity
owning or directly or indirectly controlling at least fifty percent (50%) of the
stock or other ownership interest normally entitled to vote for election of
directors of a Party, and (ii) any corporation or other business entity owned or
directly or indirectly controlled by a Party, or by a corporation defined by
subparagraph (i) above, through ownership of at least fifty percent (50%) of
stock or other ownership interest normally entitled to vote for election of
directors.
<PAGE>

1.4  "Agreement" shall mean the present agreement including its appendices.

1.5  "Compound Patents" means any Patents that claim: (i) an Active Compound
and/or a Research Program Compound; and/or any precursor, intermediate or
starting material used to make the Active Compound and/or the Research Program
Compound and/or any related compounds of any of the foregoing that are claimed
in the Compound Patents; or (ii) methods of making or using any compositions
containing any of the compounds specified in subparagraph i) above.

1.6  "Confidential Information" means any and all knowledge, information, data
material, experience or reports by one Party to the other under this Agreement
including inventions, compounds, know-how, data and materials relating to the
Research Program or to the licensed Products, and shall include without
limitation research, technical, manufacturing, marketing, financial, personnel
and other business information and plans, whether in oral, written, graphic or
electronic form.

1.7  "Directed Diversity Software Tools" or "Software" means certain software
tools proprietary to 3DP and used to generate combinatorial libraries, calculate
compound property descriptors, compare mapping and visualize compound libraries,
and support multi-objective selection strategies for compound optimization.

1.8  "Effective Date" means the effective date of this Agreement as set forth in
its first paragraph.

1.9  "Field" means plant management, pest management (including fungi) and
animal health, including but not limited to the use of herbicides, plant trait
modifiers, plant growth regulators, pesticides, fungicides, animal health care,
home and garden products, and environmental health products.  The term "Field"
expressly excludes human diagnostic and human therapeutic products.

1.10 "Licensed Product" means any commercial product comprising: (1) an Active
Compound or a Research Program Compound; or (2) a compound synthesized by AgrEvo
and covered by a Compound Patent, provided that the compound synthesized by
AgrEvo results from Optimization Synthesis performed at 3DP on an Active
Compound selected for optimization by 3DP pursuant to Sections 2.5 and 5.

                                      -2-
<PAGE>

1.11  "Net Sales" means the gross invoiced sales price charged to third parties
in an arms length transaction for all Licensed Products sold by AgrEvo, its
Affiliates and sublicensees in the Field in the Territory after deduction of the
following items: (i) customary trade, quantity and case discounts, wholesaler-
charge backs, or rebates (including rebates to governmental agencies); provided
that such discounts, charge backs and rebates are not applied disproportionately
with respect to particular products sold; (ii) customary credits or allowances
for rejection or return of previously sold Licensed Products; (iii) any direct
tax or government charge (other than an income tax) levied on the sale, use,
transportation or delivery of a Licensed Product and borne by the seller
thereof; and (iv) any charge for freight or insurance if separately stated.

Combination Products: Where Licensed Product is sold in the form of a
Combination Product containing one or more active ingredients in addition to an
Active Compound, Research Program Compound or a compound synthesized by AgrEvo
and covered by a Compound Patent, provided that the compound synthesized by
AgrEvo results from Organization Synthesis performed at 3DP on an Active
Compound selected for optimization by 3DP pursuant to Sections 2.6 and 5.3
(hereinafter, "Licensed Compounds"), Net Sales for such Combination Product will
be calculated by multiplying actual Net Sales of such Combination Product by the
fraction A/(A+B) where A is the net invoice price to third parties of product
containing such Licensed Compound, if sold separately.  If, on a country-by-
country basis, the other active component or components in the combination are
not sold separately and where B is the net invoice price to third parties of
product containing the additional ingredients, if sold separately in said
country, Net Sales for the purpose of determining royalties on the Combination
Product shall be calculated by multiplying actual Net Sales of such Combination
Product by the fraction A/C where A is the invoice price of Product containing
the Licensed Compound, if sold separately, and C is the invoice price of the
Combination Product.  If, on a country-by-country basis, neither the Product nor
the other active component or components of the Combination Product is sold
separately in said country, Net Sales for the purposes of determining royalties
of the combination Product shall be reasonably allocated between the Product and
the other active components based upon their relative value as determined by the
Parties hereto in good faith.

1.12  "Optimization Synthesis" means at least [**] interactive rounds of SAR
generation, selection synthesis and testing.

1.13  "Patents" means all patent applications or issued patents, including
provisionals, divisionals, continuations, continuations-in-part, reissues and
extensions derived therefrom in any country.

1.14  "Probe library" means the collection of discrete, structurally diverse
small organic molecules synthesized at the Effective Date from the Accessible
Compound Libraries, including additional compounds synthesized subsequently.

1.15  "Research Program" means the collaborative research activities conducted
by 3DP and AgrEvo, as described in Article 2 of this Agreement.


**Certain portions of this Exhibit have been omitted upon a request of
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed seperately with the Commission.

                                      -3-
<PAGE>

1.16  "Research Program Compound" means a compound that has been synthesized by
3DP in the course of the Research Program, e.g., in the course of optimizing an
Active Compound.

1.17  "Research Program Patents" means any Patents, other than Compound Patents
and 3DP Technology Patents, that claim inventions made by either Party in the
course of the Research Program.

1.18  "Research Program Term" means an initial period of two (2) years from the
Effective Date in which the Parties have agreed to conduct collaborative
research pursuant to the Research Program.  This Research Program Term may be
extended pursuant to Sections 2.8 and 6.2 or may be shortened pursuant to
Section 12.4 of this Agreement.

1.19  "Research Steering Committee"or"Committee"means the committee to be formed
pursuant to Article 3 of this Agreement.

1.20  "ThermoFluor Protein Characterization and Screening Technology" or
"ThermoFluor Technology" means a parallel, microscale [**] that provides a
fluorescent signal readout useful for target characterization, assay
development, and compound library screening.

1.21  "Territory" means the entire world.

1.22  "3DP Screening Library" means a collection of [**] compounds, selected
from the Probe Library and from the Accessible Compound Library, provided by 3DP
to AgrEvo for screening pursuant to Section 2.2 of this Agreement "3DP Screening
Compound" means a compound present in the 3DP Screening Library.

1.23  "3DP Technology" means U.S. Patents No. 5,463,564; 5,574,656; 5,684,711
and 5,901,069, associated know-how and other intellectual property rights of 3DP
that cover the use of DirectedDiversity Accessible Compound Libraries,
DirectedDiversity Software Tools and ThermoFluor Protein Characterization and
Screening Technology, and other related technology developed by 3DP during the
course of this Agreement.

1.24  "3DP Technology Patents" mean Patents covering 3DP Technology.

1.25  "Valid Claim" means a claim of a Patent that has not lapsed or become
abandoned or been declared invalid or unenforceable by a court or agency of
competent jurisdiction from which no appeal can be or has been taken.

2.  COLLABORATIVE RESEARCH PROGRAM

2.1  Research Program.  The goal of the Research Program is to identify and
optimize compounds of commercialization in the Field.  The Parties agree to
collaborate in drafting a specific research plan, to be approved by the Research
Steering Committee pursuant to Section 3.1 of this Agreement, and agree to use
their reasonable efforts to achieve the goal of the Research Program.


**Certain portions of this Exhibit have been omitted upon a request of
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed seperately with the Commission.

                                      -4-
<PAGE>

2.2  3DP Screening Compounds. 3DP will supply 3DP Screening Compounds to AgrEvo
to be screened at AgrEvoin in [**] according to section 2.4 with the aim to
identify Active Compounds for potential use in the Field under the following
terms or other terms agreed to by the Research Steering Committee on behalf of
the Parties:

(a)  3DP will supply the 3DP Screening Library to AgrEvo through approximately
monthly deliveries that cumulatively contains [**] compounds that are jointly
selected by the Research Steering Committee from the Probe Library and
Accessible Compound Libraries designated by 3DP.

(b)  3DP will deliver samples of 3DP Screening Compounds to AgrEvo at a rate of
approximately [**] compounds per month until the entire 3DP Screening Library
has been delivered to AgrEvo. Each 3DP Screening Compound sample will contain
approximately [**] mg of compound as a [**] solution in 96 deep well plates in
DMSO, each deep well plate containing 88 compounds. 3DP agrees to use
commercially reasonable efforts to deliver the initial [**] 3DP Screening
Compounds within four (4) weeks from the Effective Date. If requested by the
Research Steering Committee, reasonable additional amounts of the Screening
Library Compounds will be provided by 3DP to AgrEvo for screening purposes. 3DP
shall be reimbursed by AgrEvo at 3DP's costs for providing such additional
amounts of the Screening Library Compounds, if providing such additional amounts
of compounds requires the services of FTEs outside of the Research Program.

(c)  3DP will supply an electronic record of structures of 3DP Screening
Compounds as delivered. AgrEvo agrees to restrict access to inspection of these
structures to its employees on a need to know basis for AgrEvo's research
activities, unless and until otherwise agreed to in writing by 3DP.

2.3  Screening at AgrEvo.  AgrEvo will conduct screening tests on the 3DP
Screening Compounds and Research Program Compounds.  Within [**] months
of receipt of a given 3DP Screening Compound, AgrEvo will declare if it is
interested in further research on such a compound.  In case of interest, such a
compound shall be designated as an Active Compound by AgrEvo.  AgrEvo's general
criteria for the designation of an Active Compound shall be discussed at the
Research Steering Committee.

2.4  Screening at 3DP.  Upon request of AgrEvo, 3DP shall perform enzymology or
ThermoFluor Protein Characterization assays on molecular targets supplied by
AgrEvo as required for screening of 3DP Screening Compounds and/or Research
Program Compounds. As approximate performance objectives, it is estimated that
[**] will be required to set up a new enzymologicolassay; [**] will be required
to perform an enzymologicalassay on up to [**] compounds; and [**] will be
required and run a ThermoFluor(R) Protein Characterization assay on up to [**]
compounds. 3DP shall promptly report the results of such screening
to AgrEvo.  In the event that AgrEvo requests 3DP to conduct assays on a larger
number of molecular targets than can be conducted by the FTE commitment
hereunder, AgrEvo shall negotiate in good faith to increase FTE support.


**Certain portions of this Exhibit have been omitted upon a request of
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed seperately with the Commission.

                                      -5-
<PAGE>

2.5  Research on Active Compounds. AgrEvo may conduct further research pursuant
to this Agreement on Active Compounds. If AgrEvo decides that the activity of an
Active Compound is not sufficient to direct further development, it may select,
at its sole discretion, such a compound for optimization. Optimization may be
carried out either by 3DP or AgrEvo. Notwithstanding the foregoing, in deciding
which Party carries out the optimization of a given Active Compound the members
of 3DP in the Research Steering Committee shall have a first right of refusal to
perform such optimization at 3DP. For purposes of clarification, once 3DP
exercises its right to optimize an Active Compound, 3DP shall have the
obligation to perform such optimization, and 3DP shall have the right to
continue optimizing compounds that result from previous rounds of optimization
performed at 3DP. It is understood, however, that 3DP shall not be obligated to
perform optimization work that either exceeds the capacity of the FTE's
allocated to the Research Program, or the term of the Research Program.

2.6  Synthesis at 3DP. 3DP will provide chemical and biochemical support
services for the optimization of Active Compounds as stipulated in Section 2.5
and/or prepare new libraries of Research Program Compounds for screening
according to Sections 2.3 and 2.4. The optimization services to be provided by
3DP shall include the following, with specific FTE allocations to be determined
by the Research Steering Committee.


(a)  Optimization of Active Compounds obtained from screens performed at AgrEvo
through iterative rounds of SAR generation, selection, synthesis and testing (at
AgrEvo or 3DP) of compounds selected from 3DP Accessible Compound Libraries. The
Research Program compounds derived from the optimization of Active Compounds
under this subparagraph shall not be considered as part of the 3DP Screening
Library to be provided to AgrEvo under Paragraph 2.2(a). [As an approximate
performance objective, it is estimated that [**] will be required to select,
synthesize, and perform quality control tests on [**] new compounds derived
from established Accessible Compound Libraries (depending on synthesis
routes).]

(b)  Design and production chemistry development for new libraries for screening
purposes according to Section 2.3 and 2.4 and/or new libraries based on Active
Compounds obtained from screens performed at AgrEvo or 3DP. Such new libraries
and the Research Program Compounds contained therein shall not be considered as
part of the 3DP Screening Library to be provided to AgrEvo under Paragraph
2.2(a) [As an approximate performance objective, it is estimated that [**]
will be required to develop, scope and verify a new combinational synthesis
for such a library.]

(c)  ThermoFluor Protein Characterization assays performed to support
optimization programs on molecular targets supplied by AgrEvo as required for
the progress of the Research Program. [As an approximate performance
objective, it is estimated that [**] will be required to set up and run a
ThermoFluor(R) assay on up to [**] compounds.]

2.7  Notwithstanding the Confidentiality Obligations of Article 8, and except
for the use of DirectedDiversity Software Tools by AgrEvo as described in
Article 4 and the use of the ThermoFluor Workstation as described in Section
5.8, 3DP hereby agrees that research, optimization and development undertaken by
AgrEvo pursuant to the terms of this Agreement may be undertaken for AgrEvo by
any Affiliate or Affiliates of AgrEvo, provided that such Affiliate or
Affiliates agree(s) to be bound by the obligations accepted by AgrEvo under this
Agreement.


**Certain portions of this Exhibit have been omitted upon a request of
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed seperately with the Commission.

                                      -6-
<PAGE>


2.8  AgrEvo shall have the option to extend the Research Program for additional
one-year terms, on ninety (90) days written notice prior to the end of the
initial or extended term, with a minimum support obligation of [**]. For any
ongoing project that is started but not completed before the expiration of a
term, the parties shall negotiate in good faith an appropriate extension of
the existing term which is less than one year in order to complete such
project.

3.  RESEARCH STEERING COMMITTEE

3.1  Research Steering Committee. The Research Program will be managed by a
Research Steering Committee ("Committee").  AgrEvo and 3DP shall each designate
three (3) employees, to be selected by their respective R&D management, to form
this Committee.  One of the AgrEvo members shall be designated as the
chairperson.  In the event of a tie vote, the chairperson shall cast the
deciding vote, except with respect to the first right of refusal of 3DP to
perform such optimization at 3DP as stipulated in Section 2.5. From time-to-
time, the Research Steering Committee may designate additional qualified
representatives of AgrEvo and 3DP to perform specific Committee-related tasks.
The Research Steering Committee shall be responsible for:

(a)  Reviewing and approving a research plan, and monitoring the progress of
research; and

(b)  Reviewing the research plan on a quarterly basis, and amending the research
plan from time to time;

(c)  Discussing general criteria for designating Active Compounds.

(d)  Tracking the development and status of Active Compounds and Research
Program Compounds.

(e)  Adjusting the objectives and program priorities of the FTEs allocated to
the Research Program on a quarterly and a project-by-project-basis; and

(f)  Reviewing and approving publications and other like disclosures related to
the subject matter of the Research Program.

3.2  Meetings of the Research Steering Committee.  The Research Steering
Committee shall meet quarterly, alternating at the facilities of AgrEvo and 3DP,
unless meeting locations are otherwise agreed to by the Committee.

4.  DIRECTEDDIVERSITY SOFTWARE TOOLS


     The use of DirectedDiversity Software Tools by AgrEvo, as covered by this
Article 4, and support obligations of 3DP, may be extended by AgrEvo to its
Affiliate, AgrEvo UK Limited (Chesterford Park), if AgrEvo UK Limited agrees
in writing to be bound by the provisions of this Agreement. In the event of the
proposed merger of the life science activities of Hoechst Aktiengesellschaft
and Rhone Poulenc SA, the merged entity will be entitled to [**]


**Certain portions of this Exhibit have been omitted upon a request of
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed seperately with the Commission.

                                      -7-
<PAGE>

[**] if such research sites agree in writing to be bound by the provisions of
this Agreement.

4.1  Use of DirectedDiversity Software Tools. 3DP will provide DirectedDiversity
Software Tools and support to AgrEvo for in-house use by AgrEvo only in the
Field according to Section 4.3.

4.2  DirectedDiversity Software Tools and Support.  3DP will supply the
following Software modules and technical support to AgrEvo:

        [**]

4.3  Workstation for DirectedDiversity Software Tools.  DirectedDiversity
Software Tools will be implemented on a Windows NT Workstation. 3DP agrees to
furnish up to [**] singleseat Windows NT DirectedDiversity code installations at
sites to be defined by AgrEvo. 3DP shall provide up to [**] days of on-site
consultation at 3DP to one to three (1-3) AgrEvo scientists per year.  Licenses
to DirectedDiversity Software Tools shall be renewable on a yearly basis
provided that the Research Program is in effect.  After the expiration or
termination of the Research Program, 3DP agrees to negotiate in good faith with
AgrEvo for AgrEvo's continued use of the Directed Diversity Software Tools.  In
the absence of such a further agreement, and upon 3DP's written request, AgrEvo
agrees to return the DirectedDiversity Software Tools promptly to 3DP. 3DP
agrees to use commercially reasonable efforts to install the DirectedDiversity
Software Tools within eight (8) weeks from the Effective Date.

4.4  Limitations on Use of Software.  The DirectedDiversity Software Tools are
provided to AgrEvo pursuant to this Agreement and, notwithstanding anything else
in this Agreement to the contrary, they may not be transferred or assigned to,
or used by or on behalf of any third parties.  AgrEvo may make no more than one
(1) copy of the Software, which may be used for backup purposes only.  AgrEvo
may not, directly or indirectly, decompile, disassemble, reverse engineer or
otherwise attempt to derive source code for the Software, and may not modify,
enhance, create derivative works based on, or otherwise change the Software,
AgrEvo may not sell, assign, lease, sublicense, or otherwise transfer, disclose,
or grant access to the Software or any copy thereof to any third party, without
the written consent of 3DP, which may be withheld in 3DP's sole discretion.
Except as expressly permitted by this Agreement, AgrEvo may not place or install
any portion of the Software on any electronic media, including but not limited
to, local or wide area networks, multiple processing units, multiple site
arrangements, service or software rental bureaus, list servers, electronic
bulletin boards, World Wide Web sites or any other server that is Internet-
enabled.

4.5  Proprietary Rights, Protection of Confidentiality.  AgrEvo acknowledges
that 3DP owns all right, title and interest in and to the Software or any
portion thereof.  AgrEvo acknowledges that the Software contains confidential
and proprietary information and trade secrets of 3DP whether or not the
Software, or any portion thereof, is or may be copyright or copyrightable and/or
patented or patentable, and that the Software is disclosed to AgrEvo in the
strictest confidence.  AgrEvo hereby agrees to maintain the Software in
confidence using the same degree of care as


**Certain portions of this Exhibit have been omitted upon a request of
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed seperately with the Commission.

                                      -8-
<PAGE>

AgrEvo takes to safeguard its own proprietary information and trade secrets, but
in no event shall AgrEvo use less than a reasonable degree of care, and to
refrain from disclosing the Software to third parties.

4.6  Warranties as to the Software. 3DP warrants that, to 3DP's knowledge, based
upon its review of the results of a reasonable search of relevant issued U.S.
patents, as of the Effective Date, the use of the 3DP DirectDiversity Technology
as permitted by this Agreement, will not violate the rights of third parties in
the U.S. In the event that 3DP has reason to change this view after the
Effective Date and during the term of the Research Program, 3DP shall promptly
inform AgrEvo and provide full justification therefor. 3DP guarantees the
operability of the software at the AgrEvo Workstation and that the Software has
been written following the accepted rules of programming.

4.7  Limitation of Warranties and liabilities as to the Software.  3DP SHALL NOT
BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE
DAMAGES, ARISING OUT OF OR IN CONNECTION WITH THE LICENSE GRANTED HEREIN OR USE
OF THE SOFTWARE; INCLUDING WITHOUT LIMITATION, LOSS OF DATA, LOSS OF INCOME OR
PROFIT, OR OTHER LOSSES SUSTAINED AS A RESULT OF INJURY TO ANY PERSON OR LOSS OR
DAMAGE TO PROPERTY; OR CLAIMS OF THIRD PARTIES.

5.  LICENSE AND ALLOCATION OF RIGHTS

5.1  Research Program License for 3DP Technology. 3DP hereby grants to AgrEvo a
worldwide, non-exclusive, irrevocable license under the 3DP Technology during
the term of the Research Program to conduct the Research Program.
Notwithstanding anything in this Agreement to the contrary, AgrEvo may not use
3DP Technology outside the Field.  This license is provided to AgrEvo and those
of its Affiliates who agree to be bound by the provisions of this Agreement and
may not be assigned, sublicensed or used on behalf of any third parties without
written permission from 3DP.  Notwithstanding the foregoing, the use of the
DirectedDiversity Software Tools by AgrEvo is limited by the provisions of
Article 4 and Section 5.7, and the use of the ThermoFluor Workstation is limited
by the provisions of Section 5.8.

5.2  Rights to Exclusive Screening.  AgrEvo shall have the exclusive right to
screen each 3DP Screening Compound for use in the Field pursuant to Section 2.3
for one [**] from its date of receipt by AgrEvo. Subject to Section 5.3, after
the [**] exclusivity period, 3DP shall regain all rights to a minimum of [**] of
the total compounds supplied to AgrEvo in the 3DP Screening Library. With regard
to 3DP Screening Compounds for which 3DP regains rights pursuant to this Section
5.2, AgrEvo also hereby grants to 3DP a fully paid-up, royalty free worldwide
license in the Field, with the right to sublicense under any Compound Patents
and under Research Program Patents to make, have made, use, sell, have sold,
import and have imported patented products.


**Certain portions of this Exhibit have been omitted upon a request of
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed seperately with the Commission.

                                      -9-
<PAGE>

5.3  Rights to Nonexclusive Screening. Notwithstanding the provisions of Section
5.2, after the period outlined in Section 5.2, AgrEvo shall have the
nonexclusive right to screen any remaining amount of all 3DP Screening Compounds
for use in the Field. If, as a result of such nonexclusive screening, AgrEvo is
interested in the optimization for subsequent development of a 3DP Screening
Compound, and provided 3DP is not contractually prohibited from granting
development and commercialization rights to AgrEvo for such a compound, 3DP
shall have the first right of refusal to optimize for subsequent development
such a compound under terms and conditions to be negotiated in good faith by the
Parties, taking into account the terms and conditions of this Agreement.

5.4  Rights to Exclusive Optimization and  Development.  3DP shall not provide
any Active Compound nor any Research Program Compound to any third party for use
in the Field, unless AgrEvo has declared in writing that it is not interested in
the further development of such Active Compound or Research Program Compound.

5.5  Ownership of Compound Patents by AgrEvo and License to 3DP.  AgrEvo shall
own all Compound Patents.  AgrEvo hereby grants to 3DP a fully paid-up, royalty
free worldwide, exclusive license outside of the Field, with the right to
sublicense under such Compound Patents and under Research Program Patents to
make, have made, use, sell, have sold, import and have imported patented
products.  AgrEvo shall have the right to enforce the Compound Patents in the
Field, and 3DP shall have the right to enforce the Compound Patents outside of
the Field, as described in Section 9.5. Notwithstanding the foregoing, this
license shall not permit 3DP to sell or license for uses outside of the Field,
the specific Active Compounds and Research Program Compounds that are
commercially developed by AgrEvo.

5.6  Other 3DP Patents.  In case a compound resulting from the Research Program
and developed by AgrEvo is covered by a patent or patent application of 3DP, 3DP
hereby grants to AgrEvo irrevocable worldwide, exclusive license in the Field
under such patent to make, have made, use, sell, have sold, import and have
imported licensed Products, under the conditions stipulated in Article 6,
provided that 3DP is not contractually prohibited from granting such an
exclusive license.

5.7  Research License to DirectedDiversity Software Tools Outside of the
Research Program. 3DP hereby also grants to AgrEvo a worldwide, nonexclusive
license under the 3DP Technology to utilize the DirectedDiversity Software Tools
within the Field but outside of the Research Program.  The license conveyed by
this Section 5.7 is granted to AgrEvo pursuant to the terms and conditions of
Articles 4 and 6 of this Agreement, and may not be assigned or sublicensed or
used on behalf of third parties without written permission from 3DP.

                                      -10-
<PAGE>

5.8  ThermoFluor Protein Characterization and Screening Technology. At AgrEvo's
option, 3DP agrees to lease to AgrEvo a ThermoFluor Workstation and associated
analysis software [**]. 3DP hereby also grants to AgrEvo a nonexclusive license
under the 3DP Technology to utilize the ThermoFluor Protein Characterization and
Screening Technology within the Field also outside of the Research Program. The
license conveyed by this Section 5.8 is granted, pursuant to the terms and
conditions of Article 6 of this Agreement, to AgrEvo and its Affiliate, as such
Affiliate is defined in Article 4, and may not be assigned or sublicensed or
used on behalf of third parties without written permission from 3DP.

6.  FINANCIAL TERMS


6.1  3DP Technology Licensing Fee ($ U.S. Dollars). In consideration of the
rights granted and services provided by 3DP under this Agreement, AgrEvo agrees
to pay the following sums to 3DP: (a) [**] due within four (4) weeks of the
Effective Date of this Agreement provided that AgrEvo has received the inital
[**] 3DP Screening Library Compounds as provided in Paragraph 2.2(b); (b) [**]
within three (3) weeks of delivery by 3DP of the first [**] 3DP Screening
Compounds; (c) [**] within three (3) weeks of delivery by 3DP of the second [**]
3DP Screening Compounds; and (d) [**] annual fee due on installation and on
each anniversary thereafter, for each single-seat DirectedDiversity(R)
workstation installation described in Section 4.3.

6.2  3DP Optimization Services and Allocated FTE Costs. Allocated FTE costs will
be supported by AgrEvo at the rate of [**] for the initial two (2) year term
of the Research Program, to be paid quarterly in advance. 3DP agrees to
allocate [**] three (3) months from the Effective Date of this Agreement.
After the first [**] of the program, the total FTE allocation shall be [**].
In the event that the term of the Research Program is extended pursuant to
Sections 2.8 and 5.3, AgrEvo shall support FTE costs to be negotiated in good
faith by the Parties.

6.3  Development Milestone Payments. Development milestone payments are to be
paid for each compound advanced for commercial development as a result of the
collaboration according to the following schedule: (a) [**] on selection of an
Active Compound or Research Program Compound for thirty (30) or ninety (90)
days oral toxicology studies on rodents; and (b) [**] on selection of an
Active Compound or Research Program Compound for chronic toxicology studies on
rodents.

6.4  Performance Incentive Payment. AgrEvo agrees to pay [**] to 3DP on the
selection in any three (3) year period of three (3) Active Compounds and/or
Research Program Compounds for chronic toxicology studies on rodents.

6.5  Royalty on Licensed Products. In consideration of the grant of rights
under Article 5 of this Agreement, AgrEvo agrees to pay 3DP a royalty of [**]
on the first [**] of annual Net Sales of each Licensed Product, combined for
all uses in the Field. AgrEvo further agrees to pay 3DP a royalty of [**] on
the amount of annual Net Sales in excess of [**] of each Licensed Product,
combined for all uses in the Field. Notwithstanding the foregoing, royalties
pursuant to this Section 6.5 shall be due only for Net Sales of Licensed
Products to the extent that they fall within the scope of a Valid Claim of the
Compound Patents. No royalties shall be due on Net Sales of a Licensed
Product, to the extent that it is covered by a Compound Patent application
that AgrEvo chooses not to file or pursue, but that 3DP does choose to file or
pursue as described in Section 9.3(a), more than five (5) years from the time
that the application was first filed in that country unless and until the
Compound Patent actually issues in that country.

6.6  Additional Support for DirectedDiversity(R) Software Tools. The annual fee
for the DirectedDiversity(R) workstations pursuant to Section 6.1 shall
include on-site consulting at 3DP for [**] per year. Additional consulting at
3DP or AgrEvo shall be available during the term of the Research Program at [**]
(reasonable travel and lodging expenses to be borne by AgrEvo).

6.7  ThermoFluor(R) Technology Financial Terms. Upon request by AgrEvo made
during the initial term of the Research Program, 3DP agrees to grant AgrEvo [**]
to be delivered to AgrEvo for use in the Field. The [**] fee shall be [**] and
shall be paid on the following schedule. [**] at the commencement of the [**];
and [**]. AgrEvo may [**].


6.8  Mode of Payment.  All payments to 3DP shall be made against invoice within
thirty (30) days net in United States Dollars in the requisite amount to one
account to be named by 3DP.  As to the royalty payments, the amount of Net Sales
in any country in the Territory shall be converted into U.S. Dollars, by
applying the buying rate for the application day of conversion as published by
Wall Street Journal on the last business day of applicable quarter.

6.9  Taxes.

(a)  General. Any existing or future taxes, duties, fees or other charges which
are incurred in connection with the conclusion and execution of this Agreement
shall be borne by AgrEvo if they are incurred in the Federal Republic of Germany
and by 3DP if they are incurred in the U.S.

(b)  German Income Tax. 3DP becomes with the license fee income a non-resident
taxpayer in Germany, and AgrEvo has to deduct and pay the income tax at a rate
of 25% of the license income (Section 50(a)(4) no.3 EStG). According to the
Double Tax Treaty between the U.S. and the Federal Republic of Germany, licensee
fees derived and beneficially owned by a resident of a Contracting State shall
be taxable only in that State, which means that 3DP shall only be taxed in the
U.S. This does not apply, if 3DP carries on business in Germany through a
permanent establishment or performs independent personal services from a fixed
base and the property raising the license fee is part of these activities (Art.
12). The exemption from the 25% rate has to be applied for at the Bundesamt fur
Finanzen, Bonn/Germany. AgrEvo will assist 3DP in this procedure and send the
application form to 3DP in advance to provide sufficient time to prepare and
file the application but in no event less than 60 days before the filing
deadline. AgrEvo is exempted from the duty to deduct and pay only from that
point in time, when AgrEvo has received the exemption assessment from the
Bundesamt fur Finanzen. The application should be made immediately after signing
the contract. Payments from this agreement should be done after AgrEvo has
received the exemption assessment. If payments will be done before this point in


** Certain portions of this Exhibit have been omitted upon a request of
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      -11-
<PAGE>

time, AgrEvo will deduct and pay the amount of 25% of the license income, but
then AgrEvo will assist 3DP with the refund application.

(c)  VAT. In general, 3DP becomes a VAT player on the license fees received from
AgrEvo. AgrEvo would have to deduct and pay the VAT (actual rate: 16%). This can
be avoided, if 3DP does not allocate VAT in its invoices submitted to AgrEvo,
and AgrEvo, if VAT would be allocated, could be refunded (Section 52 UstDV,
Nullregelung ("Zero Regulation")). AgrEvo shall confirm the non-deduction of VAT
to 3DP.

7.  AGREVO OBLIGATIONS

7.1  Development.  The development of any compound from the Research Program
(Active Compound, Research Program Compound or a compound resulting from
optimization work by AgrEvo) is at the sole discretion of AgrEvo.  The above
notwithstanding, in developing and commercializing such a compound AgrEvo will
use its reasonable efforts, comparable to those extended to its in-house
development of products of similar importance and/or commercial value.

7.2  Annual Progress Reports.  AgrEvo shall provide 3DP with written annual
reports after the end of each calendar year during the term of this Agreement to
report on AgrEvo's progress in developing Active Compounds and Research Program
Compounds.  The obligation to submit such progress reports shall end upon the
commencement of Net Sales.

7.3  Annual Sales Reports.  Following first Net Sales, AgrEvo shall provide 3DP
with written annual reports on Net Sales within ninety (90) days after the end
of each calendar year during the term of this Agreement.

7.4  Records Retention.  AgrEvo, its Affiliates and sublicensees shall keep
complete, accurate and correct records of Net Sales in sufficient and
appropriate detail to determine the amount of royalties due to 3DP.  Such
records shall be available for inspection and maintained for a period of three
(3) years after the payment of any such royalty.  AgrEvo shall permit such books
and records to be examined at a reasonable time during normal business hours by
a certified public accountant chosen by 3DP and reasonably acceptable to AgrEvo
for the purposes only of verifying the report and payments required by this
Agreement.  Such investigation shall be at the expense of 3DP unless it reveals
a discrepancy in 3DP's favor of more than ten per cent, in which event it shall
be at AgrEvo's expense.

7.5  Compliance with Applicable Law.  AgrEvo agrees to comply with all
applicable federal, state and local laws that relate to the manufacture, use and
sale of Licensed Products. 3DP shall comply with all applicable federal, state
and local laws that relate to its activities under this Agreement.


8.  CONFIDENTIAL INFORMATION

                                      -12-
<PAGE>

8.1  Confidentiality Obligations.  The Parties agree that, for the term of this
Agreement and for five years thereafter, the "Receiving Party" shall keep
completely confidential and shall not publish or otherwise disclose and shall
not use for any purpose (except as expressly permitted hereunder) any
Confidential Information furnished to it by the "Disclosing Party" pursuant to
this Agreement (including without limitation, know-how), except to the extent
that it can be established by the Receiving Party that such Confidential
Information:

(a)  was already known to the Receiving Party, other than under an obligation of
confidentiality from the Disclosing Party; at the time of disclosure;

(b)  was generally available to the public or otherwise part of the public
domain at the time of its disclosure to the Receiving Party;

(c)  became generally available to the public or otherwise part of the public
domain after its disclosure and other than through any act or omission of the
Receiving Party in breach of this Agreement;

(d)  was subsequently lawfully disclosed to the Receiving Party by a third
party; or disclosure was compelled by governmental administrative agency or
judicial requirements. The Receiving Party shall notify the Disclosing Party of
such action prior to disclosure.

The obligations of confidentiality and non-use set forth in this Section 8.1
shall also apply to biological material and chemical compounds and associated
information (including without limitation know-how) disclosed by one Party to
the other prior to or during the term of this Agreement.

8.2  Written Assurance.  Each Party shall limit the disclosure of Confidential
Information that it receives from the other Party to those employees and
consultants who have a reasonable need to know such Confidential Information in
connection with the activities contemplated under this Agreement.  Each party
also agrees to inform its employees and consultants who perform substantial work
on the Research Program of the obligations of confidentiality specified in
Paragraph 8.1 and all such persons shall be bound by the terms of
confidentiality set forth therein.  The Parties shall ensure that all employees
and consultants who are inventors on any patents arising under work carried out
under the Research Program will assign to such Party or Parties all inventions
made by such persons during the course of performing the Research Program.  Each
Party may disclose the other's Confidential Information to the extent such
disclosure is reasonably necessary in filing or prosecuting patent applications,
prosecuting or defending litigation, complying with applicable governmental
regulations, making a permitted sublicense of its rights hereunder or otherwise
in performing its obligations or exercising its rights hereunder, provided that
if a Party is required to make any such disclosure of another Party's secret or
Confidential Information, it will give at least thirty (30) day written, advance
notice to the latter Party of such disclosure requirement.  However, to the
extent such disclosure is not required by law, a Party shall provide the Party
whose Information is being disclosed, an opportunity to identify Confidential
Information that shall not be disclosed.

                                      -13-
<PAGE>

8.3  Permitted Disclosures

(a)  Notwithstanding the foregoing, or any other provision in this Agreement to
the contrary, and subject to Section 12.7 herein, 3DP may describe the financial
terms of this Agreement in confidence, in connection with capital raising or due
diligence activities. Furthermore, AgrEvo acknowledges that 3DP may be obligated
to disclose terms of this Agreement and make public a copy of this Agreement in
the event it becomes a public company as required by applicable U.S. law.

(b)  Notwithstanding the forgoing, AgrEvo shall be free to disclose Confidential
Information to those of its Affiliates that agree to be bound by the terms of
this Agreement.

9.  INVENTIONS AND PATENTS

9.1  Ownership.  As stipulated in Article 5, all Research Program Patents shall
be individually or jointly owned depending on the relative inventive
contributions of each Party.  All 3DP Technology Patents or improvements thereto
made in the course of the Research Program shall be owned by 3DP regardless of
inventorship.  All Compound Patents shall be owned by AgrEvo regardless of
inventorship.

9.2  Disclosure of Inventions.  The Parties agree to disclose, on a timely
basis, all inventions and discoveries made in the course of the Research Program
to the Research Steering Committee.

9.3  Filing of Patent Applications.

(a)  Compound Patents. AgrEvo has the right but not the obligation to file and
pursue Compound Patents. If AgrEvo chooses to do so, then 3DP shall not file or
pursue any patent directed to the same invention. If AgrEvo chooses not to do
so, then 3DP shall have the right but not the obligation to file and pursue such
Compound Patents at 3DP's expense. This right includes the right to file in
countries where AgrEvo has not sought patent protection.

If necessary, 3DP will assist AgrEvo in complying with all formal and
substantive requirements for filing such Compound Patents free of charge.  If
AgrEvo intends to abandon a Compound Patent in any country it shall inform 3DP
thereof in advance and, upon, request of 3DP, shall assign said patent in said
county to 3DP at 3DP's expense.

(b)  Research Program Patents. AgrEvo has the right but not the obligation to
file and pursue Research Program Patents that are owned solely by AgrEvo. 3DP
has the right but not the obligation to file and pursue Research Program Patents
that are owned solely by 3DP. Where there is co-inventorship and thus co-
ownership of Research Program Patents, the Parties will decide who is in the
best position to file, and shall regularly provide each other with copies of all
filings and other materials submissions and correspondence with the patent
offices, in sufficient time to allow for review and comment. The Parties shall
consult in good faith as to the territorial

                                      -14-
<PAGE>

scope of filing jointly owned Research Program Patents and on the preparation,
prosecution and maintenance and jointly owned Research Program Patents.

(c)  3DP Technology Patents. 3DP shall have the sole responsibility and
discretion as to the filing and prosecution of any 3DP Technology Patents to the
extent that they claim 3DP Technology.

9.4  Patent Expenses.  AgrEvo shall bear the costs of prosecuting and
maintaining Compound Patents, owned by AgrEvo. 3DP shall bear the costs of
prosecuting and maintaining any patents owned by 3DP.  The Parties agree to
share the reasonable cost of prosecuting and maintaining jointly owned Research
Program Patents.  However, either party may chose to assign any of such Compound
Patents or jointly owned Research Program Patents to the other party and have no
further obligations for costs for such patent rights and no further license
rights with respect to Compound Patents.

9.5  Enforcement of Compound Patents.

If either Party considers that a Valid Claim of any of the Compound Patents or
Research Program Patents is being infringed by a third Party in the Field, it
shall notify the other Party and provide it with any evidence of such
infringement which is reasonably available.  AgrEvo shall have the right but not
the obligation at its own expense, to attempt to remove such infringement by
commercially appropriate steps, including suit.  If required by law, 3DP shall
join such suit as a party, at AgrEvo's reasonable expense.  In the event AgrEvo
does not take commercially appropriate steps with respect to such infringement
that is likely to have a material adverse effect on the sale of Licensed
Products, within six months following notice of such infringement, 3DP shall
have the right to do so at its expense and shall retain any recovery, provided
that AgrEvo shall not be required to enforce such Compound Patents against more
than one entity or in more than one country at any one time.

Any amounts recovered by AgrEvo pursuant to this Section 9.5, whether by
settlement or judgment, shall be reported as Net Sales for the purpose of
calculating royalties to 3DP, after deduction of AgrEvo's reasonable expenses
[e.g. attorney fees] in making such recovery.

AgrEvo shall have the right to enforce the Compound Patents in the Field, and
3DP shall have the right to enforce the Compound Patents outside of the Field.
However, neither AgrEvo or 3DP or any of their Affiliates and sublicensees, may
enforce Compound Patents without first consulting in good faith with the other
Parties and taking into account the reasonable concerns of all parties.

The Party not enforcing the Compound Patents and Research Program Patents shall
provide reasonable assistance to the other Party, including providing access to
relevant documents and other evidence and making its employees available,
subject to the enforcing Party's reimbursement of any reasonable out-of-pocket
expenses incurred by the other Party.

                                      -15-
<PAGE>

9.6  Third Party Patent Rights.  If any warning letter or other notice of
infringement is received by a Party, or action, suit or proceeding is brought
against a Party alleging infringement of a patent of any third party in the
manufacture, use or sale of a Licensed Products or the conduct of the Research
Program, the Parties shall promptly discuss the best way to respond.  Each party
shall be responsible for responding for its own activities.

10.  DISPUTE RESOLUTION

10.1  Dispute Resolution.  Any dispute concerning or arising out of this
Agreement or concerning the existence or validity hereof, shall be determined by
the following procedure.

(a)  Both Parties understand and appreciate that their long term mutual interest
will be best served by affecting a rapid and fair resolution of any claims or
disputes which may a risk out of services performed under this contract or from
any dispute concerning the terms of this Agreement. Therefore, both Parties
agree to use their best efforts to resolve all such disputes as rapidly as
possible on a fair and equitable basis. Toward this end both Parties agree to
develop and follow a process for presenting, rapidly assessing, and settling
claims on a fair and equitable basis which takes into account the precise
subject and nature of the dispute.

(b)  If any dispute or claim arising under this Agreement cannot be readily
resolved by the Parties pursuant to the process described above, the Parties
agree to refer the matter to a panel consisting of the Chief Executive Officer
("CEO") of 3DP and the AgrEvo Board member responsible for research for review
and a non-binding resolution. A copy of the terms of this Agreement, agreed upon
facts (and areas of disagreement), and concise summary of the basis for each
side's contentions will be provided to the panel described above which shall
review the same, confer, and attempt to reach a mutual resolution of the issue.

(c)  If the matter has not been resolved utilizing the foregoing process, and
the Parties are unwilling to accept the non-binding decision of the indicated
panel, either, or both Parties may elect to pursue definitive resolution through
binding arbitration, which the Parties agree to accept in lieu of litigation or
other legally available remedies (with the exception of injunctive relief where
such relief is necessary to protect a Party from irreparable harm pending the
outcome of any such arbitration proceeding). Binding arbitration shall be
settled in accordance with the Rules of Conciliation and Arbitration of the
International Chamber of Commerce by a panel of three arbitrators chosen in
accordance with said Rules. This Agreement shall be governed by and construed in
accordance with the substantive laws of the State of Delaware without regard to
the conflicts of laws provision thereof. The arbitration will be held in
Wilmington, Delaware if initiated by AgrEvo, or in Frankfurt am Main, Germany,
if initiated by 3DP. Judgment upon the award rendered may be entered in any
court having jurisdiction and the Parties hereby consent to the said
jurisdiction and venue, and further irrevocably waive any objection which either
Party may have now or hereafter to the laying of venue of any proceedings in
said courts and to any claim that such proceedings have been brought in an
inconvenient forum, and further irrevocably agrees that judgment or order in any
such proceedings shall be conclusive and binding upon the Parties and may be
enforced in the courts of any other jurisdiction thereof.

                                      -16-
<PAGE>

11.  INDEMNIFICATION

11.1  Indemnification by AgrEvo.  AgrEvo shall indemnify, defend and hold 3DP
and its agents, employees and directors (the "3DP Indemnitees") harmless from
and against any and all liability, damage, loss, cost or expense (including
reasonable attorney's fees) arising out of third party claims or suits relates
to (a) AgrEvo's performance of its obligations under this Agreement; or (b) the
manufacture, use or sale or other commercialization of Licensed Products by
AgrEvo and its Affiliates sublicensees, distributors and agents, except to the
extent such claims or suits result from the breach of any of the material
provisions of this Agreement, negligence or willful misconduct of the 3DP
Indemnitees.  Upon the assertion of any such claim or suit, the 3DP Indemnitees
shall promptly notify AgrEvo thereof and AgrEvo shall appoint counsel reasonably
acceptable to the 3DP Indemnitees to represent the 3DP Indemnitees with respect
to any claim or suit for which indemnification is sought.  The 3DP Indemnitees
shall not settle any such claim or suit without the prior written consent of
AgrEvo, which consent shall not unreasonably be withheld, unless they shall have
first waived their rights to indemnification hereunder.

11.2  Indemnification with respect to U.S. Civil Action No. 98-583 by 3DP. 3DP
shall indemnify, defend and hold AgrEvo and its agents, employees and directors
harmless from and against any and all liability, damage, loss, cost or expense
(including reasonable attorney's fees) arising out of claims in relation to
Civil Action No. 98-583 in the U.S. District Court in Delaware, as stipulated in
Section 13.5, with respect to 3DP's activities pursuant to Section 2.4 of this
Agreement.

11.3  Indemnification by 3DP.  3DP shall indemnify, defendant hold AgrEvo and
its agents, employees and directors (the "AgrEvo Indemnitees') harmless from and
against any and all liability, damage, loss, cost or expense (including
reasonable attorney's fees) arising out of third party claims or suits related
to 3DP's performance to its obligations under this Agreement except to the
extent that such claims or suits result from the breach of any of the material
provisions of this Agreement, negligence or willful misconduct of the AgrEvo
Indemnitees.  Upon the assertion of any such claim or suit, the AgrEvo
Indemnitees shall promptly notify 3DP thereof and 3DP shall appoint counsel
reasonably acceptable to the AgrEvo Indemnitees to represent the AgrEvo
Indemnitees with respect to any claim or suit for which indemnification is
sought.  The AgrEvo Indemnitees shall not settle any such claim or suit without
the prior written consent of 3DP, which consent shall not unreasonably be
withheld, unless they shall have first waived their rights to indemnification
hereunder.

12.  TERM AND TERMINATION

12.1  Effective Date.  This Agreement shall commence upon the Effective Date.

12.2  Term of the Research Program.  The initial term of the Research Program
shall be two (2) years unless it is extended pursuant to Section 2.8.

                                      -17-
<PAGE>

12.3  Termination.  This Agreement shall terminate upon the expiration of the
last-to-expire of the Compound Patents and jointly owned Research Program
Patents, unless earlier terminated pursuant to this Article 12.

12.4  Termination for Breach.  Failure by a Party to comply with any of the
material obligations contained herein or failure of 3DP to comply essentially
with the requirements of the Research Program shall entitle the Party not in
default to give notice to have the default cured.  If such default is not cured
within sixty (60) days after the receipt of such notice, or diligent steps not
taken to cure if by its nature such default could not be cured within sixty (60)
days, the Party not in default shall be entitled, without prejudice to any of
its other rights conferred on it by this Agreement, and in addition to any other
remedies available to it by law or in equity, to terminate this Agreement
provided however, that such right to terminate shall be stayed in the event
that, during such 60 day period, the Party alleged to have been in default shall
have: (i) initiated arbitration in accordance with Section 10.1, above with
respect to the alleged default, and (ii) diligently and in good faith co-
operated in the prompt resolution of such arbitration proceedings.

The right of a Party to terminate this Agreement as provided above shall not be
affected in any way by its waiver or failure to take action with respect to any
prior default.

12.5  Insolvency or Bankruptcy.  Either Party may, in addition to any other
remedies available by law or in equity, terminate this Agreement by written
notice to the other Party in the event the latter Party shall have become
insolvent or bankrupt, or shall have an assignment for the benefit of its
creditors, or there shall have been appointed a trustee or receiver of the other
Party or for all or a substantial part of its property or any case or proceeding
shall have been commenced or other action taken by or against the other Party in
bankruptcy or seeking reorganization, liquidation, dissolution, winding-up,
arrangement or readjustment of its debts or any other relief under any
bankruptcy, insolvency, reorganization or other similar act or law of any
jurisdiction now or hereafter in effect, or there shall have been issued a
warrant of attachment, execution, distraint or similar process against any
substantial part of the property of the other Party, and any such event shall
have continued for ninety (90) days undismissed, unbonded and undischarged.

12.6  Consequence of Termination.  Upon termination or expiration of the
Research Program Portion of this Agreement, each Party shall promptly return all
relevant records and materials in its possession or control containing the other
Party's Confidential Information and to which the former Party does not have
rights hereunder -- except for one copy for documentation and proof purposes.
The obligations of confidentiality specified in Sections 4.5, 8.1 and 8.2
continue and remain in force even if this Agreement is terminated.  Accrued
financial obligations pursuant to Article 6 shall be due and payable upon
termination.

12.7  Change of Control.  If 3DP acquires, is acquired by, merges with or
otherwise combines with a company that has substantial activities in the Field
and is a significant competitor of AgrEvo in the Field, AgrEvo has the option to
terminate this Agreement upon written notice to 3DP or to require 3DP to take
reasonable actions necessary to ensure that any of AgrEvo's confidential
information, trade secrets or proprietary information is not disclosed to
personnel within such company directly involved in such competitive activities.

                                      -18-
<PAGE>

13.  REPRESENTATION AND WARRANTIES

13.1  Authority.  Each Party represents and warrants that it has the full right,
power and authority to execute, deliver and perform this Agreement.

13.2  No Conflicts.  Each Party represents and warrants that the execution,
delivery and performance of this Agreement does not conflict with, or constitute
a breach or default under any of its charter or organizational documents, any
law, order, judgment or governmental rule or regulation applicable to it, or any
material agreement, contract, commitment or instrument to which it is a party.

13.3  No Existing Third Party Rights.  The Parties represent and warrant that
their obligations under this Agreement are not encumbered by any rights granted
by either Party to any third parties.  Notwithstanding the foregoing, 3DP
represents to AgrEvo that 3DP has entered into contractual relationship with
E.I. DuPont de Nemours & Co. and with Heska Corporation that 3DP warrants will
not encumber this Agreement and the Research Program as presently contemplated
by the Parties.

13.4  Continuing Representations.  The representations and warranties of each
Party contained in this Article 13 shall survive the execution and delivery of
this Agreement and shall remain and correct at all times during the term of this
Agreement with the same effect as if made on as of such latter date.

13.5  Warranty as to Third Party Patents. 3DP warrants that, to 3DP's knowledge,
based upon its review of the results of a reasonable search of relevant issued
U.S. patents, as of the Effective Date, the conduct of the Research Program,
including the use of the 3DP DirectedDiversity Technology as permitted by this
Agreement, will not violate any Valid Claims of third parties in the U.S.
Notwithstanding the foregoing, 3DP hereby advises AgrEvo that Scriptgen
Pharmaceuticals, Inc. has filed suit against 3DP in the U.S. District Court in
Delaware, Civil Action No. 98-583 (GNS), alleging that 3DP's ThermoFluor
Technology infringes certain U.S. patent rights of Scriptgen.  In the event that
3DP has reason to change this view after the Effective Date and during the term
of the Research Program, 3DP shall promptly inform AgrEvo and provide full
justification therefor.

13.6  No Warranty as to Commercial Success. 3DP offers no warranty that use of
the 3DP DirectedDiversity Technology under this Agreement will result in the
discovery or the successful commercialization of a Licensed Product for in the
Field.

13.7  No Other litigation.  Other than Civil Action 98-583 set forth in
Paragraph 13.5, 3DP warrants and represents that it is not presently involved in
any other legal proceedings involving the alleged infringement of any third
party's intellectual property rights.

14.  MISCELLANEOUS PROVISIONS

                                      -19-
<PAGE>

14.1  Accrued Rights; Surviving Obligations Termination, relinquishment or
expiration of this Agreement for any reasons shall be without prejudice to any
rights which shall have accrued to the benefit of a Party prior to such
termination, or expiration.  Such termination, relinquishment or expiration
shall not relieve a Party from obligations which are expressly indicated to
survive termination or expiration of this Agreement.  Without limiting the
foregoing, Sections 4.7, 5.2 (license to 3DP), 5.5, 5.6, 7.4 and 9.5, and
Articles 8, 10, 11 and 14 of this Agreement shall survive the expiration or
termination of this Agreement

14.2  Further Actions.  Each Party agrees to execute, acknowledge and deliver
such further instruments and to do all such other acts as may be necessary or
appropriate in order to carry out the purposes and intent of this Agreement.

14.3  Independent Contractor.  Both Parties are independent contractors under
this Agreement.  Nothing contained in this Agreement is intended nor is to be
construed so as to constitute AgrEvo or 3DP as partners or joint ventures with
respect to this Agreement.  Neither Party shall have any express or implied
right or authority to assume or create any obligation s on behalf of or in the
name of the other Party or to bind the other Party to any other contract,
agreement, or understanding with any Third Party.

14.4  Force Majeure.  The failure of a Party to perform any obligation under
this Agreement by reason of acts of God, acts of governments, riots, wars,
strikes, accidents or deficiencies in materials or other causes of a similar
magnitude beyond its control shall not be deemed to be a breach of this
Agreement

14.5  No Trademark Rights.  No right, expressed or implied, is granted by this
Agreement to a Party to use in any manner the name or any other trade name or
trademark of a Party in connection with the performance of this Agreement

14.6  Public Announcements.  A joint press release to announce the signing of
this Agreement is attached as Appendix A to this Agreement, and the Parties
agrees to coordinate the dissemination of this press release.  The Parties shall
consult with each other and reach mutual written agreement before making any
other public announcement concerning this Agreement or the subject matter
hereof.  Notwithstanding the foregoing, the Parties may disclose the existence
and general nature of this Agreement.  However, neither Party shall use the name
of the other Party for promotional purposes.  AgrEvo shall have the right to
review all filings, to the extent that they describe the terms of this Agreement
or the arrangements with AgrEvo reflected herein, prior to their submittal by
3DP to the SEC, including all proposed redacted copies of this Agreement. 3DP
shall give due respect to any reasonable and timely request by AgrEvo with
respect thereto, including confidential treatment of selected portions of this
Agreements.

14.7  Entire Agreement of the Parties; Amendments.  This Agreement constitutes
and contains the entire understanding and agreement of the Parties respecting
the subject matter hereof and cancels and supersedes any all prior negotiations,
correspondence, understandings and agreements between the Parties, whether oral
or written, regarding such subject matter.  No

                                      -20-
<PAGE>

waiver, modification or amendment of any provision of this Agreement shall be
valid or effective unless made in writing and signed by a duly authorized
officer of each Party.

14.8   Severability.  If any provision of this Agreement becomes or is declared
by a court of competent jurisdiction to be illegal, unenforceable or void, this
Agreement shall continue in full force and effect without said provision, so
long as the Agreement, talking into account said voided provision(s), continues
to provide the Parties with the same practical economic benefits as the
Agreement containing said voided provision(s) did on the date of this Agreement.
If, after taking into account said voided provision(s), the Parties are unable
to realize the practical economic benefit contemplated on the date of this
Agreement, the Parties shall negotiate in good faith to amend this Agreement to
reestablish the practical benefit provided the Parties on the date of this
Agreement.

14.9   Captions. The captions to this Agreement are for convenience only, and
are to be of no force or effect in construing or interpreting any of the
provisions of this Agreement.

14.10  Applicable Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Delaware without reference to its
conflicts of laws provisions.

14.11  Notices and Deliveries.  Any formal notices, request, delivery, approval
or consent required or permitted to be given under this Agreement shall be in
writing and shall be deemed to have been sufficiently given when it is received,
whether delivered in person, transmitted by facsimile with contemporaneous
confirmation, or delivery by registered letter (or its equivalent) or delivery
by certified overnight courier service, to the Party to which it is directed at
its address shown below or such other address as such Party shall have last
given by notice to the other parties.

     If to AgrEvo:

     Hoechst Schering AgrEvo GmbH
     Hoechst Works, G 836
     D-65926 Frankfurt am Main
     Germany
     Attention:  Head of Research, Agrochemicals

     with a copy to:

     Hoechst Schering AgrEvo GmbH
     Patent & License Department, K 801
     D-65926 Frankfurt am Main
     Germany
     Attention: Head of Patents

                                      -21-
<PAGE>

     If to 3DP:

     3-Dimensional Pharmaceuticals, Inc.
     Eagleview Corporate Center
     665 Stockton Drive, Suite 104 Exton, PA 10341
     Attention:  CEO

     with a copy to:


     Morgan, Lewis & Bockius LLP
     1701 Market Street
     Philadelphia, PA 19103
     Attention: David R. King, Esq.

14.12  No Consequential Damages.  IN NO EVENT SHALL EITHER PARTY NOR ANY OF ITS
RESPECTIVE AFFILIATES BE LIABLE TO THE OTHER PARTY OR ANY OF ITS AFFILIATES FOR
SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER IN CONTRACT,
WARRANTY, TORT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE, including, but not
limited to, loss of profits or revenue, or claims of customers of any of them or
other third parties for such or other damages.

14.13  Assignment.  Except for the research license granted pursuant to Section
5.1 and AgrEvo's access to 3DP DirectedDiversity Technology pursuant to the
confidentiality provisions under Article 8, which shall be limited to the
current sites of AgrEvo or such Affiliate as have agreed to be bound by the
provisions of this Agreement accepted by AgrEvo, this Agreement may be assigned
by either Party in connection with the sale or transfer of substantially all of
its assets that relate to this Agreement, subject in the case of 3DP, to the
provisions of Section 12.7. The above notwithstanding, this Agreement and any
rights and obligations herein shall be freely transferable or assignable by: (1)
AgrEvo to the successor company of AgrEvo resulting from the intended merger of
Hoechst Aktiengesellschaft and Rhone Poulenc S.A.; and (2) 3DP to a subsidiary
that is reasonably acceptable to AgrEvo.

14.14  Advice of Counsel.  AgrEvo and 3DP have each consulted with counsel of
their choice regarding this Agreement, and each acknowledges and agrees that
this Agreement shall not be deemed to have been drafted by one party or another
and will be construed accordingly.

                                      -22-
<PAGE>

     IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
by their respective duly authorized officers as of the day and year first above
written, each copy of which shall for all purposes be deemed to be an original.

    3 DIMENSIONAL                       HOECHST SCHERING
    PHARMACEUTICALS, INC.               AGREVO GMB

    By:  /s/ David U' Prichard, Ph.D.   By:  /s/ Dr. Wengenmayer  /s/ Dr. Rippel
    ---------------------------------        -----------------------------------
    Name: David U'Prichard, Ph.D.       Name:   Dr. Wengenmayer       Dr. Rippel
    Title: Chief Executive Officer      Title:  Head of Research, Patents,
                                                Frankfurt Agrochemicals

    By:  /s/ F. Raymond Salemme, Ph.D.
          -----------------------------
    Name: F. Raymond Salemme, Ph.D.
    Title: President and Chief Scientific
           Officer

                                     -23-

<PAGE>

                                                                   EXHIBIT 10.26


     Appendix A
     ----------

                                      Confidential Draft (Dated October 8, 1999)
                                                              Bechtold's version

                  JOINT PRESS RELEASE FOR IMMEDIATE PUBLISHING


     For 3DP, Contact:                  For AgrEvo, Contact:

     Business                           F. Rainer Bechtold
     Michael J. Wassil                  AgrEvo Corporate Communication
     Chief Financial Officer            + 49 69 305-40033
     610-458-6073

     Media
     Jerry Parrott
     Jerry Parrott & Associates
     212-472-1244


                    3-Dimensional Pharmaceuticals and AgrEvo
                 Announce Agrochemical Discovery Collaboration

Exton, PA and Frankfurt am Main, Germany - October 19, 1999 -- 3-Dimensional
Pharmaceuticals, Inc. (3DP) and Hoechst Schering AgrEvo GmbH today announced a
strategic collaboration in which 3DP's DirectedDiversity technology will be used
to discover and refine innovative new agrochemicals.

     3DP will provide libraries of diverse compounds to AgrEvo, and will make
available its DirectedDiversity Technology to optimize active compounds
identified from screening the compound libraries.  AgrEvo will receive the
exclusive right to commercialize agricultural products discovered during the
course of the collaboration. 3DP will retain rights for non-
<PAGE>

agrochemical uses of compounds developed through the collaboration.

     "3DP's technology brings together a unique blend of powerful computational
tools, combinatorial chemistry and high-throughput screening techniques", said
Dr. Friedrich Wengenmayer, Head of Research, Agrochemicals, AgrEvo.  "We believe
it has the potential to make a significant contribution to our research and
development efforts."

     F. Raymond Salemme, Ph.D., 3DP President and Chief Scientific Officer,
noted that 3DP scientists are looking forward to working with their colleagues
at AgrEvo.  "We are confident 3DP's technology will enhance AgrEvo's discovery
efforts and will help speed the time to market for new agrochemical products.
This is a multi-million dollar agreement in which 3DP will receive payment for
delivery of compounds, research and development funding, license fees and
royalties on resulting products.  Equally important is the continued market
validation of our proprietary technology brought by this collaboration with one
of the world's leading companies in agricultural biotechnology and chemistry."

     DirectedDiversity is a patented, computer-aided, iterative process for
generating chemical compounds with a prescribed set of physical, chemical and/or
biological properties.  A key feature of the technology is that
DirectedDiversity Accessible Compound Libraries are initially generated and
indexed using a comprehensive set of more than 200 molecular descriptors to
allow rapid retrieval of compounds with user-selectable ranges of structural and
chemical properties. 3DP to date has developed Accessible Libraries totaling
over 1.5 billion compounds, virtually any of which can be synthesized through
automated chemistry.  To prime its drug and chemical discovery process, 3DP has
synthesized DirectedDiversity Probe

                                      -2-
<PAGE>

Libraries that include diverse selections of over 150,000 compounds from the
Accessible Libraries.

     AgrEvo is a global leader in biotechnology, seeds, crop protection and
environmental health.  The company markets globally a range of products for
enhancing crop production, together with applications for urban pest control.
AgrEvo operates in more than 70 countries with approximately 8,600 employees.

     3-Dimensional Pharmaceuticals, Inc. is a leading innovator in drug
discovery.  The company has developed a proprietary technology platform known as
DiscoverWorks(TM), which uniquely integrates structure-based drug design,
combinatorial chemistry and high-throughput screening.  DiscoverWorks reduces
discovery costs, increases the rate of success and enhances the ultimate
commercial value of a drug development pipeline. 3DP is using its proprietary
technology both in collaboration with other companies and in its own research
programs, which currently target orally active small-molecule pharmaceuticals to
treat cardiovascular disease and cancer.

                                      -3-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.19
<SEQUENCE>10
<FILENAME>0010.txt
<DESCRIPTION>RESEARCH & LICENSE AGMNT BTWN COMPANY & DUPONT
<TEXT>

<PAGE>

                                                                   EXHIBIT 10.19



                 COLLABORATIVE RESEARCH AND LICENSE AGREEMEENT


     This Collaborative Research and License Agreement is made and effective as
of October 12, 1998 (the "Effective Date"), by and between 3-Dimensional
Pharmaceuticals, Inc., a corporation having its principal place of business at
Eagleview Corporate Center, 665 Stockton Drive, Suite 104, Exton, PA 19341,
U.S.A. ("3DP"), and E.I. DuPont de Nemours & Co., a corporation having its
principal place of business at 1007 Market Street, Wilmington, Delaware 19898,
U.S.A. ("DuPont"). 3DP and DuPont may be referred to herein as a "Party" or,
collectively, as "Parties".

     WHEREAS, 3DP is engaged in discovery research for a variety of biologically
active compounds and the development of technologies to facilitate such
research, and 3DP has patented systems for generating chemical compounds having
desired properties;

     WHEREAS, DuPont is engaged in research and development of biologically
active compounds and the development of technology for the control of pests and
disease.

     WHEREAS, 3DP and DuPont desire to enter into a research and development
collaboration to discover, identify, and evaluate compounds that have the
property of [**]; and DuPont may develop, manufacture, distribute, market and
sell world-wide products containing one or more of such [**] products;

     NOW, THEREFORE, in consideration of the various promises and undertakings
set forth herein, the Parties agree as follows:

1.  DEFINITIONS
     Unless otherwise specifically provided herein, the following terms shall
have the following meanings:

     1.1  "Active Compound" means any composition of matter that has been shown
to have [**] and [**] activity in the course of the Research Program.

     1.2  "Active Compound Patents" means any Patents that claim: (1) Active
Compounds that are first conceived by either Party in the course of the Research
Program; or (2) methods of making or using Active Compounds, where such methods
are first conceived by either Party in the course of the Research Program.

     1.3  "Affiliate" of a Party means: (1) any corporation owning or directly
or indirectly controlling at least fifty percent (50%) of the stock normally
entitled to vote for election of directors of a party, and (2) any corporation
owned or directly or indirectly controlled by a party, or by a corporation
defined by subparagraph (1) above, through

** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed separately with the Commission.
<PAGE>

ownership of at least fifty percent (50%) of stock normally entitled to vote
for election of directors.

     1.4   "Agreement" shall mean the present agreement including its
 appendices.

     1.5   "Commercialization Candidate" means a Development Candidate that
meets DuPont's formal criteria for marketing.

     1.6   "Confidential Information" means all information that has or could
have commercial value or other utility in a Party's business, or the
unauthorized disclosure of which could be detrimental to the Party's interests,
including confidential information, inventions, know-how, data and materials
relating to the Research Program or to the Licensed Products, and shall include
without limitation research, technical, clinical development, manufacturing,
marketing, financial, personnel and other business information and plans,
whether in oral, written, graphic or electronic form.

     1.7   "Custom Accessible Libraries" means any DirectedDiversity Chemical
Library derived from using 3DP DirectedDiversity Technology and structure
activity data provided by DuPont, and includes synthetically accessible
compounds generated by 3DP and DuPont in the course of the Research Program
derived from any source other than DuPont Compounds or a DuPont Compound Library
or the Available Chemicals Directory.

     1.8   "Development Candidate" means an Active Compound that has
commercially useful properties and has been selected for advanced field testing.

     1.9   "DirectedDiversity Chemical Library" means a computer-generated
library of compounds containing integrated structure-activity and synthesis
data.

     1.10  "DuPont" means E.I. DuPont de Nemours & Co. and Affiliates.

     1.11  "DuPont Compounds" means any compound developed or obtained by DuPont
outside of the Research Program.

     1.12  "DuPont Compound Library" means any collection of DuPont Compounds or
an electronic data file describing such a collection of DuPont Compounds, for
example DuPont's CBCH compound file.

     1.13  "DuPont Custom Accessible Libraries" means any DirectedDiversity
Chemical Library derived from using 3DP DirectedDiversity Technology and
structure activity data provided by DuPont, and includes synthetically
accessible compounds generated by 3DP and DuPont in the course of the Research
Program derived only from DuPont Compounds or a DuPont Compound Library.

     1.14  "DuPont Patents" means any Patents owned or controlled by DuPont.

                                      -2-
<PAGE>

     1.15  "Effective Date" means the effective date of this Agreement as set
forth in the first paragraph hereof.


     1.16  "Field" means the agricultural use of Active Compounds to inhibit the
Target.


     1.17  "Joint Project Team" means the committee to be formed pursuant to
Article 4 of this Agreement.

     1.18  "Licensed Product" means any product containing an Active Compound.

     1.19  "Major Market" means Brazil, Canada, China, France, Germany, Italy,
Japan, Russia, Spain, United Kingdom and United States.

     1.20  "Net Sales" means the gross invoiced sales price charged to third
parties for all Licensed Products sold by DuPont and its Affiliates to such
third parties after deduction of the following items: (i) customary trade,
quantity and case discounts, wholesaler-charge backs, or rebates (including
rebates to governmental agencies); provided that such discounts, charge backs
and rebates are not applied disproportionately with respect to particular
products sold; (ii) customary credits or allowances for rejection or return of
previously sold Licensed Products; (iii) any direct tax or government charge
(other than an income tax) levied on the sale, transportation or delivery of a
Licensed Product and borne by the seller thereof; and (iv) any charge for
freight or insurance if separately stated.

     Combination Products: Where Product is sold in the form of a combination
product containing one or more active ingredients in addition to an Active
Compound, Net Sales for such Combination Product will be calculated by
multiplying actual Net Sales of such combination Product by the fraction A/(A+B)
where A is the net invoice price of Product to an end use customer containing
such Active Compound, if sold separately, and B is the net invoice price of a
product to an end use customer containing any other component or components in
the combination, if sold separately.  If, on a country-by-country basis, the
other active component or components in the combination are not sold separately
in said country, Net Sales for the purpose of determining royalties on the
Combination Product shall be calculated by multiplying actual Net Sales of such
Combination Product by the fraction A/C where A is the invoice price of Product
containing the Active Compound, if sold separately, and C is the invoice price
of the Combination Product.  If, on a country-by-country basis, neither the
Product nor the other active component or components of the Combination Product
is sold separately in said country, Net Sales for the purposes of determining
royalties of the combination Product shall be reasonably allocated between the
Product and the other active components based upon their relative value as
determined by the Parties hereto in good faith.

** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed separately with the Commission.

                                      -3-
<PAGE>

     1.21  "Patents" means all U.S. patent applications or issued patents,
including provisionals, divisionals, continuations, continuations-in-part,
reissues and extensions derived therefrom, as well as all foreign patents and
foreign patent counterparts to the foregoing.


     1.22  [**] means the inhibition of the [**] of the Target in an assay to be
identified by DuPont.


     1.23  "Research Program" means the joint research program that will be
implemented pursuant to the research plan described in Article 2.

     1.24  "Research Program Patents" means any Patents, other than Active
Compound Patents and 3DP DirectedDiversity Technology, that claim inventions,
discoveries or knowhow conceived or reduced to practice by either Party in the
course of the Research Program.

     1.25  "Research Term" means an initial period of three (3) years in which
the Parties conduct research pursuant to the Research Program. This Research
Term may be extended pursuant to Section 6.1 or can be shortened pursuant to
Section 9.2 of this Agreement.


     1.26  "Target" means the [**]


     1.27  "Target Leads" means any compound selected for evaluation of its [**]
from any source, including but not limited to Custom Accessible Libraries, 3DP
Accessible Libraries, DuPont Compound Libraries and the Available Chemicals
Directory (which is a commercially available directory).

     1.28  "3DP Accessible Libraries" means any DirectedDiversity Chemical
Library that is generated by 3DP outside of the Research Program.

     1.29  "3DP Compounds" means any compounds that are developed by 3DP outside
of the Research Program, including but not limited to compounds that are
actually synthesized by 3DP or contained in a 3DP Accessible Library.

     1.30  "3DP DirectedDiversity Technology" means 3DP Patents and know-how
that relate to generating and utilizing a DirectedDiversity Chemical Library,
including but not limited to U.S. Patent Nos. 5,463,564; 5,574,656; and
5,684,711. This term also includes any discoveries, improvements, inventions and
modifications made in the Research Program to the extent that they relate to 3DP
DirectedDiversity Technology. This term does not include the SAR models as
described in Article 2 of this Agreement.

     1.31  "3DP Patents" means any Patents owned or controlled by 3DP.

     1.32  "Territory" means the entire world.

** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed separately with the Commission.

                                      -4-
<PAGE>

     1.33  "Valid Claim" means a claim of a Patent that has not lapsed or become
abandoned or been declared invalid or unenforceable by a court or agency of
competent jurisdiction from which no appeal can be or has been taken.

2.  RESEARCH PROGRAM AND RESEARCH PLAN

     A.   Discovery Phase I.  Discovery Phase I will be implemented pursuant to
          -----------------
the confidentiality conditions of Article 3 below.  The objective of this Phase
I is to utilize 3DP DirectedDiversity Technology and DuPont knowledge and
expertise to identify a first set of Target Leads to be screened for [**]
against the Target.  It is anticipated that this Discovery Phase I will be
completed within three (3) months from the time that 3DP is provided access by
DuPont to the DirectedDiversity Workstation described in Section 3.1 below.

     2.1  DuPont will furnish to 3DP structure and activity data on the [**] or
additional properties of agrochemical utility of DuPont Compounds screened
against the Target, including both compounds that are active and compounds that
are inactive.

     2.2  3DP and DuPont will use 3DP's DirectedDiversity Technology to compute
a chemical descriptor matrix to describe and map into a chemical descriptor
space those DuPont Compounds for which [**] is provided by DuPont in Section
2.1.

     2.3  3DP and DuPont will develop a Structure Activity Relationship ("SAR")
model based on the descriptor matrix described in Section 2.2 and other relevant
information that may be available to 3DP.

     2.4  The chemical descriptor matrix of Section 2.2 and the SAR of Section
2.3 will be used to map DuPont Compounds, as they may be described in the DuPont
Chemical Library, into the chemical descriptor space described in Section 2.2.

     2.5  3DP and DuPont will utilize 3DP's DirectedDiversity Technology to
select jointly between [**] compounds as candidates for acquisition or
synthesis. These candidate compounds, which will be selected based on the SAR
described in Section 2.3, may be drawn from any appropriate source, including
but not limited to, 3DP Accessible Libraries, Custom Accessible Libraries,
DuPont Chemical Libraries, DuPont Custom Accessible Libraries, the Available
Chemicals Directory and other chemical and available chemical libraries.

     2.6  3DP will provide synthesis protocols and consultations to DuPont for
production of the compounds selected from the 3DP Accessible Libraries in
Section 2.5.

     B.   Discovery Phase II. Discovery Phase II will be implemented pursuant to
          ------------------
the confidentiality conditions of Article 3 below. The objective of this task is
to utilize 3DP DirectedDiversity Technology to identify a Target Lead having
[**]. It is

** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed separately with the Commission.

                                      -5-
<PAGE>

anticipated that this Discovery Phase II will be completed within twelve (12)
months from the completion of Phase 1.

     2.7   DuPont will make a reasonable effort to acquire or synthesize the
compounds identified in Section 2.5, and to screen these compounds for [**]
against the Target.

     2.8   From the screening results obtained pursuant to Section 2.7, 3DP and
DuPont jointly will develop a second generation SAR and will select an
additional set of between [**] Target Leads for acquisition or synthesis. These
compounds are to be selected from any of the sources identified in Section 2.5.
DuPont will make a reasonable effort to acquire or synthesize the Target Leads
selected in this Section 2.8, and to screen these Target Leads for [**] against
the Target.

     C.  Discovery Phase III.  Discovery Phase III will be implemented pursuant
         -------------------
to the confidentiality conditions of Article 3 below.  The objective of this
task is to utilize 3DP DirectedDiversity Technology identify an Active Compound.
It is anticipated that this Discovery Phase III will be completed within twenty-
two (22) months from the completion of Phase II.

     2.9   Based on the data developed in Phase II, or as soon as practically
defined by a derived SAR obtained in paragraph 2.3, 3DP and DuPont will jointly
develop more refined Custom Accessible Libraries. 3DP and DuPont will jointly
determine the selection criteria of the Target Leads to be selected from the
Custom Accessible Libraries. DuPont shall be responsible for developing the
synthesis protocols of selected Target Lead compounds in the Custom Accessible
Libraries and will validate production chemistry to produce the selected Target
Lead compounds with high fidelity (typically >80% of library compounds
synthesized at > 80% purity). DuPont will make a reasonable effort to acquire or
synthesize the compounds selected from the Custom Accessible Libraries in this
Section 2.9, and to screen the selected compounds for Protease Inhibition
Activity against the Target.

     2.10  3DP and DuPont will perform iterative cycles of selection, synthesis,
acquisition, screening and SAR generation until Active Compounds are produced
with commercially useful properties.  Progress toward these properties will be
evaluated no less frequently than every six (6) months by the Joint Project Team
described in Article 4. Performance criteria that will define Active Compounds
against the Target both in vitro and in vivo will be established that are
mutually agreeable to DuPont and 3DP.

     2.11  In the event that a suitable high resolution X-ray crystal structure
of the Target becomes available during the course of the Program, 3DP- shall use
this structural information to suggest other Target Leads from any appropriate
and available source.

** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed separately with the Commission.

                                      -6-
<PAGE>

3.  IMPLEMENTATION AND SECURITY FOR CONFIDENTIAL
     INFORMATION

     3.1  Access by DuPont to DirectedDiversity Workstation. In order to satisfy
the confidentiality concerns of the Parties about their respective Confidential
Information, particularly including but not limited to the 3DP DirectedDiversity
Technology, 3DP Accessible Libraries, DuPont Compounds and the DuPont Compound
Libraries, the Parties agree to utilize the following procedures and safeguards.
A restricted access computer workstation will be established at a DuPont
facility to be identified that is capable of operating the 3DP DirectedDiversity
Technology and accessing 3DP Accessible Libraries and DuPont Compound Libraries.
DuPont will provide the required hardware and system software and 3DP the
required application software component of the 3DP DirectedDiversity Technology
for the workstation. Access to this workstation will be limited to selected 3DP
and DuPont employees. The software application component will be jointly
operated by representatives of 3DP and DuPont. A dual password protection system
will be used to ensure that there is at least one employee from both 3DP and
DuPont present at all times when the workstation is being used interactively.
Additional operational details regarding the workstation will be jointly
determined.

     3.2  Confidentiality Obligations. The Parties agree that, for the term of
this Agreement and for five years thereafter, the "Receiving Party" shall keep
completely confidential and shall not publish or otherwise disclose and shall
not use for any purpose (except as expressly permitted hereunder) any
Confidential Information furnished to it by the "Disclosing Party" pursuant to
this Agreement (including without limitation, know-how), except to the extent
that it can be established by the Receiving Party that such Confidential
Information:

          (a)  was already known to the Receiving Party, other than under an
     obligation of confidentiality from the Disclosing Party; at the time of
     disclosure;

          (b)  was generally available to the public or otherwise part of the
     public domain at the time of its disclosure to the Receiving Party;

          (c)  became generally available to the public or otherwise part of the
     public domain after its disclosure and other than through any act or
     omission of the Receiving Party in breach of this Agreement;

          (d)  was subsequently lawfully disclosed to the Receiving Party by a
     third party; or

          (e)  disclosure was compelled by governmental administrative agency or
     judicial requirements.

                                      -7-
<PAGE>

          (f)  The obligations of confidentiality and non-use set forth in this
     Section 3.2 shall also apply to biological material and chemical compounds
     and associated information (including without limitation know-how)
     disclosed by one Party to the other prior to or during the term of this
     Agreement. The Receiving Party shall notify the Disclosing Party of such
     action prior to disclosure.

     3.3  Written Assurances. Each Party shall inform its employees and
consultants who perform substantial work on the Research Program, of the
obligations of confidentiality specified in Paragraph 3.2 and all such persons
shall be bound by the terms of confidentiality set forth therein. All employees
and consultants who are inventors on any patents arising under work carried out
under the Research Program shall assign to such Party or Parties all inventions
made by such persons during the course of performing the Research Program. Each
Party may disclose the other's Confidential Information to the extent such
disclosure is reasonably necessary in filing or prosecuting patent applications,
prosecuting or defending litigation, complying with applicable governmental
regulations, making a permitted sublicense of its rights hereunder or otherwise
in performing its obligations or exercising its rights hereunder, provided that
if a Party is required to make any such disclosure of another Party's secret or
Confidential Information, it will give at least 30 day written, advance notice
to the latter Party of such disclosure requirement and, to the extent such
disclosure is not required by law, shall provide the Party whose information is
being disclosed, a first right of refusal.

     3.4  Permitted Disclosures for Business Development Purposes.
Notwithstanding the foregoing, or any other provision in this Agreement to the
contrary, 3DP may describe the financial terms of this Agreement in confidence
to those whose primary business is venture capital, their agents, and investment
bankers.

4. JOINT PROJECT TEAM

     4.1  Joint Project Team.

          (a)  The Discovery Phase of the Program will be managed by a Joint
     Project Team. DuPont and 3DP will each designate three (3) members selected
     by their respective R&D management to form this Joint Protect Team. The
     Joint Project Team shall be responsible for:

                    i.  Monitoring the progress of research; and

                    ii.  Reviewing, approving, and amending the research plan.

          (b)  The Joint Project Team may make recommendations about, but will
     not have sole authority over:

                    i.  Review and approval of publications and other
               disclosures related to the subject matter of the Program;

                                      -8-
<PAGE>

                    ii.  Selecting compounds to be advanced for further chemical
               elaboration or field testing, or regulatory animal testing; and

                    iii.  Annual allocation of the Program budget within DuPont.

     The final decision on items i, ii, and iii in subparagraph (b) above shall
be made by DuPont.

     Matters outside the scope of the Program and internal to each Party are not
under the purview of the Joint Project Team.  Such matters include, but are not
limited to the following: internal personnel policies and programs, budgeting,
finance, commercial and marketing strategies, and business decisions.  However,
the Parties agree to communicate with each other promptly on those matters which
while outside the scope of the Program, nevertheless may reasonably be expected
to influence the conduct or term of the Program or the intended
commercialization of an Active Compound.

5. LICENSE AND ALLOCATION OF RIGHTS

     5.1  Research License to DuPont for DirectedDiversity Technology. 3DP
hereby grants to DuPont a three (3) year, world-wide, nonexclusive, non-
cancelable license under the 3DP DirectedDiversity Technology and 3DP Patents to
evaluate the Custom Accessible Libraries, DuPont Custom Accessible Libraries and
3DP Accessible Libraries to identify Target Leads pursuant to the Research
Program. DuPont shall not use the 3DP DirectedDiversity Technology or the
foregoing research license for any other purpose except that which is provided
in Section 5.9. This license is personal to DuPont and may not be assigned or
sublicensed without written permission from 3DP.

     5.2  Ownership of DuPont Compounds, DuPont Custom Accessible Libraries and
their Use in the Research Program. DuPont retains ownership of the DuPont
Compounds and DuPont Custom Accessible Libraries produced in the course of the
Research Program. The Parties agree that 3DP may use, for purposes of this
Research Program only, any information provided by DuPont about any of the
DuPont Compounds to produce a data base containing compound descriptors, and
that 3DP may use such a data base to jointly develop Custom Accessible Libraries
for the Target field exclusively.

     5.3  Ownership of 3DP Compounds and 3DP Accessible Libraries. 3DP shall own
all 3DP Compounds and 3DP Accessible Libraries.

     5.4  Ownership of Custom Accessible Libraries and their Use in the Research
Program.  Custom Accessible Libraries produced in the course of the Research
Program shall be jointly owned.  For a period of five (5) years following the
end of the Research Term, 3DP agrees not to utilize any Custom Accessible
Libraries or 3DP Accessible Libraries to identify Target Leads or Active
Compounds outside of this Agreement.  Notwithstanding the foregoing, in the
event that any compound contained in any Custom Accessible Library falls within
the scope of any DuPont Patents or any Active Compound

                                      -9-
<PAGE>

Patent, this Agreement provides no license or other rights under such DuPont
Patents to 3DP.

     5.5  Ownership of Inventions Made in the Research Program. All Active
Compound Patents shall be owned by DuPont. All Research Program Patents shall be
owned on the basis of inventorship as described in Section 7. 1. All 3DP
DirectedDiversity Technology shall be owned by 3DP.

     5.6  Background License to DuPont in the Field for Active Compounds. 3DP
hereby grants to DuPont a world-wide, paid-up nonexclusive license, with the
right to sublicense, under any Custom Accessible Library, 3DP Accessible
Library, 3DP Patents or Research Program Patents to the extent that such rights
are reasonably necessary for the synthesis or commercialization of Active
Compounds in the Field.

     5.7  Commercialization by DuPont of Custom Accessible Library Compounds
Outside of the Field. Where Active Compounds are concerned, the royalty
provisions of Sections 6.4 and 6.5 shall apply for commercialization by DuPont
outside of the Field. The Parties agree to negotiate in good faith an exclusive
license under any Custom Accessible Library, 3DP Accessible Library, 3DP Patents
or Research Program Patents for any compounds contained in a Custom Accessible
Library, other than Active Compounds, that are actually synthesized by DuPont
and selected for marketing for uses outside of the Field. Accordingly, 3DP
grants DuPont rights to screen such compounds against Targets outside of the
Field.

     5.8  License of Active Compounds by 3DP for Uses Outside of the Field.
DuPont agrees to negotiate in good faith a license for 3DP to commercialize
Active Compounds under the Active Compound Patents to develop, make, have made,
import, use, sell and offer for sale Active Compounds for all uses outside of
the Field, provided the Active Compounds are outside DuPont's life science
efforts or interest.

     5.9  Expansion of License Rights to 3DP DirectedDiversity Technology. Upon
request by DuPont, 3DP agrees to enter into good faith negotiations to expand
DuPont's license rights granted pursuant to Section 5.1 to use 3DP
DirectedDiversity Technology to additional targets and/or other fields. During
the term of the license agreement granted pursuant to Section 5.1, 3DP will work
with a representative of DuPont to design and run mutually agreeable experiments
utilizing 3DP DirectedDiversity Technology. The purpose of such experiments will
be to allow DuPont to evaluate the additional application of 3DP
DirectedDiversity Technology.

     5.10 Further Assurances. Each Party shall refrain from allowing any lien
or encumbrance to vest with respect to any rights granted pursuant to this
Article 5. Each Party agrees that it shall not practice or use any rights
granted to it by the other Party under this Agreement, except as permitted by
the terms hereof

                                      -10-
<PAGE>

     5.11 Non-Compete. 3DP shall not enter into any agreement with a
third party to discover inhibitors of the Target while the license in Section
5.1 to use the 3DP DirectedDiversity Technology remains in effect and for a
period of five years thereafter.

6. FINANCIAL TERMS


     6.1  DirectedDiversity Licensing Fee. The licensing fee for the initial
three (3) years of the research license granted pursuant to Section 5.1, shall
be [**], and shall be payable in annual installments of [**] that are not
cancelable or refundable. The first payment of which shall be due within thirty
(30) days from the Effective Date of this Agreement and the second and third
payments of which shall be due twelve (12) and twenty-four (24) months
thereafter. After the initial three (3) year period, the Research Program may be
extended on an annual basis, along with the research license to use the 3DP
DirectedDiversity(R) Technology in the Research Program, upon payment of a
license fee of [**] per year, for all or any part of each year that the Research
Program is extended. These fees are non-refundable, and provide a license to use
3DP DirectedDiversity Technology, including custom software, that is limited to
research involving the Target in the Field, and that is further limited to the
confidentiality obligations and joint implementation protocol described in
Section 3.1.


     6.2  Discovery Phase Milestone Payments.


                    i.   Discovery Phase I - [**] upon completion of Phase I.

                    ii.  Discover Phase II - [**] upon the earlier of: (1)
               completion of tasks outlined in Phase II; or (2) the
               identification of a Target Lead having [**].

                    iii. Discovery Phase III - [**] at the initiation by DuPont
               and 3DP of the development of additional Custom Accessible
               Libraries pursuant to Section 2.9, and [**] every six (6) months
               thereafter until the completion of the Discovery Phase III
               pursuant to Section 2.10. These payments will continue until the
               Launch Decision Milestone described in Section 6.3 has been
               achieved. Prior to each six (6) month period, evaluation of the
               progress toward an inhibitor with commercial promise will be made
               by a DuPont and 3DP Joint Project Team. New objectives will be
               established by the Joint Project Team for each six (6) month
               period. It is expected that the tasks outlined in Section 2.9 and
               Section 2.10 will lead to the identification of an Active
               Compound [**]. A corresponding acceptable level of in vivo
               activity is to be mutually agreed upon by DuPont and 3DP.


     6.3  Development Phase Milestone Payments.


<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
If Active Compound derived from...
----------------------------------------------------------------------------------------------
                                       DuPont Compound             Custom             3DP
                                     Libraries, Available        Accessible        Accessible
                                    Chemicals Directory or   Libraries or DuPont   Libraries
                                      other third party       Custom Accessible
                                      chemical libraries         Libraries
----------------------------------------------------------------------------------------------
<S>                                 <C>                      <C>                   <C>
Upon formal selection of a
  Development Candidate
  (venture verification)                   [**]                     [**]              [**]
----------------------------------------------------------------------------------------------
Upon formal selection of a
  Commercialization
  Candidate (venture
  development)                             [**]                     [**]              [**]
----------------------------------------------------------------------------------------------
Upon formal determination
  of a Launch Decision
  (venture launch)                         [**]                     [**]              [**]
----------------------------------------------------------------------------------------------
</TABLE>


     6.4  Commercialization Phase Payments.


<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
If Active Compound derived from...
------------------------------------------------------------------------------------------------
                                         DuPont Compound             Custom             3DP
                                       Libraries, Available        Accessible        Accessible
                                      Chemicals Directory or   Libraries or DuPont   Libraries
                                        other third party       Custom Accessible
                                        chemical libraries         Libraries
------------------------------------------------------------------------------------------------
<S>                                   <C>                      <C>                   <C>
Upon formal commercialization
  (registration and sales) in
  a Major Market of an Active
  Compound                                   [**]                     [**]              [**]
------------------------------------------------------------------------------------------------
If Active Compound derived from...
------------------------------------------------------------------------------------------------
Upon [**] commercialization
  (registration and sales) of
  an Active Compound in [**]
  additional Major Markets                   [**]                     [**]              [**]
------------------------------------------------------------------------------------------------
</TABLE>


     6.5  Royalty for Net Sales of Active Compounds. DuPont shall pay 3DP a
sliding scale royalty on annual Net Sales in the Territory, on a country by
country basis, for a period of not less than 10 years or until any Active
Compound Patent(s) in that country expire, whichever period of time is greater.
Thereafter, DuPont shall have a fully paid-up perpetual license in such country.
These royalty payments shall be paid on an

** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed separately with the Commission.

                                      -11-
<PAGE>

annual basis within thirty (30) days following the end of each calendar year.
The sliding scale royalty shall be:


<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
If Active Compound derived from...
----------------------------------------------------------------------------------------------
                                       DuPont Compound             Custom             3DP
                                     Libraries, Available        Accessible        Accessible
                                    Chemicals Directory or   Libraries or DuPont   Libraries
                                      other third party       Custom Accessible
                                      chemical libraries         Libraries
----------------------------------------------------------------------------------------------
<S>                                 <C>                      <C>                   <C>
  Annual Net Sales less than
  or equal to [**]                         [**]                     [**]              [**]
----------------------------------------------------------------------------------------------
  Annual Net Sales greater
  than [**] and less than or
  equal to [**]                            [**]                     [**]              [**]
----------------------------------------------------------------------------------------------
  Annual Net Sales greater
  than [**] and less than or
  equal to [**]                            [**]                     [**]              [**]
----------------------------------------------------------------------------------------------
  Annual Net Sales greater
  than [**]                                [**]                     [**]              [**]
----------------------------------------------------------------------------------------------
</TABLE>


     6.6  Mode of Payment.  All payments to 3DP hereunder shall be made by wire
transfer of United States Dollars in the requisite amount to such bank account
as 3DP may from time to time designate by notice to DuPont.  Payments shall be
free and clear of any taxes (other than withholding and other taxes imposed on
3DP), fees or charges, to the extent applicable.  As to the royalty payments,
the amount of Net Sales shall be converted into U.S. Dollars, by applying the
buying rate for the applicable day of conversion as published by Wall Street
Journal on the last business day of applicable quarter.

     6.7  Records Retention. For two years after each sale of each Licensed
Product, DuPont shall keep (and shall assure that its Affiliates and any
sublicensees shall keep) records of such sale in sufficient detail to confirm
the accuracy of the royalty calculations hereunder. At the request of 3DP,
DuPont shall permit an independent certified accountant appointed by 3DP, at
reasonable times and upon reasonable notice, to examine these records solely to
the extent necessary to verify such calculations. Such investigation shall be at
the expense of 3DP unless it reveals a discrepancy in DuPont's favor of more
than ten per cent, in which event it shall be at DuPont's expenses.

     6.8  Taxes.  The Party receiving royalties and other payments under this
Agreement shall pay any and all taxes levied on account of such payment.  If any
taxes are required to be withheld by the paying Party, it shall (a) deduct such
taxes from the remitting payment, (b) timely pay the taxes to the proper taxing
authority, and (c) send proof of payment to the other Party and certify its
receipt by the taxing authority within sixty (60) days following such payment.

7. INVENTIONS AND PATENTS

     7.1  Title to Patents.  Subject to the conditions of Article 5, all Active
Compound Patents shall be owned by DuPont.  All Research Program Patents shall
be individually or jointly owned depending on the relative inventive
contributions of each Party.  All 3DP DirectedDiversity Technology made in the
course of the Research Program shall be owned by 3DP.

** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed separately with the Commission.

                                      -12-
<PAGE>

     7.2  Filing of Patent Applications.

              (a)  DuPont has the right but not the obligation to file patent
     applications that fall within the scope of Active Compound Patents. DuPont
     also has the right but not the obligation to file patent applications that
     fall within the scope of Research Program Patents that are owned solely by
     DuPont or owned jointly with 3DP. 3DP has the right but not the obligation
     to file patent applications that fall within the scope of Research Program
     Patents that are owned solely by 3DP and patent applications that fall
     within the scope of 3DP DirectedDiversity Technology.

               (b)  If either Party having the right to file patent applications
     chooses not to do so, the other Party may file such patent applications.
     Notwithstanding the foregoing, DuPont shall have the sole responsibility
     and discretion as to the filing and prosecution of any Active Compound
     patents or Research Program Patents to the extent that they claim DuPont
     Compounds. 3DP shall have the sole responsibility and discretion as to the
     filing and prosecution of any Patents to the extent that they claim 3DP
     DirectedDiversity Technology.

               (c)  DuPont and 3DP shall consult as to the territorial scope of
     filing of Active Compound Patents and Research Program Patents and the
     preparation, prosecution and maintenance of resulting patent rights. Where
     there is co-ownership, the Parties will decide who is in the best position
     to file, and shall regularly provide each other with copies of all filings
     and other material submissions and correspondence with the patent offices,
     in sufficient time to allow for review and comment.

     7.3  Patent Expenses.  The costs of prosecuting and maintaining patent
applications that are jointly owned shall be shared equally by the Parties.
However, either party may chose to assign any of such patent rights to the other
party and have no further obligations for costs for such patent rights.

     7.4  Enforcement of Patents.

               (a)  If either Party considers that a Valid Claim of any of the
     Active Compound Patents claiming the manufacture, use or sale of a
     Commercialization Candidate or Licensed Product is being infringed by a
     third party, it shall notify the other Party and provide it with any
     evidence of such infringement which is reasonably available. DuPont shall
     have the right but not the obligation, at its own expense, to attempt to
     remove such infringement by commercially appropriate steps, including suit.
     If required by law, 3DP shall join such suit as a party, at DuPont's
     expense. In the event DuPont fails to take commercially appropriate steps
     with respect to such an infringement of the Active Compound Patents that is
     likely to have a material adverse effect on the sale of Commercialization
     Candidates or Licensed Products, within six months following

                                      -13-
<PAGE>

     notice of such infringement, 3DP shall have the right to do so at its
     expense, provided that DuPont shall not be required to enforce such Active
     Compound Patents against more than one entity or in more than one country
     at any one time.

          (b)  Any amounts recovered by DuPont pursuant to subsection a), above,
     whether by settlement or judgment shall be reported as Net Sales for the
     purpose of calculating royalties to 3DP, after deduction of DuPont's
     expenses in making such recovery.

          (c)  The Parties agree to discuss whatever steps may be appropriate to
     enforce Active Compound Patents to the extent that they encompass uses of
     Active Compounds outside of the Field.

          (d)  The Party not enforcing the Active Compound Patents shall provide
     reasonable assistance to the other Party, including providing access to
     relevant documents and other evidence and making its employees available,
     subject to the enforcing Party's reimbursement of any out-of-pocket
     expenses incurred by the other Party.

          (e)  If either Party considers that a Valid Claim of any of the
     Research Program Patents is being infringed by a third party, it shall
     notify the other Party and provide it with any evidence of such
     infringement which is reasonably available. The Parties agree to discuss in
     good faith the enforcement of any such Patents. If such Patents are
     enforced by either Party, the Party not enforcing the Research Program
     Patents shall provide reasonable assistance to the other Party, including
     providing access to relevant documents and other evidence and making its
     employees available, subject to the enforcing Party's reimbursement of any
     out-of-pocket expenses incurred by the other Party.

     7.5  Third Party Patent Rights.  If any warning letter or other notice of
infringement is received by a Party, or action, suit or proceeding is brought
against a Party alleging infringement of a Patent of any third party in the
manufacture, use or sale of a Commercialization Candidate or Licensed Product or
in the conduct of the Research Program, the Parties shall promptly discuss and
decide the best way to respond.

8. INDEMNIFICATION

     8.1  Indemnification by DuPont. DuPont shall indemnify, defend and hold 3DP
and its agents, employees and directors (the "3DP Indemnitees") harmless from
and against any and all liability, damage, loss, cost or expense (including
reasonable attorneys' fees) arising out of third party claims or suits related
to (a) DuPont's performance of its obligations under this Agreement; or (b) the
manufacture, use or sale of Licensed Products by DuPont and its Affiliates,
sublicensees, distributors and agents, except to the extent such claims or suits
result from the breach of any of the provisions of this Agreement, negligence or
willful misconduct of the 3DP Indemnitees. Upon the

                                      -14-
<PAGE>

assertion of any such claim or suit, the 3DP Indemnitees shall promptly notify
DuPont thereof and DuPont shall appoint counsel reasonably acceptable to the 3DP
Indemnitees to represent the 3DP Indemnitees with respect to any claim or suit
for which indemnification is sought. The 3DP Indemnities shall not settle any
such claim or suit without the prior written consent of DuPont, unless they
shall have first waived their rights to indemnification hereunder.


     8.2  Indemnification By 3DP. 3DP shall indemnify, defend and hold DuPont
and its agents, employees and directors (the "DuPont Indemnitees') harmless from
and against any and all liability, damage, loss, cost or expense (including
reasonable attorneys' fees) arising out of third party claims or suits related
to (a) 3DP's performance to its obligations under this Agreement or (b) the
manufacture, use, or sale of Licensed Products by 3DP and its Affiliates
sublicensees, distributors and agents except to the extent that such claims or
suits result from the breach of any of the provisions of this Agreement,
negligence or willful misconduct of the DuPont Indemnitees. Upon the assertion
of any such claim or suit, the DuPont Indemnitees shall promptly notify 3DP
thereof and 3DP shall appoint counsel reasonably acceptable to the 3DP
Indemnitees to represent the DuPont Indemnitees with respect to any claim or
suit for which indemnification is sought. The DuPont Indemnitees shall not
settle any such claim or suit without the prior written consent of 3DP, unless
they shall have first waived their rights to indemnification hereunder.

9.  TERM AND TERMINATION

     9.1  Term.  This Agreement shall commence upon the Effective Date. The term
of the research license to the 3DP DirectedDiversity Technology and 3DP Patents
that is granted in Section 5.1 shall be three (3) years from the Effective Date
unless the Research Program and research license are extended in the Field
pursuant to Section 6. 1. The Research Term of this Agreement shall be
coextensive with the term of the foregoing research license and shall expire
when the research license expires or is terminated. This Agreement otherwise
shall expire on the expiration of all royalty obligations hereunder. DuPont may
be granted a research license to include other targets outside of the Research
Program pursuant to Section 5.9.

     9.2  Termination.  DuPont may terminate the Research Program at any time by
giving 3DP at least one (1) month written notice.  However, such termination
does not affect the license fees otherwise due under Section 5.1, Section 5.9
and Section 6. 1. Such termination also does not affect 3DP's obligations under
Section 3.1 and Section 5.9 during the three-year license period pursuant to
Section 5.1. Termination of the Research Program also does not terminate
obligations of confidentiality under the Research Program.

                                      -15-
<PAGE>

     9.3 Breach.

          (a)  Failure by a Party to comply with any of the material obligations
     contained herein shall entitle the Party not in default to give notice to
     have the default cured. If such default is not cured within 60 days after
     the receipt of such notice, or diligent steps not taken to cure if by its
     nature such default could not be cured within 60 days, the Party not in
     default shall be entitled, without prejudice to any of its other rights
     conferred on it by this Agreement, and in addition to any other remedies
     available to it by law or in equity, to terminate this Agreement, provided,
     however, that such right to terminate shall be stayed in the event that,
     during such 60 day period, the Party alleged to have been in default shall
     have: (i) initiated arbitration in accordance with Section 12.9, below,
     with respect to the alleged default, and (ii) diligently and in good faith
     cooperated in the prompt resolution of such arbitration proceedings.

          (b)  The right of a Party to terminate this Agreement, as hereinabove
     provided, shall not be affected in any way by its waiver or failure to take
     action with respect to any prior default.

     9.4  Insolvency or Bankruptcy.

          (a)  Either Party may, in addition to any other remedies available by
     law or in equity, terminate this Agreement by written notice to the other
     Party in the event the latter Party shall have become insolvent or
     bankrupt, or shall have an assignment for the benefit of its creditors, or
     there shall have been appointed a trustee or receiver of the other Party or
     for all or a substantial part of its property or any case or proceeding
     shall have been commenced or other action taken by or against the other
     Party in bankruptcy or seeking reorganization, liquidation, dissolution,
     winding-up, arrangement or readjustment of its debts or any other relief
     under any bankruptcy, insolvency, reorganization or other similar act or
     law of any jurisdiction now or hereafter in effect, or there shall have
     been issued a warrant of attachment, execution, distraint or similar
     process against any substantial part of the property of the other Party,
     and any such event shall have continued for 90 days undismissed, unbonded
     and undischarged.

          (b)  Rights in Bankruptcy. All rights and licenses granted under or
     pursuant to this Agreement by DuPont or 3DP are, and shall otherwise be
     deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code,
     licenses of right to "Intellectual property" as defined under Section 101
     of the U.S. Bankruptcy Code. The Parties agree that the Parties as
     licensees of such rights under this Agreement, shall retain and may fully
     exercise all of their rights elections under the U.S. Bankruptcy Code. The
     Parties further agree that, in the event of the commencement of a
     bankruptcy proceeding by or against either Parties under the U.S.
     Bankruptcy Code, the Parties hereto which is not a party to such proceeding
     shall be entitled to a complete duplicate of (or complete access

                                      -16-
<PAGE>

     to, as appropriate) any such intellectual property and all embodiments of
     such intellectual property, and same, if not already in their possession,
     shall be promptly delivered to them (i) upon any such commencement of a
     bankruptcy proceeding upon their written request therefor, unless the Party
     subject to such proceedings elects to continue to perform all of their
     obligations under this Agreement or (ii) if not delivered under (i) above,
     upon the rejection of this Agreement by or on behalf of the Party subject
     to such proceeding upon written request therefore by a non-subject Party.

     9.5  Consequences of Termination. Upon termination or expiration of the
Research Program Portion of this Agreement, each Party shall promptly return all
relevant records and materials in its possession or control containing the other
Party's Confidential Information and to which the former Party does not retain
rights hereunder. The obligations of confidentiality specified in Paragraphs 3.2
continue and remain in force even if this Agreement is terminated.

     10.1 Advanced Field Trials and Regulatory Responsibilities

     10.1 Field Trials. DuPont will design and conduct all field trials that are
required in connection with the commercialization of Licensed Products, at
DuPont's sole expense.

     10.2 Regulatory Approvals.  DuPont shall be responsible for all regulatory
filings and related submissions that are made in connection with the
commercialization of Licensed Products for agricultural purposes, at DuPont's
sole expense.

11.  Representations and Warranties

     11.1 Authority. Each Party represents and warrants that it has the full
right, power and authority to execute, deliver and perform this Agreement.

     11.2 No Conflicts.  Each Party represents and warrants that the execution,
delivery and performance of this Agreement does not conflict with, or constitute
a breach or default under any of its charter or organizational documents, any
law, order, judgment or governmental rule or regulation applicable to it, or any
material agreement, contract, commitment or instrument to which it is a party.

     11.3 No Existing Third Party Rights. The Parties represent and warrant that
their obligations under this Agreement are not encumbered by any rights granted
by either Party to any third parties.

     11.4 Continuing Representations. The representations and warranties of each
Party contained in this Article 11 shall survive the execution and delivery of
this Agreement and shall remain true and correct at all times during the term of
this Agreement with the same effect as if made on and as of such later date.

                                      -17-
<PAGE>

     11.5 Warranty as to Third Party Patents.  3DP warrants that, to 3DP's
knowledge, based upon its review of the results of a reasonable search of
relevant issued U.S. patents, as of the Effective Date, the conduct of the
Research Program, including the use of the 3DP DirectedDiversity Technology as
permitted by this Agreement, will not violate the intellectual property rights
of any third party.

     11.6 No Warranty as to Commercial Success. 3DP offers no warranty that use
of the 3DP DirectedDiversity Technology under this Agreement will result in the
discovery or the successful commercialization of a Licensed Product for use
against the Target in the Field.

     12.  Miscellaneous Provisions

     12.1 Accrued Rights; Surviving Obligations.

          (a)  Termination, relinquishment or expiration of this Agreement for
     any reason shall be without prejudice to any rights which shall have
     accrued to the benefit of a Party prior to such termination, or expiration.
     Such termination, relinquishment or expiration shall not relieve a Party
     from obligations which are expressly indicated to survive termination or
     expiration of this Agreement.

          (b)  Without limiting the foregoing, Articles 3, 7, 8 and 12 and
     Sections 5.1, 5.2, 5.3, 5.4, 6.1 and 6.7 of this Agreement shall survive
     the expiration or termination of this Agreement.

     12.2 Further Actions. Each Party agrees to execute, acknowledge and
deliver such further instruments and to do all such other acts as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.

     12.3 Force Majeure. The failure of a Party to perform any obligation under
this Agreement by reason of acts of God, acts of governments, riots, wars,
strikes, accidents or deficiencies in materials or transportation or other
causes of a similar magnitude beyond its control shall not be deemed to be a
breach of this Agreement.

     12.4 No Trademark Rights. No right, expressed or implied, is granted by
this Agreement to a Party to use in any manner the name or any other trade name
or trademark of a Party in connection with the performance of this Agreement.

     12.5 Public Announcements. The Parties shall consult with each other and
reach mutual written agreement before making any public announcement concerning
this Agreement or the subject matter hereof. DuPont shall have the right to
review all filings, to the extent that they describe the terms of this Agreement
or the arrangements with DuPont reflected herein, prior to their submittal by
3DP to the SEC, including all proposed redacted copies of this Agreement. 3DP
shall give due respect to any reasonable

                                      -18-
<PAGE>

and timely request by DuPont with respect thereto, including confidential
treatment of selected portions of this Agreement.

     12.6  Entire Agreement of the Parties; Amendments.  This Agreement and the
exhibits hereto constitute and contain the entire understanding and agreement of
the Parties respecting the subject matter hereof and cancels and supersedes any
all prior negotiations, correspondence, understandings and agreements between
the Parties, whether oral or written, regarding such subject matter.  No waiver,
modification or amendment of any provision of this Agreement shall be valid or
effective unless made in writing and signed by a duly authorized officer of each
Party.

     12.7  Captions. The captions to this Agreement are for convenience only,
and are to be of no force or effect in construing or interpreting any of the
provisions of this Agreement.

     12.8  Applicable Law. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of Delaware without reference to its
conflicts of laws provisions.

     12.9  Disputes.  Either Party may give the other Party written notice of a
dispute not resolved in the normal course of business.  Upon such notice, the
Parties shall attempt in good faith to resolve any dispute arising out of or
relating to this Agreement promptly by negotiation between executives who have
the authority to settle the controversy and who are at a higher level of
management than the persons with direct responsibility for administration of
this Agreement.  If the matter has not been resolved by these persons within 30
days of a disputing party's notice, either Party may initiate mediation as
provided herein.  If the dispute has not been resolved by negotiation, the
Parties shall endeavor to settle the dispute by mediation under the Center for
Public Resources ("CPR") Model Procedure for Mediation of Business Disputes in
effect on the Effective Date of this Agreement.  Unless the Parties agree
otherwise, a neutral mediator will be selected from a CPR Panel of Neutrals,
with the assistance of CPR or, if the Parties agree, from the American
Intellectual Property Law Association (AIPLA) Panel of Mediators.

     12.10 Notices and Deliveries.  Any notice, request, delivery, approval or
consent required or permitted to be given under this Agreement shall be in
writing and shall be deemed to have been sufficiently given when it is received,
whether delivered in person, transmitted by facsimile with contemporaneous
confirmation of delivery by registered letter (or its equivalent) or delivery by
certified overnight counter service, to the Party to which it is directed at its
address shown below or such other address as such Party shall have last given by
notice to the other Parties.

                                      -19-
<PAGE>

If to DuPont:

E.I. DuPont de Nemours & Co.
1007 Market Street
Washington, DE 19898

Attention:  Corporate Secretary

with a copy to:

DuPont Agricultural Products
Barley Mill Plaza Routes 141 and 48
Wilmington, DE 19885

Attention: Manager, Cereal and Specialty Herbicides

If to 3DP:

3-Dimensional Pharmaceuticals, Inc.
Eagleview Corporate Center
665 Stockton Drive, Suite 104
Exton, PA 19341

Attention: President

with a copy to:

Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, PA 19103

Attention: David R. King, Esq.

     12.11  No Consequential Damages. IN NO EVENT SHALL EITHER PARTY NOR ANY OF
ITS RESPECTIVE AFFILIATES BE LIABLE TO THE OTHER PARTY OR ANY OF ITS AFFILIATES
FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER IN CONTRACT,
WARRANTY, TORT, NEGLIGENCE, STRICT LIABILITY OR OTHER WISE, including, but not
limited to, loss of profits or revenue, or claims of customers of any of them or
other third parties for such or other damages.

     12.12  Assignment. Except for the research license granted pursuant to
Section 5.1 and DuPont's access to 3DP DirectedDiversity Technology pursuant to
the confidentiality provisions under Article 3, this Agreement may be assigned
by either

                                      -20-
<PAGE>

Party in connection with the sale or offer of substantially all of its
assets that relate to this Agreement. 3DP shall provide reasonable notice to
DuPont before making such an assignment so that DuPont may decide whether or not
to terminate this Agreement.

                                      -21-
<PAGE>

                      ___________________________________

In WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their respective duly authorized officers as of the day and year first above
written, each copy of which shall for all purposes be deemed to be an original.

3 DIMENSIONAL                      E. I. DUPONT DE NEMOURS & CO.
PHARMACEUTICALS, INC.

By: /s/ F. Raymond Salemme                 By:/s/ Philip L. Meredith
    -------------------------                 -------------------------------

Name: F. Raymond Salmme                    Name: Philip L. Meredith
      -----------------------                    ----------------------------

Title: President & CEO                     Title: R & D Director
       ----------------------                     ---------------------------


                                           By: /s/ Elmo Berger
                                               ------------------------------

                                           Name: Elmo Berger
                                                 ----------------------------

                                           Title: Vice President of R & D
                                                  ---------------------------


                                           By: /s/ Kurt Landgraf
                                               ------------------------------

                                           Name: Kurt Landgraf
                                                 ----------------------------

                                           Title: Executive Vice President,
                                                  ---------------------------
                                                  Dupont Life Sciences
                                                  ---------------------------


                                      -22-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.20
<SEQUENCE>11
<FILENAME>0011.txt
<DESCRIPTION>COLLABORATIVE DISCOVERY AND LEAD OPTIMIZATION AGMT
<TEXT>

<PAGE>

                                                                   EXHIBIT 10.20


                          COLLABORATIVE DISCOVERY
                        AND LEAD OPTIMIZATION AGREEMENT


     This Collaborative Discovery and Lead Optimization Agreement (the
"Agreement") is made and effective as of February 11, 2000 (the "Effective
Date"), by and between 3-Dimensional Pharmaceuticals, Inc., a corporation having
its principal place of business at Eagleview Corporate Center, 665 Stockton
Drive, Suite 104, Exton, PA 19341, U.S.A. (" 3DP"), and DuPont Pharmaceuticals
Company (a wholly-owned subsidiary of E. I. DuPont de Nemours & Co. ("DuPont"))
having its principal place of business at Centre Road, Chestnut Run Plaza,
Building 721, Wilmington DE 19880 ("DPC"). 3DP and DPC may be referred to herein
as a "Party" or, collectively, as the "Parties".

     WHEREAS, 3DP is engaged in discovery research for a variety of biologically
active compounds and the development of technologies to facilitate such
research, and 3DP has patented systems for generating chemical compounds having
desired pharmaceutical properties;

     WHEREAS, DPC is engaged in research and development of human therapeutic
products;

     WHEREAS, 3DP and DPC desire to enter into a research and development
collaboration identify qualified lead compounds active against selected targets
and suitable for medicinal chemistry optimization that may be developed and
commercialized by DPC;

     NOW, THEREFORE, in consideration of the various promises and undertakings
set forth herein, the Parties agree as follows:


ARTICLE 1.   DEFINITIONS

     The terms in this Agreement with initial letters capitalized, whether used
in the singular or the plural, shall have the meaning set forth below or, if not
listed below, the meaning designated in places throughout this Agreement.

     1.1     "Active Compound" means a 3DP Compound or Derivative Compound that
has been formally selected by DPC for preclinical and/or clinical development.

     1.2     "Affiliate" means (i) any corporation or business entity of which
at least 50% of the securities or other ownership interests representing the
equity, the voting stock or general partnership interest are owned, controlled
or held, directly or indirectly, by 3DP or DPC; or (ii) any corporation or
business entity which, directly or indirectly, owns, controls or holds at least
50% of the securities or other ownership interests representing the equity, the
voting stock or, if applicable, the general partnership interest, of 3DP or DPC.

     1.3     "Agreement" means the present agreement including its Appendices.

     1.4     "Confidential Information" means all information that has or could
have commercial value or other utility in a Party's business, or the
unauthorized disclosure of which could be detrimental to the Party's interests,
including confidential information, inventions,
<PAGE>

know-how, data and materials relating to the Research Program or to the Licensed
Products, and shall include without limitation research, technical, clinical
development, manufacturing, marketing, financial, personnel and other business
information and plans, whether in oral, written, graphic or electronic form.

     1.5     "Custom Accessible Library" means any DirectedDiversity? Chemical
Library produced by 3DP using 3DP DirectedDiversity?  Technology and structure
activity data provided by DPC.

     1.6     "Combination Product" means a Licensed Product which includes one
or more active ingredients other than an Active Compound.

     1.7     "Derivative Compound" means any compound other than a 3DP Compound,
but which: (a) acts against or through a Target and is first synthesized [**]
and which is derived through iterative rational drug design [**] with
respect to the Target; or (b) is claimed by any 3DP Patent covering
discoveries or inventories made in the performance of the Research Program.

     1.8     "DirectedDiversity? Chemical Library" means a computer-generated
library of compounds containing integrated structure-activity and synthesis
data.

     1.9     "DPC" means DuPont Pharmaceuticals Company as identified above.

     1.10    "DuPont" means E. I. DuPont de Nemours & Co. as identified above.

     1.11    "Effective Date" means the effective date of this Agreement as set
forth above.

     1.12    "Field" means [**] of compounds against or acting through Targets.
The Field for any particular Target will include all therapeutic indications
for compounds acting through Targets, including but not limited to the
indications identified in the Research Plan approved by the Research Steering
Committee.

     1.13    "Licensed Product" means any commercial product containing an
Active Compound.

     1.14    "First Commercial Sale" shall mean, with respect to a given
Licensed Product, the first sale for use or consumption by the public of such
Licensed Product in a country after all required approvals, including marketing
and pricing approvals, have been granted by the applicable governmental drug
regulatory agency of such country.

     1.15    "FTE" means a full time equivalent scientist (i.e., one full-time
or multiple part-time scientists aggregating to one full-time scientist)
employed by 3DP and assigned to work on the Research Program with such time and
effort to constitute one scientist working on the Research Program on a full
time basis consistent with normal business and scientific practice (at least 40
hours per week of dedicated effort; on an annual basis, at least 40 hours per
week of dedicated effort for at least 48 weeks per year). In no event, does an
FTE include a subcontractor.


** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       2
<PAGE>

     1.16    "NDA" means an application for the final approval required for
authorization for marketing of a Licensed Product in a given country (including
applicable regulatory, marketing and pricing approval) in accordance with the
applicable laws and regulations of a given country. In the U.S., NDA means a New
Drug Application or its equivalent in the Food and Drug Administration or
successor agency.

     1.17    "Net Sales" means the aggregate gross invoiced sales price of
Licensed Product sold in the Territory by DPC, its Affiliates and any licensees
or sublicensees, to an independent third party, including but not limited to
distributors, in bona fide, arms-length transactions, after deduction of the
following items (to the extent actually incurred or reasonably estimated and
accrued and to the extent not already deducted in the amount invoiced): (i)
customary trade, quantity and case discounts, wholesaler-charge backs, or
rebates (including rebates to governmental agencies); (ii) customary credits or
allowances for rejection or return of previously sold Licensed Products; (iii)
any direct tax, duties, surcharges or government charge (other than an income
tax) levied on the sale, transportation or delivery of a Licensed Product and
borne by the seller thereof; (iv) retroactive price reductions; and (iv) any
charge for freight or insurance if separately stated.

     In the circumstance where all the active ingredients of a Combination
Product are also sold separately and in identical strengths to those contained
in the Combination Product, then the following shall apply:

     Net Sales shall be calculated as set forth above on the basis of the gross
invoice price of a Licensed Product containing the same weight of Active
Compound sold independently [ A ] divided by the sum of the gross invoice price
of each of the active ingredients contained in the Combination Product sold
independently [ B + A ], multiplied by the gross invoice price of the
Combination Product, as shown by the following formula:

     Net Sales =     [A]  x [gross invoice price of the Combination Product]
                   -------
                   [B + A]

     In the event the Active Compound and/or any of the other active ingredients
of a Combination Product are not sold separately in identical strengths to those
contained in the Combination Product, then the Parties agree to negotiate in
good faith the calculation of Net Sales with regard to such Combination Product
based upon the relative value of the active ingredients as determined by the
Parties hereto in good faith.

     1.18    "Patents" means all U. S. patent applications or issued patents,
including provisionals, divisionals, continuations, continuations-in-part,
reissues and extensions derived therefrom, such as patent term restorations,
supplementary protection certificates, etc., as well as all foreign patents and
foreign patent counterparts to the foregoing.

     1.19    "Qualified Lead Compound" means a 3DP Compound or a Derivative
Compound that satisfies the criteria established by the Research Steering
Committee.

     1.20    "Research Plan" means the detailed description of the research and
development activities of the Parties for particular Targets in the performance
of the Research Program. The

                                       3
<PAGE>

Research Plan shall be prepared by the RSC and shall be updated in writing
as changes are made to the Research Plan.

     1.21    "Research Program" means the collaborative discovery and
optimization activities of the Parties, as described in Article 2, that are
intended to lead to the discovery of small molecule Qualified Lead Compounds
that have an agreed upon level of activity against a Target and are suitable for
medicinal chemistry optimization and commercial development by DPC.

     1.22    "Research Program Patents" shall mean those Patents that claim
discoveries or inventions that are conceived in the course of the Research
Program and reduced to practice during either the term of the Research Program
or a period of [**] following the termination of the Research Program [**].

     1.23    "Research Steering Committee" or " RSC" means the committee to be
formed pursuant to Article 3 of this Agreement.

     1.24    "Target" means a protein to be selected by the RSC and approved
both by 3DP and DPC, against which Qualified Lead Compounds and Active
Compounds are to be developed. Such Targets shall be specified in writing in
the Research Plan. Any particular Target shall include the human Target and
[**].

     1.25    "Territory" means the entire world.

     1.26    "Third Party" means an individual, corporation or other entity
other than the Parties and their Affiliates.

     1.27    "3DP" means 3-Dimensional Pharmaceuticals, Inc. as identified
above.

     1.28    "3DP Accessible Library" means any DirectedDiversity?  Chemical
Library that is generated by 3DP outside of the Research Program.

     1.29    "3DP Compound" means any compound that is synthesized by 3DP during
the term of the Research Program and acts through a Target.

     1.30    "3DP DirectedDiversity? Technology" means 3DP Patents and
proprietary know-how that relate to generating and utilizing a
DirectedDiversity? Chemical Library, including but not limited to U.S. Patent
Nos. 5,463,564; 5,574,656; and 5,684,711 and 5,901,069. This term does not
include the SAR models as described in Article 2 of this Agreement.

     1.31    "3DP Patents" means any Patents owned or controlled by 3DP by
assignment, license or otherwise, which 3DP has the right to license or
sublicense to DPC, other than Research Program Patents.

     1.32    "Valid Claim" means a claim of a Patent that has not lapsed or
become abandoned or been declared invalid or unenforceable by a court or agency
of competent jurisdiction from which no appeal can be or has been taken.

**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed separately with the Commission.

                                       4
<PAGE>

Article 2. RESEARCH PROGRAM

     2.1     General Project Description. The Parties contemplate that the
Research Program will include the following steps and activities:

             (a)    DPC will furnish to 3DP the structure and activity data on
                    chemical compounds screened against a Target, including both
                    compounds that are active ("Hits") and compounds that are
                    inactive against the Target.


             (b)    3DP will use its DirectedDiversity?  Technology to compute a
                    chemical descriptor matrix to describe and map the compounds
                    for which DPC provides data.  3DP also will develop a
                    Structure Activity Relationship ("SAR") model based on this
                    descriptor matrix for Hits.

             (c)    3DP will compare the SAR model with compounds in 3DP
                    Accessible Libraries, and 3DP will identify [**] compounds
                    to be synthesized by 3DP and supplied to DPC for testing.
                    3DP will supply between [**] milligrams of each such
                    compound in 96 deep well plates (about 80 compounds per
                    plate). These compounds will meet a minimum purity of
                    [**] of the compounds provided. Upon request of DPC, 3DP
                    will provide additional quality control for individual
                    compounds.

             (d)    3DP will provide DPC with a secure internet based
                    communication channel to provide activity or other compound
                    related data to 3DP.

             (e)    3DP will develop an improved SAR model based on the testing
                    data provided by DPC.  This improved SAR will be used to
                    perform iterative rounds of selection and synthesis of
                    compounds from 3DP Accessible Libraries, and/or to develop
                    Custom Accessible Libraries from which compounds will be
                    selected and synthesized, and/or to perform preliminary
                    medicinal chemistry optimization and synthesis.  Such
                    compounds will be supplied to DPC for additional testing in
                    furtherance of the Research Program.

     2.2     Production of Qualified Lead Compounds. 3DP will iterate the steps
of the foregoing Section 2. 1 (e) until [**] Qualified Lead Compounds have been
identified for a Target.

     2.3     Production of Active Compounds. 3DP will chemically modify
Qualified Lead Compounds as may be appropriate with the objective of generating
compounds which will be selected as Active Compounds by DPC.

     2.4     Development of Active Compounds. DPC will conduct the preclinical
and clinical tests as it deems appropriate for the commercial development of
Active Compounds in the Field that are developed from Qualified Lead Compounds.


** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed separately with the Commission.

                                       5
<PAGE>

     2.5     Initial Term and Extension of Research Program. The initial term of
the Research Program shall run until December 31, 2001. DPC may extend the term
of the Research Program for up to 3 additional 1-year periods on an annual basis
by notifying 3DP in writing at least ninety (90) days prior to the end of the
initial term or any extended one-year term then in effect.

     2.6     Additional and Alternative Targets. DPC, through the Research
Steering Committee, shall have the option to bring forward a total of up to [**]
Targets at any one time or to propose changing Targets.

     2.7     Research Efforts. Each party shall use good faith commercially
reasonable and diligent efforts (as defined below) to perform its
responsibilities in the performance of the Research Program.  DPC will provide
funding to 3DP as set forth in Section 4.1 during the ten-n of the Research
Program to support qualified FTEs at 3DP, which funding by DPC shall be
contingent upon 3DP providing and retaining at least [**] such qualified FTEs
assigned to the performance of the Research Program.  As used herein, the term
"commercially reasonable and diligent efforts" will mean, unless the Parties
agree in writing otherwise, those efforts consistent with the exercise of
prudent scientific and business judgment in accordance with industry standards,
as applied to other programs of similar scientific and commercial potential.

     Throughout the term of the Research Program, including any extensions
thereof, 3DP shall assign the number of FTE qualified scientists specified in
the Research Plan to perform the work set forth in the Research Plan.  The
mixture of skills and levels of such FTEs shall be appropriate to the scientific
objectives of the Research Program and 3DP shall provide information about these
FTEs to the RSC upon request.  Unless the RSC agrees otherwise in writing, at
least 50% of such FTE support shall be Ph.D. level scientists.  The scientists
comprising such FTEs and their percentage of time devoted to working on the
Research Program shall be identified in Research Plan.  In the event that DPC
has reasonable concerns regarding any scientist assigned by 3DP to the Research
Program, such concerns shall be communicated to and addressed by the RSC.  The
Parties shall proceed diligently with the work set out in the Research Plan by
using their respective good faith commercially reasonable and diligent efforts.

     Other than the research funding provided by DPC to 3DP under Section 4.1
hereof, and except as otherwise specifically agreed in writing by 3DP and DPC,
each party shall be responsible for all costs and expenses it incurs in its
performance of the Research Program.

     2.8     Disclosure of Results; Reports. The results of all work performed
by the Parties as part of the Research Program shall be promptly disclosed to
the other Party as such results are obtained. The Parties will exchange at a
minimum quarterly written reports (with copies to the RSC) presenting a
meaningful summary of the work performed on the Research Program. In addition,
on reasonable request by DPC, 3DP will make presentations of its activities
under this Agreement to inform DPC of the details of the work done under this
Agreement.

**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed separately with the Commission.

                                       6
<PAGE>

     Know-how and other information regarding the Research Program disclosed by
one Party to the other Party pursuant hereto may be used only in accordance with
the rights granted under this Agreement.  Within 30 days following the end of
each calendar quarter, the Parties shall each exchange and provide to the RSC a
written report summarizing in reasonable detail the work performed by it under
the Research Program during the preceding calendar quarter.

Article 3. RESEARCH PROGRAM GOVERNANCE

     3.1     Research Steering Committee.  3DP and DPC agree to establish a
Research Steering Committee, and shall each designate three (3) members selected
by their respective R&D management to form this Research Steering Committee.
The Research Steering Committee shall be responsible for:

             (a)    Adopting, reviewing and amending the Research Plan to
                    implement the Research Program, subject to DPC approval.
                    The Research Plan for the first Target agreed to by the
                    Parties is described in Appendix A.
                                            ----------

             (b)    Monitoring the progress of research in the Research Program.

             (c)    Reviewing initial Target and any subsequent Target
                    selection.

             (d)    Agreeing on and adopting criteria for the designation of
                    Qualified Lead Compounds.  As an example, the Parties
                    contemplate that to satisfy such criteria in the case of
                    Hits that inhibit a Target with an [**], a Qualified Lead
                    Compound would require a [**] relatively more selective
                    against a Target than against related molecules, and be
                    patentable.  The criteria for the designation of Qualified
                    Lead Compounds shall be set forth in the Research Plan.

             (e)    Selecting Qualified Lead Compounds to be advanced for
                    biological testing.

             (f)    Reviewing and approving publications and other public
                    disclosures related to the subject matter of the Research
                    Program.

     3.2     RSC Meetings. The RSC shall meet in-person or by teleconference on
a calendar quarter basis or more frequently as necessary as may be agreed upon,
with each party to bear all travel and related costs for its representatives.
Minutes of the meetings of the RSC will be generated and circulated to its
members within 2 weeks following the RSC meeting.

     3.3     RSC Decision-Making Process. Each member of the RSC shall have one
vote, and decisions by the RSC shall be made by a majority vote. The Parties
shall attempt to resolve any disagreement among members of the RSC within the
RSC based on the efficient achievement of the objectives of this Agreement. Any
disagreement which cannot be resolved by a majority vote of the RSC shall be
referred to the appropriate officers of 3DP and DPC for resolution as set forth
in Article 12. It is the intent of the Parties to resolve issues through the RSC
whenever possible and to refer issues to the officers of 3DP and DPC only when
resolution through the RSC cannot be achieved.


**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed separately with the Commission.

                                       7
<PAGE>

     3.4     Management of Matters Outside the Jurisdiction of the Research
Steering Committee.  Matters outside the scope of the Research Program and
internal to each Party are not under the purview of the Research Steering
Committee.  Such matters include, but are not limited to the following: internal
personnel policies and programs, budgeting, finance, commercial and marketing
strategies, and business decisions. However, the Parties agree to communicate
with each other promptly on those matters which, while outside the scope of the
Research Program, nevertheless may reasonably be expected to influence the
conduct or term of the Research Program or the intended commercialization of any
Qualified Lead Compounds.

ARTICLE 4. FINANCIAL TERMS

     4.1     Technology Access and FTE Reimbursement Fees.


             (a). DPC agrees to pay a nonrefundable technology access fee of
             [**] due within thirty (30) days of the Effective Date of this
             Agreement. 3DP will credit [**] against this sum based on the
             payment made by DPC in connection with Memorandum of Intent
             signed by the Parties on September 20, 1999.

             (b). DPC agrees to pay 3DP in advance, on a calendar quarterly
             basis for the staff allocated by 3DP for the services to be
             provided under this Agreement. These services will be compensated
             by DPC at a rate equivalent to the support for [**]. Thus, the
             quarterly payment for the initial term of the Research Program
             shall be [**]. In the event that 3DP provides less than the
             number of FTEs as specified above in support of the Research
             Program, the foregoing payments will be reduced in proportion to
             the level of FTE support actually provided by 3DP in support of
             the Research Program. Such research funding shall be payable by
             DPC to 3DP in four quarterly installments during the term of the
             Research Program within 30 days of the start of the calendar
             quarter. Any payment for a portion of a quarterly period shall be
             made on a pro rata basis. Except as provided in this Section 4.1,
             or as may be agreed from time to time by the parties in writing,
             3DP and DPC will each bear all of its own expenses incurred in
             connection with the Collaboration. Depending on the total number
             of Targets designated and the number of 3DP FTEs reasonably
             necessary to meet the objectives of this Agreement, DPC and 3DP
             shall negotiate in good faith with respect to additional
             compensation to 3DP in a form to be agreed upon by the Parties,
             such as a lump sum payment or support by DPC for additional FTEs
             at 3DP. The Parties agree that the rate of compensation per FTE
             year shall be indexed annually to the U.S. Consumer Price Index
             (CPI) and adjusted for payments beginning with the first quarter
             of the year 2001.

     4.2     Extended Term Fees.  The level of reimbursement for FTEs in any
extended term of the Research Program extending after December 31, 2002 shall be
negotiated in good faith by the Parties, and shall at least reflect any increase
to the FTE support level and any changes in the CPI in accordance with Section
 4. 1 (b).

     4.3     Fees for Early Termination of the Research Program. If DPC
terminates this Agreement without cause pursuant to Section 9.2 prior to the end
of the initial term or any extended term of the Research Program, it agrees to
pay to 3DP the balance of any financial support otherwise due for that term of
the Research Program.

     4.4     Milestone Payments.  DPC agrees to make milestone payments as set
forth below upon the first occurrence of each milestone event for each 3DP
Compound and Derivative Compound.  Subject to the conditions set forth below,
the milestone payments as set forth below shall be paid only one time for any
particular 3DP Compound or Derivative Compound (regardless, for example, of the
number of clinical trials conducted and NDA approvals obtained for that
particular 3DP Compound or Derivative Compound). The amounts set forth below
apply


**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed separately with the Commission.

                                       8
<PAGE>

to 3DP Compounds and the applicable payments due for Derivative Compounds shall
be [**] of the milestone payment amounts set forth below:

             (d). [**] upon the [**] approval of an NDA.

The milestone payment under (a) above shall be subject to the following
conditions. (1) The total amount of milestone payments under (a) above for any
particular Target (i.e., for all 3DP Compounds and Derivative Compounds
directed to the same Target) shall in no event exceed [**]. (2) For any
particular Target (i.e., for all 3DP Compounds and Derivative Compounds directed
to the same Target), all milestone payments under (a) above after the first
such payment shall be deferred until the [**] for the applicable 3DP Compound
or Derivative Compound.

     4.5     Royalty on Net Sales of Licensed Products.  DPC agrees to pay an
annual royalty based on Net Sales of Licensed Products.  Royalty payments shall
be due on December 31 of each calendar year in which Net Sales are generated.

             (a). The applicable royalty rate for Licensed Products that
             contain 3DP Compounds shall be [**] on annual Net Sales below
             [**] on annual Net Sales between [**] on Net Sales above [**].

             (b). The applicable royalty rate for Licensed Products that
             contain Derivative Compounds shall be [**] on annual Net Sales
             below [**], on annual Net Sales between [**] on Net Sales above
             [**].

             (c). The Parties agree that the foregoing annual Net Sales
             threshold amounts of [**] shall be indexed annually to the
             increase in the U.S. Consumer Price Index (CPI) for the preceding
             year, and shall be adjusted on January 1 of each calendar year
             and applied to Net Sales generated for the balance of that year.
             For clarification, the royalty rates are applicable to the
             incremental Net Sales with which they are associated only, so
             that, for example, the highest royalty rate is applicable only to
             those incremental annual Net Saes in excess of [**].

     4.6     Royalty Reduction.  The royalty amounts set forth above shall be
reduced by [**] on a country-by-country basis at any such time that there is no
Patent pending or in effect that claims a particular Licensed Product in such
country.  For purposes of this Section 4.6, the royalty otherwise due in such
country shall be decreased by [**].

     4.7     Royalty Period. The royalty payments set forth above shall be
payable for each Licensed Product on a product-by-product and country-by-country
basis from the time of First Commercial Sale of Licensed Product in such country
until the later of (i) [**] years from the time of First Commercial Sale of
Licensed Product in such country or (ii) until the last to expire patent
containing a Valid Claim providing marketing exclusivity with respect to such
Licensed Product.

     4.8     Royalty Conditions. The royalties under this Article shall be
subject to the following conditions:

                    (i)   that only one royalty shall be due with respect to the
                    same unit of Licensed Product;

                    (ii)  that no royalties shall be due upon the sale or other
                    transfer among DPC, its Affiliates or licensees, but in such
                    cases the royalty shall be due and calculated upon DPC's or
                    its Affiliate's or licensee's Net Sales of Licensed Product
                    to the first independent third party;

                    (iii) no royalties shall accrue on the disposition of
                    Licensed Product in reasonable quantities by DPC, its
                    Affiliates or licensees as part of an expanded access
                    program or as bona fide samples or as donations to non-
                    profit institutions or government agencies for non-
                    commercial purposes; and

                    (iv) notwithstanding the above royalty rates, upon DPC's
                    request, the parties agree to discuss in good faith a
                    reduction of such royalty rate in any given country in the
                    event the available patent protection materially decreases
                    the commercial viability of the Licensed Product under such
                    royalty rate.

     4.9     Third Party Patents. In the event that during the term of the
royalty obligation for a Licensed Product under this Article IV, a third party
shall control a patent or patents in any country covering the sale of a Licensed
Product, and in the reasonable judgment of DPC, it would


**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed separately with the Commission.

                                       9
<PAGE>

be impractical or impossible for DPC (or its Affiliates or licensees or
sublicensees) to continue to sell the Licensed Product without obtaining a
royalty bearing license from such third party, then DPC shall be entitled to a
credit against the royalties due hereunder with respect to such country in an
amount equal to [**] of the royalty otherwise due under this Agreement, arising
from the sale of the Licensed Product in said country. However, the foregoing
royalty credit shall only be available when the total royalty obligation owed by
DPC (or its Affiliates or licensees or sublicensees) to unaffiliated third
parties exceeds [**] of Net Sales of Licensed Product.

     4.10    Mode of Payment. All payments to 3DP hereunder shall be made by
wire transfer of United States Dollars in the requisite amount to such bank
account as 3DP may from time to time designate by notice to DPC. Milestone
payments shall be made with in sixty days of occurrence of the relevant
milestone event and royalty payments for a given calendar year shall be made
with in sixty days following the end of the calendar year. Payments shall be
free and clear of any taxes (other than withholding and other taxes imposed on
3DP), fees or charges, to the extent applicable. For purposes of computing
royalty payments for Net Sales made outside of the United States, such royalties
shall be converted into U.S. Dollars, by applying the rate of exchange as used
by DPC's global accounting system which reflects the average exchange rate for
the applicable payment period.

     4.11    Records Retention. With respect to any products for which royalties
are due pursuant to Section 4.6, DPC and its Affiliates and any licensees or
sublicentees shall keep records, for two (2) years, of such Net Sales in
sufficient detail to confirm the accuracy of the royalty calculations hereunder.
At the request of 3DP, DPC shall permit an independent certified accountant of
nationally recognized standing appointed by 3DP and reasonably acceptable to
DPC, at reasonable times and upon reasonable notice, to examine these records
solely to the extent necessary to verify such calculations. Such investigation
shall be at the expense of 3DP unless it reveals a discrepancy in DPC's favor of
more than ten percent, in which event it shall be at DPC's expense.

     4.12    Taxes.  The Party receiving royalties and other payments under this
Agreement shall pay any and all taxes levied on account of such payment.  If any
taxes are required to be withheld by the paying Party, it shall: (a) deduct such
taxes from the remitting payment, (b) timely pay the taxes to the proper taxing
authority, and (c) send proof of payment to the other Party and certify its
receipt by the taxing authority within sixty (60) days following such payment.

Article 5. EXCLUSIVITY, OWNERSHIP OF ACCESSIBLE LIBRARIES AND LICENSE OF
RIGHTS

     5.1     Exclusivity. During the term of the Research Program and for a
period of 1 year thereafter 3DP shall work exclusively with DPC, and shall not
work independently of DPC, either alone or with any third party, with respect to
(i) the modeling, design, synthesis, screening and testing of compounds which
act through any Target, and (ii) the screening and testing of compounds in
assays to detect compounds which act through any Target.

     5.2     Ownership of 3DP Accessible Libraries and 3DP Patents; License
Grant to DPC Under 3DP Patents. 3DP shall own all 3DP Accessible Libraries. In
the case where any Qualified Lead Compound, Active Compound or Licensed Product
resulting from the Research


**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed separately with the Commission.

                                       10
<PAGE>

     Program that is developed by DPC is claimed in a 3DP Patent based on
research outside of the Research Program, 3DP hereby grants to DPC a fully paid
up, worldwide, exclusive license, with right to sublicense, in the Field under
such patent to develop, make, have made, use, sell, offer for sale, have sold,
import and have imported Licensed Products, provided that 3DP is not
contractually prohibited under a written agreement with a third party from
granting such an exclusive license. In the event that 3DP is so contractually
prohibited from granting such an exclusive license, 3DP shall grant to DPC as
broad a scope of license as it is permitted (for example, a non-exclusive
license) and 3DP shall use its reasonable best efforts to negotiate with such
third party to remove such contractual prohibition so as to allow 3DP to grant
DPC the foregoing exclusive license under such 3DP Patents.

     5.3     Unblocking License Grant to DPC. Subject to the limitation set
forth in Section 5.2 and subject to the other terms and conditions of this
Agreement, 3DP hereby grants to DPC a worldwide, nonexclusive license, with
right to sublicense, to develop, make, have made, use, sell, offer for sale,
have sold, import and have imported 3DP Compounds, Derivative Compounds, and
Licensed Products, under any 3DP patent rights which would otherwise be
infringed by DPC but for this license.

     5.4     Ownership of Custom Accessible Library Compounds.  DPC shall own
Custom Accessible Libraries and the compounds they contain that are produced in
the course of the Research Program.  However, DPC agrees to grant 3DP a fully
paid up, nonexclusive, worldwide license in order to use chemical process
methodologies developed for the synthesis of Custom Accessible Library compounds
for 3DP discovery programs.

     5.5     Grant-back of Rights to 3DP Outside of the Field After Termination
of the Research Program. After a period of [**] following termination of the
Research Program, DPC agrees to grant back to 3DP a fully paid up
non-exclusive license, with the right to sublicense, for use outside of the
Field, for 3DP Compounds which are not being developed by DPC, under any
applicable Research Program Patents owned by DPC; provided, however, that the
foregoing grant back shall not apply to compounds [**].

     5.6     Non-assertion by DPC. DPC agrees that it shall not assert against
3 DP any DPC patent claim where (a) the patent claims priority of a patent
application filed during the Research Program or [**] following termination of
the Research Program and (b) the claim covers an invention which is an
improvement or enhancement to the [**] and such invention falls within the
scope of the claims of the [**].

Article 6. CONFIDENTIAL INFORMATION

     6.1     Confidentiality Obligations. The Parties agree that, for the term
of this Agreement and for ten (10) years thereafter, either Party that receives
Confidential Information (a "Receiving Party") from the other Party (a
"Disclosing Party") shall keep completely confidential and shall not publish or
otherwise disclose and shall not use for any purpose (except as expressly
permitted hereunder) any Confidential Information furnished to it by the
"Disclosing Party" pursuant to this Agreement (including without limitation,
know-how), except to the extent that it can be established by the Receiving
Party that such Confidential Information:

**Certain portions of this Exhibit have been ommitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       11
<PAGE>

             (a)    was already known to the Receiving Party, other than under
                    an obligation of confidentiality from the Disclosing Party;

             (b)    was generally available to the public or otherwise part of
                    the public domain at the time of its disclosure to the
                    Receiving Party;

             (c)    became generally available to the public or otherwise part
                    of the public domain after its disclosure and other than
                    through any act or omission of the Receiving Party in breach
                    of this Agreement;

             (d)    was subsequently lawfully disclosed to the Receiving Party
                    by a Third Party;

             (e)    can be shown by written records to have been independently
                    developed by the Receiving Party without reference to the
                    Confidential Information received from the Disclosing Party
                    and without breach of any of the provisions of this
                    Agreement; or

             (f)    the disclosing party has specifically agreed in writing that
                    the receiving party may disclose.

     The obligations of confidentiality and non-use set forth in this Section
6.1 shall also apply to biological material and chemical compounds and
associated information (including without limitation know-how) disclosed by one
Party to the other prior to or during the term of this Agreement; provided
however, that such obligation of confidentiality and non-use shall not apply
with respect to compounds which are assigned to DPC or exclusively licensed to
DPC by 3DP.

     6.2     Written Assurances and Permitted Uses of Confidential Information.

             (a)    Each Party shall inform its employees and consultants who
perform substantial work on the Research Program, of the obligations of
confidentiality specified in Section 6.1 and all such persons shall be bound by
the terms of confidentiality set forth therein.

             (b)    The Receiving Party may disclose Confidential Information to
the extent the Receiving Party is compelled to disclose such information by a
court or other tribunal of competent jurisdiction, provided however, that in
such case the Receiving Party shall immediately give notice to the Disclosing
Party so that the Disclosing Party may seek a protective order or other remedy
from said court or tribunal. In any event, the Receiving Party shall disclose
only that portion of the Confidential Information that, in the opinion of its
legal counsel, is legally required to be disclosed and will exercise reasonable
efforts to ensure that any such information so disclosed will be accorded
confidential treatment by said court or tribunal.

             (c)    To the extent it is reasonably necessary or appropriate to
fulfill its obligations and exercising its rights under this Agreement, DPC may
disclose Confidential Information to its Affiliates, licensees and sublicensees
on a need-to-know basis on condition that such Affiliates, licensees and parent
companies agree to keep the Confidential Information confidential for the same
time periods and to the same extent as DPC is required to keep the

                                       12
<PAGE>

Confidential Information confidential under this Agreement.

          (d)       DPC or its licensees and 3DP may disclose such Confidential
Information to government or other regulatory authorities to the extent that
such disclosure is reasonably necessary to obtain patents covering any 3DP
Compound, Derivative Compound or Product or authorizations to conduct clinical
trials with and to commercially market any Product.

          (e)       The existence and the terms and conditions of this
Agreement which the Parties have not specifically agreed to disclose pursuant to
this Section 6.2 shall be treated by each Party as Confidential Information of
the other Party.

          (f)       If a Party is required to make any disclosure of the other
Party's Confidential Information, it will give at least thirty (30) days
written, advance notice to the latter Party of such disclosure requirement. If a
Party is required to disclose Confidential Information to comply with applicable
laws or governmental regulations, including but not limited to submitting
information to tax authorities or to comply with any discovery or similar
request for production of documents in litigation or similar alternative dispute
resolution proceedings, such party may make such disclosure provided it gives
prompt notice to the other Party, and provided it makes all reasonable efforts
to comply with all administrative or other procedures or to establish a
reasonable protective or similar order under which the confidential nature of
the information will be maintained.

     6.3  Permitted Disclosures for Business Development Purposes.
Notwithstanding the foregoing, or any other provision in this Agreement to the
contrary, 3DP may describe the financial terms of this Agreement in confidence,
in connection with capital raising or financing activities, or in connection
with a potential acquisition of 3DP, provided however, that any such recipient
of such disclosure shall agree in writing to keep such terms confidential for
the same time periods and to the same extent as 3DP is required to keep
Confidential Information confidential under this Agreement. Furthermore, DPC
acknowledges that 3DP may be obligated to disclose terms of this Agreement and
make public a copy of this Agreement in the event it becomes a public company as
required by applicable U.S. law; provided however, that the terms and copy of
this Agreement shall be redacted such that the extent of any such disclosure
shall be limited to that which in the opinion of 3DP's legal counsel is legally
required to be disclosed.

Article 7. PATENTS AND INTELLECTUAL PROPERTY

     7.1  Title to Patents.

          (a)       Subject to the other provisions of this Agreement, all
                    Research Program Patents shall be owned by DPC, to the
                    extent that they claim: (1) Custom Accessible Libraries
                    synthesized by 3DP and based on SAR provided by DPC; (2)
                    Qualified Lead Compounds; (3) Active Compounds and (4)
                    Licensed Products. All other Research Program Patents shall
                    be individually or jointly owned, depending on the inventive
                    contributions of each Party. Inventorship will be determined
                    under U.S. patent law.

          (b)       In accordance with the grant of rights under this Agreement,
                    all employees and consultants who are inventors on any
                    patents arising

                                       13
<PAGE>

                    under work carried out under the Research Program shall
                    assign to such Party or Parties all inventions made by such
                    persons during the course of performing the Research
                    Program.

     7.2  Filing of Patent Applications and Expenses.

          (a)       DPC has the night but not the obligation to pursue and
                    maintain Research Program Patents that it owns, at its own
                    cost. 3DP has the right but not the obligation to pursue and
                    maintain Research Program Patents that it owns, at its own
                    cost.

          (b)       Where there is co-ownership of any Research Program Patents,
                    the Parties will decide who is in the best position to file
                    and pursue patent applications, and shall regularly provide
                    each other with copies of all filings and other material
                    submissions and correspondence with the patent offices, in
                    sufficient time to allow for review and comment.  The costs
                    of prosecuting and maintaining patent applications that are
                    jointly owned shall be shared equally by the Parties.

     7.3  Enforcement of Patents.

          (a)       If either Party considers that a Valid Claim of any of the
                    Research Program Patents claiming the manufacture, use or
                    sale of Active Compounds or Licensed Products is being
                    infringed by a Third Party, it shall notify the other Party
                    and provide it with any evidence of such infringement which
                    is reasonably available. DPC shall have the right but not
                    the obligation, at it own expense, to attempt to remove such
                    infringement by commercially appropriate steps, including a
                    lawsuit. If required by law, 3DP shall join such suit as a
                    party, at DPC's expense. In the event DPC fails to take
                    commercially appropriate steps with respect to such
                    infringement within six months following notice of such
                    infringement, 3DP shall have the night to do so at its
                    expense, provided that DPC shall not be required to enforce
                    such Research Program Patents against more than one entity
                    or in more than one country at any one time.

          (b)       Any amounts recovered by DPC pursuant to subsection (a),
                    above, whether by settlement or judgment shall be reported
                    as Net Sales for the purpose of calculating any applicable
                    royalties to 3DP, after deduction of DPC's reasonable
                    expenses in making such recovery. If 3DP enforces such
                    patents pursuant to subsection (a), then any amounts
                    recovered by 3DP shall be retained by 3DP.

          (c)       The Party not enforcing the Research Program Patents
                    pursuant to subsections (a) above, shall provide reasonable
                    assistance to the other Party, including providing access to
                    relevant documents and other evidence and making its
                    employees available, subject to the enforcing Party's
                    reimbursement of any out-of-pocket expenses incurred by the
                    other Party.

                                       14
<PAGE>

          (d)       If either Party considers that a Valid Claim of any of the
                    jointly owned Research Program Patents other than those
                    Research Program Patents covered by subsections (a) above,
                    is being infringed by a Third Party, it shall notify the
                    other Party and provide it with any evidence of such
                    infringement which is reasonably available. The Parties
                    agree to discuss in good faith the enforcement of any such
                    jointly owned Research Program Patents. If such Patents are
                    enforced by either Party, the Party not enforcing such
                    Research Program Patents shall provide reasonable assistance
                    to the other Party, including providing access to relevant
                    documents and other evidence and making its employees
                    available, subject to the enforcing Party's reimbursement of
                    any out-of-pocket expenses incurred by the other Party.

     7.4  Third Party Patent Rights.  If any warning letter or other notice of
infringement is received by a Party, or action, suit or proceeding is brought
against a Party alleging infringement of a patent of any Third Party in the
manufacture, use or sale of an Active Compound or Licensed Product or in the
conduct of the Research Program, the Parties shall promptly discuss and decide
the best way to respond.

Article 8. INDEMNIFICATION

     8.1  Indemnification by DPC. DPC shall indemnify, defend and hold 3DP and
its agents, employees and directors (the " 3DP Indemnitees") harmless from and
against any and all liability, damage, loss, cost or expense (including
reasonable attorneys' fees) arising out of Third Party claims or lawsuits
related to (a) DPC's performance of its obligations under this Agreement; or (b)
the manufacture, use or sale of Licensed Products by DPC and its Affiliates,
sublicensees, distributors and agents, except to the extent such claims or suits
result from the breach of any of the provisions of this Agreement, negligence or
willful misconduct of the 3DP Indemnitees. Upon the assertion of any such claim
or suit, the 3DP Indemnitees shall promptly notify DPC thereof and DPC shall
appoint counsel reasonably acceptable to the 3DP Indemnitees to represent the
3DP Indemnitees with respect to any claim or suit for which indemnification is
sought. The 3DP Indemnities shall not settle any such claim or suit without the
prior written consent of DPC, unless they shall have first waived their rights
to indemnification hereunder.

     8.2  Indemnification By 3DP.  3DP shall indemnify, defend and hold DPC and
its agents, employees and directors (the "DPC Indemnitees") harmless from and
against any and all liability, damage, loss, cost or expense (including
reasonable attorneys' fees) arising out of Third Party claims or lawsuits
related to 3DP's performance of its obligations under this Agreement, except to
the extent that such claims or suits result from the breach of any of the
provisions of this Agreement, negligence or willful misconduct of the DPC
Indemnitees. Upon the assertion of any such claim or suit, the DPC Indemnitees
shall promptly notify 3DP thereof and 3DP shall appoint counsel reasonably
acceptable to the 3DP Indemnitees to represent the DPC Indemnitees with respect
to any claim or suit for which indemnification is sought. The DPC Indemnitees
shall not settle any such claim or suit without the prior written consent of
3DP, unless they shall have first waived their rights to indemnification
hereunder.

Article 9. TERM AND TERMINATION

                                       15
<PAGE>

     9.1  Term.  This Agreement shall commence upon the Effective Date.  The
term of the Research Program shall expire on December 31, 2001 unless extended
as provided under Section 2.5.  This Agreement otherwise shall terminate upon
expiration of the last Research Program Patent owned by DPC that claims Active
Compounds or Licensed Products.

     9.2  Termination of the Research Program Without Cause.  DPC may terminate
the Research Program upon ninety (90) days advance written notice during the
initial or any extended term of the Research Program.  However, termination fees
may be due as provided in Section 4.3.

     9.3  Breach. The failure by a Party to comply with any of the material
obligations contained in this Agreement shall entitle the other Party to give
notice to have the default cured.  If such default is not cured within sixty
(60) days after the receipt of such notice, or diligent steps are not taken to
cure if by its nature such default could not be cured within sixty (60) days,
the notifying Party shall be entitled, without prejudice to any of its other
rights conferred on it by this Agreement, and in addition to any other remedies
that may be available to it, to terminate this Agreement, provided, however,
that such right to terminate shall be stayed in the event that, during such 60
day period, the Party alleged to have been in default shall have: (i) initiated
arbitration in accordance with Section 12. 1, below, with respect to the alleged
default, and (ii) diligently and in good faith cooperated in the prompt
resolution of such arbitration proceedings.

     9.4  No Waiver.  The right of a Party to terminate this Agreement, as
provided in Section 9.3, shall not be affected in any way by its waiver or
failure to take action with respect to any prior default.

     9.5  Insolvency or Bankruptcy.

          (a)       Either Party may, in addition to any other remedies
                    available by law or in equity, terminate this Agreement by
                    written notice to the other Party in the event the latter
                    Party shall have become insolvent or bankrupt, or shall have
                    an assignment for the benefit of its creditors, or there
                    shall have been appointed a trustee or receiver of the other
                    Party or for all or a substantial part of its property or
                    any case or proceeding shall have been commenced or other
                    action taken by or against the other Party in bankruptcy or
                    seeking reorganization, liquidation, dissolution, winding-
                    up, arrangement or readjustment of its debts or any other
                    relief under any bankruptcy, insolvency, reorganization or
                    other similar act or law of any jurisdiction now or
                    hereafter in effect, or there shall have been issued a
                    warrant of attachment, execution, distraint or similar
                    process against any substantial part of the property of the
                    other Party, and any such event shall have continued for 90
                    days undismissed, unbonded and undischarged.

          (b)       All rights and licenses granted under or pursuant to this
                    Agreement by DPC or 3DP are, and shall otherwise be deemed
                    to be, for purposes of-Section 365(n) of the U.S. Bankruptcy
                    Code, licenses of right to "Intellectual property" as
                    defined under Section 101 of the U.S. Bankruptcy Code.  The
                    Parties agree that the Parties as licensees of such

                                       16
<PAGE>

                    rights under this Agreement, shall retain and may fully
                    exercise all of their rights and elections under the U.S.
                    Bankruptcy Code. The Parties further agree that, in the
                    event of the commencement of a bankruptcy proceeding by or
                    against either Parties under the U.S. Bankruptcy Code, the
                    Parties hereto which is not a party to such proceeding shall
                    be entitled to a complete duplicate of (or complete access
                    to, as appropriate) any such intellectual property and all
                    embodiments of such intellectual property, and same, if not
                    already in their possession, shall be promptly delivered to
                    them (i) upon any such commencement of a bankruptcy
                    proceeding upon their written request therefor, unless the
                    Party subject to such proceedings elects to continue to
                    perform all of their obligations under this Agreement or
                    (ii) if not delivered under (i) above, upon the rejection of
                    this Agreement by or on behalf of the Party subject to such
                    proceeding upon written request therefor by a nonsubject
                    Party.

     9.6  Consequences of Termination.  Upon termination or expiration of the
Research Program portion of this Agreement, each Party shall promptly return all
records and materials relevant to the Research Program in its possession or
control containing the other Party's Confidential Information and to which the
former Party does not retain rights hereunder.  Upon termination of this
Agreement, all remaining records and materials in its possession or control
containing the other Party's Confidential Information and to which the former
Party does not retain rights hereunder shall promptly be returned.

     9.7  Survival of Obligations.  The termination or expiration of this
Agreement shall not relieve the Parties of any obligations accruing prior to
such termination, and any such termination shall be without prejudice to the
rights of either Party against the other. The provisions of Articles 4 - 8,
Sections 9.4, 9.6, 9.7 and Articles 12 and 13 shall survive any termination of
this Agreement.

Article 10. DEVELOPMENT, REGULATORY AND COMMERCIALIZATION RESPONSIBILITIES

     10.1 Development, Regulatory and Commercialization Responsibilities.  DPC
shall be responsible for all development, regulatory filings and related
submissions that are made in connection with the commercialization of Licensed
Products, and all commercialization activities with respect to Licensed
Products, and shall do so at DPC's sole discretion and expense.

Article 11. REPRESENTATIONS AND WARRANTIES

     11.1 Authority.  Each Party represents and warrants that it has the full
right, power and authority to execute, deliver and perform this Agreement.

     11.2 Commercially Reasonable Efforts.  DPC represents and warrants that it
will use good faith commercially reasonable and diligent efforts to develop and
to commercialize Active Compounds and Licensed Products, consistent with sound
business judgment.

     11.3 No Conflicts.  Each Party represents and warrants that the execution,
delivery and performance of this Agreement does not conflict with, or constitute
a breach or default under

                                       17
<PAGE>

any of its charter or organizational documents, any law, order, judgment or
governmental rule or regulation applicable to it, or any material agreement,
contract, commitment or instrument to which it is a party.

     11.4 No Existing Third Party Rights.  The Parties represent and warrant
that their obligations under this Agreement are not encumbered by any rights
granted by either Party to any Third Parties, which are or may be inconsistent
with the rights and licenses granted in this Agreement.

     11.5 Continuing Representations.  The representations and warranties of
each Party contained in this Article 11 shall survive the execution and delivery
of this Agreement and shall remain true and correct at all times during the term
of this Agreement with the same effect as if made on and as of such later date.

     11.6 No Warranty as to Commercial Success.  3DP offers no warranty that use
of the 3DP DirectedDiversity? Technology under this Agreement will result in the
discovery or the successful commercialization of a Licensed Product for use
against the Target in the Field.

Article 12. DISPUTE RESOLUTION

     12.1 Dispute Resolution.  Any dispute concerning or arising out of this
          ------------------
Agreement or concerning the existence or validity hereof, shall be determined by
the following procedure.

          (a)  Both Parties understand and appreciate that their long term
mutual interest will be best served by affecting a rapid and fair resolution of
any claims or disputes which may arise out of services performed under this
contract or from any dispute concerning the terms of this Agreement. Therefore,
both Parties agree to use their best efforts to resolve all such disputes as
rapidly as possible on a fair and equitable basis. Toward this end, both Parties
agree to develop and follow a process for presenting, rapidly assessing, and
settling claims on a fair and equitable basis which takes into account the
precise subject and nature of the dispute.

          (b)  If any dispute or claim arising under this Agreement cannot be
readily resolved by the Parties pursuant to the process described above, then
the Parties agree to refer the matter to a panel consisting of the Chief
Executive Officer ("CEO") of each Party or their designees for review and a non-
binding resolution.  A copy of the terms of this Agreement, agreed upon facts
(and areas of disagreement), and concise summary of the basis for each side's
contentions will be provided to both such CEOs or their designees who shall
review the same, confer, and attempt to reach a mutual resolution of the issue.

          (c)  If the matter has not been resolved utilizing the foregoing
process, and the Parties are unwilling to accept the non-binding decision of the
indicated panel, either or both Parties may elect to pursue definitive
resolution through binding arbitration, which the Parties agree to accept in
lieu of litigation or other legally available remedies (with the exception of
injunctive relief where such relief is necessary to protect a Party from
irreparable harm pending the outcome of any such arbitration proceeding).
Binding arbitration shall be settled in accordance with the Rules of
Conciliation and Arbitration of the International Chamber of Commerce by a panel
of three arbitrators chosen in accordance with these Rules.  This Agreement
shall be governed by and construed in accordance with the substantive laws of
the

                                       18
<PAGE>

State of Delaware without regard to the conflicts of laws provisions of
Delaware. The arbitration will be held in Wilmington, Delaware. Judgment upon
the award rendered may be entered in any court having jurisdiction and the
Parties hereby consent to the said jurisdiction and venue, and further
irrevocably waive any objection which either Party may have now or hereafter to
the laying of venue of any proceedings in said courts and to any claim that such
proceedings have been brought in an inconvenient forum, and further irrevocably
agree that a judgment or order in any such proceeding shall be conclusive and
binding upon the Parties and may be enforced in the courts of any other
jurisdiction.

Article 13. MISCELLANEOUS PROVISIONS

     13.1 Entire Agreement of the Parties.  This Agreement and its Appendices
constitute and contain the entire understanding and agreement of the Parties
respecting the subject matter of this Agreement and cancels and supersedes any
all prior negotiations, correspondence, understandings and agreements between
the Parties, whether oral or written, regarding such subject matter.

     13.2 Further Actions.  Each Party agrees to execute, acknowledge and
deliver such further instruments and to do all such other acts as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.

     13.3 Binding Effect.  This Agreement and the rights granted herein shall be
binding upon and shall inure to the benefit of 3DP, DPC and their successors and
permitted assigns.

     13.4 Assignment.  This Agreement may be assigned by either Party in
connection with the sale or transfer of substantially all of its assets that
relate to this Agreement, or in the event of its merger or consolidation or
change of control or similar transaction.  Any permitted assignee shall assume
all obligations of its assignor under this Agreement.  If 3DP acquires, is
acquired by, merges with or otherwise combines with a company that has
substantial activities in the Field and is a significant competitor of DPC, DPC
may require 3DP to take reasonable actions necessary to ensure that any of DPC's
Confidential Information, trade secrets or proprietary information is not
disclosed to personnel within such company directly involved in such competitive
activities.

     13.5 No Implied Licenses.  No rights to any Patents, know-how or technical
information, or other intellectual property rights, other than as explicitly
identified herein, are granted or deemed granted by this Agreement.  No right,
expressed or implied, is granted by this Agreement to a Party to use in any
manner the name or any other trade name or trademark of the other Party in
connection with the performance of this Agreement.

     13.6 No Waiver.  No waiver, modification or amendment of any provision of
this Agreement shall be valid or effective unless made in writing and signed by
a duly authorized officer of each Party.  The failure of either Party to assert
a right hereunder or to insist upon compliance with any term or condition of
this Agreement shall not constitute a waiver of that right or excuse a similar
subsequent failure to perform any such term or condition.

     13.7 Force Majeure.  The failure of a Party to perform any obligation under
this Agreement by reason of acts of God, acts of governments, riots, wars,
strikes, accidents or

                                       19
<PAGE>

deficiencies in materials or transportation or other causes of a similar
magnitude beyond its control shall not be deemed to be a breach of this
Agreement.

     13.8 Independent Contractors.  Both Parties are independent contractors
under this Agreement.  Nothing contained in this Agreement is intended nor is to
be construed so as to constitute 3DP or DPC as partners or joint venturers with
respect to this Agreement.  Neither Party shall have any express or implied
right or authority to assume or create any obligations on behalf of or in the
name of the other Party or to bind the other Party to any other contract,
agreement, or undertaking with any Third Party.

     13.9 Notices and Deliveries.  Any formal notices, request, delivery,
approval or consent required or permitted to be given under this Agreement shall
be in writing and shall be deemed to have been sufficiently given when it is
received, whether delivered in person, transmitted by facsimile with
contemporaneous confirmation, or delivery by registered letter (or its
equivalent) or delivery by certified overnight courier service, to the Party to
which it is directed at its address shown below or such other address as such
Party shall have last given by notice to the other Parties.

                         If to DPC:


                         Vice President, Product Planning and Acquisitions
                         DuPont Pharmaceuticals Company
                         974 Centre Road, Chestnut Run Plaza
                         Wilmington, DE 19805
                         Fax: 302-992-3040

                         with a copy to:
                         Associate General Counsel
                         Legal Division
                         DuPont Pharmaceuticals Company
                         974 Centre Road, Chestnut Run Plaza, WR1028 Wilmington,
                         DE 19805
                         Fax: 302-992-3999

                         If to 3DP:

                         3-Dimensional Pharmaceuticals, Inc.
                         Eagleview Corporate Center
                         665 Stockton Drive, Suite 104
                         Exton, PA 10341

                         ATTN: Chief Executive Officer with a copy to:

                                       20
<PAGE>

                         Morgan, Lewis & Bockius LLP
                         1701 Market Street
                         Philadelphia, PA 19103

                         ATTN: David R. King, Esq.

     13.10     Public Announcements.  The Parties shall consult with each other
and reach mutual written agreement before making any public announcement
concerning this Agreement or its subject matter. A joint press release to
announce the signing of this Agreement is attached as Appendix B to this
                                                      ----------
Agreement, and the Parties agrees to coordinate the dissemination of this press
release. Notwithstanding the foregoing, the Parties may disclose the existence
and general nature of this Agreement and may make disclosures for purposes of
satisfying legal and regulatory requirements in accordance with Article 6;
however, neither Party shall use the name of the other Party for promotional
purposes.

     13.11     Headings.  The captions to the sections and articles in this
Agreement are not a part of this Agreement, and are included merely for
convenience of reference only and shall not affect its meaning or
interpretation.

     13.12     Severability.  If any provision of this Agreement becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
provision, so long as the Agreement, taking into account said voided
provision(s), continues to provide the Parties with the same practical economic
benefits as the Agreement containing said voided provision(s) did on the date of
this Agreement.   If, after taking into account said voided provision(s), the
Parties are unable to realize the practical economic benefit contemplated on the
date of this Agreement, the Parties shall negotiate in good faith to amend this
Agreement to reestablish the practical economic benefit provided the Parties on
the date of this Agreement.

     13.13     No Consequential Damages.  IN NO EVENT SHALL EITHER PARTY OR ANY
OF ITS RESPECTIVE AFFILIATES BE LIABLE TO THE OTHER PARTY OR ANY OF ITS
AFFILIATES FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER
IN CONTRACT, WARRANTY, TORT, NEGLIGENCE, STRICT LIABILITY OR OTHER WISE,
INCLUDING, BUT NOT LIMITED TO, LOSS OF PROFITS OR REVENUE, OR CLAIMS OF
CUSTOMERS OF ANY OF THEM OR OTHER THIRD PARTIES FOR SUCH OR OTHER DAMAGES.

     13.14     Applicable Law.  This Agreement shall be governed by and
interpreted in accordance with the laws of the State of Delaware without
reference to its conflicts of laws provisions.

     13.15     Advice of Counsel.  DPC and 3DP have each consulted with counsel
of their choice regarding this Agreement, and each acknowledges and agrees that
this Agreement shall not be deemed to have been drafted by one party or another
and will be construed accordingly.

     13.16     Counterparts.  This Agreement may be executed in counterparts, or
facsimile versions, each of which shall be deemed to be an original, and both of
which together shall be deemed to be one and the same agreement.

                                       21
<PAGE>

     IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
by their respective duly authorized officers as of the day and year first above
written, each copy of which shall for all purposes be deemed to be an original.


<TABLE>
<CAPTION>
3 DIMENSIONAL                              DUPONT PHARMACEUTICALS
PHARMACEUTICALS, INC.                      COMPANY
<S>                                        <C>

By: /s/  David C. U'Prichard               By: /s/ Paul A. Friedman, M.D.
   ------------------------------             ---------------------------
Name:  David C. U'Prichard, Ph.D.          Name:   Paul A. Friedman, M.D.

Title:  Chief Executive Officer            Title:  President, DuPont Pharmaceuticals
                                                   Research Laboratories
</TABLE>

                                       22
<PAGE>

Appendix A [**]












**This page and the next two pages of this Exhibit have been omitted based
upon a request for confidential treatment that has been filed with the
Commission. The omitted pages have been filed separately with the Commission.


<PAGE>

                       Appendix B - Joint Press Release


FOR IMMEDIATE RELEASE

For 3DP, Contact:                               For DuPont, Contact:
--------------------------------------------------------------------------------

Business
Michael J. Wassil                               Thomas R. Barry
Chief Financial Officer                         302-992-5020
610-458-6073

Media
Jerry Parrott
Jerry Parrott & Associates
703-757-0950

                   DuPont and 3-Dimensional Pharmaceuticals
                     Announce Drug Discovery Collaboration

  - DuPont also Licenses 3DP's DirectedDiversity(R) Drug Discovery Patents -


Exton, PA and Wilmington, DE - February XX, 2000 - DuPont Pharmaceuticals
Company, a wholly-owned independent subsidiary of DuPont (NYSE: DD), and 3-
Dimensional Pharmaceuticals, Inc. (3DP) today announced a strategic
collaboration in which 3DP will use its proprietary DirectedDiversity(R)
technology to assist DuPont Pharmaceuticals in the discovery of innovative new
drugs for specific biological targets.

3DP will apply its iterative drug discovery process to generate custom
combinatorial chemistry libraries based on molecules and information provided by
DuPont Pharmaceuticals and will optimize those molecules into preclinical drug
candidates. DuPont Pharmaceuticals will be responsible for preclinical and
clinical development, marketing and sales of the resulting products.

For the initial target, 3DP will receive payments of up to $9 million, including
an up-front technology access fee, research and development funding and
milestone payments. 3DP will also receive royalties on sales of resulting
products and will be eligible to receive additional payments if more than one
target is selected to be included in the collaboration.

The parties also announced an additional agreement in which DuPont
Pharmaceuticals will obtain a nonexclusive license to 3DP's proprietary
DirectedDiversity drug discovery patents. Under
<PAGE>

the license agreement, DuPont Pharmaceuticals will receive a non-exclusive
license to 3DP's DirectedDiversity patents in support of DuPont Pharmaceuticals
internal research programs, and will pay an annual Site License fee for each
DuPont Pharmaceuticals facility using the technology,

"DuPont Pharmaceuticals is committed to aggressive exploration and use of
leading-edge discovery technologies to speed the process of research and
development and to improve the quality of new drugs entering clinical trials,"
said Paul Friedman, M.D., President of DuPont Pharmaceuticals Research
Laboratories.

David C. U'Prichard, Ph.D., Chief Executive Officer of 3-Dimensional
Pharmaceuticals, noted that 3DP's technology platform allows the company to
discover and refine drugs against a wide range of molecular targets more quickly
than conventional approaches. "DuPont is one of the great pioneering research
based companies, and we are particularly pleased with this important recognition
of 3DP's proprietary DirectedDiversity drug discovery process.  Our scientists
look forward with great anticipation to working with their colleagues at DuPont
Pharmaceuticals," he said. "We are confident that the collaboration we are
announcing today will prove productive for both parties."

DirectedDiversity(R) Chemi-Informatic Technology uses proprietary computer
algorithms to design, select and iteratively refine combinatorial libraries of
novel, small-molecule drugs based on screening "hits" obtained from 3DP or other
screening libraries, target-protein 3D structures, or pharmacophore models
derived from lead compounds.

To prime the discovery process, 3DP has synthesized DirectedDiversity(R)
Screening Libraries totaling more than 200,000 individually synthesized drug-
like compounds. These compounds represent proven pharmacophore classes and
constitute an optimally diverse sampling of the DirectedDiversity(R) Accessible
Compound Libraries, which now total more than 1.5 billion compounds, each of
which is available for on-demand synthesis using parallel synthesis technology.

DirectedDiversity(R) is a major component of 3DP's DiscoverWorks(TM), which
provides a uniquely integrated platform for the high-throughput synthesis,
screening, and optimization of chemical compounds. DiscoverWorks(TM) can be
applied flexibly to a wide range of molecular targets
<PAGE>

identified through genome sequencing efforts -even in situations where the
target's biological function is ambiguous or unknown. DiscoverWorks(R) enhances
the efficiency of conventional drug discovery, making the process more rapid and
reliable.

Earlier this year, 30P received the fourth in a series of patents covering its
DirectedDiversity(R) process.  DirectedDiversity(R) controls and manages the
overall information flow for combinatorial drug discovery and provides the
computational tools needed to optimize drug properties rapidly using parallel
automated chemical synthesis. 3DP has a flexible licensing program available to
those companies interested in obtaining licenses to its DirectedDiversity(R)
patent portfolio.

Based in Wilmington, Delaware, DuPont Pharmaceuticals is a worldwide business
that focuses on research, development and delivery of pharmaceuticals to treat
unmet medical needs in the fight against HIV, cardiovascular disease, central
nervous system disorders, cancer and inflammatory diseases.  The company also is
a leader in medical imaging.

DuPont is a science company, delivering science-based solutions that make a
difference in people's lives in food and nutrition, health care, apparel, home
and construction, electronics, and transportation.  Founded in 1802, the company
operates in 65 countries and has 97,000 employees.

3-Dimensional Pharmaceuticals, Inc. (http://www.3dp.com) is a leading innovator
in drug discovery.   The company has developed a proprietary technology platform
known as DiscoverWorks, which uniquely integrates structure-based drug design,
combinatorial chemistry and high-throughput screening.  DiscoverWorks reduces
discovery costs, increases the rate of success and enhances the ultimate
commercial value of a drug development pipeline.  3DP is using its proprietary
technology both in collaboration with other companies and in its own research
programs, which currently target orally active small-molecule pharmaceuticals to
treat cardiovascular disease and cancer.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.21
<SEQUENCE>12
<FILENAME>0012.txt
<DESCRIPTION>NONEXCLUSIVE PATENT LICENSE AGREEMENT
<TEXT>

<PAGE>

                                                                   EXHIBIT 10.21

                     NONEXCLUSIVE PATENT LICENSE AGREEMENT

This Nonexclusive Patent License Agreement is made and effective as of February
11, 2000 (the "Effective Date"), by and between 3-Dimensional Pharmaceuticals,
Inc., a corporation having its principal place of business at Eagleview
Corporate Center, 665 Stockton Drive, Suite 104, Exton, PA 19341 ("3DP"), and
DuPont Pharmaceuticals Company (a wholly-owned subsidiary of E. I. DuPont de
Nemours & Co. ("DuPont")) having its principal place of business at Centre Road,
Chestnut Run Plaza, Building 721, Wilmington DE 19880 ("DPC"). 3DP and DPC may
be referred to herein as a "Party" or, collectively, as the "Parties".

WHEREAS, 3DP has developed and patented certain DirectedDiversity(R) technology
for generating chemical compounds having desired biological, chemical and other
properties;

WHEREAS, DPC is engaged in research and development of biologically active
compounds for the treatment of human disease;

WHEREAS, DPC wishes to license certain patent rights from 3DP on a nonexclusive
basis;

WHEREAS, the parties desire to enter into this Agreement to set forth the
licensing terms for such rights;

NOW, THEREFORE, in consideration of the various promises and undertakings set
forth herein, and intending to be legally bound, the Parties agree as follows:


Article 1  DEFINITIONS

The terms in this Agreement with initial letters capitalized, whether used in
the singular or the plural, shall have the meaning set forth below or, if not
listed below, the meaning designated in places throughout this Agreement.

     1.1  "Affiliate" means any corporation or other business entity which
          controls, is controlled by, or is under common control with 3DP or
          DPC. A corporation or other entity shall be regarded as in control of
          another corporation or entity if it owns or directly or indirectly
          controls at least 50% of the voting stock or other ownership interest
          of the other corporation or entity (or alternatively, if it owns the
          maximum such ownership interest permitted by law), or if it possesses,
          directly or indirectly, the power to direct or cause the direction of
          the management and policies of the corporation or other entity or the
          power to elect or appoint at least 50% of the members of the governing
          body of the corporation or other entity.

     1.2  "Agreement" means the present agreement including its Appendices.
<PAGE>

     1.3  "Confidential Information" means all information that has or could
          have commercial value or other utility in a Party's business, or the
          unauthorized disclosure of which could be detrimental to the Party's
          interests, including confidential information, inventions, know-how,
          data and materials relating to the Licensed Patents, and shall include
          without limitation research, technical, clinical development,
          manufacturing, marketing, financial, personnel and other business
          information and plans, whether in oral, written, graphic or electronic
          form.

     1.4  "DPC" means DuPont Pharmaceuticals Company as identified above.

     1.5  "DPC Site" means a Site which is a DPC Site or a Site of a DPC
          Affiliate which is involved in pharmaceutical (including diagnostic
          imaging) research and development.

     1.6  "DuPont" means E. I. DuPont de Nemours & Co. as identified above.

     1.7  "Effective Date" means the effective date of this Agreement as set
          forth above.

     1.8  "Field" means the research and development of chemical materials for
          use in pharmaceutical and diagnostic products. With respect to the
          Other DuPont Site described in Section 3.3, the Parties shall agree to
          the applicable definition of Field.

     1.9  "Improvements" means any inventions, discoveries, improvements or
          enhancements, whether or not patented or patentable, relating to the
          subject matter claimed in the Licensed Patents.

     1.10 "Licensed Patents" means all U.S. and foreign patent applications or
          issued patents identified in Appendix A, and any U.S. and foreign
                                       ----------
          patent applications or issued patents claiming Improvements made by
          3DP in respect thereof, including any provisionals, divisionals,
          continuations, continuations-in-part, reissues and extensions derived
          therefrom, such as patent term restorations, supplementary protection
          certificates, etc., to the foregoing that may be filed by or granted
          to 3DP during the term of this Agreement.

     1.11 "Other DuPont Site" means a Site which is a DuPont Site or a Site of a
          DuPont Affiliate which is not a DPC Site and is not involved in
          pharmaceutical (including diagnostic imaging) research and
          development.

     1.12 "Site" means a discrete research facility, for example, a building or
          building complex at which DPC or an Affiliate of DPC conducts internal
          research and development activities, in a geographic location distinct
          from other research facilities of DPC or an Affiliate of DPC.

     1.13 "Site License Fee" shall have the meaning set forth in Section 3.2
          below.

                                       2
<PAGE>

     1.14 "Third Party" means an individual, corporation or other entity other
          than the Parties and their Affiliates.

     1.15 "3DP" means 3-Dimensional Pharmaceuticals, Inc. as identified above.

Article 2  GRANT OF LICENSE

     2.1  Nonexclusive Patent License. 3DP hereby grants DPC (and its
          ---------------------------
          Affiliates, but only to the extent specifically permitted herein) a
          nonexclusive license, without any right to sublicense, under the
          Licensed Patents in the Field but only in Direct Support of DPC's (or
          its Affiliate's as permitted herein) internal and collaborative
          research and development activities. As used herein, "Direct Support"
          means that DPC (or its Affiliates as permitted herein) may operate
          under the Licensed Patents to identify compounds with activity against
          targets that have been selected through DPC's (or its Affiliate's as
          permitted herein) internal research and development programs or to
          identify compounds for which DPC (or its Affiliates as permitted
          herein) will pay for a share of the development costs or receives at
          least a 10% royalty (or equivalent revenue share) or has any rights of
          commercialization. In accordance with the foregoing, it is
          acknowledged and understood that DPC and its Affiliates are not
          permitted under the license granted herein to compete with 3DP by
          providing combinatorial chemistry services to third parties on a fee-
          for-service basis.

          The rights granted hereunder may be extended by DPC to one (1) Other
          DuPont Site, provided that in such event DuPont or its Affiliate shall
          be bound in the same way as DPC with respect to all the terms and
          conditions of this Agreement. In such event DuPont (or its Affiliate
          as permitted herein) shall have a nonexclusive license, without any
          right to sublicense, under the Licensed Patents in the Field but only
          in Direct Support of DuPont's (or its Affiliate's as permitted herein)
          internal and collaborative research and development activities. As
          used in this paragraph, "Direct Support" means that DuPont (or its
          Affiliate as permitted herein) may operate under the Licensed Patents
          to identify compounds with activity against targets that have been
          selected through DuPont's (or its Affiliate's as permitted herein)
          internal research and development programs or to identify compounds
          for which DuPont (or its Affiliate as permitted herein) will pay for a
          share of the development costs or receives at least a 10% royalty (or
          equivalent revenue share) or has any rights of commercialization.

     2.2  Limitations on License Grant. Except as permitted under Section 2.1,
          ----------------------------
          DPC (and any of its Affiliates, to the extent permitted below) may not
          operate under the Licensed Patents on behalf of any Third Parties such
          as, for example, in connection with providing research or development
          services to any Third Party on a contractual basis. The foregoing
          license

                                       3
<PAGE>

          grant is further limited to on-site activities at one or more actual
          DPC Sites, and does not include or permit off-site or remote access
          through the internet or otherwise. In addition, the foregoing license
          does not permit activities by DPC or DuPont or their Affiliates under
          this Agreement that are covered by that certain Collaborative Research
          and License Agreement, effective on October 12, 1998, between 3DP and
          E. I. DuPont de Nemours & Co.

     2.3  Term and Renewal. The initial term of this Agreement shall expire on
          ----------------
          April 1, 2000. However, this Agreement may be renewed by DPC on an
          annual basis by payment of the Site License Fees as set forth in
          Section 3.2.

     2.4  Non-Assertion. During the term of this Agreement and so long as DPC
          -------------
          has not committed any material breach with respect to any obligation
          hereunder, 3DP will not assert any patent or patent application
          against DPC to prevent DPC from practicing the rights granted to DPC
          under Article 2 hereof.

Article 3  FINANCIAL TERMS

     3.1  License Fee. In consideration of the grant of rights under Article 2
          -----------
          of this Agreement, DPC agrees to pay an initial nonrefundable license
          fee of [**] within thirty (30) days of the Effective Date of this
          Agreement. This initial license fee shall be creditable against the
          first annual Site License Fee payable in accordance with Section 3.2.

     3.2  Individual Site License Fees. DPC shall pay a DPC Site License Fee
          ----------------------------
          of [**] (to which the [**] initial license fee paid under Section
          3.1 is a credit) when a DPC Site is activated by DPC. For purposes
          of this Agreement, the term "activate a DPC Site" shall mean that
          DPC desires to operate under the license at a DPC Site. If DPC does
          not first activate a DPC Site by April 1, 2000, DPC will pay 3DP a
          second nonrefundable license fee of [**] on that date, that is also
          creditable to the first DPC Site License Fee of [**], and DPC will
          then have until July 1, 2000 to first activate a DPC Site. If DPC
          does not first activate a DPC Site by July 1, 2000, the license
          granted hereunder shall automatically terminate. The date DPC
          activates a DPC Site shall be the "Site Activation Date" for such
          Site.

          Should DPC choose to extend the license to additional DPC Sites, DPC
          will pay an annual DPC Site License Fee of [**] for a total of [**]
          DPC Sites, and [**] for a total of [**] DPC Sites. Such DPC Sites
          may include [**] as set forth in Section 3.3 below. At such time
          that DPC has activated [**] (and DPC is paying an annual DPC Site
          License Fee of [**]), additional DPC Sites may be activated at [**].
          At such time that DPC activates a DPC Site, DPC shall identify such
          Site to 3DP and the Site Activation Date for such Site. These Site
          License Fees are due when DPC commences operations under the
          Licensed Patents at any Site (i.e., upon the Site Activation Date)
          and DPC shall pay to 3DP an annual Site License Fee for each Site
          for each year DPC desires to maintain the license at such Site,
          which Site License Fee shall be payable on the anniversary of the
          Site Activation Date in accordance with the annual invoice to be
          sent by 3DP to DPC. Until such time as DPC is operating under the
          Licensed Patents at [**] DPC Sites, DPC may not transfer a Site
          License from one DPC Site to another DPC Site more than once per
          year, except in the case where DPC is permanently discontinuing
          operations at the DPC Site.

     3.3  Location of DPC Sites. The location(s) of the DPC Site(s) may include
          ---------------------
          the Wilmington Experimental Station, to the extent that DPC conducts
          research and development activities there, and other DPC Sites to be
          determined at DPC's sole discretion. Notwithstanding the foregoing,
          DPC may permit one (1) Other DuPont Site to operate under the Licensed
          Patents subject to the approval of 3DP, such approval not to be
          unreasonably withheld. Once approved, DPC may not transfer the license
          to another Other DuPont Site without the approval of 3DP, such
          approval not to be unreasonably withheld. Any such Other DuPont Site
          shall be considered to be a DPC Site for the purpose of determining
          License Fees, and operations under the Licensed Patents at any such
          Site shall be subject to all of the other terms and conditions of this
          Agreement.

     3.4  Mode of Payment. All license payments to 3DP hereunder shall be made
          ---------------
          by wire transfer of United States Dollars in the requisite amount to
          such bank account as 3DP may designate by notice to DPC. Payments
          shall be free and clear of any taxes, fees or charges, to the extent
          applicable.



**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       4
<PAGE>


     3.5  Most Favored Licensee Provision.  If 3DP grants substantially
          -------------------------------
          similar license rights in the Field as described herein to a Third
          Party after the Effective Date of this Agreement on more favorable
          financial terms to the Third Party than applicable to DPC hereunder,
          then 3DP agrees to apply those more favorable financial terms under
          this license to DPC thereafter. 3DP shall promptly notify DPC in
          writing if it has executed or does execute any license with a Third
          Party of substantially similar license rights as described herein
          containing financial terms which are more favorable to the Third Party
          than the financial terms applicable to DPC under this Agreement. For
          purposes of this Section 3.5, "substantially similar license rights"
          does not include a nonexclusive grant of license rights under the
          Licensed Patents where such grant is (i) solely during the term of a
          specified research and development collaboration and (ii) solely for
          use in support of the specified research and development collaboration
          or for use in connection with specified targets or a limited
          therapeutic class.

          Upon the written request of DPC and not more than once in each
          calendar year, 3DP shall permit an independent certified public
          accounting firm of nationally recognized standing selected by DPC and
          acceptable to 3DP (which acceptance by 3DP shall not be unreasonably
          withheld), at DPC's expense, to have access during normal business
          hours to such records of 3DP as may be reasonably necessary to verify
          3DP's compliance with the provisions of this Section 3.5. The
          accounting firm shall enter into an acceptable and customary
          confidentiality agreement with 3DP obligating the accounting firm to
          retain in confidence all information of 3DP which it obtains in
          performing such audits hereunder, and such audit shall be subject to
          3DP's third party confidentiality obligations. Such accounting firm
          shall report to DPC and 3DP whether or not 3DP is in compliance with
          this Section 3.5. If 3DP is not in compliance with this Section 3.5,
          such accounting firm shall disclose the financial terms of the Third
          Party license which contains more favorable financial terms than those
          applicable to DPC hereunder. In no event shall such accounting firm
          disclose the identity of the Third Party with whom 3DP has entered
          into a license.


     3.6  License for Use in Support of Combichem Collaborators. In 1999,
          -----------------------------------------------------
          DuPont acquired CombiChem, Inc., which is now an Affiliate of DPC. In
          the event that DPC desires to operate under the Licensed Patents for
          the benefit of a Third Party that entered into a collaborative
          research agreement with CombiChem, Inc. prior to the Effective Date
          (a "CCHM Collaborator") and such activity is not permitted under the
          grant of rights under Article 2 hereof, then upon request by DPC, 3DP
          shall grant to DPC a nonexclusive license, without any right to
          sublicense, under the Licensed Patents in the Field to permit DPC to
          operate under the Licensed Patents at a DPC Site for the benefit of
          such CCHM Collaborator. In consideration of each such grant of rights
          to DPC, DPC shall pay to 3DP an annual license fee of [**] for each
          year DPC desires to operate under the Licensed Patents for the benefit
          of each such CCHM Collaborator. Each such annual fee shall be payable
          within 30 days of the grant of the applicable license and (to the
          extent the license is desired by DPC to be continued) within 30 days
          of the anniversary date of the grant of such license. DPC shall be
          limited under this Section 3.6 to a maximum of [**] such CCHM
          Collaborators, and shall identify such CCHM Collaborators to 3DP in
          advance.


**Certain portions of this Exhibit have been ommitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       5
<PAGE>



Article 4  OBLIGATIONS OF DPC

     4.1  Annual Reports. DPC shall provide 3DP with written annual reports
          --------------
          within sixty (60) days after the end of each calendar year during the
          term of this Agreement to identify the DPC (or Affiliate's) Sites that
          are operating under the Licensed Patents.

Article 5  CONFIDENTIALITY

     5.1  Confidentiality Obligations. The Parties agree that, for the term of
          ---------------------------
          this Agreement and for ten (10) years thereafter, either Party that
          receives Confidential Information (a "Receiving Party") from the other
          Party (a "Disclosing Party") shall keep completely confidential and
          shall not publish or otherwise disclose and shall not use for any
          purpose (except as expressly permitted hereunder) any Confidential
          Information furnished to it by the "Disclosing Party" pursuant to this
          Agreement (including without limitation, know-how), except to the
          extent that it can be established by the Receiving Party that such
          Confidential Information:

          (a)  was already known to the Receiving Party, other than under an
               obligation of confidentiality from the Disclosing Party;

          (b)  was generally available to the public or otherwise part of the
               public domain at the time of its disclosure to the Receiving
               Party;

          (c)  became generally available to the public or otherwise part of the
               public domain after its disclosure and other than through any act
               or omission of the Receiving Party in breach of this Agreement;

          (d)  was subsequently lawfully disclosed to the Receiving Party by a
               Third Party;

          (e)  can be shown by written records to have been independently
               developed by the Receiving Party without reference to the
               Confidential Information received from the Disclosing Party and
               without breach of any of the provisions of this Agreement; or


**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       6
<PAGE>

          (f)  the disclosing party has specifically agreed in writing that the
               receiving party may disclose.

          The obligations of confidentiality and non-use set forth in this
          Section 6.1 shall also apply to biological material and chemical
          compounds and associated information (including without limitation
          know-how) disclosed by one Party to the other prior to or during the
          term of this Agreement; provided however, that such obligation of
          confidentiality and non-use shall not apply with respect to compounds
          which are assigned to DPC or exclusively licensed to DPC by 3DP.

     5.2  Written Assurances and Permitted Uses of Confidential Information.

          (a)  The Receiving Party may disclose Confidential Information to the
               extent the Receiving Party is compelled to disclose such
               information by a court or other tribunal of competent
               jurisdiction, provided however, that in such case the Receiving
               Party shall immediately give notice to the Disclosing Party so
               that the Disclosing Party may seek a protective order or other
               remedy from said court or tribunal. In any event, the Receiving
               Party shall disclose only that portion of the Confidential
               Information that, in the opinion of its legal counsel, is legally
               required to be disclosed and will exercise reasonable efforts to
               ensure that any such information so disclosed will be accorded
               confidential treatment by said court or tribunal.

          (b)  To the extent it is reasonably necessary or appropriate to
               fulfill its obligations and exercising its rights under this
               Agreement, the Parties may disclose Confidential Information to
               their Affiliates on a need-to-know basis on condition that such
               Affiliates agree to keep the Confidential Information
               confidential for the same time periods and to the same "extent as
               the Party is required to keep the Confidential Information
               confidential under this Agreement.

          (c)  The existence and the terms and conditions of this Agreement
               which the Parties have not specifically agreed to disclose
               pursuant to this Section 5.2 shall be treated by each Party as
               Confidential Information of the other Party.

          (d)  If a Party is required to make any disclosure of the other
               Party's Confidential Information, it will give at least thirty
               (30) days written, advance notice to the latter Party of such
               disclosure requirement. If a Party is required to disclose
               Confidential Information to comply with applicable laws or
               governmental regulations, including but not limited to submitting
               information to tax authorities or to comply with any discovery or
               similar request for production of documents in litigation or
               similar alternative

                                       7
<PAGE>

               dispute resolution proceedings, such party may make such
               disclosure provided it gives prompt notice to the other Party,
               and provided it makes all reasonable efforts to comply with all
               administrative or other procedures or to establish a reasonable
               protective or similar order under which the confidential nature
               of the information will be maintained.

     5.3  Permitted Disclosures for Business Development Purposes.
          -------------------------------------------------------
          Notwithstanding the foregoing, or any other provision in this
          Agreement to the contrary, 3DP may describe the financial terms of
          this Agreement in confidence, in connection with capital raising or
          financing activities, provided however, that any such recipient of
          such disclosure shall agree in writing to keep such terms confidential
          for the same time periods and to the same extent as 3DP is required to
          keep Confidential Information confidential under this Agreement.
          Furthermore, DPC acknowledges that 3DP may be obligated to disclose
          terms of this Agreement and make public a copy of this Agreement in
          the event it becomes a public company as required by applicable U.S.
          law; provided however, that the terms and copy of this Agreement shall
          be redacted such that the extent of any such disclosure shall be
          limited to that which in the opinion of 3DP's legal counsel is legally
          required to be disclosed.

Article 6  PATENTS AND INFRINGEMENT

     6.1  Licensed Patents. 3DP shall prepare, file, prosecute and maintain the
          ----------------
          Licensed Patents at 3DP's expense and in a manner deemed appropriate
          in 3DP's sole judgment.  3DP agrees to keep DPC fully advised of the
          status of all Licensed Patents, upon reasonable written request from
          DPC.

     6.2  Infringement of the Licensed Patents by Third Parties. In the event
          -----------------------------------------------------
          that DPC becomes aware of any infringement by Third Parties of any of
          the Licensed Patents, subject to any confidentiality obligations DPC
          may have, DPC shall promptly notify 3DP. 3DP shall respond to any such
          infringement by Third Parties in a manner deemed appropriate by 3DP in
          its sole judgment.

     6.3  Third Party Patent Rights.  If any warning letter or other notice of
          -------------------------
          infringement is received by a Party, or action, suit or proceeding is
          brought against a Party alleging infringement of a patent of any Third
          Party with respect to operations under the Licensed Patents, the
          Parties shall promptly discuss and decide the best way to respond.

Article 7  REPRESENTATIONS AND WARRANTIES

     7.1  Authority. Each Party represents and warrants that it has the full
          ---------
          right, power and authority to execute, deliver and perform its
          obligations pursuant to this Agreement.

                                       8
<PAGE>

     7.2  No Conflicts.  Each Party represents and warrants that the execution,
          ------------
          delivery and performance of this Agreement does not conflict with, or
          constitute a breach or default under any of its charter or
          organizational documents, any law, order, judgment or governmental
          rule or regulation applicable to it, or any material agreement,
          contract, commitment or instrument to which it is a party.

     7.3  No Existing Third Party Rights. The Parties represent and warrant that
          ------------------------------
          their obligations under this Agreement are not encumbered by any
          rights granted by either Party to any Third Parties, which are or may
          be inconsistent with the rights and licenses granted in this
          Agreement.

     7.4  No Unauthorized Operations Under Licensed Patents.  DPC represents and
          -------------------------------------------------
          warrants that it will not operate under the Licensed Patents at any
          Site not identified to 3DP pursuant to Article 3 of this Agreement.

     7.5  Continuing Representations. The representations and warranties of each
          --------------------------
          Party contained in this Article 7 shall survive the execution and
          delivery of this Agreement and shall remain true and correct at all
          times during the term of this Agreement with the same effect as if
          made on and as of such later date.

     7.6  Disclaimer of Warranties.  3DP MAKES NO REPRESENTATIONS AND EXTENDS NO
          ------------------------
          WARRANTIES OR CONDITIONS OF ANY KIND, EITHER EXPRESS OR IMPLIED, WITH
          RESPECT TO THE LICENSED PATENTS INCLUDING, BUT NOT LIMITED TO,
          WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

     7.7  3DP represents and warrants that Appendix A is accurate and complete
                                           ----------
          and identifies all patent rights owned by 3DP as of the Effective Date
          which are necessary for the use of the methods and technology claimed
          in the Licensed Patents in accordance with the license granted
          hereunder.

     7.8  DPC represents and warrants that as of the Effective Date, DPC is not
          operating under a valid, enforceable claim within the Licensed
          Patents. DPC further represents and warrants that it will not operate
          under a valid, enforceable claim within the Licensed Patents at any
          Site unless and until DPC activates a Site License pursuant to Section
          3.2 for that Site.

Article 8  TERM AND TERMINATION

     8.1  Term. This Agreement shall commence upon the Effective Date and
          ----
          terminate on April 1, 2000 unless extended pursuant to the provisions
          of Sections 2.3 and 3.2 of this Agreement.

     8.2  Termination for Breach. The failure by a Party to comply with any of
          ----------------------
          the material obligations contained in this Agreement shall entitle the
          other

                                       9
<PAGE>

          Party to give notice to have the default cured. If such default is not
          cured within sixty (60) days after the receipt of such notice, or
          diligent steps are not taken to cure if by its nature such default
          could not be cured within sixty (60) days, the notifying Party shall
          be entitled, without prejudice to any of its other rights conferred on
          it by this Agreement, and in addition to any other remedies that may
          be available to it, to terminate this Agreement, provided, however,
          that such right to terminate shall be stayed in the event that, during
          such sixty (60) day period, the Party alleged to have been in default
          shall have: (a) initiated arbitration in accordance with Section 9.1,
          below, with respect to the alleged default, and (b) diligently and in
          good faith cooperated in the prompt resolution of such arbitration
          proceedings.

     8.3  No Waiver. The right of a Party to terminate this Agreement, as
          ---------
          provided in Section 8.2, shall not be affected in any way by its
          waiver or failure to take action with respect to any prior default.

     8.4  Insolvency or Bankruptcy.

          (a)  Either Party may, in addition to any other remedies available by
               law or in equity, terminate this Agreement by written notice to
               the other Party in the event the latter Party shall have become
               insolvent or bankrupt, or shall have an assignment for the
               benefit of its creditors, or there shall have been appointed a
               trustee or receiver of the other Party or for all or a
               substantial part of its property or any case or proceeding shall
               have been commenced or other action taken by or against the other
               Party in bankruptcy or seeking reorganization, liquidation,
               dissolution, winding-up, arrangement or readjustment of its debts
               or any other relief under any bankruptcy, insolvency,
               reorganization or other similar act or law of any jurisdiction
               now or hereafter in effect, or there shall have been issued a
               warrant of attachment, execution, distraint or similar process
               against any substantial part of the property of the other Party,
               and any such event shall have continued for 90 days undismissed,
               unbonded and undischarged.

          (b)  All rights and licenses granted under or pursuant to this
               Agreement by DPC or 3DP are, and shall otherwise be deemed to be,
               for purposes of Section 365(n) of the U.S. Bankruptcy Code,
               licenses of right to "Intellectual property" as defined under
               Section 101 of the U.S. Bankruptcy Code. The Parties agree that
               the Parties as licensees of such rights under this Agreement,
               shall retain and may fully exercise all of their rights and
               elections under the U.S. Bankruptcy Code. The Parties further
               agree that, in the event of the commencement of a bankruptcy
               proceeding by or against either

                                       10
<PAGE>

               Parties under the U.S. Bankruptcy Code, the Parties hereto which
               is not a party to such proceeding shall be entitled to a complete
               duplicate of (or complete access to, as appropriate) any such
               intellectual property and all embodiments of such intellectual
               property, and same, if not already in their possession, shall be
               promptly delivered to them (i) upon any such commencement of a
               bankruptcy proceeding upon their written request therefor, unless
               the Party subject to such proceedings elects to continue to
               perform all of their obligations under this Agreement or (ii) if
               not delivered under (i) above, upon the rejection of this
               Agreement by or on behalf of the Party subject to such proceeding
               upon written request therefor by a nonsubject Party.

     8.5  Termination by DPC. Subject to Section 8.6, DPC shall have the right
          ------------------
          to terminate the license granted hereunder upon written notice to 3DP
          or by failure to pay at least 1 annual Site License Fee in accordance
          with Sections 2.3 and 3.2.

     8.6  Survival of Obligations.  The termination or expiration of this
          -----------------------
          Agreement shall not relieve the Parties of any obligations accruing
          prior to such termination, and any such termination shall be without
          prejudice to the rights of either Party against the other. The
          provisions of Sections 3.4 and 6.4 and Articles 4, 5, 9, 10 and 11
          shall survive any termination of this Agreement.

Article 9 DISPUTE RESOLUTION

     9.1  Dispute Resolution.  Any dispute concerning or arising out of this
          ------------------
          Agreement or concerning the existence or validity hereof, shall be
          determined by the following procedure.

          (a)  Both Parties understand and appreciate that their long term
               mutual interest will be best served by affecting a rapid and fair
               resolution of any claims or disputes which may arise out of
               services performed under this contract or from any dispute
               concerning the terms of this Agreement. Therefore, both Parties
               agree to use their best efforts to resolve all such disputes as
               rapidly as possible on a fair and equitable basis. Toward this
               end, both Parties agree to develop and follow a process for
               presenting, rapidly assessing, and settling claims on a fair and
               equitable basis which takes into account the precise subject and
               nature of the dispute.

          (b)  If any dispute or claim arising under this Agreement cannot be
               readily resolved by the Parties pursuant to the process described
               above, then the Parties agree to refer the matter to a panel
               consisting of the Chief Executive Officer ("CEO") of each Party
               or their designees for review and a non-binding resolution. A
               copy of

                                       11
<PAGE>

               the terms of this Agreement, agreed upon facts (and areas of
               disagreement), and concise summary of the basis for each side's
               contentions will be provided to both such CEOs who shall review
               the same, confer, and attempt to reach a mutual resolution of the
               issue.

          (c)  If the matter has not been resolved utilizing the foregoing
               process, and the Parties are unwilling to accept the non-binding
               decision of the indicated panel, either or both Parties may elect
               to pursue definitive resolution through binding arbitration,
               which the Parties agree to accept in lieu of litigation or other
               legally available remedies (with the exception of injunctive
               relief where such relief is necessary to protect a Party from
               irreparable harm pending the outcome of any such arbitration
               proceeding). Binding arbitration shall be settled in accordance
               with the Rules of Conciliation and Arbitration of the
               International Chamber of Commerce by a panel of three arbitrators
               chosen in accordance with these Rules. This Agreement shall be
               governed by and construed in accordance with the substantive laws
               of the State of Delaware without regard to the conflicts of laws
               provisions of Delaware. The arbitration will be held in
               Wilmington, Delaware. Judgment upon the award rendered may be
               entered in any court having jurisdiction and the Parties hereby
               consent to the said jurisdiction and venue, and further
               irrevocably waive any objection which either Party may have now
               or hereafter to the laying of venue of any proceedings in said
               courts and to any claim that such proceedings have been brought
               in an inconvenient forum, and further irrevocably agree that a
               judgment or order in any such proceeding shall be conclusive and
               binding upon the Parties and may be enforced in the courts of any
               other jurisdiction.

Article 10  INDEMNIFICATION

          (a)  Indemnification of 3DP. DPC shall indemnify and defend 3DP and
               its Affiliates and the directors, officers, employees, agents and
               counsel of 3DP and such Affiliates and the successors and assigns
               of any of the foregoing (the "3DP Indemnitees"), and hold the 3DP
               Indemnitees harmless from and against any and all losses
               resulting from any claim, suit or proceeding brought by a Third
               Party against a 3DP Indemnitee, arising from or occurring as a
               result of the operations by DPC under the Licensed Patents; or
               the manufacture, import, use, offer for sale or sale of products
               developed in whole or in part through the operations by DPC under
               the Licensed Patents; except to the extent any such claim, suit
               or proceeding results from the breach of any of the provisions of
               this Agreement, negligence or willful misconduct of 3DP.

                                       12
<PAGE>

     10.2      Procedure. Any of the 3DP Indemnitees that intends to claim
               ---------
               indemnification under this Article 10 shall promptly notify DPC
               (the "Indemnitor") in writing of any loss in respect of which the
               3DP Indemnitee intends to claim such indemnification, and the
               Indemnitor shall have the right to participate in, and, to the
               extent the Indemnitor so desires, to assume the defense thereof
               with counsel mutually satisfactory to the Parties; provided,
               however, that a 3DP Indemnitee shall have the right to retain its
               own counsel, with the fees and expenses to be paid by the
               Indemnitee, if representation of such Indemnitee by the counsel
               retained by the Indemnitor would be inappropriate due to actual
               or potential differing interests between such 3DP Indemnitee and
               the Indemnitor in such proceeding. The Indemnitor shall control
               the defense and/or settlement of any such loss, and the indemnity
               agreement in this Article 10 shall not apply to amounts paid in
               connection with any loss if such payments are made without the
               consent of the Indemnitor, which consent shall not be withheld
               unreasonably. The failure to deliver written notice to the
               Indemnitor within a reasonable time after the commencement of any
               such action, if prejudicial to its ability to defend such action,
               shall relieve such Indemnitor of any liability to the 3DP
               Indemnitee under this Article 10. At the Indemnitor's request,
               the 3DP Indemnitee under this Article 10, and its employees and
               agents, shall cooperate fully with the Indemnitor and its legal
               representatives in the investigation of any loss covered by this
               indemnification and provide true, correct and complete
               information with respect thereto.

Article 11  MISCELLANEOUS

     11.1      Entire Agreement.  This Agreement and its Appendices constitute
               ----------------
               and contain the entire understanding and agreement of the Parties
               respecting the subject matter of this Agreement and cancels and
               supersedes any all prior negotiations, correspondence,
               understandings and agreements between the Parties, whether oral
               or written, regarding such subject matter.

     11.2      Further Actions.  Each Party agrees to execute, acknowledge and
               ---------------
               deliver such further instruments and to do all such other acts as
               may be necessary or appropriate in order to carry out the
               purposes and intent of this Agreement.

     11.3      Binding Effect.  This Agreement and the rights granted herein
               --------------
               shall be binding upon and shall inure to the benefit of 3DP, DPC
               and their successors and permitted assigns .

     11.4      Assignment.  This Agreement may be assigned by either Party in
               ----------
               connection with the sale or transfer of substantially all of its
               assets that relate to this Agreement, or in the event of its
               merger or consolidation or

                                       13
<PAGE>

               change of control or similar transaction. Any permitted assignee
               shall assume all obligations of its assignor under this
               Agreement.

     11.5      No Implied Licenses.  No rights to any other patents, know-how or
               -------------------
               technical information, or other intellectual property rights,
               other than as explicitly identified herein, are granted or deemed
               granted by this Agreement. No right, expressed or implied, is
               granted by this Agreement to a Party to use in any manner the
               name or any other trade name or trademark of the other Party in
               connection with the performance of this Agreement.

     11.6      No Waiver.  No waiver, modification or amendment of any provision
               ---------
               of this Agreement shall be valid or effective unless made in
               writing and signed by a duly authorized officer of each Party. No
               waiver, modification or amendment of any provision of this
               Agreement shall be valid or effective unless made in writing and
               signed by a duly authorized officer of each Party. The failure of
               either Party to assert a right hereunder or to insist upon
               compliance with any term or condition of this Agreement shall not
               constitute a waiver of that right or excuse a similar subsequent
               failure to perform any such term or condition.

     11.7      Force Majeure.  The failure of a Party to perform any obligation
               -------------
               under this Agreement by reason of acts of God, acts of
               governments, riots, wars, strikes, accidents or deficiencies in
               materials or transportation or other causes of a similar
               magnitude beyond its control shall not be deemed to be a breach
               of this Agreement.

     11.8      Independent Contractors.  Both Parties are independent
               -----------------------
               contractors under this Agreement. Nothing contained in this
               Agreement is intended nor is to be construed so as to constitute
               3DP or DPC as partners or joint venturers with respect to this
               Agreement. Neither Party shall have any express or implied right
               or authority to assume or create any obligations on behalf of or
               in the name of the other Party or to bind the other Party to any
               other contract, agreement, or undertaking with any Third Party.

     11.9      Notices and Deliveries.  Any formal notices, request, delivery,
               ----------------------
               approval or consent required or permitted to be given under this
               Agreement shall be in writing and shall be deemed to have been
               sufficiently given when it is received, whether delivered in
               person, transmitted by facsimile with contemporaneous
               confirmation, or delivery by registered letter (or its
               equivalent) or delivery by certified overnight courier service,
               to the Party to which it is directed at its address shown below
               or such other address as such Party shall have last given by
               notice to the other Parties.

                                       14
<PAGE>

               If to DPC:

               Vice President, Product Planning and Acquisitions
               DuPont Pharmaceuticals Company
               974 Centre Road, Chestnut Run Plaza
               Wilmington, DE 19805
               Fax: 302-992-3040

               with a copy to:

               Associate General Counsel
               Legal Division
               DuPont Pharmaceuticals Company
               974 Centre Road, Chestnut Run Plaza, WR1028
               Wilmington, DE 19805
               Fax: 302-992-3999


               If to 3DP:

               3-Dimensional Pharmaceuticals, Inc.
               Eagleview Corporate Center
               665 Stockton Drive, Suite 104
               Exton, PA 10341

               ATTN:  Chief Executive Officer

               with a copy to:

               Morgan, Lewis & Bockius LLP
               1701 Market Street
               Philadelphia, PA 19103

               ATTN: David R. King, Esq.

     11.10     Public Announcements. The Parties shall consult with each other
               --------------------
               and reach mutual written agreement before making any public
               announcement concerning this Agreement or its subject matter. A
               joint press release to announce the signing of this Agreement is
               attached as Appendix B to this Agreement, and the Parties agrees
                           ----------
               to coordinate the dissemination of this press release.
               Notwithstanding the foregoing, the Parties may disclose the
               existence and general nature of this Agreement and may make
               disclosures for purposes of satisfying legal and regulatory
               requirements in accordance with Article 5; however, neither Party
               shall use the name of the other Party for promotional purposes.

                                       15
<PAGE>

     11.11     Headings. The captions to the sections and articles in this
               --------
               Agreement are not a part of this Agreement, and are included
               merely for convenience of reference only and shall not affect its
               meaning or interpretation.

     11.12     Severability. If any provision of this Agreement becomes or is
               ------------
               declared by a court of competent jurisdiction to be illegal,
               unenforceable or void, this Agreement shall continue in full
               force and effect without said provision, so long as the
               Agreement, taking into account said voided provision(s),
               continues to provide the Parties with the same practical economic
               benefits as the Agreement containing said voided provision(s) did
               on the date of this Agreement. If, after taking into account said
               voided provision(s), the Parties are unable to realize the
               practical economic benefit contemplated on the date of this
               Agreement, the Parties shall negotiate in good faith to amend
               this Agreement to reestablish the practical economic benefit
               provided the Parties on the date of this Agreement.

     11.13     No Consequential Damages.  IN NO EVENT SHALL EITHER PARTY OR ANY
               ------------------------
               OF ITS RESPECTIVE AFFILIATES BE LIABLE TO THE OTHER PARTY OR ANY
               OF ITS AFFILIATES FOR SPECIAL, INDIRECT, INCIDENTAL OR
               CONSEQUENTIAL DAMAGES, WHETHER IN CONTRACT, WARRANTY, TORT,
               NEGLIGENCE, STRICT LIABILITY OR OTHER WISE, INCLUDING, BUT NOT
               LIMITED TO, LOSS OF PROFITS OR REVENUE, OR CLAIMS OF CUSTOMERS OF
               ANY OF THEM OR OTHER THIRD PARTIES FOR SUCH OR OTHER DAMAGES.

     11.14     Applicable Law.  This Agreement shall be governed by and
               --------------
               interpreted in accordance with the laws of the State of Delaware
               without reference to its conflicts of laws provisions.

     11.15     Advice of Counsel.  DPC and 3DP have each consulted with counsel
               -----------------
               of their choice regarding this Agreement, and each acknowledges
               and agrees that this Agreement shall not be deemed to have been
               drafted by one party or another and will be construed
               accordingly.

     11.16     Counterparts.  This Agreement may be executed in counterparts, or
               ------------
               facsimile versions, each of which shall be deemed to be an
               original, and both of which together shall be deemed to be one
               and the same agreement.

                                       16
<PAGE>

In WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their respective duly authorized officers as of the day and year first above
written, each copy of which shall for all purposes be deemed to be an original.


3 DIMENSTIONAL                         DUPONT PHARMACEUTIALS
PHARMACEUTICALS, INC.                  COMPANY


By:  /s/ David C. U'Prichard           By: /s/ Paul A. Friedman
   ----------------------------           ------------------------

Name:  David C. U'Prichard, Ph.D.      Name:  Paul A. Friedman, M.D.

Title:  Chief Executive Officer        Title:  President, DuPont Pharmaceuticals
                                               Research Laboratories

                                       17
<PAGE>

                      Appendix A:  Licensed Patent Rights


<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
    3DP                Application Number         Filing Date                             Title
    ---                -----------------          -----------                             -----
 Reference             or Patent Number           or Issue Date
 ---------             ----------------           -------------
-------------------------------------------------------------------------------------------------------------------------
<S>                    <C>                    <C>                        <C>
1503.0010000           Patent No. 5,463,564   Issued October 31, 1995    System and Method of Automatically Generating
                                                                         Chemical Compounds with Desired Properties
-------------------------------------------------------------------------------------------------------------------------
1503.0010001           Patent No. 5,574,656   Issued November 12, 1996   System and Method of Automatically Generating
                                                                         Chemical Compounds with Desired Properties
-------------------------------------------------------------------------------------------------------------------------
1503.0010002           Patent No. 5,684,711   Issued November 4, 1997    System, Method, and Computer Program Product
                                                                         for at Least Partially Automatically Generating
                                                                         Chemical Compounds Having Desired Properties
-------------------------------------------------------------------------------------------------------------------------
1503.0010003           Patent No. 5,901,069   Issued May 4, 1999         System, Method, and Computer Program Product
                                                                         for at LEAST PARTIALLY AUTOMATICALLY GENERATING
                                                                         Chemical Compounds Having Desired Properties From
                                                                         a List of Potential Chemical Compounds to
                                                                         Synthesize
-------------------------------------------------------------------------------------------------------------------------
1503.0010004           Appl. No. 09/213,156   Filed December 17, 1998    Method of Generating Chemical Compounds
                                                                         Having Desired Properties
-------------------------------------------------------------------------------------------------------------------------
1503.001AU00           Patent No. 688598      Issued September 17, 1998  System and Method of Automatically Generating
                                                                         Chemical Compounds with Desired Properties
-------------------------------------------------------------------------------------------------------------------------
1503001AU10            Appl. No. 71886/98     Filed June 12, 1998        System and Method of Automatically Generating
                                                                         Chemical Compounds with Desired Properties
-------------------------------------------------------------------------------------------------------------------------
1503.001CA00           Appl. No. 2,199,264    Filed September 11, 1995   System and Method of Automatically Generating
                                                                         Chemical Compounds with Desired Properties
-------------------------------------------------------------------------------------------------------------------------
1503.001EP00           Appl. No. 95933748.6   Filed September 11, 1995   System and Method of Automatically Generating
                                                                         Chemical Compounds with Desired Properties
-------------------------------------------------------------------------------------------------------------------------
1503.001HU00           Appl. No. P9801578     Filed September 11, 1995   System and Method of Automatically Generating
                                                                         Chemical Compounds with Desired Properties
-------------------------------------------------------------------------------------------------------------------------
1503.001IL00           Patent No. 115292      Issued October 28, 1999    System and Method of Automatically Generating
                                                                         Chemical Compounds with Desired Properties
-------------------------------------------------------------------------------------------------------------------------
1503.001IL10           Patent No. 125017      Issued October 28, 1999    Computer Based System and Method of
                                                                         Automatically Generating Chemical Compounds
-------------------------------------------------------------------------------------------------------------------------
1503.001IN00           Appl. No. 1068CAL95    Filed September 7, 1995    System and Method of Automatically Generating
                                                                         Chemical Compounds with Desired Properties
-------------------------------------------------------------------------------------------------------------------------
1503.001JP00           Appl. No. 510247/1996  Filed September 11, 1995   System and Method of Automatically Generating
                                                                         Chemical Compounds with Desired Properties
-------------------------------------------------------------------------------------------------------------------------
1503.001PC00           Appl. No.              Filed September 11, 1995   System and Method of Automatically Generating
                       PCT/US95/11365                                    Chemical Compounds with Desired Properties
-------------------------------------------------------------------------------------------------------------------------
1503.001TW00           Appl. No. 84109873     Filed September 26, 1995   System and Method of Automatically Generating
                                                                         Chemical Compounds with Desired Properties
-------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       18
<PAGE>

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
    3DP                Application Number         Filing Date                                Title
    ---                ------------------         -----------                                -----
 Reference              Or Patent Number         or Issue Date
 ---------              ----------------         -------------
-------------------------------------------------------------------------------------------------------------------------------
<S>                    <C>                       <C>                       <C>
1503.0200001           Appl. No. 08/963,870      Filed November 4, 1997    System, and Method, and Computer Program Product
                                                                           for Identifying Chemical Compounds Having Desired
                                                                           Properties
-------------------------------------------------------------------------------------------------------------------------------
1503.0200002           Appl. No. 08/963,872      Filed November 4, 1997    System, Method, and Computer Program Product for the
                                                                           Visualization and Interactive Processing and
                                                                           Analysis of Chemical Data
-------------------------------------------------------------------------------------------------------------------------------
1503.0200003           Appl. No. 09/073,845      Filed May 7, 1998         System, Method, and Computer Program Product for
                                                                           Representing Proximity Data in a Multi-Dimensional
                                                                           Space
-------------------------------------------------------------------------------------------------------------------------------
[**]
-------------------------------------------------------------------------------------------------------------------------------
1503.020AU01           Appl. No. 54407/98        Filed November 4, 1997    System, Method, and Computer Program Product for
                                                                           Identifying Chemical Compounds Having Desired
                                                                           Properties
-------------------------------------------------------------------------------------------------------------------------------
1503.020AU02           Appl. No. 51800/98        Filed November 4, 1997    System, Method, and Computer Program Product for the
                                                                           Visualization and Interactive Processing and
                                                                           Analysis of Chemical Data
-------------------------------------------------------------------------------------------------------------------------------
1503.020CA01           Appl. No. 2,269,669       Filed November 4, 1997    System, Method, and Computer Program Product for
                                                                           Identifying Chemical Compounds Having Desired
                                                                           Properties
-------------------------------------------------------------------------------------------------------------------------------
1503.020CA02           Appl. No. 2,270,527       Filed November 4, 1997    System, Method, and Computer Program Product for the
                                                                           Visualization and Interactive Processing and
                                                                           Analysis of Chemical Data
-------------------------------------------------------------------------------------------------------------------------------
1503.020EP01           Appl. No. 97948320.3      Filed November 4, 1997    System, Method, and Computer Program Product for
                                                                           Identifying Chemical Compounds Having Desired
                                                                           Properties
-------------------------------------------------------------------------------------------------------------------------------
1503.020EP02           Appl. No. 97946679.4      Filed November 4, 1997    System, Method, and Computer Program Product for the
                                                                           Visualization and Interactive Processing and
                                                                           Analysis of Chemical Data
-------------------------------------------------------------------------------------------------------------------------------
1503.020IL01           Appl. No. 129498          Filed November 4, 1997    System, Method, and Computer Program Product for
                                                                           Identifying Chemical Compounds Having Desired
                                                                           Properties
-------------------------------------------------------------------------------------------------------------------------------
1503.020IL02           Appl. No. 129728          Filed May 4, 1997         System, Method, and Computer Program Product for the
                                                                           Visualization and Interactive Processing and
                                                                           Analysis of Chemical Data
-------------------------------------------------------------------------------------------------------------------------------
1503.020JP01           Appl. No. 521902/1998     Filed November 4, 1997    System, Method, and Computer Program Product for
                                                                           Identifying Chemical Compounds Having Desired
                                                                           Properties
-------------------------------------------------------------------------------------------------------------------------------
1503.020JP02           Appl. No. 521903/1998     Filed November 4, 1997    System, Method, and Computer Program Product for the
                                                                           Visualization and Interactive Processing and
                                                                           Analysis of Chemical Data
-------------------------------------------------------------------------------------------------------------------------------
1503.020PC01           Appl. No.                 Filed November 4, 1997    System, Method, and Computer Program Product for the
                       PCT/US97/20918                                      Visualization and Interactive Processing and
                                                                           Analysis of Chemical Data
 -------------------------------------------------------------------------------------------------------------------------------
1503.020PC02           Appl. No.                 Filed November 4, 1997    System, Method, and Computer Program Product for
                       PCT/US97/20919                                      Identifying Chemical Compounds Having Desired
                                                                           Properties.
 -------------------------------------------------------------------------------------------------------------------------------
[**]
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>

     ** Certain portions of this Exhibit have been omitted based upon a request
     for confidential treatment that has been filed with the Commission. The
     omitted portions have been filed separately with the Commission.

                                       19
<PAGE>

                       Appendix B:  Joint Press Release



FOR IMMEDIATE RELEASE
For 3DP, Contact:                             For DuPont Contact:
-------------------------------------------------------------------------------
Business
Michael J. Wassil                              Thomas R. Barry
Chief Financial Officer                          302-992-5020
(610) 458-6073

Media
Jerry Parrot
Jerry Parrot & Associates
703-757-0950

                   DuPont and 3-Dimensional Pharmaceuticals
                     Announce Drug Discovery Collaboration

  -  DuPont also Licenses 3DP's DirectedDiversity(R) Drug Discovery Patents-

Exton, PA and Wilmington, DE - February XX, 2000 - DuPont Pharmaceuticals
Company, a wholly-owned independent subsidiary of DuPont (NYSE: DD), and 3-
Dimensional Pharmaceuticals, Inc. (3DP) today announced a strategic
collaboration in which 3DP will use its proprietary DirectedDiversity technology
to assist DuPont Pharmaceuticals in the discovery of innovative new drugs for
specific biological targets.

3DP will apply its iterative drug discovery process to generate custom
combinatorial chemistry libraries based on molecules and information provided by
DuPont Pharmaceuticals and will optimize those molecules into preclinical drug
candidates. DuPont Pharmaceuticals will be responsible for preclinical and
clinical development, marketing and sales of the resulting products.

                                       20
<PAGE>

For the initial target, 3DP will receive payments of up to $9 million, including
an up-front technology access fee, research and development funding and
milestone payments. 3DP will also receive royalties on sales of resulting
products and will be eligible to receive additional payments if more than one
target is selected to be included in the collaboration.

The parties also announced an additional agreement in which DuPont
Pharmaceuticals will obtain a non-exclusive license to 3DP's proprietary
DirectedDiversity(R) drug discovery patents.  Under the license agreement,
DuPont Pharmaceuticals will receive a non-exclusive license to 3DP's
DirectedDiversity(R) patents in support of DuPont Pharmaceuticals internal
research Programs, and will pay an annual Site License fee for each DuPont
Pharmaceuticals facility using the technology.

DuPont Pharmaceuticals is committed to aggressive exploration and use of
leading-edge discovery technologies to speed the process of research and
development and to improve the quality of new drugs entering clinical trials,"
said Paul Friedman, M.D., President of DuPont Pharmaceuticals Research
Laboratories.

David C. U'Prichard, Ph.D., Chief Executive Officer of 3-Dimensional
Pharmaceuticals, noted that 3DP's technology platform allows the company to
discover and refine drugs against a wide range of molecular targets more quickly
than conventional approaches.  "DuPont is one of the great pioneering research-
based companies, and we are particularly pleased with this important recognition
of 3DP's proprietary DirectedDiversity(R) drug discovery process.  Our
scientists look forward with great anticipation to working with their colleagues
at DuPont Pharmaceuticals," he said.  "We are confident that the collaboration
we are announcing today will prove productive for both parties".

                                       21
<PAGE>

DirectedDiversity(R) Chemi-Informatic Technology uses proprietary computer
algorithms to design, select and iteratively refine combinatorial libraries of
novel, small-molecule drugs based on screening "hits" obtained from 3DP or other
screening libraries, target-protein 3D structures, or pharmacophore models
derived from lead compounds.

To prime the discovery process, 3DP has synthesized DirectedDiversity(R)
Screening Libraries totaling more than 200,000 individually synthesized drug-
like compounds.  These compounds represent proven pharmacophore classes and
constitute an optimally diverse sampling of the DirectedDiversity(R) Accessible
Compound Libraries, which now total more than 1.5 billion compounds, each of
which is available for on-demand synthesis using parallel synthesis technology.

DirectedDiversity(R) is a major component of 3DP's DiscoverWorks, which
provides a uniquely integrated platform for the high-throughput synthesis,
screening, and optimization of chemical compounds.  DiscoverWorks can be
applied flexibly to a wide range of molecular targets identified through genome
sequencing efforts - even in situations where the target's biological function
is ambiguous or unknown.  DiscoverWorks enhances the efficiency of conventional
drug discovery, making the process more rapid and reliable.

Earlier this year, 3DP received the fourth in a series of patents covering its
DirectedDiversity(R) process.  DirectedDiversity(R) controls and manages the
overall information flow for combinatorial drug discovery and provides the
computational tools needed to optimize drug properties rapidly using parallel
automated chemical synthesis. 3DP has a flexible licensing program available to
those companies interested in obtaining licenses to its DirectedDiversity(R)
patent portfolio.

                                       22
<PAGE>

Based in Wilmington, Delaware, DuPont Pharmaceuticals is a worldwide business
that focuses on research, development and delivery of pharmaceuticals to treat
unmet medical needs in the fight against HIV, cardiovascular disease, central
nervous system disorders, cancer and inflammatory diseases.  The company also is
a leader in medical imaging.

DuPont is a science company, delivering science-based solutions that make a
difference in people's lives in food and nutrition, health care, apparel, home
and construction, electronics, and transportation.  Founded in 1802, the company
operates in 65 countries and has 97,000 employees.

3-Dimensional Pharmaceuticals, Inc. (http://www.3dp.com) is a leading innovator
in drug discovery.  The company has developed a proprietary technology platform
known as DiscoverWorks, which uniquely integrates structure-based drug design,
combinatorial chemistry and high-throughput screening.  DiscoverWorks reduces
discovery costs, increases the rate of success and enhances the ultimate
commercial value of a drug development pipeline. 3DP is using its proprietary
technology both in collaboration with other companies and in its own research
programs, which currently target orally active small-molecule pharmaceuticals to
treat cardiovascular disease and cancer.

                                       23
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.22
<SEQUENCE>13
<FILENAME>0013.txt
<DESCRIPTION>RESEARCH & LICENSE AGMNT BTWN COMPANY & HESKA
<TEXT>

<PAGE>


                                                                   EXHIBIT 10.22

                               AMENDMENT NO. 1 TO
                         RESEARCH AND LICENSE AGREEMENT


     This Amendment No. 1 modifies the Research and License Agreement dated
     December 18, 1997 ("Original Agreement") between Heska Corporation and 3-
     Dimensional Pharmaceuticals Inc.

1.   Expiration. Termination or Extension of Research Term. Section 9.1.2 of the
     -----------------------------------------------------
     Original Agreement is amended to extend the Research Term to July 14, 2000,
     which is six months from the Project Team meeting held on January 14, 2000.

2.   Research Funding.  Section 3 of the Original Agreement is amended to
     ----------------
     include the following:

     During the extended Research Term Heska will pay to 3DP the amount of [**]
     in two equal installments in consideration for 3DP's dedication of [**]
     FTE's during this extension. The first installment of [**] shall be paid
     within 15 days of complete execution of this Amendment. The second
     installment of [**] shall be paid on or before April 14, 2000.

3.   No Other Changes.  Except as expressly modified by this Amendment, all
     provisions of the Original Agreement shall remain in full force and effect.

     IN WITNESS WHEREOF, this Amendment has been executed by the duly authorized
representatives of the parties.

SIGNED:


Heska Corporation                       3-Dimensional Pharmaceuticals Inc.


By: /s/ Ronald L. Hendrick              By: /s/ Scott Horvitz
    -------------------------------         ------------------------------
Name: Ronald L. Hendrick                Name: /s/ Scott Horvitz
      -----------------------------           ----------------------------
Title: Executive Vice President,        Title: Executive Vice President,
       Chief Financial Officer                 Finance & Adm.
       ----------------------------            ---------------------------
Date: February 25, 2000                 Date: February 17, 2000
      -----------------------------           ----------------------------


**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

                        RESEARCH AND LICENSE AGREEMENT


     THIS IS A RESEARCH AND LICENSE AGREEMENT ("Agreement") dated as of December
18, 1997 between 3-Dimensional Pharmaceuticals Inc., a Delaware corporation
("3DP"), and the Heska Corporation ("Heska").

                                   BACKGROUND
                                   ----------

     3DP has developed and owns certain patented and proprietary technology
which is registered under the name "DirectedDiversity(R)" and which may be
useful in developing certain compounds.

     Heska desires to fund a research project whereby 3DP will use its
technologies to attempt to develop an array of administered compounds with the
goal of [**] in non-human animals.

     Heska desires to obtain and 3DP desires to grant an exclusive worldwide
license in such compounds, provided that 3DP will retain all rights to the
compounds for all human applications, on the terms and conditions contained
herein.

                                     TERMS
                                     -----

     NOW, THEREFORE, in consideration of the mutual covenants and obligations
contained herein, and intending to be legally bound hereby, the parties agree as
follows:

1.   Definitions.  For purposes of this Agreement the following terms shall have
     -----------
the following meanings:

     1.1  "Abbreviated NADA" shall mean the application described at 21 U.S.C.
           ----------------
(S) 360b(n) (1994).

     1.2  "Affiliate" shall mean any corporation, firm, partnership or other
           ---------
entity, which, at the time in question, is directly or indirectly owned by or
controlled by, or under common control with, Heska or 3DP, as the case may be.
For the purposes of this definition, "control" shall mean the ownership,
directly or indirectly, of more than 50% of the voting stock or shareholders'
equity of a corporation or, in the case of a non-corporate entity, the right to
receive more than 50% of either the profits or the assets upon dissolution.

     1.3  "Candidate Compound" shall mean any Test Compound or Derivative
           ------------------
Compound which has demonstrated activity in the Primary Field in Initial
Screening.

**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed separately with the Commission.

                                       1
<PAGE>

     1.4  "Commercialization" shall mean the process of commercializing a
           -----------------
Development Compound or Heska Compound, including without limitation the
manufacturing, marketing and distribution of the resulting Product or Heska
Product after receipt of applicable Regulatory Approvals.

     1.5  "Companion Animal" shall mean dog or cat.
           ----------------


     1.6  "Competitive Program" shall mean a small molecule drug discovery
           -------------------
program that is based on the compounds that (i) are listed in Exhibit 1.12, (ii)
                                                              ------------
[**], (iii) [**] as the target of such program, which compounds are for use as
[**] but excluding any program relating to [**].


     1.7  "Controlled" shall mean, with respect to a particular Patent, Patent
           ----------
Application, item of Know-How or Material, that a Party (a) owns or has a
license to such Patent, Patent Application, item of Know-How or Material, and
(b) has the ability to grant to the other Party access to and a license or
sublicense, as applicable, to such Patent, Patent Application, item of Know-How
or Material as provided herein at the time such access or license is required to
be granted.

     1.8  "Derivative Compound" shall mean any compound that is an analog,
           -------------------
homolog, isomer or other chemical derivative of a Test Compound and that was
made by Heska based on Heska's knowledge of such Test Compound or information
about its activity in the Fields derived from the Research.  Derivative
Compounds are not Test Compounds.

     1.9  "Development Compound" shall mean any Candidate Compound that has
          --------------------
been selected for Development by Heska pursuant to Section 4.1 for use in the
Primary Field.

     1.10 "Development" shall mean the process of creating data and dossiers for
           -----------
the purposes of obtaining Regulatory Approval for the purpose of
Commercialization of any Development Compound, including without limitation the
conduct of all appropriate target animal studies on such Development Compound.

     1.11 "Effective Date" shall be December __, 1997.
           --------------

     1.12 "Existing Compound" shall mean any of the compounds set forth in
           -----------------
Exhibit 1.12 of this Agreement.
------------

     1.13 "First Commercial Sale" shall mean the first sale by Heska of a
           ---------------------
Product after Regulatory Approval thereof.

     1.14 "Fields" shall mean the Primary Field and the Other Fields.
           ------

**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed separately with the Commission.

                                       2
<PAGE>

     1.15 "FDA" shall mean the U.S. Food and Drug Administration.
           ---

     1.16 "FTE" shall mean a full-time scientific or technical personnel
           ---
equivalent who (i) has a Ph.D. and at least 2 years, or a master's degree and at
least 3 years, of experience in the pharmaceutical or combinatorial chemistry
industry or (ii) has been approved by the Project Team.

     1.17 "FTE Year" shall mean one or more FTEs working for the summed
           --------
equivalent of one year on the Research, excluding administrative or management
time.

     1.18 "Heska Compound" shall mean any Derivative Compound or Test Compound,
           --------------
which Derivative Compound or Test Compound is developed by Heska for use in the
Other Fields.

     1.19 "Heska Intellectual Property" shall mean (a) the Heska Patents; and
           ---------------------------
(b) all Know-How and Materials existing as of the Effective Date that are
Controlled by Heska and that are necessary for or reasonably useful to any
aspect of the Research activities to be conducted by 3DP hereunder, including
without limitation the manufacture of Test Compounds; and (c) all Results that
are made, created, developed or generated solely by employees, directors,
agents, consultants or others working on behalf of Heska; and (d) any and all
intellectual property rights (other than Patents or Patent Applications)
appurtenant to the Results described in subsection (c).

     1.20 "Heska Patents" shall mean (a) all Patents and Patent Applications
           -------------
existing as of the Effective Date that are Controlled by Heska and that claim
any aspect of the Research activities to be conducted by 3DP hereunder,
including without limitation the manufacture of Test Compounds; and (b) all
Patents and Patent Applications that claim any inventions in the Results that
are made, created, developed or generated solely by employees, directors,
agents, consultants or others working on behalf of Heska.

     1.21 "Heska Product" shall mean any product (including any formulation
           -------------
thereof) containing a Heska Compound, which product is marketed and sold for use
in the Other Fields and not in the Primary Field.

     1.22 "Initial Screening" shall mean the initial efficacy screens of Test
           -----------------
Compounds and Derivative Compounds for use in the Primary Field performed by
Heska on suitable screening models (such as an artificial dog model) pursuant to
Section 2.2.2.

     1.23 "Initial Animal Studies" shall mean target non-human animal safety and
           ----------------------
efficacy studies performed by Heska pursuant to Section 2.2.4 on the Candidate
Compounds for use in the Primary Field to prepare the data needed to select
Development Compounds.

     1.24 "Joint Intellectual Property" shall mean (a) all Results that are
           ---------------------------
made, created, developed or generated jointly by employees, directors, agents,
consultants or others working on behalf of Heska and

**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed separately with the Commission.

                                       3
<PAGE>

by employees, directors, agents, consultants or others working on behalf of 3DP;
and (b) any and all intellectual property rights appurtenant to the Results
described in subsection (a), including without limitation any and all Patents or
Patent Applications that claim inventions in such Results.

     1.25 "Joint Patents" shall mean all Patents and Patent Applications
           -------------
included in the Joint Intellectual Property.

     1.26 "Know-How" shall mean any and all information, expertise, data,
           --------
results, techniques, methods, trade secrets, know-how, ideas, inventions,
discoveries, developments, concepts, formulas, designs, specifications or
procedures.

     1.27 "Licensed Product" shall mean any product (including any formulation
           ----------------
thereof) containing any Development Compound, which product is sold for use in
the Primary Field and is claimed by a Valid Claim.

     1.28 "Materials" shall mean all chemical, biological and physical tangible
           ---------
materials, as well as any other materials ordinarily engendered by such tangible
materials.

     1.29 "NADA" shall mean a New Animal Drug Application as provided in the
           ----
Federal Food, Drug and Cosmetic Act, 21 U.S.C. (S) 360b(b) (1994).

     1.30 "NADA Approval" shall mean the order issued by the Secretary approving
           -------------
a NADA or an Abbreviated NADA.

     1.31 "Net Sales" shall mean, with respect to a Product sold, the invoiced
           ---------
sales price of such Product billed to third party purchasers who are not
Affiliates or sublicensees of Heska, less actual amounts for (a) credits,
allowances, discounts and rebates to, and charge backs from the account of, such
independent customers for damages or rejected Product or out of date Product
returned in accordance with Heska policies; (b) freight and insurance costs as
set forth on the invoice for transporting such Products to such customers; (c)
quantity and trade discounts and other price reductions and commissions paid to
third parties with respect to the sale of Products; (d) sales, use, value-added
and other direct taxes incurred; and (e) customs, duties, surcharges and other
governmental charges incurred in connection with the exportation or importation
of the Products. Sales between or among Heska and its Affiliates or permitted
sublicensees shall be excluded from the computation of Net Sales.  Net Sales
shall include the subsequent final sales to Third Parties by such Affiliates or
permitted sublicensees.  In the event that a Product is sold or distributed for
use in combination with or as a component of another product or products (a
"Combination Product"), the calculation of "Net Sales" from such Combination
Product shall be determined by multiplying the Net Sales of the Combination
Product by a fraction, the numerator of which is the fair market value of the
Product in such Combination Product, and the denominator of which is the sum of
the fair market value of the Product and the fair market value of the other
products in the Combination Product.  In the event that a Product is sold or
distributed as part of a bundle of other

                                       4
<PAGE>

products where the bundle is sold at one total price and there is no separate
invoiced selling price for the Product along (a "Bundled Product"), the
calculation of "Net Sales" for the Product sold in such Bundle Product shall be
determined by multiplying the Net Sales for the Bundled Product (calculated as
provided above for the total invoiced price for such Bundled Product), by a
fraction, the numerator of which is the fair market value of the Product
included in such Bundled Product and the denominator is the sum of the fair
market values of all the products, including the Product, included in such
Bundled Product. As used herein, the "fair market value" of a particular product
shall be the average invoiced selling price for such product when sold alone
during the quarter for which Net Sales are being calculated hereunder, if such
amount can be calculated, and otherwise will be the amount that the selling
party reasonably could expect to charge for an independent sale of such product
to a willing third party purchaser during such period.

     1.32 "Other Fields" shall mean any use of a compound other than (a) in or
           ------------
on a human, or (b) in the Primary Field.

     1.33 "Party" or "Parties" shall mean, respectively, 3DP or Heska, and 3DP
           -----      -------
and Heska.

     1.34 "Patent" or "Patents" shall mean an issued United States or foreign
           ------      -------
patent or supplementary protection certificate, including all provisional
applications, substitutions, extensions, reissues, reexaminations, renewals,
patents of addition, divisionals, continuations, continuations-in-part and
inventors' certificates and all foreign counterparts of the foregoing.

     1.35 "Patent Application" shall mean an application for a Patent.
           ------------------

     1.36 "Pivotal Animal Study" shall mean any test performed for regulatory
           --------------------
submission by Heska or other studies in preparation for such submission pursuant
to Section 4.2 on non-human animals to establish the safety and efficacy of a
Development Compound.

     1.37 "Post Launch Year" shall mean, for any Product, the 12-month period
           ----------------
beginning on the first day that the Product first receives Regulatory Approval
and ending on the first anniversary and each 12-month period thereafter.


     1.38 "Primary Field" shall mean any use of a compound in or on a [**].
           -------------


     1.39 "Product" shall mean a Licensed Product or Heska Product.
           -------

     1.40 "Project Team" shall be the Project Team established by the Parties
           ------------
pursuant to Section 5.

**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed separately with the Commission.

                                       5
<PAGE>

     1.41 "Project Year" shall mean any of the 12-month periods during the
           ------------
Research Term beginning on the Effective Date or on an anniversary thereof.

     1.42 "Regulatory Approval" shall mean, with respect to any country, filing
           -------------------
for and receipt of all regulatory agency registrations, approvals, licenses or
marketing authorizations required from the applicable Regulatory Authorities for
the marketing and sale of a Product for the indication for which it is being
marketed in such country, including but not limited to, any NADA Approvals.
"Regulatory Approval" shall also include pricing or reimbursement approval, to
the extent that such approval is required from a Regulatory Authority to legally
place the Product on the market in such countries.

     1.43 "Regulatory Authority" shall mean the Governmental authority or entity
           --------------------
responsible for authorizing the placement on the market in any country or
territory in the Territory of any Product for commercial sale.

     1.44 "Regulatory Filings" shall mean all applications, filings, materials,
           ------------------
studies, data and documents of any nature whatsoever filed with, prepared in
connection with or necessary to support any application for a Regulatory
Approval from a Regulatory Authority in any country or territory in the
Territory.

     1.45 "Research" shall mean all the research activities conducted by 3DP and
           --------
Heska pursuant to Section 2.2 and the Research Plan.

     1.46 "Research Funding" shall mean the funding provided under Section 3 of
           ----------------
this Agreement by Heska to 3DP for 3DP's efforts in conducting the Research.

     1.47 "Research Plan" shall mean the research plan for the Research prepared
           -------------
by and agreed upon by the Project Team pursuant to Section 2.1, as amended from
time to time by written agreement of the entire Project Team.

     1.48 "Research Term" shall have the meaning attributed to it in Section
           -------------
9.1.2.

     1.49 "Results" shall mean any and all Know-How and Materials that are made,
           -------
created, or reduced to practice in the course of, or as a result of, the
Research, as well as any and all reports resulting from testing conducted
pursuant to the Research during the Research Term.

     1.50 "Royalty Expiration Date" of a Product shall mean, on a country-by-
           -----------------------
country basis, the later to occur of:

          1.50.1  the expiration date of the last to expire Valid Claim of a
Patent Right in such country that claims the Product, its manufacture, or its
use; and

                                       6
<PAGE>

          1.50.2  the expiration date of the ten-year period commencing on the
Effective Date.

     1.51 "Subsequent Development Compound" shall mean each Candidate Compound,
           -------------------------------
excluding Replacement Compounds as defined in Section 8.1, on which Heska
conducts Development for use in the Primary Field as a Development Compound in
addition to the Development Compound first selected for Development pursuant to
Section 4.1.

     1.52 "Territory" shall mean all the countries and territories of the world.
           ---------

     1.53 "Test Compound" shall mean any compound discovered, synthesized or
           -------------
produced by 3DP pursuant to or in the course of the Research that has the
potential for activity or efficacy in the Primary Field.  It is understood that
a Test Compound, as defined herein, may also meet the definition for Candidate
Compound, Development Compound, Heska Compound or Product, and any such Test
Compound will in such event be deemed to be, for purposes of this Agreement, a
Test Compound as well as a Candidate Compound, Development Compound, Heska
Compound or Product, as applicable.

     1.54 "3DP Intellectual Property" shall mean  (a) the 3DP Patents; and (b)
           -------------------------
all Know-How and Materials existing as of the Effective Date that are Controlled
by 3DP and that are necessary for or reasonably useful to any aspect of the
Research, Development and Commercialization activities to be conducted by Heska
or its Affiliates or sublicensees pursuant to this Agreement, including without
limitation the manufacture and use of Test Compounds and the sale of Products;
and (c) all Results that are made, created, developed or generated solely by
employees, directors, agents, consultants or others working on behalf of 3DP;
and (d) any and all intellectual property rights (other than Patents or Patent
Applications) appurtenant to the Results described in subsection (c).

     1.55 "3DP Patents" shall mean (a) all Patents and Patent Applications
           -----------
existing as of the Effective Date that are Controlled by 3DP and that claim any
aspect of the Research, Development and Commercialization activities to be
conducted by Heska or its Affiliates or sublicensees pursuant to this Agreement,
including without limitation the manufacture and use of Test Compounds and the
sale of Products; and (b) all Patents and Patent Applications that claim any
inventions in the Results that are made, created, developed or generated solely
by employees, directors, agents, consultants or other working on behalf of 3DP.

     1.56 "Third Party" shall mean any person other than a Party or its
           -----------
Affiliate.

     1.57 "Valid Claim" shall mean a claim which (i) in the case of any
           -----------
unexpired United States or foreign Patent, shall not have been donated to the
public, disclaimed, nor held invalid or unenforceable by a court of competent
jurisdiction in an unappealed or unappealable decision, or (ii) in the case of
any United States or foreign Patent Application, shall not have been canceled,
withdrawn, or abandoned without being refiled in another Patent Application or
finally rejected by an administrative agency action from which no appeal can be
taken, or shall have been pending for more than four years.  For purposes of
this definition,

                                       7
<PAGE>

time periods shall be measured cumulatively for claims in a later filed Patent
Application in a country which are substantially the same as claims in an
earlier filed Patent Application in that country. If a claim of a Patent
Application that ceased to be a Valid Claim under clause (ii) due to the passage
of time later issues as part of a Patent described within clause (i) then it
shall again be considered to be a Valid Claim effective as of the issuance of
such Patent.

2.   Research
     --------

     2.1  Preparation of Research Plan.  Within sixty days after execution of
          ----------------------------
this Agreement, the Parties'  representatives on the Project Team shall prepare
a detailed research plan which shall set forth the Parties' respective
obligations and responsibilities in connection with the Agreement through the
selection of a Development Compound under Section 4.1.  Once the Project Team
has prepared the proposed research plan, it shall submit the proposed research
plan to the appropriate members of management of both Parties for their review.
Once the Parties mutually agree in writing that the proposed research plan is in
an acceptable form, the proposed research plan shall become the Research Plan
for purposes of this Agreement.  Upon selection of the Development Compounds by
Heska pursuant to Section 4.2, the Project Team shall meet only as needed to
perform the functions as set forth in Section 5.2.

     2.2  Research and Initial Screening.  During the Research Term, pursuant to
          ------------------------------
the Research Plan and subject to the provisions of this Agreement, the parties
will undertake the following Research:

          2.2.1  3DP will use combinatorial or analog chemistry to discover,
synthesize or produce Test Compounds for use in the Primary Field until a
Development Compound is selected by Heska under Section 4.1.

          2.2.2  3DP will provide Heska with up to [**] quantities of any
synthesized Test Compounds for evaluation in the Initial Screening.  Test
Compounds will be validated by 3DP to be at least 80% pure.  3DP will provide to
Heska information regarding the structure and purity of such Test Compounds as
soon as practicable or as otherwise directed by the Project Team.  Upon receipt
by Heska from 3DP of any Test Compounds, Heska will perform the Initial
Screening of such Test Compounds.  Heska may also perform Initial Screening of
Heska Compounds.  Test Compounds showing activity for use in the Primary Field
in the Initial Screening will be designated Candidate Compounds.

          2.2.3  After the identification of Candidate Compounds that Heska
believes have a likelihood of success in the Primary Field, Heska will provide
3DP notice of such Candidate Compounds selected by Heska (up to a total of ten
compounds), and 3DP will promptly use commercially reasonable efforts to obtain
a written opinion of independent patent counsel selected by 3DP, and reasonably

**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed separately with the Commission.

                                       8
<PAGE>

acceptable to Heska, as to whether such Candidate Compounds may infringe on the
issued patents, if any, that, in the reasonable opinion of such counsel, are
relevant to such Candidate Compounds (the "Relevant Patents").  Heska may
provide such notice on more than one occasion, until such time as Heska has
received written opinions, subject to qualifications reasonably acceptable to
Heska, of the patent counsel that a total of ten of such identified Candidate
Compounds do not infringe the Relevant Patents.  Promptly after Heska has
received such written opinion, subject to qualifications reasonably acceptable
to Heska, that one or more of such selected Candidate Compounds do not infringe
the Relevant Patents, 3DP will use commercially reasonable efforts to produce
within a reasonable time after Heska's written request five grams of each of the
Candidate Compounds identified as non-infringing in such opinion, for Heska to
use in the Initial Animal Studies for purposes of identifying Development
Compounds.  If additional quantities of a selected Candidate Compound are
required for any purpose, the cost to produce the additional amounts of such
selected Candidate Compounds will be borne by Heska.  The quantities of
Candidate Compounds produced by 3DP for Heska hereunder shall be at least 99%
pure and shall be accompanied by a certificate of analysis.

          2.2.4  Within sixty days after receipt of the required quantities of
all selected Candidate Compounds from 3DP pursuant to Section 2.2.3, Heska will
use commercially reasonable efforts to initiate and conduct Initial Animal
Studies on Candidate Compounds until a Development Compound has been selected by
Heska pursuant to Section 4.1. In the event that Heska does not initiate such
Initial Animal Studies within such time period, then Heska shall promptly give
written notice thereof to 3DP, including a reasoned scientific or commercial
rationale for Heska's decision. Heska shall use commercially reasonable efforts
to conduct and complete the Initial Animal Studies promptly after receipt of the
required quantifies of the selected Candidate Compounds. If Heska fails to
complete such Initial Animal Studies within nine months after receiving all such
Candidate Compounds from 3DP, Heska shall either (a) provide to 3DP written
documentation that Heska is using diligent efforts to complete such Initial
Animal Studies promptly, and continue all such efforts as necessary to complete
such studies as soon as practicable thereafter, or (b) provide to 3DP the
scientific, technical, regulatory or other substantial reasons for Heska's
inability, in such time period, to commence or complete such studies, along with
a written plan for overcoming the problems caused thereby and for completing
such studies, and shall use all reasonable efforts to complete such studies as
soon as practicable thereafter. If Heska fails to comply with the foregoing in
such time frame, at 3DP's election and upon written notice to Heska, all rights
of Heska in the Candidate Compounds shall revert to 3DP and Heska shall have no
further rights thereto. In the event that, upon completion of the Initial Animal
Studies on the first set of ten selected Candidate Compounds provided by 3DP,
Heska determines that none of such compounds is appropriate for selection as
Development Compounds for Development for use in the Primary Field, then, upon
Heska's request, 3DP will generate and provide to Heska additional Test
Compounds, and after testing such compounds Heska may select additional
Candidate Compounds, which will be identified by written notice to 3DP as
provided in Section 2.2.3 above, and the testing procedures, including all
applicable time frames, set forth in Sections 2.2.3 and 2.2.4 will be repeated
for such additional selected Candidate Compounds. Heska will pay 3DP, at 3DP's
actual cost, for (i) any Candidate Compounds in excess of the five grams
provided pursuant to Section 2.3.3 of the first ten

                                       9
<PAGE>

selected Candidate Compounds, and (ii) any quantity of any Test Compound in
excess of 2 milligrams of such Test Compound.

     2.3  Research Manpower Estimates.  During the first Project Year, 3DP will
          ---------------------------
require its personnel to conduct the Research for an equivalent of [**] Years.
During the second Project Year, 3DP will require its personnel to conduct the
Research for an equivalent of up to [**] years as determined by the Project
Team.  Any revisions to the number of FTE hours needed to complete the Research
shall be authorized by the Project Team.

     2.4  Records.   The Parties will maintain records of their own activities
          -------
and conduct in the course of the Research (or cause such records to be
maintained) pursuant to the Research Plan in sufficient detail and in good
scientific manner as will properly reflect all work done and results achieved in
the performance of the Research (including, but not limited to, all data in the
form required under any applicable governmental regulations and as directed by
the Project Team).  Each Party shall allow the other Party, at the other Party's
sole cost, to have reasonable access to all pertinent materials and data
generated by or on behalf of such Party in connection with the Research to the
extent such Party reasonably needs such materials and data to perform its duties
under this Agreement.

     2.5  Compliance with Laws.  All activities undertaken in connection with
          --------------------
the Research shall be carried out in compliance with federal, state and local
laws, regulations and guidelines and professional standards governing the
conduct of the Research at the site where it is being conducted in the
Territory.

     2.6  Exclusivity of Research.  During the Research Term, neither Party
          -----------------------
will, except pursuant to this Agreement, conduct or fund, either by itself or at
a Third Party, any research or Development activity specifically intended to
identify, discover, synthesize or develop compounds using any of the Existing
Compounds as leads for, or as the basis for, chemical discovery for use in the
Primary Field.


3.   Research Funding.  During the Research Term, Heska shall provide the
     ----------------
following funding ("Research Funding") to 3DP to enable 3DP to carry out 3DP's
responsibilities under the Research Plan in accordance with this Section 3. For
the first Project Year, Heska will pay 3DP a minimum of [**] in four equal
quarterly installments, in consideration for 3DP's dedication of the equivalent
of [**] to the Research of [**]. For the second Project Year, Heska will pay 3DP
an amount, on a quarterly basis, equal to the pro rata amount of FTE Years to be
conducted by 3DP on Research during such quarter, as determined by the Project
Team, at [**], up to a maximum for the year of [**] in consideration of the
Research effort by 3DP during such second year. The first installment shall be
paid on the Effective Date and subsequent installments shall be paid on the date
three months after the last payment. Heska shall bear its own costs and expenses
incurred in performing its responsibilities under the Research in accordance
with this Section 3. All payments of Research Funding shall be made by Heska to
3DP in U.S. Dollars by wire transfer of immediately available funds to the
account specified in Exhibit 3 or to such other account notified to Heska by 3DP
                     ---------
from time to time in a written notice to Heska.


**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed separately with the Commission.

                                       10
<PAGE>

4.   Pivotal Animal Studies, Development and Commercialization
     ---------------------------------------------------------

     4.1  Selection of Development Compounds.  Within one hundred eighty days
          ----------------------------------
after completion of the Initial Animal Studies pursuant to Section 2.2.4
(including testing required on additional Candidate Compounds), Heska shall
select one or more Candidate Compounds as Development Compounds for use in the
Primary Field.  If the results of the Initial Animal Studies indicate that
additional testing needs to be completed before Heska is able to select
Development Compounds (including testing required on additional Candidate
Compounds), Heska shall so indicate to 3DP in writing and shall use reasonably
commercial efforts to conduct such additional required testing promptly; in such
event, the foregoing one hundred eighty day period will commence at the
completion of such additional studies.  Heska shall provide 3DP with written
notice during the applicable time period of the Candidate Compounds it has
selected as Development Compounds, and shall indicate the non-human animal
species in which it intends to use such Development Compounds.  In the event
that Heska selects a Development Compound for use in any additional non-human
animal species, it shall immediately notify 3DP in writing of such decision.  If
Heska fails to select any Development Compounds within one hundred eighty days
after completion of all required Initial Animal Studies, Heska shall provide to
3DP the scientific, technical, regulatory or other substantial reasons for
Heska's inability, in such time period, to select at least one Development
Compound, along with a written plan for overcoming the problems caused thereby,
selecting a Development Compound and commencing Development, and shall use all
reasonable efforts to do so as soon as practicable thereafter.  If Heska fails
to comply with the foregoing in such time frame, then at 3DP's election and upon
written notice to Heska, all rights of Heska in the Candidate Compounds shall
revert to 3DP and Heska will have no further rights thereto.  If, during such
time period, Heska has selected at least one Development Compound for
Development in one non-human animal species, Heska may decide at any time during
the term of this Agreement to engage in Development of such Development Compound
for use in the Fields in additional non-human animal species, or select
Subsequent Development Compounds for Development in the Fields, provided that
Heska shall provide 3DP with written notice immediately upon reaching such
decision.

     4.2  Development.  After selection of Development Compounds, Heska will use
          -----------
commercially reasonable efforts to design, initiate and conduct Pivotal Animal
Studies in the Primary Field and shall be deemed the sponsor of all such Pivotal
Animal Studies as defined in applicable regulations.  At Heska's request, 3DP
will supply to Heska, at 3DP's actual cost to be paid by Heska, sufficient
Development Compounds to Heska in order for Heska to conduct the Pivotal Animal
Studies.  If Heska is unable to initiate Pivotal Animal Studies on at least one
Development Compound within one hundred eighty days after selection of a
Development Compound under Section 4.1, Heska shall provide to 3DP the
scientific, technical, regulatory or other substantial reasons for Heska's
inability, in such time period, to commence such Pivotal Animal Studies, along
with a written plan for overcoming the problems caused thereby and for
commencing such Pivotal Animal Studies promptly thereafter, and shall use all
reasonable efforts to commence such Pivotal Animal Studies as soon as
practicable thereafter.  If Heska fails to comply with the foregoing in such
time frame, then at 3DP's election and upon written notice to Heska, all rights
of Heska

                                       11
<PAGE>

in Test Compounds and the Development Compounds shall revert to 3DP, Heska will
have no further rights thereto and this Agreement will terminate.

     4.3  Commercialization of Development Compound.  Within ninety days after
          -----------------------------------------
the first Regulatory Approval of a Development Compound, Heska shall provide
written notice to 3DP of Heska's decision regarding whether to undertake
Commercialization in the Primary Field of the Development Compound.  If Heska
decides to undertake Commercialization in the Primary Field of a Development
Compound, such notice to 3DP shall identify the countries and territories within
the Territory in which Heska intends to pursue such Commercialization.  Heska
will commence Commercialization in the Primary Field of such Development
Compound within twelve months after such decision and will use commercially
reasonable efforts to conduct such Commercialization. If Heska fails to commence
such Commercialization of the Development Compound within twelve months after
Regulatory Approval, Heska will provide to 3DP the scientific, technical or
regulatory or other substantial reasons for Heska's inability, in such time
period, to commence such Commercialization, along with a written plan for
overcoming the problems caused thereby and for commencing such Commercialization
promptly thereafter, and shall use all reasonable efforts to commence such
Commercialization as soon as practicable thereafter.  If Heska fails to comply
with the foregoing in such time frame, then at 3DP's election and upon written
notice to Heska, all rights of Heska in such Development Compounds shall revert
to 3DP and Heska will have no further rights thereto.

     4.4  Cessation of Commercialization by Heska. If Heska has commenced
          ---------------------------------------
Commercialization in accordance with Section 4.3, Heska's right to market the
resulting Licensed Product and any other Licensed Product for use in the Primary
Field hereunder shall be worldwide so long as Heska is conducting
Commercialization of a Licensed Product in the United States.  If Heska ceases
(other than due to government or legal action) Commercialization of all Licensed
Products in the United States, it shall immediately notify 3DP in writing, and
Heska shall use good faith efforts to find a sublicensee reasonably acceptable
to 3DP to conduct Commercialization of at lease one Licensed Product in such
countries in the Territory where Heska or its Affiliates or existing
sublicensees are not conducting Commercialization of Licensed Products,
including without limitation the United States.  If Heska does not enter in to
such a sublicensing arrangement for such countries within six months after
Heska's termination of Commercialization of Licensed Products in the United
States, then the Parties shall work together during the six months immediately
following such six-month period to locate an acceptable sublicensing
arrangement.  If, after such additional six-month time period, Heska has not
entered into such a sublicensing arrangement, then all rights of Heska in the
Licensed Products shall revert to 3DP and Heska shall have no further rights
thereto in such countries where none of Heska, its Affiliates or sublicensees is
marketing Licensed Products, except that in the event that 3DP locates a
sublicensee after Heska's rights have terminated or commences marketing such
Licensed Products, 3DP will pay to Heska an amount equal to [**] of any
royalties or other license fees or milestone payments received by 3DP under any
license granted

**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed separately with the Commission.

                                       12
<PAGE>

by 3DP to commercialize such Licensed Product in such countries for use in the
Primary Field or, if sold directly by 3DP or its Affiliates, [**] of the Net
Sales of Licensed Products made by 3DP or its Affiliates, until such time that
the total of such payments to Heska equal the amounts paid by Heska to 3DP
pursuant to Section 8.1 and 8.2 as of the date that Heska ceases
Commercialization of the Licensed Products in the United States.

     4.5  Responsibility for and Costs of Pivotal Animal Studies, Development
          -------------------------------------------------------------------
and Commercialization.  Heska shall be solely responsible for the implementation
---------------------
of Pivotal Animal Studies and Development and Commercialization of Development
Compounds and Products, as the case may be, at Heska's cost except as otherwise
provided herein.  3DP will provide or disclose to Heska all Results and 3DP
Intellectual Property relating to Test Compounds reasonably needed to conduct
such Development and Commercialization.

     4.6  Development and Commercialization Summaries.  For each Development
          -------------------------------------------
Compound or Licensed Product for which Heska has begun to pursue Development or
Commercialization and for which Heska has not ceased pursuing Development or
Commercialization, Heska shall keep 3DP informed periodically with summary
reports on the proposed design and the conduct of any Clinical Trials, including
summaries of proposed study protocols, other clinical or investigative research
and other Regulatory Filings for such Development Compound or Product, and shall
provide to 3DP copies of all toxicological data and reports of Development and
Commercialization efforts.  Heska shall provide such reports each year in
meetings as reasonably requested by 3DP, and each party shall be responsible for
its own costs with regard to such meeting.

     4.7  3DP Right of First Negotiation.  During the two year period commencing
          ------------------------------
on the Effective Date, Heska hereby grants to 3DP a right of first negotiation
according to the terms of this Section regarding entering into collaborations or
other agreements for Competitive Programs, excluding (i) any program entered
into pursuant to exercise by [**] of rights [**], or (ii) any [**] (the
"Excluded Programs").  If Heska desires to enter into an agreement with a third
party to conduct such a Competitive Program other than an Excluded Program,
Heska will give 3DP written notice of such desire, specifying the specific
targets to be pursued in such Competitive Program.  3DP shall have twenty days
in which to provide Heska written notice that it desires to enter into such an
agreement, in which case the Parties shall meet promptly thereafter and
negotiate in good faith the terms of such an agreement, for a period of up to
ninety days, with the understanding that Heska may also negotiate with Third
Parties during such period regarding the terms of such an agreement so long as
Heska does not enter into such an agreement with any Third Party during the
period.  If 3DP does not provide such written notice, or if the Parties are
unable to execute such an agreement by the end of the ninety day negotiation
period, for a period of nine months, Heska may enter into such an agreement with
a third party without again complying with this Section,


**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed separately with the Commission.

                                       13
<PAGE>

5.   Project Team.
     ------------

     5.1  Membership of Project Team.  The Parties shall select a team to direct
          --------------------------
the Research which shall consist of six members, three of whom shall be
appointed by Heska and three of whom shall be appointed by 3DP (the "Project
Team"). Each Party shall notify the other in writing if it substitutes any
member of the Project Team.

     5.2  Meetings of Project Team.  The Project Team shall meet (at their
          ------------------------
option, telephonically, by video conference or in person) at such times and
places as it may select but in no event shall the Project Team meet less
frequently than quarterly.

     5.3  Responsibilities of Project Team.  The Project Team shall be
          --------------------------------
responsible for:

          5.3.1  reviewing, approving and amending the Research Plan;

          5.3.2  monitoring the progress of the Research;

          5.3.3  reviewing and approving publications in accordance with Section
11.5;

          5.3.4  monitoring and assisting the drafting, filing and prosecution
of Patents and Patent Applications in accordance with Section 12.2; and

          5.3.5  allocating resources for the Research budget as established in
Section 2.3.

     5.4  Quorum; Voting.  The presence of at least four members, two of whom
          --------------
shall have been selected by each Party, shall constitute a quorum for purposes
of consideration and action by the Project Team. Any decision taken by the
Project Team shall at all times be unanimous.   In the event that the Project
Team is not able to reach agreement on any issue, the matter may be approved or
settled in accordance with Section 17.3, and any requirement for approval by the
Project Team under this Agreement shall be satisfied by approval in accordance
with Section 17.3.

     5.5  Reports and Conferences.  During the Research Term and any time during
          -----------------------
which a Party is conducting activities under Sections 4.1, 4.2 and 4.3, 3DP and
Heska shall provide the Project Team with written project reports during each
calendar quarter concerning their efforts with respect to Research, Development
and Commercialization, including any change in plans in the Research,
Development or Commercialization activities or any adverse effects of any Test
Compound or Derivative Compound and shall also provide a final written report
concerning the Research within forty-five (45) days after the end of the
Research Term or such activities or earlier termination of this Agreement.

                                       14
<PAGE>

6.   Ownership of Intellectual Property
     ----------------------------------

     6.1  3DP Intellectual Property.  3DP has and shall have and retain
          -------------------------
exclusive right, title and interest in and to:  (a) any and all Patents, Patent
Applications, Know-How, Materials or other intellectual property owned by 3DP on
the Effective Date; (b) any and all Results which are made, reduced to practice,
or created solely by employees, directors, agents, consultants or others working
on behalf of 3DP; (c) any and all intellectual property rights (including
without limitation Patents and Patent Applications, except to the extent
provided in Section 12.2.3) appurtenant to or claiming the Results described in
subsection (b); and (d) any and all Know-How, Materials and intellectual
property rights made, created or reduced to practice by or on behalf of 3DP
independent of this Agreement.

     6.2  Heska Intellectual Property.  Heska has and shall have and retain
          ---------------------------
exclusive right, title and interest in and to:  (a) any and all Patents, Patent
Applications, Know-How, Materials or other intellectual property owned by Heska
on the Effective Date; (b) any and all Results  which are made, reduced to
practice, or created solely by employees, directors, agents, consultants or
others working on behalf of Heska; (c) any and all intellectual property rights
(including without limitation Patents and Patent Applications) appurtenant to or
claiming the Results described in subsection (b); and (d) any and all Know-How,
Materials and intellectual property rights made, created or reduced to practice
by or on behalf of Heska independent of this Agreement.

     6.3  Joint Intellectual Property.  Each Party has and shall retain an
          ---------------------------
undivided one-half interest in all right, title and interest in and to the Joint
Intellectual Property, subject to the licenses and other rights granted
hereunder.

     6.4  Independent Rights.  Each Party shall retain exclusive right, title
          ------------------
and interest in and to all its other inventions, developments, know-how, patent
rights and other intellectual property that are not 3DP Intellectual Property
Rights, Heska Intellectual Property Rights or Joint Intellectual Property
Rights, independent of and not subject to any provision of this Agreement.

7.   Licenses.
     --------

     7.1  Licenses from 3DP to Heska.  Subject to all the terms and conditions
          --------------------------
of this Agreement:

          7.1.1  Research License.  3DP hereby grants to Heska, for the term of
                 ----------------
this Agreement, the exclusive (except as to 3DP), worldwide right and license
under the 3DP Intellectual Property and 3DP's interest in the Joint Intellectual
Property to use the Test Compounds solely for the purpose of conducting Research
on the Test Compounds solely for use in the Fields, including without limitation
the right to prepare Heska Compounds for Research hereunder.

          7.1.2  Production and Use License. 3DP hereby grants to Heska, for the
                 --------------------------
term of this Agreement, an exclusive, worldwide, royalty-bearing right and
license under the 3DP Intellectual Property and 3DP's interest in the Joint
Intellectual Property to engage in Development, and to use, sell, have sold,
import and offer to sell and engage in the Commercialization of any Test
Compound,

                                       15
<PAGE>

3DP's interest in the Joint Intellectual Property to use the Test Compounds
solely for the purpose of conducting Research on the Test Compounds solely for
use in the Fields, including without limitation the right to prepare Heska
Compounds for Research hereunder.

          7.1.2  Production and Use License. 3DP hereby grants to Heska, for the
                 --------------------------
term of this Agreement, an exclusive, worldwide, royalty-bearing right and
license under the 3DP Intellectual Property and 3DP's interest in the Joint
Intellectual Property to engage in Development, and to use, sell, have sold,
import and offer to sell and engage in the Commercialization of any Test
Compound, Derivative Compound or Licensed Product for use in the Fields and any
Heska Compound or Heska Product for use in the Other Fields throughout the
Territory. Subject to the provisions of Section 17.7 and Section 7.1.4, Heska
shall have the right to grant sublicenses, subject to and upon terms consistent
with this Agreement, under the license granted in this Section 7.1.2, provided
that Heska shall remain primarily liable under this Agreement.

          7.1.3  Manufacturing License. Subject to the limitations herein, 3DP
                 ---------------------
hereby grants to Heska, for the term of the Agreement, an exclusive, worldwide
right and license under the 3DP Intellectual Property and 3DP's interest in the
Joint Intellectual Property to make and have made any Test Compound, Derivative
Compound or Licensed Product for use in the Fields or any Heska Compound or
Heska Product for use within the Other Fields throughout the Territory.  Subject
to the provisions of Section 17.7 and Section 7.1.4, Heska shall have the right
to grant sublicenses, subject to and upon terms consistent with this Agreement,
under the license granted in this Section 7.1.3, provided that Heska shall
remain primarily liable under this Agreement.

          7.1.4  Limitation of Grant. Notwithstanding the foregoing Sections
                 -------------------
7.1.1, 7.1.2 and 7.1.3, and except for the licenses granted to Heska in Sections
7.1.1, 7.1.2 and 7.1.3, 3DP shall retain all of its rights, title and interest
to the 3DP Intellectual Property and 3DP's interest in the Joint Intellectual
Property , including without limitation the right to develop, make, have made,
use and sell, import and offer to sell any compound, product or composition of
matter for human use. Without limiting the foregoing, nothing in Section 7.1.1,
7.1.2 or 7.1.3 shall be deemed to grant to Heska, and 3DP shall retain, any
rights to the Test Compounds, 3DP Intellectual Property or 3DP's interest in the
Joint Intellectual Property for use in or on a human.   Nothing contained in any
provision of this Agreement shall be deemed to grant to Heska any rights in
3DP's proprietary technology known as DirectedDiversity(R), its proprietary
technology known as ThermoFluor(R), or its other proprietary technology useful
for the creation of combinatorial chemical libraries, the processes for the
chemical synthesis of compounds and optimization of their properties, except to
the extent, if any, necessary for the manufacture of Test Compounds as permitted
by Section 7.1.3.

          7.1.5  Exclusivity in the Fields. 3DP agrees that Heska shall have
                 -------------------------
exclusive rights to use the Test Compounds in the Fields during the term of and
in accordance with the terms of this Agreement, and that 3DP may not make, use,
sell, promote, market or license or otherwise permit or authorize any other
party to make, use, sell, promote, or market the Test Compounds for any use

                                       16
<PAGE>

in the Fields during the term of this Agreement except as permitted by Section
4. 3DP covenants that it shall expressly prohibit any licensees of 3DP or its
Affiliates who are licensed to make, use or sell any Test Compounds for use in
or on humans from making, using, selling, promoting, or marketing the Test
Compounds for any use in the Fields.


     7.2  Licenses from Heska to 3DP.
          --------------------------

          7.2.1  License for Research and Development.  Heska hereby grants to
                 ------------------------------------
3DP, for the Research Term, an exclusive (except as to Heska), worldwide right
and license under the Heska Intellectual Property and an exclusive (except as to
Heska) worldwide right and license under Heska's interest in Joint Intellectual
Property to engage in the Research contemplated by this Agreement.

          7.2.2  Human Use.  Heska hereby grants to 3DP, for the term of this
                 ---------
Agreement, the exclusive, worldwide right and license, under the Results
comprising toxicological data for Test Compounds included in Heska's
Intellectual Property and under Heska's interest in Joint Intellectual Property
to use, make, have made, sell, have sold, import and offer to sell and engage in
the Commercialization of any Test Compound for use in or on humans.  Subject to
the provisions of Section 17.7 and Section 7.2,2,  3DP shall have the right to
grant sublicenses under the license granted in this Section 7.2.1, provided that
3DP shall remain primarily liable to Heska under this Agreement.

          7.2.3  Limitation of Grant.  Notwithstanding the foregoing Sections
                 -------------------
7.2.1, and except for the licenses granted to 3DP in Section 7.2.1, Heska shall
retain all of its rights, title and interest to the Heska Intellectual Property
and Heska's interest in the Joint Intellectual Property, including without
limitation the right to develop, make, have made, use and sell, import and offer
to sell any compound, product or composition of matter for use in the Fields.
Without limiting the foregoing, nothing in Section 7.2.2 shall be deemed to
grant 3DP, and Heska shall retain, any rights to Heska Intellectual Property or
Heska's interest in Joint Intellectual Property for any use in the Fields.

8.   Milestone Payments and Royalties.
     --------------------------------

     8.1  One-time Milestone Payments.  Heska shall make one-time milestone
          ---------------------------
payments to 3DP as follows:


          8.1.1  [**] payment, upon the Effective Date, for 3DP's development of
the 3DP Intellectual Property to be used over the Research Term, which payment
shall be non-refundable.

          8.1.2  [**] upon the selection by Heska pursuant to Section 4.1 of the
[**] Development Compound by Heska for use in the Primary Field.

          8.1.3  [**] upon the selection by Heska pursuant to Section 4.1 of the
[**] Development Compound by Heska for use in the other animal species in the
Primary Field.

          8.1.4  [**] within 15 days after the date on which a Regulatory Agency
has accepted the [**] complete application for Regulatory Approval of a Licensed
Product for use in the Primary Field.

          8.1.5  [**] within 15 days after the date on which a Regulatory Agency
has accepted the [**] complete application for Regulatory Approval of a Licensed
Product for use in the Primary Field in the other animal species.

          8.1.6  [**] upon the [**] Commercial Sale in the United States of any
Licensed Product for use in the Primary Field.

          8.1.7  [**] upon the [**] Commercial Sale in Europe of a Licensed
Product for use in the Primary Field.

          8.1.8  [**] upon the [**] Commercial Sale in the United States of any
Licensed Product for use in the Primary Field in the other animal species.


In the event that Heska or its Affiliates or sublicensees are conducting
Development on a particular Development Compound, and such Development efforts
cease for any reason (other than Regulatory Approval), and Heska or its
Affiliates or sublicensees subsequently select a different Development Compound
(the "Replacement Compound") and commence Development on such Replacement
Compound to replace the Development Compound that was dropped from Development,
then Heska shall

**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed separately with the Commission.

                                       17
<PAGE>

not be obligated to pay any of the milestone payments set forth in Section 8.1.2
through 8.1.5 for achievement of the milestone events set forth therein by the
Replacement Compound if such payments were previously made by Heska as a result
of achievement of such milestone events by such Development Compound that was
dropped from Development.

     8.2  Additional Milestones.  Heska shall make additional milestone payments
          ---------------------
to 3DP with respect to Subsequent Development Compounds as follows:


          8.2.1  [**] upon the selection by Heska pursuant to Section 4.1 of
each Subsequent Development Compound and commencement of Development for use in
the Primary Field.

          8.2.2  [**] upon the [**] Commercial Sale of each Licensed Product
containing a Subsequent Development Compound for use in the Primary Field.

          8.2.3  [**] upon the [**] Commercial Sale of each Licensed Product
containing a Subsequent Development Compound for use in the other animal species
in the Primary Field anywhere in the Territory.


In the event that Heska or its Affiliates or sublicensees are conducting
Development on a particular Subsequent Development Compound, and such
Development efforts cease for any reason (other than Regulatory Approval), and
Heska or its Affiliates or sublicensees subsequently select a different
Subsequent Development Compound (the "Subsequent Replacement Compound") and
commence Development on such Subsequent Replacement Compound to replace the
Subsequent Development Compound that was dropped from Development, then Heska
shall not be obligated to pay the milestone payments set forth in Section 8.2
for achievement of the milestone events set forth therein by the Subsequent
Replacement Compound to the extent such payments were previously made by Heska
as a result of achievement of such milestone events by such Subsequent
Development Compound that was dropped from Development.


     8.3  Milestones for Heska Products.  Heska shall pay to 3DP [**] upon the
          -----------------------------
First Commercial Sale of each Heska Product for use in the Other Fields anywhere
in the Territory.


     8.4  Combined Milestone Payments.  Heska shall make the following one-time
          ---------------------------
payments to 3DP upon the occurrence of the following events:


          8.4.1  [**] upon the [**] achievement of [**] in Net Sales in any
Post-Launch Year of all Licensed Products containing a particular Development
Compound for use in a particular animal in the Primary Field in the Territory.

          8.4.2  [**] upon the [**] achievement of [**] in Net Sales in any
Post-Launch Year of all Licensed Products containing a particular Development
Compound for use in the other animal species in the Primary Field in the
Territory.


     8.5  Royalties.  As consideration for the licenses and rights granted by
          ---------
3DP to Heska under this Agreement, Heska shall pay to 3DP during the period
ending on the applicable Royalty Expiration Date the following royalties:


          8.5.1  [**] of annual Net Sales of all Licensed Products in the
Territory until such time that such aggregate annual Net Sales of Licensed
Products throughout the Territory (including the U.S.) in each Post Launch Year
equal [**].

          8.5.2  [**] of that portion of the annual Net Sales of all Licensed
Products in the Territory in each Post Launch Year that exceed [**] up to
aggregate Net Sales of Licensed Products throughout the Territory in such Post
Launch Year equal [**].

          8.5.3  [**] of that portion of the annual Net Sales of all Licensed
Products in the Territory in each Post Launch Year that exceed [**].

          8.5.4  [**] of annual Net Sales in the Territory of Heska Products.


     8.6  Royalty Reductions.  Royalties payable under Section 8.5 with respect
          ------------------
to a Product in a country where such Product is not claimed by a Valid Claim
within the 3DP Patents or Joint Patents, shall be reduced by [**].  In addition,
in the event that Heska or its Affiliate or sublicenses is required to obtain a
license under a Patent owned by a Third Party in order to manufacture or sell a
Product, Heska may deduct from the royalty amounts otherwise owed to 3DP based
on sales of such Product [**] of the

**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed separately with the Commission.

                                       18
<PAGE>

amount of royalties paid to such Third Party based on sale of such Product,
provided that such deduction may not reduce the royalty payment made in any one
quarter by more than [**] of the amount otherwise owed.

     8.7  Records.  Heska shall keep, and require its Affiliates and
          -------
sublicensees to keep, complete and accurate records, on a country-by-country
basis, of Net Sales of Products and the calculation of royalties with respect
thereto, separately showing the calculation of all adjustments.

     8.8  Royalty Reports.  Heska shall deliver to 3DP written reports,
          ---------------
consistent with U.S. generally accepted accounting principles, within forty-five
(45) days after the close of each calendar quarter, showing separately for each
Product or Development Compound in each such quarter:

          8.8.1 gross sales by Heska its Affiliates and sublicensees, broken
down by both units sold and revenue and the calculation of Net Sales;

          8.8.2  details of the quantities sold in each country;

          8.8.3  royalties due to 3DP pursuant to Section 8; and

          8.8.4  the exchange rates used in determining the amount of U.S.
dollars and the basis for such determination.

     8.9  Royalty Payments.  Within 45 days after the end of each calendar
          ----------------
quarter during which royalties accrue on a Product pursuant to this Section 8 on
account of Net Sales, Heska shall pay to 3DP the total amount of royalties due
to 3DP for the previous calendar period, with such royalties to be accompanied
by a report for the previous calendar period described in this Section. All
payments of royalties made by Heska shall be made in U.S. Dollars by wire
transfer of immediately available funds to the account specified in Exhibit 3 or
                                                                    ---------
to such other account as 3DP may specify to Heska from time to time in a written
notice to Heska.

9.   Term and Termination
     --------------------

     9.1  Term.
          -----

          9.1.1  Expiration of Agreement.  Unless otherwise terminated, this
                 -----------------------
Agreement shall expire upon the last Royalty Expiration Date.  Upon such
expiration, Heska shall have a non-exclusive, worldwide, perpetual, irrevocable
license under the 3DP Intellectual Property and 3DP's interest under the Joint
Intellectual Property to make, have made, use, sell, import and offer for sale
all Test Compounds, Derivative Compounds and Licensed Products for use in the
Fields and Heska Compounds and Heska Products for use in the Other Fields and
3DP shall have a non-exclusive, worldwide, perpetual, irrevocable license, with
the right to sublicense, under Heska's interest in the Joint Intellectual
Property and under any

                                       19
<PAGE>

Results comprising toxicological data for Test Compounds included in the Heska
Intellectual Property to develop, commercialize, make, have made, use, sell,
import and offer for sale any Test Compounds for use in or on humans.

          9.1.2  Expiration, Termination or Extension of Research Term.  The
                 -----------------------------------------------------
Research Term shall be for an initial period of two years from the Effective
Date.  The Research Term may be terminated prior to its expiration or extended
beyond its expiration by written agreement of the Parties.

     9.2  Termination
          -----------

          9.2.1  Termination for Default.  If either Party breaches any material
                 -----------------------
provision of this Agreement and if such breach is not corrected within 45 days
after the non-breaching Party gives notice of the breach to the breaching Party,
in the case of a breach consisting of the non-payment of money, or 90 days after
the non-breaching Party gives notice of the default to the breaching Party, in
the case of any other breach, the non-breaching Party may terminate this
Agreement immediately by giving notice of the termination, effective on the date
of the notice; provided, however, that if any such non-monetary breach is not
               --------  -------
capable of being cured within the aforesaid 90-day period, so long as the
breaching Party commences to cure the breach promptly after receiving notice of
the breach from the non-breaching Party and thereafter diligently prosecutes the
cure to completion as soon as is practicable, the non-breaching Party may not
terminate this Agreement unless the breaching Party, notwithstanding such
efforts, is unable to cure the breach within 180 days after the other Party
gives notice of the default, in which case the non-breaching Party may terminate
this Agreement immediately by giving notice of the termination, effective on the
date of the notice.

          9.2.2  Rights in Event of Bankruptcy.
                 -----------------------------

                 9.2.2.1 Notwithstanding the bankruptcy of a Party, or the
impairment of performance by a Party of its obligations under this Agreement as
a result of bankruptcy or insolvency of the Party, the other Party shall be
entitled to retain the license rights and licenses granted herein, subject to
such Party's performance of all its obligations under the Agreement and to the
Party's rights to terminate this Agreement for reasons other than bankruptcy or
insolvency as expressly provided in this Agreement.

                 9.2.2.2 All license rights and licenses granted under or
pursuant to this Agreement under Patents and other intellectual property rights,
including know-how and trade secrets, by one Party to the other Party are, and
shall otherwise be deemed to be, for purposes of Section 365(n) of the U.S.
Bankruptcy Code, licenses of rights to "intellectual property" as defined under
Section 101(52) of the U.S. Bankruptcy Code. Each Party agrees that the other
Party as a licensee of such rights under this Agreement, shall retain and may
fully exercise all of its rights and elections under the U.S. Bankruptcy Code,
subject to performance by such electing Party of its preexisting obligations
under this Agreement.

                                       20
<PAGE>

           9.2.3 Voluntary Termination of License Rights. Heska may
                 ---------------------------------------
terminate the license rights granted to it by 3DP under Section 7.1 of this
Agreement with respect to any particular country or countries in the Territory
or with respect to a particular Test Compound or Licensed Product by giving 3DP
at least thirty (30) days written notice thereof.

           9.2.4 Mutual Termination. By written agreement, the Parties may
                 ------------------
at any time terminate this Agreement on mutually acceptable terms.

10.  Rights and Duties upon Termination
     ----------------------------------

     10.1  Monies Paid or Due. Upon the termination of this Agreement, 3DP shall
           ------------------
have the right to retain all payments previously received from Heska, subject to
the resolution, by audit or by settlement pursuant to Section 17.3 below, of any
dispute regarding such payments, and each Party shall pay to the other all sums
accrued hereunder which are then due.

     10.2  Remaining Product.  In the event that this Agreement is terminated
           -----------------
early for any reason, Heska shall notify 3DP of the amounts of each Product that
Heska, its Affiliates, sublicensees and distributors then have on hand in the
applicable country or countries, and, at 3DP's election Heska and its
sublicensees and distributors may sell the Product in that country or countries
if Heska pays royalties thereon in accordance with Section 8.

     10.3  Termination of Licenses. Any early termination of this Agreement
           -----------------------
shall terminate all licenses granted to Heska under Section 7.1 with respect to
the applicable country or countries, with full reversion to 3DP of all 3DP's
interest and rights in the 3DP Intellectual Property in such country or
countries.

     10.4  Sublicenses. Any termination of this Agreement will terminate all
           -----------
sublicenses granted by Heska under the license rights granted to Heska
hereunder.

     10.5  Survival of Rights. In the event of the termination of this Agreement
           ------------------
prior to its expiration, the obligations of the Parties theretofore accrued
under this Agreement shall survive, and the rights and obligations of the
Parties under this Section 10 and Sections [6, 7, 8, 10, 11, 13, 15, 16 and 17]
shall survive in accordance with the terms of such Sections.

     10.6  Rights Not Exclusive. All rights to terminate, and rights upon
           --------------------
termination, provided for either Party in this Agreement are in addition to
other remedies in law or equity which may be available to either Party.

11.  Exchange of Information and Confidentiality
     -------------------------------------------

     11.1  Requirement of Confidentiality. This Agreement contemplates the
           ------------------------------
exchange of certain confidential and proprietary information orally and in
writing both inside and outside the Fields by one Party

                                       21
<PAGE>

(the "Disclosing Party") to the other Party (the "Receiving Party") during the
term of this Agreement (the "Confidential Information") and the development of
certain confidential and proprietary information in the Fields in the course of
the Research collaboration by the Parties hereunder, including, without
limitation, Test Compounds and Results (the "Research Information") (the
Confidential Information and Research Information are collectively referred to
hereinafter as the "Information"). Such information shall be marked
"Confidential" and any information disclosed orally shall be deemed not to be
Information unless notified in writing by the Disclosing Party to the Receiving
Party within thirty (30) days of the oral disclosure. With respect to
Information, each Party, shall:

          11.1 1 use the Information only for the purpose of performing its
duties or exercising its rights under this Agreement and for no other purpose,
subject to the terms and conditions of this Agreement;

          11.1.2 safeguard the Information against disclosure to others with
the same degree of care as it exercises with its own data of a similar nature,
but not less than a reasonable degree of care; and

          11.1.3 not disclose the Information to others (except to its
employees, consultants, Affiliates, or sublicensees, or the employees or
consultants of an Affiliate or sublicensee, who have a need to know such
Information in order to perform or supervise Research or otherwise exercise the
Party's rights under this Agreement and who are bound to the Receiving Party by
a like obligation of confidentiality and restriction on use) without the express
written consent of the other Party.

     11.2 Exemption from Restrictions on Information.  The obligations of
          ------------------------------------------
Section 11.1 shall not apply to Information of the Disclosing Party which:

          11.2.1 the Receiving Party or its Affiliate can demonstrate by written
records was previously known to it;

          11.2.2 is now, or in the future becomes, public knowledge other than
through the acts or omissions of the Receiving Party or its Affiliate;

          11.2.3 is or was lawfully obtained by the Receiving Party or its
Affiliate from sources independent of the Disclosing Party;

          11.2.4 the Receiving Party can demonstrate was independently developed
by or for employees of the Receiving Party or its Affiliate having no knowledge
of such Information; or

          11.2.5 The Receiving Party is required to disclose by law or pursuant
to the direction of a court or government agency; provided the Disclosing Party
is first given a reasonable opportunity to contest such disclosure or seek a
protective order.

                                       22
<PAGE>

     11.3  Permitted Use and Disclosure of Information. Nothing contained herein
           -------------------------------------------
is intended to prevent either Party from using the Information to make
Regulatory Filings and to obtain necessary or appropriate Regulatory Approvals
or to prosecute or obtain Patents and Patent Applications for Products developed
hereunder; provided, however, that the Disclosing Party shall take all
reasonable efforts to prevent disclosure of the Information to Third Parties.
Each Party may use and disclose Information owned by such Party, provided that
such Information is not exclusively licensed to the other Party under this
Agreement.

     11.4  Disclosure of Information Not a License.  The furnishing of the
           ---------------------------------------
Information of the Disclosing Party to the Receiving Party shall not constitute
any grant or license to the Receiving Party under any legal rights now or
hereinafter held by the Disclosing Party.

     11.5  Prior Review of Publications.  Neither Party shall submit for written
           ----------------------------
or oral publication any manuscript, abstract or the like which includes
Information, including without limitation any data or other information relating
to any Test Compound, Product, Development or Commercialization without first
obtaining the prior written consent of the Project Team pursuant to Section
5.3.4 and the other Party.  Such consent shall not be unreasonably withheld or
delayed. Notwithstanding the foregoing, either Party may make publications
relating to such Party's Patent Applications that were filed prior to the
Effective Date without such Party having to obtain the other Party's  consent to
the publication.  The contribution of each Party shall be noted in all
publications or presentations by acknowledgment or co-authorship, whichever is
appropriate.

     11.6  Publicity and News Releases.  Except as may be required by applicable
           ---------------------------
laws, rules or regulations, neither Party will originate any publicity, news
release, or other public announcement or filing, written or oral, whether to the
public press or otherwise, relating to performance hereunder or the existence of
an arrangement between the Parties including this Agreement or any amendment
hereto, without the prior written approval of the other Party which approval
shall not be unreasonably withheld or delayed.  In the event disclosure is
required by applicable law, rules or regulations, then the Party required to so
disclose such information shall, to the extent possible, provide to the other
Party for its approval (such approval not to be unreasonably withheld or
delayed) a written copy of such public announcement at least three business days
prior to disclosure. Notwithstanding the foregoing, (i) the Parties have agreed
to the press releases relating to the entering into of this Agreement agreed
upon by the Parties, copies of which are attached to this Agreement as Exhibit
                                                                       -------
11.6 and (ii) the Parties shall have the right to disclose the material terms of
----
this Agreement to any bona-fide financial partner or potential investor or
acquirer.

     11.7  Period of Confidentiality.  The obligations of this Section 11 shall
           -------------------------
remain in effect during the term of this Agreement and the five-year period
beginning on the termination or expiration date of the term of this Agreement.

     11.8  Injunctive Relief.  3DP and Heska agree that unauthorized disclosure
           -----------------
of Information could result in irreparable harm.  Accordingly, in the event that
either 3DP or Heska breaches its obligations with

                                       23
<PAGE>

respect to Information under the Agreement, the Party injured shall be entitled
to enjoin any further breach and may take such additional action as it deems
necessary and appropriate including seeking damages in any court of competent
jurisdiction.

12.  Inventions, Patents and Patent Prosecution
     ------------------------------------------

     12.  Joint Intellectual Property.
          ---------------------------

          12.1.1  Each Party shall promptly inform the other Party upon the
making of a potentially patentable invention that is Joint Intellectual
Property. The Parties thereafter shall promptly meet to discuss in good faith an
appropriate patent prosecution strategy for such invention. It is the intention
of the Parties whenever possible to divide prosecution of Patent Applications
claiming such inventions so that Heska has the responsibility for prosecution of
Patent Applications that claim uses or applications of the invention in the
Fields and 3DP shall have the responsibility for prosecution of Patent
Applications that claim uses or applications of the invention in or on humans.
Based on such discussions, the Parties will allocate to each Party the agreed
responsibility for filing and prosecution of Patent Applications claiming such
invention.

          12.1.2  3DP shall have the first right, at its own expense and using
in-house or outside legal counsel reasonably acceptable to Heska, to prepare,
file, prosecute, maintain and extend such Patent Applications and Patents
claiming the Joint Intellectual Property as allocated to 3DP by the Parties
under Section 12.1.1, in countries of its choice throughout the world. Heska
shall have the first rights, at its own expense and using in-house or outside
legal counsel reasonably acceptable to 3DP, to prepare, file, prosecute,
maintain and extend such Patent Applications and Patents claiming the Joint
Intellectual Property as allocated to Heska by the Parties under Section 12.1.1,
in countries of its choice throughout the world. Each Party shall consult with
the Project Team concerning the nature and text of such Patent Applications and
prosecution matters related thereto prior to filing of such applications or
responding to any correspondence with patent authorities regarding such
applications.

          12.1.3  If a Party that has the right under Section 12.1.2 to
prosecute certain Patent Applications claiming an invention in the Joint
Intellectual Property declines to file, prosecute or maintain such Patent
Applications or Patents issuing therefrom, such Party will give the other Party
written notice of its election to cease such efforts at least sixty days before
any date that would act as a forfeiture or abandonment of the rights in such
Patent Application or Patent. Thereafter, the other Party may at its expense
undertake the filing, prosecution and maintenance of such abandoned application
or Patent.

          12.1.4  In the event that a Party desires to license to a Third Party
any of such Party's interest in Joint Intellectual Property (to the extent not
already licensed hereunder), such Party shall provide the other Party notice of
such proposed license, in confidence, and agrees to negotiate with such other
Party, if it so requests, to grant such license rights to such Party, provided
that the noticing Party may negotiate with any Third Party at the same time.

                                       24
<PAGE>

     12.2 3DP Intellectual Property.
          -------------------------

          12.2.1  3DP shall promptly inform Heska of any potentially
patentable invention within the Results that may have applicability or utility
in the Primary Field, promptly after making such invention.  Heska shall have
the right to discuss such invention with 3DP and to request the filing and
prosecution of Patent Applications with respect to such invention to the extent
applicable to or useful in the Primary Field, and 3DP shall consider reasonably
all such requests.

          12.2.1  3DP shall have the first right, at its own expense and using
in-house or outside legal counsel reasonably acceptable to Heska, to prepare,
file, prosecute, maintain and extent Patent Applications and Patents claiming
inventions in the Results, in countries of its choice throughout the world. With
respect to any such Patent Applications that have claims that relate to the
Primary Field or have application or utility in the Primary Field, 3DP will
provide Heska the Patent Application a reasonable amount of time prior to filing
(at least 30 days wherever possible) so that Heska may review and give comments
to 3DP, which comments 3DP will reasonably consider. 3DP also will provide Heska
copies of all correspondence and other communications from patent authorities
regarding such Patent Applications and copies of the responses or other
communications proposed to be made by 3DP to such authorities a reasonable
amount of time prior to making such communications so that Heska may review and
give comments to 3DP, which comments 3DP will reasonably consider.

          12.2.2  If 3DP declines to file, prosecute or maintain any Patent
Applications or Patents claiming Results that, in Heska's reasonable belief,
relate to the Primary Field or have application or utility in the Primary Field,
3DP will give Heska written notice of its election to cease such efforts at
least sixty days before any date that would act as a forfeiture or abandonment
of the rights in such Patent Application or Patent.  Thereafter, Heska may at
its expense undertake the filing, prosecution and maintenance of such abandoned
Patent Applications or Patent, and immediately after Heska undertakes such
efforts 3DP shall assign to Heska all right, title and interest in and to such
Patent Application or Patent.

     12.3 Heska Intellectual Property.
          ---------------------------

          12.3.1  Heska shall promptly inform 3DP of any potentially patentable
invention within the Results included in the Heska Intellectual Property that
may have applicability or utility to use of a Test Compound in the Primary
Field, promptly after making such invention.  3DP shall have the right to
discuss such invention with Heska and to request the filing and prosecution of
Patent Applications with respect to such invention to the extent of such
applicability to or utility for use of Test Compounds in the Primary Field, and
Heska shall consider reasonably all such requests.

          12.3.2  Heska shall have the first right, at its own expense and using
in-house or outside legal counsel reasonably acceptable to 3DP, to prepare,
file, prosecute, maintain and extend Patent Applications and Patents claiming
inventions in the Results included in the Heska Intellectual Property, in

                                       25
<PAGE>

countries of its choice throughout the world.  With respect to any such Patent
Applications that have claims that relate to or have application or utility to
use of a Test Compound in the Primary Field, Heska will provide 3DP the Patent
Application a reasonable amount of time (at least thirty days whenever possible)
prior to the filing so that 3DP may review and give comments to Heska, which
comments Heska will reasonably consider.  Heska also will provide 3DP copies of
all correspondence and other communications from patent authorities regarding
such Patent Applications and copies of the responses or other communications
proposed to be made by Heska to such authorities a reasonable amount of time
prior to making such communication so that 3DP may review and give comments to
Heska, which comments Heska will reasonably consider.

     12.4  Assistance.  Each Party shall, at its own expense, provide reasonable
           ----------
assistance, including without limitation making inventors available to discuss
their inventions and appropriate documentation, to the other Party to facilitate
filing of all Patent Applications prosecuted by such other Party pursuant to
this Section 12 and shall execute all documents deemed necessary or desirable
therefore.

13.  Infringement
     ------------

     13.1  Third Party Litigation.  In the event of the institution of any suit
           ----------------------
by a Third Party against 3DP, Heska or their respective Affiliates or
sublicensees for patent infringement involving the manufacture, use, sale,
distribution or marketing of a Development Compound or Licensed Product by
Heska, its Affiliates or sublicensees anywhere in the Territory, the Party sued
shall promptly notify the other Party in writing.  Heska shall defend such suit
at its expense. Any costs and expenses of Heska in defending a suit arising
solely out of the use of 3DP Intellectual Property, and any amounts that Heska
is required to pay to the Third Party in order to settle or otherwise dispose of
such suit or in damages or other amounts finally awarded to such Third Parties
in such suit may be offset by Heska against any amounts that Heska owes to 3DP
under Section 8; provided that Heska may not settle such suit without 3DP's
prior written approval, such approval to not be unreasonably be withheld or
delayed.

     13.2  Infringement.  In the event that 3DP or Heska becomes aware of actual
           ------------
or threatened infringement of 3DP Patents or Joint Intellectual Property
(insofar as they relate to the Heska Compounds, Development Compounds or
Products) anywhere in the Territory, that Party shall promptly so notify the
other Party in writing.  Heska shall have the first right but not the obligation
to bring, at its own expense, an infringement action or file any other
appropriate action or claim against any Third Party related to infringement of
such Patents or Joint Intellectual Property.  If Heska does not commence a
particular infringement action within 90 days after it receives written notice
of such infringement of 3DP Intellectual Property or Joint Intellectual
Property, 3DP, after so notifying Heska in writing, shall be entitled to bring
such infringement action or any other appropriate action or claim at 3DP's
expense.  In any action pursuant to this section, the Party bringing the action
shall have the right to use the name of the other Party in connection therewith,
provided that the Party bringing the action defends, indemnifies and holds
harmless the other Party, its officers, directors, shareholders, employees,
successors and assigns from any loss, damage or liability, including reasonable
attorneys' fees, resulting from the action.

                                       26
<PAGE>

     13.3  Control of Litigation, Assistance and Settlement.  The Party
           ------------------------------------------------
conducting any action pursuant to Section 13.2 shall be entitled to bring and
control the action through counsel of its choice, and, upon request, the other
Party shall cooperate and provide reasonable assistance in any such action
without expense to the requesting Party.  No settlement or consent judgment or
other voluntary final disposition of any suit defended or action brought by one
Party pursuant to this Section may be entered into without the consent of the
other Party if such settlement would require the non-settling Party to be
subject to an injunction or to make a monetary payment or would adversely affect
the non-settling Party's rights under this Agreement or in its intellectual
property.

     13.4  Expenses and Awards.  The damages and awards recovered in an action
           -------------------
brought under Section 13.1 or 13.2 shall be applied as follows:

           13.4.1 first, to reimburse the Party defending or bringing such
action;

           13.4.2 second, to reimburse the expenses of the other Party in
connection with such action; and

           13.4.3 the balance to the Party that controlled the action, which, if
the Party controlling the action is Heska, shall be treated as Net Sales.

     13.5  Obligation to Inform.  The Parties shall keep one another informed of
           --------------------
the status of, and their respective activities regarding, any litigation
concerning any Development Compound or Product.

14.  Audit Rights, Taxes,  Payments and Interest
     -------------------------------------------

     14.1  Audit Rights.
           ------------

           14.1.1 3DP shall have the right, at its expense, through a certified
public accountant reasonably acceptable to Heska and 3DP, to examine the records
required to be maintained by Heska under this Agreement during regular business
hours, and upon reasonable prior notice, before the termination or expiration of
this Agreement and for three years thereafter, provided that such examination
shall not take place more often than once a year and shall not cover such
records for more than the preceding three years, and provided further that such
accountant shall report to 3DP only on the accuracy of royalty statements and
payments.  If the auditor discloses a discrepancy in royalties owed by Heska to
3DP and royalties paid to 3DP which exceeds five percent (5%) of total Net Sales
made until the date of completion of the audit, Heska shall pay the entire
expense of the audit and pay to 3DP the entire amount of the discrepancy plus
interest within 30 days from the date upon which 3DP notified Heska of the
discrepancy.  Interest shall be computed at the rate set forth in Section 14.5.

                                       27
<PAGE>

          14.1.2 Heska shall have the right, at its expense, through a certified
public accountant reasonably acceptable to 3DP and Heska, during regular
business hours and upon reasonable prior notice, to examine 3DP's records of FTE
Years applied to the Research and costs of Test Compounds supplied to Heska at
Heska's expense to determine 3DP's compliance with its obligations as to the
allocation of FTE Years to the Research and to charge Heska its cost for such
Test Compounds, and its records relating to amounts payable to Heska under
Section 4.4 to determine compliance with its obligations under Section 4.4,
before the termination or expiration of this Agreement and for three years
thereafter, provided that such examination shall not take place more often than
once a year and shall not cover such records for more than the preceding three
years, and provided further that such accountant shall report to Heska only on
3DP's allocation of FTE Years or the accuracy of payments under Section 4.4. If
the auditor discloses a discrepancy in amounts owed by 3DP to Heska under
Section 4.4 which exceeds five percent (5%) of total amounts payable until the
date of completion of the audit, 3DP shall pay the entire expense of the audit
and pay to Heska the entire amount of the discrepancy plus interest within 30
days from the date upon which Heska notified 3DP of the discrepancy. Interest
shall be computed at the rate set forth in Section 14.5.

     14.2 Taxes.  Any tax required to be withheld and paid by a Party on account
          -----
of royalties payable to the other Party under this Agreement shall be deducted
from the amount of royalties otherwise due.  The paying Party shall secure and
send to the other Party written proof of any such taxes withheld and paid for
the benefit of the other Party in a form sufficient to satisfy the United States
Internal Revenue Service.

     14.3 Payments in U.S. Dollars.  All dollar amounts set forth in this
          ------------------------
Agreement are references to U.S. dollars.  If Heska is prevented from making any
payment under this Agreement by virtue of the statutes, laws, codes or
governmental regulations of the country from which the payment is to be made,
then such payments may be paid by depositing them in the currency in which
accrued to 3DP's account in a bank acceptable to 3DP in the country whose
currency is involved.

     14.4 Conversions to U.S. Dollars.  Monetary conversions from the currency
          ---------------------------
of a foreign country, in which a Product is sold, into U.S. currency shall be
made at the average spot rate for the purchase of U.S. dollars with such
currency as quoted by Citibank, N.A., New York, New York (or its successor in
interest), at approximately 9 a.m. (New York City time) on the last ten business
days of the calendar quarter with respect to which such revenues were earned.

     14.5 Interest.  Any payment that is not made on or before the date when due
          --------
under this Agreement shall accrue interest thereon from and including such date
and until but excluding the date of payment at the rate of 1.5% (one and one-
half percent) per month or, if such rate is in excess of the rate then permitted
by applicable law, at the highest rate so permitted.

                                       28
<PAGE>

15.  Representations and Warranties
     ------------------------------

     15.1  Each Party represents and warrants to the other Party:

           15.1.1  Corporate Power. Such Party is duly organized and validly
                   ---------------
existing under the laws of the jurisdiction of its formation and has full
corporate power and authority to enter into this Agreement and carry out the
provisions hereof.

           15.1.2  Due Authorization. Such Party is duly authorized to execute
                   -----------------
and deliver this Agreement and to perform its obligations hereunder.

           15.1.3  Binding Agreement.  This Agreement is a legal and valid
                   -----------------
obligation of such Party and the execution, delivery and performance of this
Agreement by such Party does not and will not conflict with any agreement,
instrument or understanding, oral or written, to which it is a Party or by which
it may be bound, nor violate any law or regulation of any court, governmental
body or administrative or other agency having authority over such Party.

           15.1.4  Authorizations. Such Party has obtained, and will maintain
                   --------------
for the term of the Agreement, all licenses, authorizations, approvals and
reviews required by any federal, state or local governmental authority for
performance of any activities under this Agreement.

           15.1.5  No Agreement. No agreement exists between such Party and a
                   ------------
Third Party as of the Effective Date which would prevent such Party from
performing its obligations under this Agreement or granting to the other Party
the rights granted hereunder, and such Party shall not enter into any such Third
Party agreement that would prevent such Party from performing its obligations
under this Agreement or granting to those other Party the rights granted
hereunder.

     15.2  3DP represents and warrants to Heska that:

          15.2.1  To 3DP's knowledge, based upon its review of the issued
Patents covering the Existing Compounds and its having performed a reasonable
search of relevant published Patents, as of the Effective Date, the conduct of
the Research, including the use of the 3DP Intellectual Property by Heska as
permitted by this Agreement, will not violate the intellectual property rights
of any Third Party and there is a reasonable likelihood that 3DP will be able to
discover, synthesize or produce a reasonable number of Test Compounds that will
not violate the intellectual property rights of any Third Party. Nothing in this
Agreement shall be construed as a representation or warranty that the Patents in
the 3DP Intellectual Property are valid or enforceable, or that they will be
during the term of this Agreement.

     15.3  3DP Disclaimer of Warranties. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH
           ----------------------------
IN THIS AGREEMENT, 3DP MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OR
CONDITIONS OF ANY KIND, EITHER EXPRESS OR IMPLIED, WITH

                                       29
<PAGE>

RESPECT TO THE 3DP INTELLECTUAL PROPERTY, ANY PATENTS, ANY KNOW-HOW, ANY
DEVELOPMENT COMPOUND, ANY PRODUCT, THE RESEARCH, THE RESULTS OR ANY INFORMATION
DISCLOSED HEREUNDER. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, 3DP
DISCLAIMS ANY AND ALL IMPLIED WARRANTIES INCLUDING, WITHOUT LIMITATION, ANY AND
ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND
NON-INFRINGEMENT.

     15.4  Heska Disclaimer of Warranties.  EXCEPT AS OTHERWISE EXPRESSLY SET
           ------------------------------
FORTH IN THIS AGREEMENT, HESKA MAKES NO REPRESENTATIONS AND EXTENDS NO
WARRANTIES OR CONDITIONS OF ANY KIND, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO
THE HESKA INTELLECTUAL PROPERTY, ANY PATENTS, ANY KNOW-HOW, ANY DEVELOPMENT
COMPOUND, ANY PRODUCT, THE RESEARCH, THE RESULTS OR ANY INFORMATION DISCLOSED
HEREUNDER. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, HESKA DISCLAIMS ANY
AND ALL IMPLIED WARRANTIES INCLUDING, WITHOUT LIMITATION, ANY AND ALL IMPLIED
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-
INFRINGEMENT.

16.  Indemnification and Insurance
     -----------------------------

     16.1  Mutual Indemnification.  Each party (the "Indemnifying Party") agrees
           ----------------------
to indemnify, defend and hold harmless the other, its officers, directors,
shareholders, employees, Affiliates, agents, sublicensees, successors and
assigns (the "Indemnified Parties") from and against any loss, damage, or
liability, including interest and penalties and reasonable attorney's fees, and
any claim, complaint, suit, proceeding or cause of action against an Indemnified
Party resulting from or arising out of:

           16.1.1  any negligent or intentional act by the Indemnifying Party,
its officers, directors, shareholders, employees, Affiliates, agents,
sublicensees successors and assigns;

           16.1.2  any breach by Indemnifying Party of any representation,
warranty, covenant or provision in this Agreement;

     16.2  Indemnification by Heska.  Heska agrees to indemnify, defend and hold
           ------------------------
harmless 3DP, its officers, directors, shareholders, employees, Affiliates,
agents, sublicensees, successors and assigns (the "3DP Indemnified Parties")
from and against any loss, damage, or liability, including interest and
penalties and reasonable attorney's fees, and any claim, complaint, suit,
proceeding or cause of action against an 3DP Indemnified Party resulting from or
arising out of:

                                       30
<PAGE>

          16.2.1  any product liability or other lawsuit, claim, demand or other
action brought with respect to damage or harm caused by a Development Compound
or Product sold by Heska or any of its Affiliates or sublicensees; and

          16.2.2  the death of or injury to any person or persons, damage to
property, or any other claim, proceeding, demand, expense and liability of any
kind whatsoever resulting from the design, testing (including, without
limitation, clinical trials), production, manufacture, shipping, handling, use
(in commerce or otherwise), sale, lease, consumption, promotion or advertisement
of any Development Compound or Product by Heska or any of its Affiliates or
sublicensees.

Heska shall not be responsible or have any obligation hereunder, however, for
the negligent or intentional wrongdoing of any 3DP Indemnified Party.

     16.3 Indemnification by 3DP.  3DP agrees to indemnify, defend and hold
          ----------------------
harmless Heska, its officers, directors, shareholders, employees, Affiliates,
agents, sublicensees, successors and assigns (the "Heska Indemnified Parties")
from and against any loss, damage, or liability, including interest and
penalties and reasonable attorney's fees, and any claim, complaint, suit,
proceeding or cause of action against a Heska Indemnified Party resulting from
or arising out of:

          16.3.1  any product liability or other lawsuit, claim, demand or other
action brought with respect to damage or harm caused by a Product sold by 3DP or
any of its Affiliates or sublicensees; and

          16.3.2  the death of or injury to any person or persons, damage to
property, or any other claim, proceeding, demand, expense and liability of any
kind whatsoever resulting from the design, testing (including, without
limitation, clinical trials), production, manufacture, shipping, handling, use
(in commerce or otherwise), sale, lease, consumption, promotion or advertisement
of any Product by 3DP or any of its Affiliates or sublicensees.

3DP shall not be responsible or have any obligation hereunder, however, for the
negligent or intentional wrongdoing of any Heska Indemnified Party.

     16.4 Insurance.  During the term of this Agreement and for a period of five
          ---------
years thereafter, Heska shall obtain and/or maintain at its sole cost and
expense, product liability insurance in amounts, which are reasonable and
customary in the animal health industry for companies of comparable size and
activities.  Such product liability insurance shall insure against all
liability, including product liability, personal liability, physical injury or
property damage (subject to usual policy exceptions).  Heska shall provide
written proof of the existence of such insurance to 3DP upon request therefor.

     16.  Procedures for Indemnification.  In the event that a Party seeks
          ------------------------------
indemnification under the terms of Sections 16.2 or 16.3, it shall inform the
indemnifying party of the claim as soon as

                                       31
<PAGE>

reasonably practicable after it receives notice of the claim, shall permit the
indemnifying party to assume direction and control of the defense of the claim
(including the right to settle the claim solely for monetary consideration), and
shall cooperate as requested (at the indemnifying party's expense), in the
defense of the claim.

17.  Miscellaneous
     -------------

     17.1  Force Majeure.  If the performance of any part of this Agreement by
           -------------
either Party, including the performance of the Research, or of any obligation
under this Agreement, is prevented, restricted, interfered with or delayed by
reason of any cause beyond the reasonable control of the Party liable to
perform, unless conclusive evidence to the contrary is provided, the Party so
affected shall, upon giving written notice to the other Party, be excused from
such performance to the extent of such prevention, restriction, interference or
delay, provided that the affected Party shall use its best efforts to avoid or
remove such causes of non-performance and shall continue performance with the
utmost dispatch whenever such causes are removed.  When such circumstances
arise, the Parties shall discuss what, if any, modification of the terms of this
Agreement may be required in order to arrive at an equitable solution.

     17.2  Governing Law; Convention on Contracts for the International Sale of
           --------------------------------------------------------------------
Goods.  This Agreement shall be deemed to have been made in the State of New
-----
York, U.S.A., and its form, execution, validity, construction and effect shall
be determined in accordance with the law of First Circuit of the United States
and of the State of New York,  U.S.A., without giving effect to the principles
of conflicts of law thereof.  To the extent that it may otherwise be applicable,
the Parties hereby expressly agree to exclude from the operation of this
Agreement the United Nations Convention on Contracts for the International Sale
of Goods, concluded at Vienna, on April 11, 1980, as amended and as may be
amended further from time to time.

     17.3  Dispute Resolution.  Either Party may initiate the dispute resolution
           ------------------
procedure set forth in this Section 17.3 by providing written notice to the
other Party. Any dispute between the Parties relating to this Agreement shall be
resolved pursuant to the following procedures:

          17.3.1  Any dispute arising out of or in connection with the Research
shall first be submitted to the Project Team for resolution.  The Project Team
shall have 30 days to attempt to resolve the dispute.  The Project Team will set
forth its resolution in writing.

          17.3.2  If the Project Team is unable to resolve the dispute related
to the Research within the 30-day period specified in Section 17.3.1, or if
either Party gives written notice to the other Party of any dispute under this
Agreement that is not related to the Research, the dispute shall automatically
be referred to the President/CEO of 3DP and an executive officer designated by
Heska from time to time (together, the "Officers"), who shall attempt to resolve
the dispute within a reasonable

                                       32
<PAGE>

time, but in no case more than 45 days from the time that the Project Team
forwards its resolution to the Officers. The Officers shall issue their
resolution in writing.

          17.3.3  If the Officers are unable to resolve the dispute, they shall
use best efforts to select and agree upon a neutral arbitrator. If the
executives are unable to agree upon a neutral arbitrator within twenty (20)
days, a neutral arbitrator shall be appointed pursuant to the Commercial
Arbitration Rules of the American Arbitration Association ("AAA") then in
effect. The Officers and the neutral arbitrator shall participate in a meeting
in which the Parties shall work in good faith to resolve the dispute in
question. The meeting shall be held within 15 days after the selection or
appointment of the neutral arbitrator at a time and place to which the Parties
mutually agree, which agreement shall not be unreasonably withheld by the other
Party. The meeting shall be of such duration as the Parties in good faith deem
necessary, but in no event shall it extend beyond two business days. No formal
procedural rules shall govern this meeting. Each of the Parties may make such
oral and written presentations and present such oral and written presentations
and present such documents and other exhibits as it deems appropriate. After
listening to such presentations and examining such documents and other exhibits,
the two Officers, with the assistance of the neutral arbitrator, shall work
together in good faith to resolve the dispute in question. Each Party shall
absorb all of its own expenses in connection with such meeting and shall pay on
e-half of any costs or fees related to the services of the neutral arbitrator.
In the event the dispute is not resolved after such meeting is concluded, the
provisions of Section 17.3.4 below shall apply.

          17.3.4  If any dispute arising out of or in connection with this
Agreement is not resolved pursuant to Section 17.3.4, then the dispute shall be
settled by arbitration in accordance with the Commercial Arbitration Rules of
the AAA then in effect, as modified below. The Parties will cooperate with each
other in causing the arbitration to be held in as efficient and expeditious a
manner as practicable.

               17.3.4.1       Arbitration shall be initiated by filing a demand
at the office of the AAA at 225 N. Michigan Avenue, Suite 2527, Chicago,
Illinois 60601.

               17.3.4.2       Disputes will be heard and determined by a panel
of three arbitrators. One Party arbitrator will be appointed by each Party to
serve on a panel. One neutral arbitrator will be appointed by the AAA.

               17.3.4.3       Neither Party will communicate separately with any
arbitrator. All communications between a Party and a Party arbitrator or the
neutral arbitrator will be directed to the AAA for transmittal to the
arbitrator.

               17.3.4.4       Any award rendered by the arbitrators shall be
final and binding upon the Parties hereto. Judgment upon the award may be
entered in any court of record of competent jurisdiction.

                                       33
<PAGE>

          17.3.5  Notwithstanding the foregoing provisions, either Party may
initiate and pursue any legal or equitable action to protect its Information,
intellectual property rights and ownership rights and either Party may initiate
and pursue legal action to avoid the expiration of any applicable statute of
limitations by seeking injunctive or other legal or equitable relief in any
court having jurisdiction over such matter.

     17.4  Severability. In the event that any provision of this Agreement shall
           ------------
be held illegal, void or ineffective, the remaining portions hereof shall remain
in full force and effect so long as such remaining portions do not materially
change the intent of this Agreement or the right or obligations of the Parties
hereunder. If any provision of this Agreement is in conflict with any applicable
statute or law in any jurisdiction, then such provision shall be deemed
inoperative in such jurisdiction to the extent of such conflict and the Parties
will renegotiate the affected provisions of this Agreement to resolve any
inequities. It is the intention of the Parties that, if any court or other
tribunal construes any provision or clause of this Agreement, or any portion
thereof, to be illegal, void or unenforceable because of the duration of such
provision or the area or matter covered thereby, such court shall reduce the
duration, area or matter of such provision and enforce such provision in its
reduced form.

     17.5  Entire Agreement, Amendment.  This Agreement constitutes the entire
           ---------------------------
agreement between the Parties relating to the subject matter hereof and
supersedes all previous writings and understandings, whether oral or written,
relating to the subject matter of this Agreement.  This Agreement may not be
amended, supplemented or otherwise modified except by an instrument in writing
signed by both Parties that specifically refers to this Agreement.

     17.6  Notices.  Any notice or other communication required or permitted
           -------
under this Agreement shall be sent by certified mail or courier service, charges
pre-paid, or by facsimile transmission, to the address or facsimile number
specified below:

     If to 3DP:

            3-Dimensional Pharmaceuticals, Inc.
            Eagleview Corporate Center
            665 Stockton Drive, Suite 104
            Exton, PA  19341
            Fax No.:   (610) 458-8258
            Attention:  Thomas P. Stagnaro, President
                        and Chief Executive Officer

                                       34
<PAGE>

     with a copy to:

            Morgan, Lewis & Bockius LLP
            2000 One Logan Square
            Philadelphia, PA  19103
            Fax No.:  (215) 963-5299
            Telephone No.: (215) 953- 5371
            Attention:  David R. King, Esq.

     If to Heska:

            The Heska Corporation
            1825 Sharp Point Drive
            Fort Collins, CO 80525
            Fax No.:  (970) 484-9505
            Telephone No.:  (970) 493-7272
            Attention: Paul Hudnut
                       Vice President of Business Development

     with a copy to:

            Cooley Godward LLP
            Five Palo Alto Square
            3000 El Camino Real
            Palo Alto, California 94306
            Fax No.: (650) 857-0003
            Telephone No.: (650) 857-5000
            Attention: Bob Jones, Esq.


or to such other address or facsimile number as the person may specify in a
notice duly given to the sender as provided herein.  A notice will be deemed to
have been given five days after the date deposited in the United States mail or
with a courier service or, in the case of facsimile transmission, when received.

     17.7  Assignment and Binding Effect. This Agreement and the licenses herein
           -----------------------------
granted shall be binding upon and inure to the benefit of the successors and
assigns of the Parties hereto. Neither Party may assign any of its rights, or
delegate any of its obligations, under this Agreement without the written
consent of the other Party. Notwithstanding the foregoing, either Party may,
without obtaining the consent of the other Party assign this Agreement to any
Affiliate or to any corporation with which it may merge or consolidate, or to
which it may transfer all or substantially all of its assets.

                                       35
<PAGE>

     17.8  Recordation.  Each Party shall have the right during the term of this
           -----------
Agreement to record or register this Agreement in any patent office or other
appropriate facility anywhere in the Territory, and the other Party shall
provide reasonable assistance in effecting such recording.

     17.9  Headings and References.  All section headings contained in this
           -----------------------
Agreement are for convenience of reference only and shall not affect the meaning
or interpretation of this Agreement.  Unless the context requires otherwise, all
references in this Agreement to any section, exhibit or appendix shall be deemed
and construed as references to a section of, or an exhibit or appendix to, this
Agreement, and any such exhibits and appendices are hereby incorporated in this
Agreement by such reference.

     17.10 No Agency. It is understood and agreed that each Party shall have the
           ---------
status of an independent contractor under this Agreement and that nothing in
this Agreement shall be construed as authorization for either Party to act as
agent for the other. Members of the Project Team shall remain employees of Heska
or 3DP, as the case may be, and neither Party shall incur any liability for any
act or failure to act by employees of the other Party, including members of any
of the foregoing committees who are employees of the other Party.

     17.11 Counterparts.  This Agreement may be executed in any number of
           ------------
counterparts, each of which shall be an original as against any Party whose
signature appears thereon but all of which together shall constitute but one and
the same instrument.

     17.12 Export Control.  The Parties agree not to remove or export from the
           --------------
United States or reexport from anywhere any Results, 3DP Intellectual Property,
Development Compound or Product to Afghanistan, the Peoples' Republic of China
or any Group Q, S, W, Y or Z country (as specified in Supplement No. 1 to
Section 770 of the U.S. Export Administration Regulations, or a successor
thereto) or otherwise except in compliance with and with all licenses and
approvals required under applicable export laws and regulations, including,
without limitation, those of the U.S. Department of Commerce.

                                       36
<PAGE>

          IN WITNESS WHEREOF, the Parties, through their authorized officers,
have duly executed this Agreement as of the date first written above.

                         3-DIMENSIONAL PHARMACEUTICALS, INC.


                         By:   /s/ Thomas P. Stagnaro
                             ------------------------------------------------
                             Name:      Thomas P. Stagnaro
                             Title:     President & CEO


                         HESKA CORPORATION


                         By:   /s/ Paul Hudnut
                             ------------------------------------------------
                             Name:      Paul Hudnut
                             Title:     Vice President, Business Development

                                       37
<PAGE>


                                 EXHIBIT 1.12
                                 ------------
                                     [**]


**This page and the next two pages of this Exhibit have been omitted based
upon a request for confidential treatment that has been filed with the
Commission. The omitted pages have been filed separately with the Commission.

<PAGE>


                                   EXHIBIT 3
                                 ------------

               3DP BANK ACCOUNT INFORMATION FOR WIRE TRANSFERS

                         Wire Transfer Instructions:


                                    [**]

**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.23
<SEQUENCE>14
<FILENAME>0014.txt
<DESCRIPTION>LICENSE AND RESEARCH AGREEMENT
<TEXT>

<PAGE>

                                                                   EXHIBIT 10.23

                        LICENSE AND RESEARCH AGREEMENT

LICENSE AND RESEARCH AGREEMENT (the "Agreement") dated as of May 17, 2000 (the
"Effective Date") by and between 3-DIMENSIONAL PHARMACEUTICALS, INC., a Delaware
corporation having its principal place of business at 665 Stockton Drive, Suite
104, Exton, PA 19341-1151, USA (hereinafter referred to as "3DP") and SCHERING
AG, a corporation organized and existing under the laws of Germany having its
principal place of business at 13342, Berlin, Germany (hereinafter referred to
as "Schering"). 3DP and Schering are sometimes referred to herein individually
as a "Party" and collectively as the "Parties".

WHEREAS:

(A)  3DP has identified a class of non-peptidic, potent urokinase plasminogen
     activator (uPA) inhibitors with potential application in various
     therapeutic fields, and has the right to grant rights and licenses under
     patent applications, patents and know-how relating to such class of
     inhibitors.

(B)  3DP is interested in continuing to carry out research to evaluate further
     uPA inhibitors and Schering is willing to fund such research on the terms
     and subject to the conditions hereinafter set out.

(C)  Schering is interested in obtaining from 3DP certain rights and licenses to
     the patent applications, patents and know-how relating to the above-
     mentioned class of uPA inhibitors already identified by 3DP and to any
     compounds identified during the course of the above-mentioned research, and
     3DP is willing to grant such rights and licenses to Schering under the
     terms and subject to the conditions hereinafter set out.

                                                                               1
<PAGE>

(D)  Schering Berlin Venture Corporation and 3DP have entered into a Stock
     Purchase Agreement of even date herewith (the "Stock Purchase Agreement").

NOW THEREFORE, in consideration of the mutual covenants set forth in this
Agreement and other good and valuable consideration the sufficiency of which is
hereby acknowledged, the Parties agree as follows:


                                   ARTICLE 1

                                  DEFINITIONS

The following terms, when capitalized, shall have the following meanings (such
meanings to be equally applicable to both the singular and the plural forms of
the terms defined) as used in this Agreement:

1.1  "3DP Know-How" means all Know-How, whether currently existing or developed
     during the course of the Research Term or within six (6) months thereafter
     that relates to the research, development, utilization, manufacture, use or
     sale of a Licensed Compound or Licensed Product. Notwithstanding anything
     herein to the contrary, 3DP Know-How shall exclude 3DP Patents and 3DP Non-
     uPA Inhibitor Patents.

1.2  "3DP Non-uPA Inhibitor Compounds" mean compounds and data relating to such
     compounds discovered during the Research Program by 3DP or an Affiliate
     which do not constitute uPA Inhibitors but which the Joint Research
     Committee considers have some biological activity of interest to the
     Research Program or are of potential commercial interest to Schering.

1.3  "3DP Non-uPA Inhibitor Patents means Patents Controlled by 3DP which
     claim Non-uPA Inhibitor Compounds.

                                                                               2
<PAGE>

1.4  "3DP Patents" means: (i) Patents in Schedule A; (ii) Patents to be filed by
     3DP that claim 3DP's orally available uPA Inhibitor lead series, [**] and
     derivatives thereof, as described in the Outline Research Plan; and (iii)
     Patents that claim New Compounds. Notwithstanding anything herein to the
     contrary, 3DP Patents shall exclude any 3DP Know-How, Improvements and 3DP
     Non-uPA Inhibitor Patents.

1.5  "3DP Technology" means 3DP Know-How and 3DP Patents.

1.6  "Accept", "Accepted" or "Acceptance" as used with respect to a Lead
     Candidate, Back-Up or Follow-Up means a Lead Candidate, Back-Up or Follow-
     Up, respectively, that has fulfilled the Biological Criteria agreed upon by
     the Parties pursuant to Section 2.3 and which Schering has decided to
     develop either as an Accepted Lead Candidate or as an Accepted Back-Up or
     Accepted Follow-Up thereof.

1.7  "Accepted Back-Up" means a Back-Up which has fulfilled the Biological
     Criteria agreed upon by the Parties pursuant to Section 2.3 and which
     Schering has decided to develop as a Back-Up to an Accepted Lead Candidate.

1.8  "Accepted Follow-Up" means a Follow-Up which has fulfilled the Biological
     Criteria agreed upon by the Parties pursuant to Section 2.3 and which
     Schering has decided to develop as a Follow-Up to an Accepted Lead
     Candidate.

1.9  "Accepted Lead Candidate" means a Lead Candidate which has fulfilled the
     Biological Criteria agreed upon by the Parties pursuant to Section 2.3 and
     which Schering has decided to develop as a Licensed Product in a specified
     Separate Therapeutic Area.

___________________

**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed separately with the Commission.

                                                                               3
<PAGE>

1.10 "Affiliate" means any person, corporation, partnership, firm, joint venture
     or other entity which, directly or indirectly, through one or more
     intermediaries, controls, is controlled by or is under common control with
     3DP or Schering, as the case may be. As used in this definition, "control"
     means the possession of the power to direct or cause the direction of the
     management and policies of an entity, whether through the ownership of the
     outstanding voting securities or by contract or otherwise.

1.11 "Annual Worldwide Net Sales" means the total worldwide Net Sales of a
     Licensed Product in a Separate Therapeutic Area in a Sales Year or in the
     First Sales Year as applicable.

1.12 "Audit Disagreement" shall have the meaning set forth in Section 9.2.

1.13 "Back-Up" shall mean a Licensed Compound that is intended to be reserved as
     a back-up for an Accepted Lead Candidate and is not intended to be
     developed or commercialized unless development and/or commercialization of
     such Accepted Lead Candidate is terminated by Schering.

1.14 "Base Compound" means a uPA Inhibitor existing at the Effective Date which:
     (i) falls within the claims of the Patents referenced in Schedule A or
     falls within the same Chemical Class as such compounds; or (ii) falls
     within 3DP's orally available uPA Inhibitor lead series, [**] and
     derivatives thereof, as described in the Outline Research Plan.

1.15 "Biological Criteria" means the criteria for acceptance of a Lead
     Candidate, Back-Up or Follow-up to be agreed upon by the Parties pursuant
     to Section 2.3.

____________________

**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed separately with the Commission.

                                                                               4
<PAGE>

1.16 "Chemical Class": Compounds shall be deemed to fall within the same
     Chemical Class if one compound is a homolog, isomer, analog or first order
     derivative of another compound. A compound is a "homolog" of another
     compound if it differs from that compound by a methylene group or an
     ethylene group or a similar or equivalent group that does not affect the
     relationship of the functional groups in the compound that give rise to its
     activity as a uPA Inhibitor. An "isomer" is a compound differing from
     another compound by positional isomery, geometric isomery or stereochemical
     isomery. An "analog" is a compound which differs from another compound by
     the replacement of a single group within the latter compound. A compound is
     a "first order derivative" of another compound if it is derived from that
     compound by a single chemical reaction.

1.17 "Control" or "Controlled" means possession of the ability to grant a
     license or sublicense of patent rights, know-how or other intangible rights
     as provided for herein without violating the terms of any agreement or
     other arrangement with any Third Party.

1.18 "Drug Approval Application" means an application for Regulatory Approval
     required to be approved before commercial sale or use of a Licensed Product
     as a drug in a regulatory jurisdiction, including, but not limited to, for
     the purposes of Regulatory Approval in the United States, a New Drug
     Application and all supplements filed pursuant to the requirements of the
     FDA (including all documents, data and other information concerning a
     Licensed Product which are necessary for, or included in, FDA approval to
     market the Licensed Product), and, for the purposes of Regulatory Approval
     in the EU, applications for Regulatory Approval to the EMEA.

1.19 "EMEA" means the European Medicines Evaluation Agency or any
     successor agency.

                                                                               5
<PAGE>

1.20 "EU" means the countries which are members of the European Union as such
     membership may change from time to time.

1.21 "FDA" means the United States Food and Drug Administration or any successor
     agency.

1.22 "Field" means all uses of Licensed Products for the prevention, treatment,
     cure or mitigation of all disease states, conditions, disorders and
     indications in humans.

1.23 "First Commercial Sale" means the date on which Schering or an Affiliate or
     sublicensee of Schering first sells commercially, pursuant to a Regulatory
     Approval, a Licensed Product in any country, provided that if such first
     commercial sale has occurred in a country for which pricing or
     reimbursement approval is necessary for widespread sale and no more than a
     reasonable minimal amount of Licensed Product has been sold in such country
     prior to grant of such pricing or reimbursement approval, then such sale
     shall not be deemed a First Commercial Sale until such pricing or
     reimbursement approval has been obtained.

1.24 "First Sales Year" means the period between the date of First Commercial
     Sale of a Licensed Product in a Separate Therapeutic Area in the first
     country in the Territory in which such Licensed Product is sold in such
     Separate Therapeutic Area and the end of the calendar year in which such
     First Commercial Sale is made.

1.25 "Follow-Up" shall mean a Licensed Compound which is proposed by either
     Party for Acceptance as a follow-up to an Accepted Lead Candidate to be
     developed or commercialized for the same Separate Therapeutic Area for
     which the Accepted Lead Candidate is then being developed or
     commercialized; provided, however, that a Licensed Compound which
     constitutes the Follow-Up cannot be the same

                                                                               6
<PAGE>

     Licensed Compound as is already being developed or commercialized as a Lead
     Candidate.

1.25 "Improvements" shall mean Patents and Know-How that are based on research
     conducted by 3DP outside of the Research Program and that are specifically
     and directly related to Licensed Products, to the extent that such Patents
     and Know-How are Controlled by 3DP. For the avoidance of doubt, Patents and
     Know-How claiming New Compounds shall be considered 3DP Patents and 3DP
     Know-How rather than Improvements.

1.26 "IND" means the investigational new drug application relating to one or
     more Licensed Products required to be filed with the FDA pursuant to 21 CFR
     Part 312, including any amendments thereto. References herein to an IND
     shall include, to the extent applicable, any comparable applications
     outside the US such as, for example, the CTX in the EU.

1.27 "Joint Patents" shall have the meaning set forth in Section 7.3.

1.28 "Joint Research Committee" means the committee established pursuant
     to Section 2.3.

1.29 "Know-How" means all data, technical information, know-how, experience,
     inventions, discoveries, trade secrets, compositions of matter and methods,
     and whether or not patentable or confidential, to the extent that such
     Know-How is Controlled by a Party or its Affiliates.

1.30 "Lead Candidate" means a Licensed Compound which is proposed by either
     Party for Acceptance as an Accepted Lead Candidate pursuant to Section 2.6.

1.31 "Licensed Compound" means a Base Compound or a New Compound.

                                                                               7
<PAGE>

1.32 "Licensed Product" means a product in finished dosage form containing a
     Licensed Compound as active ingredient for use in the Field.

1.33 "Major Market Country" means the US, Japan and any country of the European
     Union.

1.34 "Net Sales" means the amount invoiced by Schering, its Affiliates or
     sublicensees for sales of a Licensed Product to Third Parties less the
     following deductions applicable to the Licensed Product for:

     (i)    transportation charges and insurance charges paid by Schering;

     (ii)   sales and excise taxes or customs duties paid by Schering or any
            other governmental charges imposed upon the sale of the Licensed
            Product and paid by Schering;

     (iii)  fees paid to distributors, consignees or agents in connection with
            the sale of the Licensed Product;

     (iv)   reasonable rebates and premiums granted or allowed in connection
            with the sale of a Licensed Product;

     (v)    allowances or credits to customers on account of governmental
            requirements, price differences, rejection, outdating, returns or
            recalls of the Licensed Product;

     (vi)   quantity discounts, cash discounts or chargebacks granted in
            connection with the sale of the Licensed Product;

     (vii)  provisions for price reductions; and

     (viii) costs of customer programs such as cost effectiveness or patient
            assistance studies or programs designed to aid in patient compliance
            with medication schedules in connection with the sale of a Licensed
            Product.

                                                                               8
<PAGE>

     For the purpose of calculating Net Sales, the Parties recognize that (a)
     Schering's customers may include persons in the chain of commerce who enter
     into agreements with Schering as to price even though title to the Licensed
     Product does not pass directly from Schering to such customers and even
     though payment for such Licensed Product is not made by such customers
     directly to Schering and (b) in such cases, chargebacks paid by Schering to
     or through a Third Party (such as a wholesaler) can be deducted by Schering
     from gross revenue in order to calculate Net Sales.  Any deductions above
     which involve a payment by Schering shall be taken as a deduction against
     aggregate sales for the period in which the payment or deduction is made.

     In the event a Licensed Product is sold in the form of a combination
     product containing one or more active ingredients in addition to a Licensed
     Product, Net Sales for such combination product will be adjusted by
     multiplying actual Net Sales of such combination product by the fraction
     A / (A+B) where A is the invoice price of the Licensed Product, if sold
     separately, and B is the invoice price of any other active ingredient or
     ingredients in the combination, if sold separately. If, on a country-by-
     country basis, the other active ingredient or ingredients in the
     combination are not sold separately in that country, Net Sales shall be
     calculated by multiplying actual Net Sales of such combination product by
     the fraction A / C where A is the invoice price of the Licensed Product if
     sold separately, and C is the invoice price of the combination product. If,
     on a country by country basis, neither the Licensed Product nor the other
     active component or components of the combination product is sold
     separately in said country, Net Sales shall be determined between the
     parties in good faith.

1.35 "New Compound" means: (i) any uPA Inhibitor and members of the same
     Chemical Class which is identified, discovered, created or synthesized by
     3DP or an Affiliate in the course of the Research Program; (ii) any
     chemical entity, and any member of the same Chemical Class as such chemical
     entity, that is identified, discovered, created or synthesized by 3DP or an
     Affiliate and is

                                                                               9
<PAGE>

     discovered during the Research Term, but outside of the Research Program,
     to be a uPA Inhibitor, to the extent that such chemical entity is
     Controlled by 3DP or an Affiliate; and (iii) any chemical entity, and any
     member of the same Chemical Class as such chemical entity that is
     identified, discovered, created or synthesized by 3DP or an Affiliate and
     is discovered to be a uPA Inhibitor after the end of the Research Term but
     within six (6) months thereafter, to the extent that such chemical entity
     is Controlled by 3DP or an Affiliate.

1.36 "Patents" mean all patents and patent applications and all patent
     applications hereafter filed, including any continuation, continuation-in-
     part, division, provisional or any substitute applications, any patent
     issued with respect to any such patent applications, any reissue,
     reexamination, renewal or extension (including any supplemental patent
     certificate) of any such patent, and any confirmation patent or
     registration patent or patent of addition based on any such patent, and all
     foreign counterparts of any of the foregoing, to the extent that such
     Patents are Controlled by a Party and its Affiliates.

1.37 "Patent Expenses" means the fees, expenses and disbursements and outside
     counsel fees, and payments to Third Party agents incurred in connection
     with the preparation, filing, prosecution and maintenance of 3DP Patents or
     Joint Patents covering a Licensed Compound or Licensed Product in the
     Field, including costs of patent interference and opposition proceedings
     and actions at law and equity against Third Parties for patent
     infringement.

1.38 "Pivotal Clinical Trial" means a clinical trial designed by Schering or an
     Affiliate or sublicensee which is essential to demonstrate efficacy and
     without which the relevant New Drug Application to the FDA (or equivalent
     in another Major Market Country) would lack adequate and well-controlled
     proof of efficacy likely to be acceptable to the regulatory authorities for
     the grant of marketing approval of a Licensed Product  set by the
     regulatory authorities in the Major Market Country for which the clinical
     trial is designed.

                                                                              10
<PAGE>

1.39 "Regulatory Approval" means any approvals (including pricing and
     reimbursement approvals), product and/or establishment licenses,
     registrations or authorizations of any federal, state or local regulatory
     agency, department, bureau or other governmental entity, necessary for the
     manufacture, use storage, importation, export, transport or sale of
     Licensed Compound or Licensed Product in a regulatory jurisdiction.

1.40 "Research Plan" means the Outline Research Plan (as described in Section
     2.4) for identifying, conceiving, synthesizing, structurally characterizing
     and/or otherwise discovering or optimizing one or more Licensed Compounds
     agreed upon by the Parties and attached to this Agreement as Part I of
     Schedule B; together with the First Year Research Plan and Second Year
     Research Plan to be agreed to between the Parties pursuant to Section 2.4
     and to be attached to this Agreement as Part II and Part III of Schedule B,
     respectively.

1.41 "Research Program" means research activities undertaken pursuant to this
     Agreement as described in the Research Plan, associated with the discovery
     or creation of Base Compounds and New Compounds, including in vitro studies
     of Licensed Compounds, in vivo animal studies for research purposes only
     and related activities.

1.42 "Research Term" means a twenty-four month period commencing on the
     Effective Date.

1.43 "Research Year" means a twelve-month period during the Research Term
     commencing on the Effective Date and ending on an anniversary thereof.

1.44 "Sales Year" means a full calendar year during which any Licensed Product
     is sold in any country of the world in a Separate Therapeutic Area.

                                                                              11
<PAGE>

1.45 "Separate Therapeutic Area" means a broad category of disease(s),
     condition(s) or disorder(s) generally regarded, by virtue of their common
     pathology, area of impact or otherwise, as therapeutically/medically
     distinct from other such categories.  For avoidance of doubt and without
     limitation, examples of Separate Therapeutic Areas are: oncology;
     cardiovascular system; central and peripheral nervous systems;
     endocrinology; dermatology and inflammation.

1.46 "Territory" means all countries of the world.

1.47 "Third Party" means any entity other than 3DP or Schering and their
     respective Affiliates and sublicensees.

1.48 "Urokinase Plasminogen Activator (uPA) Inhibitor" means a compound that
     has (i) [**] as determinated by 3DP using a standardized assay reasonably
     acceptable to the Joint Research Committee [**], and (ii) selectivity
     with respect to the [**], as determined by 3DP using a standardized assay
     reasonably acceptable to the Joint Research Committee, for [**]; and
     (iii) selectivity with respect to the [**], as determined by 3DP using a
     standardized assay reasonable acceptable to the Joint Research Committee,
     for [**].

1.49 "US" or "United States" means the United States of America, its territories
     and possessions, including the District of Columbia, the Commonwealth of
     Puerto Rico, the US Virgin Islands, Guam, and all other places under the
     jurisdiction of the United States of America.

________________
**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                                                              12
<PAGE>

1.50 "Valid Claim" means any claim of an issued, unexpired patent which shall
     not have been abandoned, withdrawn, canceled or disclaimed, nor held
     invalid or unenforceable by a court of competent jurisdiction in an
     unappealed or unappealable decision.

                                   ARTICLE 2

                               RESEARCH PROGRAM

2.1  Commencement: The Research Program will commence on the Effective Date and
     will continue (unless earlier terminated pursuant to Article 10 below) for
     the Research Term. 3DP shall perform its responsibilities under the
     Research Program in accordance with the terms of the Research Plan. The
     objective of the Research Program is to identify Licensed Compounds which
     may become Lead Candidates for development and commercialization by
     Schering.

2.2  Research Funding: Schering shall fund the Research Program in the amount of
     [**] for each Research Year. Payments for each Research Year will be made
     quarterly in advance. In addition, Schering shall reimburse 3DP the
     documented costs payable to any Third Party in connection with activities
     under the Research Program where such activities and the costs therefor
     have been approved in advance in writing by Schering. The Parties consider
     that the performance of the Research Program as currently envisaged will
     not require the payment of any such costs to Third Parties. No activities
     may be delegated by 3DP under the Research Program without the prior
     written consent of Schering except as agreed to by the Joint Research
     Committee. All payments shall be made in US dollars to the credit of such
     bank account as may be designated by 3DP in writing to Schering. Any
     payments which fall due on a date which is a legal holiday in the

________________
**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed separately with the Commission.

                                                                              13
<PAGE>

     State of Pennsylvania or in Berlin, Federal Republic of Germany, may be
     made on the next following day which is not a legal holiday.

2.3  Joint Research Committee:

     (a)   Composition and Purposes:  Upon the execution of this Agreement, 3DP
           ------------------------
     and Schering will establish a Joint Research Committee which shall consist
     of six members, three designated by 3DP and three designated by Schering.
     The  Joint Research Committee shall meet formally at least quarterly or
     with such other frequency, and at such time and location, as may be
     established by the Joint Research Committee, for the following purposes:

     (i)   To review and approve, if appropriate, revisions to the Research
           Plan;

     (ii)  To monitor and review the progress of the Research Program and to
           consider whether any amendment of the Research Program should be
           recommended to the Parties;

     (iii) To review Licensed Compounds proposed by either Party for further
           preclinical testing;

     (iv)  To review and approve Biological Criteria for the Acceptance of Lead
           Candidates, Back-Ups and Follow-Ups;

     (v)   To decide whether and how a Licensed Compound proposed by either
           Party as a potential Lead Candidate, Back-Up or Follow-up should be
           assessed in accordance with the Biological Criteria.

     (vi)  To discuss matters relating to publications and Patents.

     (b)   Decision Making:  The objective of the Joint Research Committee shall
           ---------------
     be to reach agreement by consensus on all matters within the scope of the
     Research Plan.  However, all decisions to be made under this Agreement will
     be made by majority vote in the Joint Research Committee, and if the Joint
     Research Committee cannot agree on any matter (a "Disputed Matter"), the
     Disputed Matter shall be referred to the Chief Executive Officer of 3DP and
     the President

                                                                              14
<PAGE>

     of Schering's Affiliate, Berlex Biosciences, for resolution. If the
     Disputed Matter is not then resolved, Schering's decision shall be final
     and binding.

     (c)  Powers:  Each Party shall retain the rights, powers and discretion
          ------
     granted to it under this Agreement and the Joint Research Committee shall
     not be delegated or vested with any such rights, powers or discretion
     except as expressly provided in the Agreement.  The Joint Research
     Committee shall not have the power to amend or modify this Agreement, which
     may only be amended or modified as provided in Section 12.11.

2.4  Research Plan: 3DP and Schering have agreed upon an outline for a two (2)
     year Research Plan (the "Outline Research Plan") for identifying,
     conceiving, synthesizing, structurally characterizing and/or otherwise
     discovering one or more Licensed Compounds that are commercially viable
     candidates for development as drugs in the Field. The Outline Research Plan
     is attached hereto as Part I of Schedule B. Within forty five (45) days of
     the Effective Date, the Joint Research Committee shall adopt a more
     detailed research plan which describes the research activities to be
     carried out in the first Research Year (the "First Year Research Plan",
     such plan to be consistent with the Outline Research Plan and to be
     attached hereto as Part II of Schedule B. Three months before the end of
     the first Research Year, 3DP and Schering will agree upon a detailed
     research plan which describes the research activities for the second
     Research Year (the "Second Year Research Plan"), such plan to be consistent
     with the Outline Research Plan and to be attached hereto as Part III of
     Schedule B. The Joint Research Committee will be responsible for overseeing
     implementation of the Research Plan. Amendments to the Research Plan shall
     be effective only if agreed in writing by both Parties in accordance with
     the provisions of this Agreement. The Research Plan also shall establish a
     Research Project Team that shall be responsible for implementing the
     Research Plan. The Parties will allocate for the performance of the
     Research Plan the resources, in terms of personnel, equipment, materials
     etc., necessary to perform the Research

                                                                              15
<PAGE>

     Program, such resources to be at least equal to the amounts stipulated in
     the Research Plan.

2.5  Biological Criteria: The Parties have agreed upon provisional biological
     criteria attached hereto as part of the Outline Research Plan as the basis
     for the determination of Biological Criteria under this Agreement. The
     Parties shall, within forty-five (45) days of signature of this Agreement,
     finalize the Biological Criteria, for the Lead Candidate.

2.6  Selection of Lead Candidates, Back-Ups and Follow-Ups:

     (a)  Either Party may propose a Licensed Compound for selection and
          evaluation as a Lead Candidate, Back-Up or Follow-up . If the Joint
          Research Committee decides that such Licensed Compound should be
          evaluated, the Parties will assess whether the Biological Criteria
          have been met. If a Licensed Compound is Accepted, Schering shall be
          free to proceed with the development of such Licensed Compound.

     (b)  In the event that the Parties agree that the Biological Criteria have
          not been met, 3DP shall, at Schering's request and as part of the
          Research Program, carry out such optimization of the Lead Candidate,
          Back-Up or Follow-Up as Schering may reasonably request with a view to
          qualifying such Lead Candidate, Back-Up or Follow-Up to meet the
          Biological Criteria. If the Parties disagree as to whether the
          Biological Criteria have been met in any case, this dispute will be
          dealt with in the same way as Disputed Matters pursuant to Section
          2.3(b) above. Both Parties will use all reasonable efforts in good
          faith to come to agreement on whether the Biological Criteria have
          been met.

2.7  Reversion of Rights to Compounds that are Not Accepted by Schering: When a
     Lead Candidate, Back-Up or Follow-Up is recommended by the Joint Research
     Committee for evaluation and both Parties agree that such Lead Candidate or
     Back-Up or Follow-Up meets all Biological Criteria, Schering may, at its
     absolute discretion, either: (i) Accept the Lead Candidate, Back-Up or

                                                                              16
<PAGE>

     Follow-Up and pay the milestone payment due pursuant to Section 4.1.1; or
     (ii) decline to Accept such compound, in which case Schering agrees to
     negotiate in good faith with 3DP at that time to provide a release of
     rights to 3DP to pursue clinical development of such compound(s) in
     Separate Therapeutic Areas designated by 3DP and which Schering confirms
     are not of interest to Schering. The parties contemplate that the royalty
     and milestone terms of this Agreement would be applicable to such release
     of rights by Schering.

2.8  Reversion of Rights to Compounds Whose Development is Terminated by
     Schering. If Schering, having Accepted a Lead Candidate, Back-Up or Follow-
     Up decides, at any stage, to terminate pharmaceutical development of such
     Lead Candidate, Back-Up or Follow-Up, Schering agrees to negotiate in good
     faith with 3DP at such time to provide a release of rights to 3DP to pursue
     development of such Licensed Compound(s) in Separate Therapeutic Areas
     designated by 3DP and which Schering confirms are not of interest to
     Schering. The parties contemplate that the royalty and milestone terms of
     this Agreement would be applicable to such release of rights by Schering.
     Any product developed by 3DP pursuant to Sections 2.7 or 2.8 of this
     Agreement will be developed in such a way that it cannot be directly
     substituted for off label uses for any Licensed Product being developed or
     commercialized by Schering.

2.9  Designation of Separate Therapeutic Areas.  If:

     (i)   3DP has requested a release of rights pursuant to Sections 2.7 or 2.8
           above to pursue development of a designated Licensed Compound in a
           designated Separate Therapeutic Area; and

     (ii)  Schering has refused to release such rights on the basis that the
           designated Separate Therapeutic Area is of interest to Schering; and

     (iii) Schering is not, within two years of the request for release of
           rights by 3DP, either developing or commercializing a Licensed
           Compound or Licensed Product in such designated Separate Therapeutic
           Area or

                                                                              17
<PAGE>

           developing or commercializing such designated Licensed Compound in
           another Separate Therapeutic Area;

     then 3DP may renew its request for a release of rights to such designated
     Licensed Compound in such designated Separate Therapeutic Area and Schering
     shall negotiate in good faith with 3DP at such time to provide a release of
     rights to 3DP to pursue development of such designated Licensed Compound in
     such designated Separate Therapeutic Area.

2.10 Rights to Non-uPA Inhibitors. To the extent that 3DP or an Affiliate
     Controls any Non-uPA Inhibitor Compounds, 3DP agrees to negotiate in good
     faith with Schering to grant an exclusive, worldwide, sublicensable license
     to Schering to pursue development and commercialization of such Non-uPA
     Inhibitor Compounds in one or more Separate Therapeutic Areas in the Field.
     The parties contemplate that the research funding, royalty and milestone
     terms of this Agreement would be applicable to any such license to
     Schering. In the event that Schering wishes to develop such Non-uPA
     Inhibitors together with a Third Party partner, Schering agrees to first
     negotiate in good faith with 3DP as a potential partner for the development
     of Non-uPA Inhibitor Compounds. In the event that 3DP is not able to grant
     to Schering a license to any Non-uPA Inhibitor Compound as provided above,
     then 3DP undertakes, during the term of this Agreement, not to develop or
     commercialize or permit the development or commercialization of such Non-
     uPA Inhibitor Compound for any Separate Therapeutic Area for which Schering
     develops or commercializes a Licensed Compound or Licensed Product.

2.11 Research Funding: 3DP will utilize the research funding provided by
     Schering pursuant to Section 2.2 above exclusively for the performance of
     the Research Program.

2.12 Research Exclusivity: During the Research Term, the Parties agree to
     cooperate exclusively with each other in carrying out research and
     development relating to uPA Inhibitors. Neither Party shall, during the
     Research Term, carry

                                                                              18
<PAGE>

     out any research in the Field relating to the discovery of uPA Inhibitors
     except pursuant to this Agreement unless the Parties mutually agree
     otherwise in writing. Neither Party shall enter into any agreement with a
     Third Party which would prevent it from performing its obligations under
     this Agreement.


                                   ARTICLE 3

                                LICENSE RIGHTS

3.1  Grant to Schering:

     (a)  3DP hereby grants to Schering an exclusive, worldwide, sublicensable
          license under the 3DP Technology to research, develop, make, have
          made, use, sell and import for sale Licensed Compounds and Licensed
          Products in the Field. A list of the 3DP Patents identified as of the
          Effective Date is attached hereto as Schedule A. Such list shall be
          modified from time to time to reflect any changes to the 3DP Patents
          acquired by or coming under the Control of 3DP or its Affiliates
          during the term of this Agreement or within a period of six (6) months
          thereafter.

     (b)  3DP also hereby grants to Schering a nonexclusive, worldwide,
          sublicensable license under Non-uPA Inhibitor Patents to carry out
          research and development in respect of uPA Inhibitor Compounds during
          the Research Program and to use any results of such research and
          development for the development, manufacture or commercialization of
          Licensed Compounds and Licensed Products.

     (c)  3DP also hereby grants to Schering a nonexclusive, worldwide,
          sublicensable license under Improvements that are Controlled by 3DP
          during the term of this Agreement to research, develop, make, have
          made, use, sell and import for sale Licensed Products in the Field.

                                                                              19
<PAGE>

     (d)  3DP agrees not to develop or commercialize outside of the Field any
          Licensed Compound or Licensed Product that is being developed or
          marketed by Schering without the prior written approval of Schering,
          such approval not to be unreasonably withheld by Schering.

3.2  License Following Expiration: Following the Royalty Expiration Date
     specified in Section 5.1(b) below, and provided that this Agreement has not
     been terminated by Schering under Section 10.2(a) or by 3DP under Section
     10.2(b) or 10.2(c), Schering shall, in each country of the world, have an
     exclusive (even as to 3DP), paid-up, sub-licensable license under 3DP Know-
     How to research, develop, make, have made, use, sell and import for sale
     Licensed Compounds and Licensed Products.

3.3  Transfer of Information: 3DP shall promptly identify and make available to
     the Joint Research Committee, and to Schering upon request, all information
     in 3DP's possession or coming into its possession during the course of this
     Agreement relating to Licensed Compounds, Licensed Products and methods of
     manufacturing the same, which appears to be reasonably necessary or useful
     for exercise by Schering of the rights granted hereunder. Such information
     shall include copies of all Patents, copyrights, copyright registrations
     and applications therefor and all other manifestations of the intellectual
     property embodied in the Licensed Compounds and Licensed Products, whether
     in human or machine readable form.

                                   ARTICLE 4

                         MILESTONE PAYMENTS; DILIGENCE

4.1  Schering will make the following milestone payments to 3DP within 30
     (thirty) days of achievement of any of the following milestones with
     respect to a Licensed Compound or Licensed Product.

                                                                              20
<PAGE>


1. Upon Acceptance of a Lead Candidate as an            [**]
   Accepted Lead Candidate

2. Upon acceptance by the FDA of an IND in the          [**]
   US or equivalent regulatory approval in another
   Major Market Country, whichever occurs first,
   with respect to an Accepted Lead Candidate

3. Upon the [**] dosing of a Licensed Product in        [**]
   humans under the first Pivotal Clinical Trial
   conducted in the US or another a Major Market
   Country, whichever occurs first.

4. Upon Regulatory Approval of an Accepted Lead         [**]
   Candidate in the US or another Major Market
   Country, whichever occurs first.

5. On [**] Commercial Sale of a Licensed Product        [**]
   in the US or in another Major Market Country,        Note: In the event that
   whichever occurs first.                              ----
                                                        the actual [**]
                                                        Commercial Sale is made
                                                        in some country other
                                                        than those identified,
                                                        the milestone


______________________
** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                                                              21
<PAGE>


                                                        for such [**] Commercial
                                                        Sale shall be [**], and
                                                        then [**] shall be paid
                                                        upon the [**] Commercial
                                                        Sale in any of the
                                                        identified countries.

6.   On first achieving, in a Sales Year, Net Sales
     of a Licensed Product of at least [**]

     (i)   Subject to sub-sections (ii), (iii) and (v) below, each of the above
           milestone payments will be payable [**] in respect of each [**] of
           the number of Licensed Products developed or commercialized within
           such [**] of the number of indications for which such Licensed
           Products are developed or commercialized within such [**] of the
           number of countries in which each milestone is achieved.

     (ii)  in the case of an Accepted Follow-Up, the [**] milestone payments
           described above will be payable if the applicable milestones are
           reached, notwithstanding the fact that these milestone payments have
           already been paid in respect of a Lead Candidate in the same
           Separate Therapeutic Area. For the avoidance of doubt, if an
           Accepted Follow-Up is subsequently developed for a second Separate
           Therapeutic Area for which a Lead Candidate has not yet been
           Accepted, such Accepted Follow-Up will be treated as an Accepted
           Lead Candidate in such second Separate Therapeutic Area and will be
           eligible, in such second Separate Therapeutic Area, for payment of
           all applicable milestone payments except for those milestone
           payments which have already been paid in


______________________
** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                                                              22
<PAGE>


           respect of its development as an Accepted Follow-Up to an Accepted
           Lead Candidate in the first Separate Therapeutic Area.

     (iii) In the case of an Accepted Back-Up, the milestone payment described
           at Section 4.1.1 above will be payable, notwithstanding the fact
           that this has already been paid in respect of a Lead Candidate in
           the same Separate Therapeutic Area.

     (iv)  If an Accepted Lead Candidate in a Separate Therapeutic Area fails,
           for any reason, to reach any of the milestones described above, then
           the first Accepted Back-Up or Follow-Up to this Accepted Lead
           Candidate to be developed and/or commercialized in the same Separate
           Therapeutic Area will be eligible for the milestone payments which
           have not yet been made for an Accepted Lead Candidate in such
           Separate Therapeutic Area. So, for example, if Schering pays the
           first three milestone payments only in respect of the first Accepted
           Lead Candidate to be developed in a Separate Therapeutic Area and
           then stops development of the Accepted Lead Candidate and proceeds
           to develop an Accepted Back-Up or Accepted Follow-Up instead, only
           the first, fourth, fifth and sixth milestone payments (if
           applicable) would be payable in respect of that Accepted Back-Up or
           Accepted Follow-Up.

     (v)   In addition, if Schering Accepts a Lead Candidate within three
           months of the Effective Date, a milestone payment of [**] will be
           payable by Schering to 3DP instead of the [**] indicated above as
           the first milestone payment, to reward the additional research
           progress achieved by 3DP during the negotiations between the Parties
           that resulted in the signing of this Agreement.

4.2  Diligence: If a Lead Candidate or Follow-Up is Accepted by Schering,
     Schering shall use reasonable commercial efforts to develop and
     commercialize a


______________________
** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.


                                                                              23
<PAGE>

     Licensed Product containing such Lead Candidate or Follow-Up, such efforts
     to be comparable to the efforts expended by Schering on its proprietary
     compounds of equivalent potential. Schering may discharge its obligations
     pursuant to this Section 4.2 through a sub-licensee or Affiliate.


                                   ARTICLE 5

                                   ROYALTIES

5.1  Royalties

     (a)  General: In further consideration of the rights and licenses granted
          -------
          to Schering under Article III of this Agreement, Schering agrees,
          subject to Sections 5.1(b) and 5.4, to pay to 3DP the following
          royalties on Net Sales of Licensed Products:


          (i)   On Net Sales of a Licensed Product in a Separate Therapeutic
                Area in a Sales Year where Annual Worldwide Net Sales are less
                than [**]

          (ii)  On Net Sales of a Licensed Product in a Separate Therapeutic
                Area in a Sales Year (or First Sales Year if applicable) where
                Annual Worldwide Net Sales are equal to or exceed [**].

     (b)  Royalty Term: Except where expressly provided otherwise in this
          Agreement, all royalties to 3DP shall be paid, on a country-by-country
          basis, from the date of the First Commercial Sale of a Licensed
          Product in

_____________________
** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                                                              24
<PAGE>

          a particular country until the later (the "Royalty Expiration Date")
          of (i) ten (10) years from the First Commercial Sale in such country
          and (ii) the last to expire of any 3DP Patent which includes a Valid
          Claim in such country; provided, however, that if a Licensed Product
          is sold in any country in which 3DP does not have a Valid Claim which
          would prevent the sale of a generic form of such Licensed Product, the
          royalty obligations set forth in Section 5.1(a) with respect to Net
          Sales attributable to the sale of the Licensed Product in such country
          shall be reduced by [**] of the royalty that would otherwise be
          payable with respect to Net Sales attributable to the sale of the
          Licensed Product in such country.


5.2  Royalty Reports And Payments: Schering shall make royalty payments to 3DP
     quarterly within sixty (60) days after the end of each calendar quarter in
     which Net Sales occurred. A report summarizing the Net Sales of Licensed
     Products in each Separate Therapeutic Area on a country-by-country basis
     ("Quarterly Report") shall be delivered to 3DP within sixty (60) days
     following the end of each calendar quarter for which royalties are due. A
     separate report summarizing the Annual Worldwide Net Sales of each Licensed
     Product in each Separate Therapeutic Area (the "Annual Report") shall be
     delivered to 3DP within sixty (60) days of the end of the First Sales Year
     and each subsequent Sales Year.

5.3  Adjustment Of Royalty Rates: The royalty rate applicable to Net Sales of a
     Licensed Product in a Separate Therapeutic Area in the First Sales Year
     shall be deemed to be [**.] If Annual Worldwide Net Sales for such First
     Sales Year are equal to or exceed [**] Schering shall, within sixty (60)
     days of the end of the First Sales Year, pay to 3DP in respect of such Net
     Sales an amount equal to the difference between the royalty amount paid by
     Schering for such Net Sales and the amount which would have been payable if
     the applicable royalty rate had been [**.] The royalty rate applicable to
     Net Sales of a Licensed Product in a

_____________________
** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                                                              25
<PAGE>

     Separate Therapeutic Area in the second and all subsequent Sales Years
     shall be deemed to be the rate actually applicable after adjustment for the
     preceding Sales Year. Within sixty (60) days of the end of each Sales Year,
     Schering shall pay to 3DP or 3DP shall pay to Schering, as the case may be,
     the difference (if any) between the royalty amount paid in respect of such
     Annual Worldwide Net Sales in the preceding Sales Year and the amount which
     would have been payable if the royalty rate actually applicable after
     adjustment had been paid in respect of such Annual Worldwide Net Sales for
     such preceding Sales Year.

     For example, if Annual Worldwide Net Sales of a specific Licensed Product
     in a Separate Therapeutic Area in Sales Year 2 were [**,] the deemed
     royalty rate for Annual Worldwide Net Sales for that Licensed Product in
     Sales Year 3 will be [**.] If, in fact, Annual Worldwide Net Sales in Year
     3 were [**,] Schering shall, within sixty days of the end of Sales Year 3,
     pay to 3DP an extra [**] royalty on Annual Worldwide Net Sales of such
     Licensed Product in Sales Year 3, and the deemed royalty rate for Annual
     Worldwide Net Sales of such Licensed Product in Sales Year 4 will be [**.]

5.4  Third Party Royalty Obligations: If, as a result of a judgment in favor of
     or settlement with a Third Party pursuant to Section 7.6, Schering is
     required to pay monies to a Third Party in order to develop, manufacture or
     sell a Licensed Product in any country, [**] of any such monies may be set
     off against the royalties otherwise due to 3DP hereunder. Notwithstanding
     the foregoing, the permitted set-off may not decrease the royalty otherwise
     owed by Schering to 3DP by more than [**].

5.5  Payments; Interest: Any payments due under this Agreement shall be due on
     such date as specified in this Agreement and, in the event such date is a
     day on which commercial banks are not authorized to conduct business in
     either Pennsylvania, US or Berlin, Federal Republic of Germany, then the
     next


_____________________
** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                                                              26
<PAGE>

     succeeding business day, and shall be made by wire transfer to a designated
     bank account of 3DP.

     Any failure by Schering to make a payment within five days after the date
     when due shall obligate Schering to pay interest to 3DP at a rate per annum
     equal to the Prime Rate as publicly announced by Bank America on Reuters
     Screen "USPRIME1" on the due date or the next business day computed on the
     basis of a 356/360 year, the interest period commencing on the due date and
     ending on the payment day, such interest to be due and payable upon tender
     of the payment.

5.6  Taxes: 3DP shall pay any and all taxes levied on account of research
     payments, milestone payments or royalties it receives under this Agreement.
     If laws or regulations require that taxes be withheld, Schering will (i)
     deduct those taxes from the remittable royalty, (ii) timely pay the taxes
     to the proper taxing authority, and (iii) send proof of payment to 3DP
     within thirty (30) days of receipt of confirmation of payment from the
     relevant taxing authority.

5.7  Payments To Or Reports By Affiliates: Any payment required under any
     provision of this Agreement to be made to either Party or any report
     required to be made by either Party shall be made to or by an Affiliate of
     that Party if designated by that Party as the appropriate recipient or
     reporting entity without relieving such Party from responsibility for such
     payment or report.

5.8  Payment Currency: Payments by Schering under this Agreement shall be made
     in US dollars. The calculation of royalty payments is based on Euro and
     converted into US dollars. Except for Net Sales in the United States, where
     payments are based on Net Sales in countries other than the member states
     of the European Currency Union, the amount of such Net Sales expressed in
     the currency of each country shall be converted into Euros at the exchange
     rate of the last date of the applicable calendar quarter. The applicable
     exchange rate

                                                                              27
<PAGE>

     will be the Euro foreign exchange reference spot rate published on the last
     business day of the applicable calendar quarter by the European Central
     Bank, Frankfurt/Main. If no Euro foreign exchange reference spot rate is
     determined for the relevant currency, the Parties shall agree upon another
     reference rate. Finally, the payable Euro amount shall be converted into US
     dollars by the Euro foreign exchange reference spot rate published by the
     European Central Bank, Frankfurt/Main, at the last business day of the
     applicable calendar quarter. These Euro foreign exchange reference spot
     rates are currently published by Reuters on screen "ECB37".


                                   ARTICLE 6

                                CONFIDENTIALITY

6.1  Confidentiality; Exceptions: Except to the extent expressly authorized by
     this Agreement or otherwise agreed in writing, the Parties agree that the
     receiving Party and its employees (who shall be bound in writing to observe
     the confidentiality provisions of this Agreement) shall keep confidential
     and shall not publish or otherwise disclose or use for any purpose other
     than as provided for in this Agreement any Know-How and other information
     and materials furnished to it by the other Party pursuant to this Agreement
     or any information or Know-How developed during the course of the
     collaboration hereunder, or any provisions of this Agreement that are the
     subject of an effective order of the U.S Securities and Exchange Commission
     granting confidential treatment pursuant to the Securities Act of 1934, as
     amended (collectively, "Confidential Information"), except to the extent
     that it can be established by the receiving Party that such Confidential
     Information:

     (i)  was already known to the receiving Party, other than under an
          obligation of confidentiality, at the time of disclosure by the other
          Party;

                                                                              28
<PAGE>

     (ii)  was generally available to the public or otherwise part of the public
           domain at the time of its disclosure to the receiving Party;

     (iii) became generally available to the public or otherwise part of the
           public domain after its disclosure and other than through any act or
           omission of the receiving Party in breach of this Agreement;

     (iv)  was disclosed to the receiving Party, other than under an obligation
           of confidentiality, by a Third Party who had no obligation to the
           disclosing Party not to disclose such information to others.

6.2        Authorized Disclosure: Each Party may disclose Confidential
     Information hereunder to the extent such disclosure is reasonably necessary
     in filing or prosecuting patent applications, prosecuting or defending
     litigation, complying with applicable governmental regulations, or
     conducting research under this Agreement provided that, if a Party is
     required by law or regulation to make any such disclosures of the other
     Party's Confidential Information it will, except where impracticable for
     necessary disclosures, for example in the event of medical emergency, give
     reasonable advance notice to the other Party of such disclosure requirement
     and, except to the extent inappropriate in the case of patent applications,
     will use its reasonable efforts to secure confidential treatment of such
     Confidential Information required to be disclosed. In addition, and with
     prior written notice to the other Party of each Third Party with whom a
     confidential disclosure agreement is being entered into, each Party shall
     be entitled to disclose, under a binder of confidentiality, Confidential
     Information to any Third Party for the purpose of carrying out the purposes
     of this Agreement and, in the case of 3DP, in connection with the seeking
     of equity financing. Where materiality of disclosure requires a press
     release or other disclosure pertaining to this Agreement by one Party, the
     disclosing Party shall give the other Party a copy of the proposed
     disclosure and afford that Party at least two (2) business days. In
     addition, Schering may use and disclose Confidential Information for all
     purposes related to the exercise of Schering's rights under this Agreement
     provided that Schering takes the same care in respect of such


                                                                              29
<PAGE>

     Confidential Information as it does in respect of its own confidential
     information. Not withstanding the foregoing, each Party acknowledges that
     the other may be obligated to disclose terms of this Agreement and make
     public a copy of this Agreement in the event it becomes a public company as
     required by applicable U.S. law; provided however, that the terms and copy
     of this Agreement shall be redacted such that the extent of any such
     disclosure shall be limited to that which in the reasonable opinion of the
     disclosing Party's legal counsel is legally required. Each Party will
     provide a copy of such disclosure to the other.

6.3  Survival: This Article 6 shall survive the termination or expiration of
     this Agreement for a period of five (5) years.

6.4  Termination Of Prior Agreement: This Agreement supersedes the
     Confidentiality Agreement between 3DP and Schering dated as of June 25,
     1999. All information exchanged between the Parties under the said
     Confidentiality Agreement shall be deemed to be Confidential Information
     and shall be subject to the terms of this Article 6, and shall be included
     within the definition of Confidential Information.

6.5  Publications: In consultation with 3DP, Schering shall determine the
     overall strategy for publication in support of the Product in the
     Territory.

6.6  Publicity Review: Subject to the other provisions of this Article 6, no
     Party shall originate any written publicity, news release, or other
     announcement or statement relating to this Agreement or to performance
     hereunder or the existence of an arrangement between the Parties
     (collectively "Written Disclosure") without the prior prompt review and
     written approval of the other Party, which approval shall not be
     unreasonably withheld or delayed. Notwithstanding the foregoing provisions
     of this Section 6.6, any Party may make any public Written Disclosure it
     believes in good faith based upon the advice of counsel is required by
     applicable law or any listing or trading agreement concerning its publicly
     traded

                                                                              30
<PAGE>

     securities, provided that prior to making such Written Disclosure, the
     disclosing Party shall provide the other Party with a copy of the materials
     proposed to be disclosed and provide the receiving Party with at least two
     (2) business days to review the proposed Written Disclosure. Each Party
     agrees to issue press releases as soon as it reasonably can, on or after
     the Effective Date, subject to expedited review and approval by the other
     Party, such approval not to be unreasonably withheld.


                                   ARTICLE 7

             OWNERSHIP OF INTELLECTUAL PROPERTY AND PATENT RIGHTS


7.1  Ownership: Each Party shall solely own, and it alone shall have the right
     to apply for, Patents for any inventions made solely by that Party's
     employees or consultants in the course of performing work under this
     Agreement. Inventions made jointly by employees or consultants of 3DP and
     Schering shall be jointly owned by Schering and 3DP. All such inventions
     and Joint Patents are subject to the license granted by 3DP to Schering
     pursuant to Article 3 of this Agreement.

7.2  Disclosure Of Joint Inventions: Any patent application disclosing
     inventions made jointly by the Parties shall be provided by one Party to
     the other reasonably in advance of the intended date for submission of such
     application to a governmental patent authority.

7.3  Patent Filings

     (a)  Each Party, at its sole discretion, cost and responsibility, shall
     prepare, file, prosecute and maintain Patents to cover discoveries and
     inventions made solely by its own employees or consultants relating to
     Licensed Compounds or Licensed Products and use commercially reasonable
     efforts to file initially all such applications in the appropriate forum
     under the circumstances wherein such a Party determines it is commercially
     reasonable to do so. If 3DP decides not to

                                                                              31
<PAGE>

     file or, having filed, to abandon a Patent in a particular country it shall
     notify Schering and, at Schering's request, assign all rights in respect to
     such Patent to Schering. Schering shall file, prosecute and maintain
     Patents to cover inventions relating to the discovery, evaluation,
     manufacture, use or sale of the Licensed Compounds or Licensed Products
     that are made jointly by personnel of 3DP and Schering in the course of the
     Agreement (herein referred to as "Joint Patents"). The determination of the
     countries in which to file Joint Patents shall be made by Schering. In
     consultation with 3DP, and taking reasonably into account any rights
     retained by 3DP under such Joint Patents, Schering shall have the right to
     direct and control all material actions relating to the prosecution or
     maintenance of Joint Patents in the Territory, including interference
     proceedings, reexaminations, reissue opposition and revocation proceedings.

     (b)  The Parties agree to use commercially reasonable efforts to ensure
     that any Patent filed outside the United States prior to a filing in the
     United States will be in a form sufficient to establish the date of
     original filing as a priority date for the purposes of a subsequent filing
     in the United States. Schering shall bear all costs related to the filing
     of Joint Patents. The Parties agree to use commercially reasonable efforts
     to ensure that any Patent filed in the United States prior to filings
     outside of the United States will be in a form sufficient to establish the
     date of original filing as a priority date for the purpose of a subsequent
     filing in any contracting state of the Paris Convention.


7.4  Third Party Patents: Each Party agrees to bring to the attention of the
     other Party any Third Party Patent it discovers or has discovered and which
     relates to the subject matter of this Agreement.

7.5  Enforcement Rights:

     (a)  Notification of Infringement:  If either Party learns of any
          ----------------------------
     infringement or threatened infringement by a Third Party of 3DP Patents,
     Schering Patents or

                                                                              32
<PAGE>

     Joint Patents in the Field, such Party shall promptly notify the other
     Party and shall provide such other Party with all available evidence of
     such infringement.

     (b)  Enforcement in the Territory:  Schering shall have the right but not
          ----------------------------
     the obligation to institute, prosecute and control at its own expense any
     action or proceeding with respect to infringement of any 3DP Patents or
     Joint Patents covering the research, manufacture, use, importation, sale or
     offer for sale of Licensed Compounds or Licensed Products in the Field, by
     counsel of its own choice. 3DP shall have the right, at its own expense, to
     be represented in any action by counsel of its own choice. If Schering
     fails to bring such an action or proceeding or otherwise take appropriate
     action to abate such infringement within a period of one hundred eighty
     (180) days of notice by 3DP to Schering requesting action, 3DP will have
     the right but not the obligation to bring and control any such action or
     proceeding relating to 3DP Patents by counsel of its own choice and
     Schering will have the right to be represented in any such action by
     counsel of its own choice and at its own expense. If one Party brings any
     such action or proceeding, the other Party agrees to be joined as a party
     plaintiff if necessary to prosecute the action or proceeding and to give
     the first Party commercially reasonable assistance and authority to file
     and prosecute the suit. Any damages or other monetary awards recovered
     pursuant to this Section 7.5(b) shall be allocated first to the reasonable
     costs and expenses of the Party bringing suit, then to the reasonable costs
     and expenses, if any, of the other Party. In the event that Schering brings
     such action, any amounts remaining shall be distributed as follows:
     compensatory damages shall be treated as Net Sales in the country and
     calendar quarter received and punitive and exemplary damages shall be paid
     equally to Schering and 3DP. In the event that 3DP brings such action, any
     damages or other monetary awards recovered shall be divided equally between
     the Parties.

     (c)  Settlement with a Third Party: The Party that controls the prosecution
          -----------------------------
     of a given action shall also have the right to control settlement of such
     action,

                                                                              33
<PAGE>

     provided however, that if one Party controls, no settlement shall be
     entered into without the written consent of the other Party (which consent
     shall not be unreasonably withheld) if such settlement would materially and
     adversely affect the interests of the other Party.


7.6  Defense And Settlement Of Third Party Claims: If a Third Party asserts that
     a patent owned by it is infringed by any Licensed Compound or any Licensed
     Product or by the exercise by Schering of any of the rights licensed under
     Article 3 above, Schering will have the right but not the obligation to
     defend against any such assertions at its cost and expense but no
     settlement may be entered into without the written consent of 3DP, which
     shall not be unreasonably withheld. The costs of any such settlement
     (including, without limitation, damages, expense reimbursements,
     compliance, future royalties or other amounts) and of any amount awarded
     against Schering shall be paid by Schering who may offset [**] of such
     payments against the royalty payments that it owes to 3DP under this
     Agreement according to the provisions of Section 5.4.


7.7  Patent Expenses: All worldwide Patent Expenses with respect to 3DP Patents
     shall be borne by 3DP and all worldwide Patent Expenses with respect to
     Joint Patents shall be borne by Schering, subject in both cases to the
     terms of this Agreement.

7.8  Trademarks: Schering shall be responsible for the selection, registration
     and maintenance of all trademarks which it employs in connection with the
     Licensed Products and shall own and control such trademarks and pay any
     costs in connection therewith. 3DP recognizes the exclusive ownership by
     Schering of the proprietary Schering name, logotype or trademark furnished
     by Schering (including Schering's Affiliates) for use in connection with
     the Licensed Product. 3DP shall not, either while this Agreement is in
     effect or at any time thereafter, register, use or attempt to obtain any
     right in or to any such name, logotype or


_____________________
** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                                                              34
<PAGE>

       trademark or in and to any name, logotype or trademark confusingly
       similar thereto. Only Schering will be authorized to initiate, at its own
       discretion and at its own cost, legal proceedings against any
       infringement or threatened infringement of the trademarks applicable to
       the Licensed Product.

7.9    Use Of Names: Neither Party shall use the name of the other Party in
       relation to this transaction in any public announcement, press release or
       other public document without the written consent of such other Party,
       which consent shall not be unreasonably withheld or delayed, provided
       however, that either Party may use the name of the other Party in any
       document filed with any regulatory agency or authority, including the FDA
       and the Securities and Exchange Commission, in which case Schering shall
       be referred to as "Schering AG, Germany". The Parties agree not to use
       the name of the other Party in relation to this transaction in any press
       release, public announcement or other public document without the
       approval of such other Party, which approval shall not be unreasonably
       withheld or delayed.

7.10   No Trademark Rights: Except as otherwise provided herein, no right,
       express or implied, is granted by the Agreement to use in any manner the
       name "Schering" or "3DP" or any other trade name or trademark of the
       other Party or its Affiliates in connection with the performance of the
       Agreement.


                                   ARTICLE 8

                        REPRESENTATIONS AND WARRANTIES

8.1    Representations And Warranties

       (a) Each of the Parties hereby represents and warrants to the other Party
       as follows:

                                                                              35
<PAGE>

           (i)   This Agreement is a legal and valid obligation binding upon
                 such Party and enforceable in accordance with its terms. The
                 execution, delivery and performance of this Agreement by such
                 Party does not conflict with any agreement, instrument or
                 understanding, oral or written, to which it is a party or by
                 which it is bound, nor to such Party's knowledge, violate any
                 law or regulation of any court, governmental body or
                 administrative or other agency having jurisdiction over it; and

           (ii)  3DP has not granted and during the term of the Agreement will
                 not grant any right to any Third Party relating to the 3DP
                 Patents, 3DP Know-How and Joint Patents which would conflict
                 with the rights granted to Schering hereunder.

     (b)   3DP hereby represents and warrants to Schering that 3DP:

           (i)   Has provided, shown or offered to Schering all material
                 information in its possession or control or of which it is
                 aware as of the Effective Date, concerning efficacy, side
                 effects, injury, toxicity or sensitivity, reaction and
                 incidents of severity thereof, associated with any clinical
                 use, studies, investigations or tests with the Licensed
                 Compounds.

           (ii)  Has conducted or has caused its contractors or consultants to
                 conduct research, and will in the future conduct, the Research
                 Program in accordance with applicable United States law, and
                 the scientific standards applicable to the conduct of research
                 in the US.

          (iii)  Has employed and will in the future employ individuals of
                 appropriate education, knowledge, and experience to conduct or
                 oversee the conduct of the Research Program.

                                                                              36
<PAGE>

          (iv)   As of the Effective Date, except as it may have previously
                 disclosed to Schering in writing: (i) 3DP has not received any
                 notices of infringement or any written communications from
                 Third Parties relating in any way to a possible infringement
                 with respect to any potential or actual Licensed Compounds; and
                 (ii) 3DP is not aware that the manufacture, use or sale of Base
                 Compounds or the conduct of the Research Program in accordance
                 with the attached outline of the Research Plan would infringe
                 any valid claims of any Third Party patent rights.

          (v)    As of the Effective Date, it is not aware of any prior act or
                 any fact which causes it to conclude that any 3DP Patent is
                 invalid or unenforceable.

          (vi)   As of the Effective Date, 3DP is not party to any Third Party
                 agreement under which a Third Party acquires rights of any kind
                 to the Base Compounds, or to any identified uPA Inhibitors
                 owned by 3DP at the Effective Date. The 3DP Technology which is
                 subject to the license granted pursuant to Section 3.1 is the
                 sole property of 3DP and is not subject to any license obtained
                 by 3DP from a Third Party. There are no royalties, milestones
                 or other financial obligations payable to any Third Party by
                 3DP in connection with the ownership, use or licensing of the
                 3DP Technology.

          (vii)  3DP owns all rights to the 3DP Technology free and clear of any
                 liens, encumbrances or rights to repurchase.

          (viii) During the term hereof, 3DP will not grant a lien on this
                 Agreement or on any of 3DP's rights or obligations hereunder or
                 on the 3DP Technology.

          (ix)   The rights licensed to Schering under this Agreement are not
                 subject to any existing licenses from Third Parties in which
                 3DP is the licensee.

                                                                              37
<PAGE>

          (x)    During the Research Term, neither 3DP nor its Affiliates shall
                 enter into any agreements which have the effect of knowingly
                 removing from the Control of 3DP or its Affiliates any uPA
                 Inhibitor which, before the date of such third party agreement,
                 was Controlled by 3DP or an Affiliate.


8.2  Indemnification for Breaches of Representations and Warranties: Without
     prejudice to any other right or remedy available to either Party arising
     out of the breach by the other of any of the representations and warranties
     set out at Section 8.1 above, each Party hereby agrees to indemnify, defend
     and hold the other Party and its shareholders, directors, officers, agents
     and employees harmless from and against any and all losses resulting
     directly or indirectly from the breach of any representation or warranty
     made by such Party hereunder. In the event that a Party is seeking
     indemnification under this Section 8.2, it shall inform the other Party of
     a claim as soon as reasonably practicable after it receives notice of the
     claim, shall permit the indemnifying Party to assume direction and control
     of the defense of the claim (including the right to settle the claim solely
     for monetary consideration), and shall cooperate as requested (at the
     expense of the indemnifying Party) in defense of the claim.

8.3       Performance by Affiliates: The Parties recognize that each Party may
perform some or all of its obligations under this Agreement through Affiliates,
provided however, that each Party shall remain responsible for and be a
guarantor of the performance by its Affiliates and shall cause its Affiliates to
comply with the provisions of this Agreement in connection with such
performance.


                                   ARTICLE 9


                           ROYALTY REPORTS AND AUDITS


                                                                              38
<PAGE>

9.1  Royalty Records: Schering will maintain complete and accurate records which
     are relevant to the calculation of Net Sales and royalties on a country-by-
     country basis and Annual Worldwide Net Sales under this Agreement and such
     records shall be open during reasonable business hours for a period of
     three (3) years from creation of individual records for examination at
     3DP's expense and not more often than once each year by a firm of certified
     public accountants selected by 3DP and reasonably acceptable to Schering,
     for the sole purpose of verifying for 3DP the correctness of calculations
     and classifications of such Net Sales or royalty calculations or Annual
     Worldwide Net Sales made under this Agreement. 3DP shall bear its own costs
     related to such audit; provided that, for any underpayments greater than
     five (5) percent by Schering, Schering shall pay 3DP the amount of
     underpayment, interest as provided for in Section 5.4 from the time the
     amount was due and 3DP's out-of-pocket expenses. For any underpayments less
     than five (5) percent by Schering found under this Section, Schering shall
     pay 3DP the amount of underpayment. Any overpayments by Schering will be
     credited to future royalties. Any records or accounting information
     received from the Schering shall be Confidential Information for purposes
     of Article 6. Results of any such audit shall be provided to both Parties,
     subject to Article 6.

9.2  If there is a dispute between the Parties following any audit performed
     pursuant to Section 9.1, either Party may refer the issue (an "Audit
     Disagreement") to an independent certified public accountant for
     resolution. In the event an Audit Disagreement is submitted for resolution
     by either Party, the Parties shall comply with the following procedures:

     (i)   The Party submitting the Audit Disagreement for resolution shall
           provide written notice to the other that it is invoking the
           procedures of this Section 9.2.


                                                                              39
<PAGE>

     (ii)   Within thirty (30) business days of the giving of such notice, the
            Parties shall jointly select a recognized international accounting
            firm to act as an independent expert to resolve such Audit
            Disagreement;
     (iii)  The Audit Disagreement submitted for resolution shall be described
            by the Parties to the independent expert, which description may be
            in written or oral form, within ten (10) days of the selection of
            such independent expert.
     (iv)   The independent expert shall render a decision on the matter as soon
            as practicable.
     (v)    The decision of the independent expert shall be final and binding
            unless such Audit Disagreement involves alleged fraud, breach of
            this Agreement or construction or interpretation of any of the terms
            and conditions hereof;
     (vi)   All fees and expenses of the independent expert, including any Third
            Party support staff or other costs incurred with respect to carrying
            out the procedures specified at the direction of the independent
            expert in connection with such Audit Disagreement, shall be borne by
            each Party in inverse proportion to the disputed amounts awarded to
            the Party by the independent expert through such decision (e.g.
            Party A disputes $100, the independent expert awards Party A $60,
            then Party A pays forty percent (40%) and Party B pays sixty percent
            (60%) of the independent expert's costs.)


                                  ARTICLE 10

                             TERM AND TERMINATION

10.1 Term: This Agreement shall commence as of the Effective Date and, unless
     sooner terminated as provided herein shall continue in effect until such
     time as no royalties are payable under Article 5 hereunder to 3DP, provided
     that the license to 3DP Know-How granted pursuant to Section 3.2 shall
     survive such termination.


                                                                              40
<PAGE>

10.2 Termination

     (a)  Termination at Will:  Schering will have the right to terminate this
          --------------------
          Agreement for the world or on a country-by-country basis at any time
          after the expiry of the Research Term and be fully released of all
          obligations hereunder (except as expressly provided for herein) by
          ninety (90) days' notice given at any time, and 3DP shall thereafter
          retain full rights to use any data and information generated, up to
          the date of termination, by 3DP, Schering, or jointly pertaining to
          the Licensed Compound and the Licensed Product.

     (b)  Termination for Material Breach: Failure by Schering or 3DP to comply
          --------------------------------
          with any of the respective material obligations and conditions
          contained in this Agreement shall entitle the other Party to give the
          Party in default notice requiring it to cure such default. If such
          default is not cured within ninety (90) days after receipt of such
          notice, the notifying Party shall be entitled (without prejudice to
          any of its other rights conferred by this Agreement) to terminate this
          Agreement or, in the event of an uncured material breach by 3DP
          exercise the rights of Schering set forth in Section 10.2(e) by giving
          a notice to take effect immediately. The right of either Party to
          terminate this Agreement as hereinabove provided shall not be affected
          in any way by its waiver of, or failure to take action with respect
          to, any previous default.

     (c)  Termination for Insolvency: In the event that one of the Parties
          ---------------------------
          hereto shall go into liquidation, a receiver or a trustee be appointed
          for the property or estate of that Party and said receiver or trustee
          is not removed within sixty (60) days, or the Party makes an
          assignment for the benefit of creditors (collectively, a "Bankruptcy
          Event"), and whether any of the aforesaid Bankruptcy Events be the
          outcome of the voluntary act of that Party or otherwise, the other
          Party shall be entitled to terminate this


                                                                              41
<PAGE>

          Agreement (or in the event 3DP suffers such a Bankruptcy Event,
          Schering may exercise its rights described in Section 10.2(e))
          forthwith by giving a written notice to 3DP).

     (d)  Effect of Termination:  In the event that this Agreement is terminated
          ---------------------
          by Schering in one or more countries or in its entirety in accordance
          with Section 10.2(a), or this Agreement is terminated by 3DP pursuant
          to Sections 10.2(b) or (c) either in one country or in its entirety,
          Schering will, with respect to each country to which the termination
          applies:

          (i)     deliver to 3DP the 3DP Know-How and assign to 3DP any rights
                  in the 3DP Technology, if any, in either case relating solely
                  to the country that is the subject of the termination;

          (vii)   not use the 3DP Know-How as long as it has to be kept
                  confidential pursuant to Article 6 hereof in such country;

          (viii)  not infringe any of the 3DP Patents in such country; and

          (ix)    provide 3DP with the right to utilize and commercialize the
                  3DP Technology notwithstanding the existence of any Patents
                  that are Controlled by Schering or its Affiliates that cover
                  such 3DP Technology.

     (e)  Effect of Termination by Schering Pursuant to Sections 10.2(b) and
          ------------------------------------------------------------------
          (c): In the event of a Bankruptcy Event or a material default
          ---
          described in Sections 10.2(b) and (c) by 3DP, which default is not
          cured as provided therein, Schering may elect, in lieu of terminating
          this Agreement (and without prejudice to any claim for damages arising
          out of such material default) to declare the license granted pursuant
          to this Agreement to be irrevocable. From the date of receipt of
          notice of such election, 3DP shall have no further rights or
          obligations (except for those arising under Article 6) under this
          Agreement except that 3DP's right to receive financial


                                                                              42
<PAGE>

          payments by Schering pursuant to the terms of this Agreement will
          remain in full force and effect.

     (f)  General: Except where expressly provided for otherwise in this
          -------
          Agreement, termination of this Agreement shall not relieve the Parties
          hereto of any liability, including any obligation to make payments
          hereunder, which accrued hereunder prior to the effective date of such
          termination nor preclude any Party from pursuing all rights and
          remedies it may have hereunder or at law or in equity with respect to
          any breach of this Agreement nor prejudice any Party's right to obtain
          performance of any obligation.

     (g)  Surviving Rights: The rights and obligations set forth in this
          ----------------
          Agreement shall extend beyond the term or termination of the Agreement
          only to the extent expressly provided for herein, or the extent that
          the survival of such rights or obligations are necessary to permit
          their complete fulfillment or discharge.


                                  ARTICLE 11

                                INDEMNIFICATION

11.1      Indemnification: With respect to Licensed Products (determined on a
     country by country basis):

     (a)  Except as specified below, Schering hereby agrees to save, defend and
          hold 3DP and its directors, officers, agents and employees harmless
          from and against any and all suits, claims, actions, demands,
          liabilities, expenses and/or losses, including reasonable legal
          expenses and attorneys' fees (collectively "Losses") resulting from
          the development or commercial sale of the Licensed Products except to
          the extent such Losses result from the


                                                                              43
<PAGE>

          negligence or willful misconduct of 3DP or a breach by 3DP of any of
          its material obligations under this Agreement or of any representation
          or warranty under Article 8, in which case 3DP hereby agrees to save,
          defend and hold Schering and its directors, officers, agents and
          employees harmless from any and all such Losses.


                                                                              44
<PAGE>

     (b) Each indemnified Party agrees to give the indemnifying Party prompt
         written notice of any Loss or discovery of fact upon which such
         indemnified Party intends to base a request for indemnification under
         Section 11.1(a). Each Party shall furnish promptly to the other copies
         of all papers and official documents received in respect of any Loss.
         With respect to any Loss relating solely to the payment of money
         damages and which will not result in the indemnified Party becoming
         subject to injunctive or other relief or otherwise adversely affecting
         the business of the indemnified Party in any manner, and as to which
         the indemnifying Party shall have acknowledged in writing the
         obligation to indemnify the indemnified Party hereunder, the
         indemnifying Party shall have the sole right to defend, settle or
         otherwise dispose of such Loss, on such terms as the indemnifying
         Party, in its sole discretion, shall deem appropriate. The indemnifying
         Party shall obtain the written consent of the indemnified Party which
         shall not be unreasonably withheld or delayed, prior to ceasing to
         defend, settling or otherwise disposing of any Loss if as a result
         thereof the indemnified Party would become subject to injunctive or
         other equitable relief, or any remedy other than the payment of money
         which is the responsibility of the indemnifying Party. The indemnifying
         Party shall not be liable for any settlement or other disposition of a
         Loss by the indemnified Party which is reached without the written
         consent of the indemnifying Party. The reasonable costs and expenses,
         including reasonable fees and disbursements of counsel incurred by any
         indemnified Party in connection with any Loss, shall be reimbursed on a
         quarterly basis by the indemnifying Party, without prejudice to the
         indemnifying Party's right to contest the indemnified Party's right to
         indemnification and subject to refund in the event the indemnifying
         Party is ultimately held not to be obligated to indemnify the
         indemnified Party.

                                                                             45
<PAGE>

                                  ARTICLE 12

                                 MISCELLANEOUS

12.1 ASSIGNMENT:

     (b)  Either Party may assign any of its rights or obligations under this
          Agreement in any country to any of its Affiliates, provided that such
          assignment shall not relieve the assigning Party of its
          responsibilities for performance of its obligations under this
          Agreement .

     (c)  This Agreement shall be binding upon and inure to the benefit of the
          successors and permitted assigns of the Parties. Any assignment not in
          accordance with this Agreement shall be void.

12.2 RETAINED RIGHTS: Nothing in this Agreement shall limit in any respect the
     right of either Party to conduct research and development and to market
     products using such Party's technology other than as herein expressly
     provided.

12.3 FURTHER ACTIONS: Each Party agrees to execute, acknowledge and deliver such
     further instruments, and to do all such other acts as may be necessary or
     appropriate in order to carry out the purposes and intent of this
     Agreement.

12.4      NOTICES: All notices hereunder shall be in writing and shall be deemed
     given if delivered personally or two days after mailed by registered or
     certified mail (return receipt requested), postage prepaid, or sent by
     express courier service to the Parties at the following addresses (or at
     such other address for a Party as shall be specified by like notice;
     provided that notices of a change of address shall be effective only upon
     receipt thereof).


                                                                              46
<PAGE>

     (a)  If to 3DP

          3-Dimensional Pharmaceuticals, Inc.
          Eagleview Corporate Center
          665 Stockton Drive, Suite 104
          Exton, PA 10341

          ATTN: Chief Executive Officer

          with a copy to:

          Morgan, Lewis & Bockius LLP
          1701 Market Street
          Philadelphia, PA 19103

          ATTN: David R. King, Esq.


     (a)  If to Schering:

          Schering Aktiengesellschaft
          13342 Berlin
          Germany,
          Attention: Legal Department

          with a copy to:

          Berlex Biosciences
          15049 San Pablo Avenue
          P.O. Box 4099
          Richmond, CA 94804-0099
          Attention: President

12.5 Waiver:  Except as specifically provided for herein, the waiver from time
     to time by either of the Parties of any of their rights or their failure to
     exercise any

                                                                              47
<PAGE>

      remedy shall not operate or be construed as a continuing waiver of same or
      any other of such Party's rights or remedies provided in this Agreement.

12.6  Severability: If any term, covenant or condition of this Agreement or the
      application thereof to any Party or circumstances shall, to any extent or
      in any country, be held to be invalid or unenforceable, then (i) the
      remainder of this Agreement, or the application of such term, covenant or
      condition of this Agreement shall be valid and be enforced to the fullest
      extent permitted by law; and (ii) the Parties hereto covenant and agree to
      renegotiate any such term, covenant or application thereof in good faith
      in order to provide a reasonably acceptable alternative to the term,
      covenant or condition of this Agreement or the application thereof that is
      invalid or unenforceable, it being the intent of the Parties that the
      basic purposes of this Agreement are to be effected.

12.7  Ambiguities: Ambiguities, if any, in this Agreement shall not be construed
      against any Party, irrespective of which Party may be deemed to have
      authored the ambiguous provision.

12.8      Governing Law and Jurisdiction:  This Agreement shall be governed by
      and interpreted under the laws of the State of New York as applied to
      contracts entered into and performed entirely in New York by New York
      residents. Any lawsuit concerning this Agreement shall be brought in the
      state or federal courts of New York.

12.9  Headings: The sections and paragraph headings contained herein are for the
      purposes of convenience only and are not intended to define or limit the
      contents of said sections or paragraphs.

12.10 Counterparts: This Agreement may be executed in one or more counterparts
      (and by facsimile), each of which shall be deemed an original but all of
      which together shall constitute one and the same instrument.


                                                                             48
<PAGE>

12.11 Entire Agreement; Amendments: This Agreement, including all Exhibits
      attached hereto and thereto, and all documents delivered concurrently
      herewith and therewith, set forth all the covenants, promises, agreements,
      warranties, representations, conditions and understandings between the
      Parties hereto and supersede and terminate all prior agreements and
      understandings between the Parties. There are no covenants, promises,
      agreements, warranties, representations, conditions or understandings,
      either oral or written, between the Parties other than as set forth herein
      and therein. No subsequent alteration, amendment, change or addition to
      this Agreement shall be binding upon the Parties hereto unless reduced to
      writing and signed by the respective authorized officers of the Parties.
      This Agreement, including without limitation the exhibits, schedules and
      attachments thereto, are intended to define the full extent of the legally
      enforceable undertakings of the Parties hereto, and no promise or
      representation, written or oral, which is not set forth explicitly herein
      or therein is intended by either Party to be legally binding. Both Parties
      acknowledge that in deciding to enter into the Agreement and to consummate
      the transaction contemplated hereby neither has relied upon any statement
      or representations, written or oral, other than those explicitly set forth
      herein.

12.12 Expenses: Except as otherwise specified in this Agreement, all costs and
      expenses including, without limitation, fees and disbursements of counsel,
      financial advisors and accountants, travel, lodging, meals and
      entertainment incurred in connection with this Agreement and the
      transactions contemplated hereby shall be paid by the Party incurring such
      costs and expenses.

12.13 Independent Contractors: The status of the parties under this Agreement
      shall be that of independent contractors. Neither Party shall have the
      right to enter into any agreements on behalf of the other Party, nor shall
      it represent to any person that it has any such right or authority.
      Nothing in this Agreement shall be construed as establishing a partnership
      or joint venture relationship between the


                                                                             49
<PAGE>

      Parties. This Agreement is not intended to be a partnership between 3DP
      and Schering for federal, state or local income tax purposes.

IN WITNESS WHEREOF 3DP and Schering have caused this agreement to be executed as
of the date first written above by their respective officers thereunto duly
authorized.


SIGNED for and on behalf of
SCHERING AKTIENGESELLSCHAFT



/S/ G. Stock                            /S/ J.F. Kapp
------------                            -------------

Name:  Prof. Dr. G. Stock               Name:  Dr. J.F. Kapp

Title:  Member of Executive             Title:  Head of Strategic Business
        Board of Directors                      Unit Therapeutics

Date:                                   Date:



SIGNED for and on behalf of
3-DIMENSIONAL PHARMACEUTICALS, INC.



/S/ David U'Prichard
--------------------

Name:  Dr. David U'Prichard

Title:  Chief Executive Officer

Date:

                                                                            50
<PAGE>

                                  Schedule A

Patents
       Appl. No./     Filing Date/ Country      Title         SKGF Docket Status
             Patent No. or   Issue Date                            Number

                                  Publication

[**]












_____________________________
** This page and the next five pages of this Exhibit have been omitted based
upon a request for confidential treatment that has been filed with the
Commission. The omitted pages have been filed separately with the Commission.


                                                                              51
<PAGE>

                                   Schedule B

                                     Part I

                             Outline Research Plan
[**]











_____________________________
** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.


                                                                              52
<PAGE>

[**]











_____________________________
** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.


                                                                              53
<PAGE>

[**]











_____________________________
**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.


                                                                              54
<PAGE>

[**]












_____________________________
** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.


                                                                              55
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.25
<SEQUENCE>15
<FILENAME>0015.txt
<DESCRIPTION>AMENDED AND RESTATED LEASE
<TEXT>

<PAGE>

                             AMENDED AND RESTATED


                             LEASE FOR COMBINATION


                  OFFICE/LABORATORY/LIGHT MANUFACTURING SPACE


                                      AT


                          EAGLEVIEW CORPORATE CENTER


                                    LOT 28


                    LANDLORD: EAGLEVIEW TECHNOLOGY PARTNERS


                  TENANT: 3-DIMENSIONAL PHARMACEUTICALS, INC.
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
                                                                     Page
<S>                                                                  <C>

1.   LEASED SPACE AND PURPOSE.......................................   1
2.   TERM...........................................................   2
3.   RENT...........................................................   3
4.   ADDITIONAL.RENT................................................   6
5.   NEGATIVE COVENANTS OF TENANT; HAZARDOUS SUBSTANCES.............   7
6.   LATE PAYMENT...................................................  10
7.   CONSTRUCTION OF NEW SPACE......................................  10
8.   TENANT'S ALTERATIONS...........................................  16
9.   MECHANIC'S LIENS...............................................  17
10.  CONDITION OF LEASED SPACE......................................  17
11.  BUILDING SERVICES..............................................  17
12.  ASSIGNMENT AND SUBLETTING......................................  18
13.  ACCESS TO LEASED SPACE.........................................  19
14.  REPAIRS........................................................  19
15.  TERMINATION AND EXTENSION......................................  20
16.  INTENTIONALLY OMITTED..........................................  20
17.  INDEMNIMFICATION AND INSURANCE.................................  20
18.  FIRE OR OTHER CASUALTY.........................................  21
19.  CONDEMNATION...................................................  22
20.  ESTOPPEL CERTIFICATES..........................................  22
21.  DEFAULT........................................................  23
22.  REMEDIES.......................................................  24
23.  CONFESSION OF JUDGMENT.........................................  25
24.  WAIVER.........................................................  26
25.  QUIET ENJOYMENT................................................  26
26.  FORCE MAJEURE..................................................  26
27.  SUCCESSORS.....................................................  26
28.  LANDLORD'S LIABILITY...........................................  26
</TABLE>

                                      -i-
<PAGE>

                               TABLE OF CONTENTS

                                  (continued)

<TABLE>
                                                                     Page
<S>                                                                  <C>

29.  SUBORDINATION..................................................  27
30.  SUBSTITUTE SPACE...............................................  28
31.  RULES AND REGULATIONS..........................................  28
32.  GOVERNING LAW..................................................  28
33.  SEVERABILITY...................................................  28
34.  HOLDING OVER...................................................  28
35.  NOTICES........................................................  29
36.  BROKERS........................................................  29
37.  SIGNS..........................................................  30
38.  SECURITY DEPOSIT; SECURITY INTEREST............................  30
39.  USE OF INFORMATION IN ADVERTISING..............................  31
40.  CAPTIONS.......................................................  31
41.  ENTIRE AGREEMENT...............................................  31
42.  RIGHT OF FIRST REFUSAL.........................................  31
43.  OPTION TO CANCEL...............................................  32
44.  RIGHT OF FIRST REFUSAL TO PURCHASE THE BUILDING................  33
45.  COOPERATION OF TENANT..........................................  33
</TABLE>

                                     -ii-
<PAGE>

                          AMENDED AND RESTATED LEASE
                          --------------------------


     LEASE made this ____ day of __________________, 1997 between Eagleview
TECHNOLOGY PARTNERS, a limited partnership, successor in interest to the Hankin
Group ("Landlord"), with its office at 717 Constitution Drive, P.O. Box "562,
Exton, PA 19341

                                      AND

     3-DIMENSIONAL PHARMACEUTICALS, INC., a Delaware corporation ("Tenant"),
with its office at 665 Stockton Drive, Suite 104, Exton, PA 19341

                                  BACKGROUND

     The Hankin Group, predecessor in interest to the Landlord, and Tenant
entered into a Lease on April 28, 1994 for 15,861 square feet of space
("Original Space") in a building located on lot 28, 665 Stockton Drive in the
center known as Eagleview Corporate Center, Route 100, Exton, Uwchlan Township,
Chester County, Pennsylvania ("Original Lease").

     The Original Lease contemplated the possibility of the expansion of the
Original Space. Tenant now desires to expand the Original Space and extend the
term of the Original Lease among other desired amendments to the Original Lease.

     Landlord and Tenant now wish to amend and restate their respective rights,
duties and obligations under the Original Lease in this Amended and Restated
Lease. Accordingly, effective as of the date hereof, the Original Lease is
hereby amended and restated in its entirety as follows:

1.   LEASED SPACE AND PURPOSE.

     (a)  Landlord hereby rents to Tenant all that certain space within a
building t (the "Original Building"), in the center known as Eagleview Corporate
Center, ("Center") Route 100, Exton, Uwchlan Township, Chester County,
Pennsylvania (the term "Center" as used herein shall not include residential
areas), which Original Building is located on Lot 28, 665 Stockton Drive as more
fully shown on the land development plan attached hereto as Exhibit "1A1", the
space leased by Tenant consists of approximately fifteen thousand eight hundred
sixty one (15,861) square feet, more or less, as depicted on the building plan
attached hereto as Exhibit "IA2". plus a storage shed and enclosed area outside
the Original Building as shown on Exhibits "lA3" and "lA4", and is referred to
herein as the "Original Space". The Original Space includes all fixtures,
improvements, additions and other property installed therein at any time during
the term of this Lease, and by virtue of this Lease.

     (b)  Landlord hereby further rents to Tenant all that certain space to be
constructed in accordance with Section 7 below (the "New Building") as an
addition to the Original Building and the Original Space, such additional space
to be leased by Tenant to consist of all of the being co the New Building, being
approximately Fourteen Thousand Five Hundred Fifty (14,550) square feet, more or
less, as depicted on the prebuilding plan attached hereto as Exhibit "IA3",
<PAGE>

and is referred to herein as the "New Space". The New Space includes all
fixtures, improvements, additions and other property installed therein at any
time during the term of this Lease and by virtue of this Lease.

     (c)  The New Space and the Original Space shall be individually and
collectively as the "Leased Space." The Original Building and the New Building
shall be individually and collectively known as the "Building". Tenant shall
have the right to use, in common with others, the parking lot and other public
portions of the Building and of the Center. The Leased Space shall be used and
occupied as an office, laboratory and light manufacturing facility qualifying as
high technology under the regulations adopted by the Pennsylvania Industrial
Development Authority and for no other purpose.

2.   TERM.

     (a)  The term of this Lease and Tenant's obligation to pay rent hereunder
for the Original Space commences on the date of execution of this Lease, and for
the New Space on the "Commencement Date" hereinafter defined, or on such earlier
date determined in accordance with Section 2(c) below.:

     (b)  The occupancy by Tenant of the New Space shall commence upon a date
("Commencement Date") which is the earlier of:

          (i)  the date when the New Space is ready for occupancy; or

          (ii) the date when Tenant shall commence conducting its business in
the New Space.

     (c)  The New Space shall be deemed ready for occupancy when (i) Landlord
has substantially completed Landlord's Work (defined below); and (ii) a use and
occupancy certificate is issued by Uwchlan Township authorizing lawful occupancy
of the New Building and the New Space and a copy of such certificate is
delivered to Tenant. In the event of any disagreement between Landlord and
Tenant as to whether "substantial completion" has occurred, the same shall be
resolved by the Architect. "Substantial completion" shall mean such completion
as shall enable Tenant to reasonably and conveniently use and occupy the New
Space for the conduct of its business. Substantial completion shall be deemed to
have been achieved even though minor or insubstantial details of construction,
mechanical adjustment or decoration remain to be performed the non-completion of
which does not materially interfere with Tenant's use of the Lease Space for the
conduct of its business therein. Tenant and Landlord shall execute a declaration
of the Commencement Date upon the Commencement Date. Notwithstanding the fact
that the Commencement Date may not yet have occurred as to the entire New Space,
when, the "non-laboratory area" of the New Space as designated on Exhibit IA3 is
ready for occupancy, Tenant shall be permitted to occupy the same on such date.
or not Tenant takes occupancy, beginning on such date, Tenant shall pay, in
addition to Original Minimum Annual Rent, a prorated portion for the
"nonlaboratory area" of (1) the Minimum Annual Rent calculated in accordance
with Section 3(c)(i); and (2) Additional Rent in accordance with Section 3(e),
and shall be otherwise subject to all of the terms, conditions and other
obligations of Tenant under this Lease as of such date, with the exception of
obligations relating to the Minimum Annual

                                      -2-
<PAGE>

Rent and payments on account of Real Estate Taxes and Operating Expenses
allocable to laboratory areas in the New Space to be deferred until the
Commencement Date. Tenant and Landlord shall execute an interim declaration of
possession upon substantial completion of the nonlaboratory areas.

     (d)  Landlord shall substantially complete Landlord's Work within eight (8)
months following Tenant's approval of the "Tenant Plans" (as hereinafter
defined), provided that, if such approval occurs later than October 31, 1997,
Landlord shall have a period of (1) one additional day for every day after
October 31, 1997 that the approval has not been given to substantially complete
Landlord's Work (such required date of substantial completion being hereinafter
called the "Landlord's Work Completion Date"). The term ("Term") of this Lease
shall end ten (10) years after the Commencement Date, provided, however, that if
the Commencement Date is not the first day of a calendar month, the Term shall
extend to the last day of the calendar month ten (10) years after the last day
of the calendar month in which the Commencement Date occurs.

3.   RENT.

     (a)  Definitions.

          (i)   "Tenant's Proportionate Share" means for the Original Building,
60.82% and for the New Building, 100%. If Landlord desires, it may combine
Tenant's Proportionate Share for the entire Building, which shall be 74.85%.

          (ii)  "Real Estate Taxes" shall mean all taxes and assessments levied,
assessed or imposed at any time by any governmental authority upon or against
the Building and the land upon which the Building is situate, and also any tax
or assessment levied, assessed or imposed at any time by any governmental
authority in connection with the receipt of income or rents from said Building
or land to the extent that the same shall be in lieu of (and/or in lieu of an
increase in) all or a portion of any of the aforesaid taxes or assessments upon
or against the said Building and/or land, but shall not include any federal or
state income tax (unless the same are imposed in lieu of any of the taxes
against the Building and land described above, or in lieu of an increase in such
taxes), or any franchise capital stock, estate or inheritance taxes.

          (iii) "Operating Expenses" shall mean that part of any and all
expenses, without mark-up or premium, reasonably incurred by Landlord in
connection with its ownership, and operation of the Building, and the land upon
which the Building is situate (i.e., Lot 28), including, without limitation,
insurance maintained on the Building which, in Landlord's judgment, shall be
necessary, all direct labor costs, management fees, service contracts and
supplies used in connection with the cleaning, operating, labor and maintenance
of the Building, all repairs and decorating required to be performed by Landlord
as provided for in this Lease (other than "Landlord's Work" as defined herein),
common area maintenance and snow removal, building supplies, equipment,
purchases and maintenance, all charges for the common areas of the Building for
electricity and water, removal of trash, rubbish, garbage and refuse, the cost
of operating or leasing an identification sign or signs for the Building,
replacing of paving, curbs, walkways, directions or other signs, drainage,
maintenance of fire sprinkling systems (if any), and the Building's pro rata
share of such other expenses as Landlord may deem necessary and proper in
connection with the operation and maintenance of the common areas of the
Building

                                      -3-
<PAGE>

and Center, excluding any costs which under generally accepted accounting
principles are capital expenditures; provided, however, that Operating Expenses
shall also include the annual amortization (over the anticipated useful life) of
a capital improvement failing within any of the following categories: (i) a
labor saving device or improvement which is intended to reduce or eliminate any
other component of Operating Expenses; (ii) an installation or improvement
required by reason of any law, ordinance or regulation, which requirement did
not exist on the date of this Lease and is generally applicable to similar
buildings; (iii) an installation or improvement which directly enhances safety
of tenants in the Building or Center generally. Landlord shall have the right to
bill Tenant directly for any items of Operating Expenses which can be attributed
directly to Tenant's use only. The following shall be excluded from the term
'Operating Expenses": (i) expenses for repairs or other work occasioned by fire,
windstorm or other insured casualty (excluding any deductible amounts) or caused
by and chargeable to a particular tenant; (ii) expenses incurred in leasing or
procuring new tenants (e.g., for lease commissions, advertising expenses and
expenses of renovating space for new or existing tenants); (iii) legal expenses
in enforcing the terms of any lease; (iv) interest and amortization payments on
any mortgage or mortgages; (v) the cost of any item, whether purchased or
leased, that would be considered a capital item or improvement under generally
accepted accounting principles (except to the extent permitted above); and (vi)
any charge or fee paid by, or for which Landlord is reimbursed by, any other
tenant occupying the Building; (vii) Real Estate Taxes and (viii) any cost to
remediate an environmental problem provided said problem was not caused by any
act or omission of Tenant or any contractor, employee, agent, invitee or guest
of Tenant.

     (b)  From the date hereof until the Commencement Date, Tenant shall pay
Landlord minimum annual rent ("Original Minimum Annual Rent") equal to the sum
of $198,524.21 in monthly installments of $16,543.68 each.

     (c)  Tenant shall pay Landlord minimum annual rent from and after the
Commencement Date Annual Rent") equal to the applicable "Shell Rent" and
"Amortized Fit Out-Rent Portion" as described below.

          (i)    For the period from the Commencement Date until February 28,
2005 (the "Rent Adjustment Date"), the "Shell Rent" per annum shall be: (A)
$114,654.00 being, the square footage of the New Space which for the purposes of
this Lease, the parties agree shall be deemed to be 14,550 square feet,
multiplied by $7.88, plus (B) $105,797.63, being the square footage of the
Original Space which for the purposes of this Lease, the parties agree shall be
deemed to be 15,861 square feet, multiplied by $6.6703, plus

          (ii)   For the period from the Rent Adjustment Date through the end of
the Term, the "Shell Rent" per annum shall be $239,638.68, being the square
footage of the entire Leased Space, which for the purposes of this Lease, the
parties agree shall be deemed to be 30,411 square feet, multiplied by $7.88.

          (iii)  For the period from the Commencement Date until the Rent
Adjustment Date, the "Amortized Fit-Out Rent Portion: shall mean $92,726.59
(representing the "Amortized Fit-Out Rent Portion" for the Original Space
calculated pursuant to the Original Lease), plus the "New Space Amortized Fit-
Out Rent Portion' as defined below.

                                      -4-
<PAGE>

     (iv)  For the period from the Rent Adjustment Date through the end of the
Term, the Amortized Fit-Out Rent Portion shall be the New Space Amortized Fit-
Out Rent Portion as defined below

     (v)   For the purposes of this Lease, and the calculation of Minimum Annual
Rent, the following terms shall have the meanings as set forth below:

          (A)  "Fit-Out Cost" shall mean the "Cost to Landlord" of performing
the Fit-Out Work for the New Space.

          (B)  "Cost to Landlord" shall mean the actual cost billed to Landlord
by Eagleview Commercial Construction Company, Inc. (the "General Contractor") of
supplying all labor and materials to perform the Fit-Out Work for the New Space,
including all items as are included within the definition of "Cost of the Work"
pursuant to Article 8 of the "American Institute for Architects AIA Document
Al11 Standard Form of Agreement Between Owner and Contractor where the basis of
payment is the Cost of the Work Plus a Fee," plus a fee of ten (10%) which shall
be charged to Landlord by the General Contractor.

          (C)  "Fit-out Work" shall mean "Landlord's Work" (as defined in
Section 7 below) exclusive of site work, building shell construction, building
shell architectural, site engineering and related work, within the portion of
the New Space intended to be completely fit-out by Landlord prior to the
Commencement Date, presently estimated at 14,550 square feet.

          (D)  "New Space Amortized Fit-Out Rent Portion" shall mean a sum equal
to the monthly payment necessary to repay one half of the Fit-Out Cost, with
interest at ten (10%) percent per annum over a 120 month term in equal monthly
installments, multiplied by twelve (12). The principal base upon which the
Amortized Fit-Out Rent Portion shall be calculated is hereinafter called the
"Amortization Base." Landlord and Tenant have established a preliminary budget
for the Fit-Out Cost of $1,675,450.00, for 14,550 square feet of finished New
Space. By way of illustration, if the actual Fit-Out Cost is $1,675,450.00, one-
half the Fit-Out Cost would be $837,725.00, and the Amortized Fit-Out Rent
Portion for the New Space would be $132,847.32 per year.

     (d)  Minimum Annual Rent and Original Minimum Annual Rent shall be paid in
equal monthly installments on the first day of each calendar month in advance.
If the Commencement Date is not the first day of a calendar month, rent from the
Commencement Date to the first day of the following month shall be apportioned
at the Minimum Annual Rent rate (based on a 365-day year) and shall be paid, on
or before the Commencement Date. All rent shall be payable, in advance, and
without prior notice or demand, at the address of Landlord set forth in the
heading of this Lease or at such other place, or to such other person as
Landlord may from time to time direct by written notice to Tenant.

     (e)  In addition, Tenant shall pay to Landlord as Additional Rent in equal
monthly installments one twelfth (1/12) of Tenant's Proportionate Share of
annual Real Estate Taxes and Operating Expenses, at the time of payment of each
monthly installment of Minimum Annual Rent or Original Minimum Annual Rent,
based upon the most recent costs of Operating Expenses and Real Estate Taxes
available. For the period from the date hereof until the

                                      -5-
<PAGE>

Commencement Date such monthly installment shall be equal to: (i) $2.30,
multiplied by the sum of 15,861 plus, ii) the square footage of the "non
laboratory areas", only if the "non laboratory areas" of the New Space is ready
for occupancy, (iii) divided by 12. For the period from the Commencement Date
until the issuance of a statement pursuant to subsection 3(f) below, such
monthly installment shall be equal to $2.30 multiplied by 30,41 1, divided by
12.

     (f)  Within ninety (90) days of the expiration of each calendar year
Landlord shall furnish Tenant with a written statement, certified by Landlord,
of the actual Operating Expenses and Real Estate Taxes incurred for such year.
Within thirty (30) days of the rendition of such statement, Tenant shall pay any
amounts in excess of those collected pursuant to the payments on account of Real
Estate Taxes and Operating Expenses pursuant to Section 3 (c) hereof, and
Landlord shall refund to Tenant or credit against the next installments of rent
due, any excess of the payments by Tenant under Section 3 (c) over the actual
Tenant's Proportionate Share of Operating Expenses and Real Estate Taxes. In the
event the last year of the term of this Lease shall not be a full calendar year,
then Tenant's obligation for Expenses and Real Estate Taxes attributable to such
year shall be pro rated.

     (g)  For each calendar year, Landlord shall make a reasonable estimate of
the Operating Expenses and Real Estate Taxes and notify Tenant as to such
estimate on or about December 15th of the preceding calendar year.

     (h)  Within ninety (90) days after receipt of each statement, Tenant shall
have the right to audit and contest Landlord's determination of Operating
Expenses and Real Estate Taxes and to inspect Landlord's records with respect
thereto during normal business hours upon at least ten (10) days advance written
notice. If any such audit shall reveal a discrepancy in Landlord's determination
of the Operating Expenses and/or Real Estate Taxes, Landlord and Tenant shall
cooperate in good faith to resolve the discrepancy and mutually agree upon the
amount of the actual Operating Expenses and Real Estate Taxes. In the event it
is determined that Tenant has been charged more than its actual Tenant's
Proportionate Share of Operating Expenses and Real Estate Taxes, Landlord shall
refund the excess payment to Tenant.

     (i)  All sums due under this Article shall be appropriately apportioned and
prorated for any portion of a Lease year, so that Tenant shall not be obligated
to pay any Operating Expenses or Real Estate Taxes that accrue following the
expiration or earlier termination of the Term of this Lease. In the event that
this Lease shall expire or terminate at any time other than at the end of a
calendar year, then within thirty (30) days after statements reflecting the
actual Operating Expenses for the year in which such expiration or termination
occurs are submitted by Landlord to Tenant (pro-rated on the basis of the number
of calendar year days included within such partial Lease year divided by 365
days), either Landlord or Tenant shall pay to the other party the adjustment sum
due. The provisions of this paragraph shall survive the expiration of this
Lease.

4.   ADDITIONAL.RENT.

     Tenant shall pay to Landlord as "Additional Rent" (in addition to sums
payable pursuant to sections 3 (c) and 3 (d) the following:

                                      -6-
<PAGE>

     (a)  Expenses Incurred by Landlord as a Result of Tenant's Default. Any and
          -------------------------------------------------------------
all damages, costs and expenses (including without limitation thereto reasonable
attorney's fees) which Landlord may suffer or incur by reason of the occurrence
of an Event of Default under this Lease, and any damage to the Building or the
real estate of which the Building is a part caused by any act or omission of
Tenant, together with interest to the date of payment (whether before or after
entry of judgment and issuance of execution thereon) at a rate equal to five
(5%) percent above the prime interest rate (or similar rate if the prime
interest rate is no longer published) of First Union Bank, N.A. or its
successor, in effect during the period said payment is due ("Default Rate").

     (b)  Use and Occupancy Taxes. All use and Occupancy taxes imposed by any
          -----------------------
governmental body allocable to Tenant's use and occupancy of the Leased Space.

     (c)  Utilities. All charges for beat, gas, water, electric, trash and
          ---------
sewage disposal for the Leased Space, whether billed directly by the providers
of the same to Tenant, or by Landlord as the owner of the Building. Landlord
shall cause electric, gas (if any), water and sewer to be separately sub-
metered. Landlord shall bill Tenant for Landlord's sub-metered amount of
Tenant's consumption of water and sewer.

5.   NEGATIVE COVENANTS OF TENANT; HAZARDOUS SUBSTANCES.

     (a)  Tenant will not:

          (i)    damage the Leased Space or any other part of the Building;

          (ii)   except in the ordinary course of laboratory business and as
permitted in accordance with all applicable laws, regulations and ordinances,
bring into or permit to be kept in the Leased Space any dangerous, explosive or
obnoxious substances;

          (iii)  violate any of the terms and conditions of the Amended and
Restated Declaration of Easements and Protective Covenants and Restrictions
dated July 12, 1990, as supplemented and clarified by a certain Supplement and
Clarification dated April 2, 1991, and as amended by: First Amendment to Amended
and Restated Declaration of Easements and Protective Covenants and Restrictions
dated August 26, 1991, Second Amendment to Amended and Restated Declaration of
Easements and Protective Covenants and Restrictions For Eagleview Corporate
Center dated July 15, 1993., Third Amendment to Amended and Restated Declaration
of Easements and Protective Covenants and Restrictions For Eagleview Corporate
Center dated December 2, 1993 Fourth Amendment to Amended and Restated
Declaration of Easements and Protective Covenants and Restrictions dated May 15,
1997 and Fifth Amendment to Amended and Restated Declaration of Easements and
Protective Covenants and Restrictions for Eagleview Corporate Center dated July
22, 1997. copies of which have been delivered to Tenant, and such further
amendments thereto as may be adopted from time to time;

          (iv)   conduct itself or permit its agents, servants, employees or
invitees to conduct themselves in a manner that in Landlord's judgment
reasonably exercised is unsafe;

                                      -7-
<PAGE>

          (v)    manufacture any commodity or prepare or dispense any food or
beverages in the Leased Space, except for consumption in Leased Space by Tenant,
its employees or invitees;

          (vi)   remove, attempt to remove or manifest any intention to remove
Tenant's goods or property from the Space other than in the ordinary course of
business;

          (vii)  vacate or abandon the Lease Space, or permit the Leased Space
to be empty or unoccupied for a period in excess of 15 consecutive days; or

          (viii) do or suffer to be done, any act, matter or thing objectionable
to the fire insurance companies or Board of Underwriters whereby the fire
insurance or any other now in force or hereafter to be placed on the Leased
Space or the Building or Center shall become void or suspended, or whereby the
same shall be rated as a more hazardous risk than at the Commencement Date.
Tenant agrees to pay to Landlord as Additional Rent, any and all increases in
premiums for insurance carried by Landlord on the Leased Space, or on the
Building, caused in any way by the occupancy of Tenant; or

          (ix)   use water in quantities beyond 3000 gallons per day, or dispose
of effluent which requires pretreatment as a condition to being treated in
accordance with regulations established by the Downingtown Area Regional
Authority for its wastewater treatment plants, or violate any of the terms or
conditions of the Industrial Waste Discharge Rider attached hereto and made part
hereof . If Tenant's required water usage exceeds 3000 gallons- per day,
Landlord shall not unreasonably withhold its consent to Tenant's request for
greater usage; provided, however, that in such event, Tenant shall pay to
Landlord (in addition to the metered charge for water and sewer service) a per
gallon connection fee equal to the Tenant's required water usage in excess of
3000 gallons per day (the "Excess Capacity"), multiplied by the Landlord's
calculation of the per gallon cost of designing, permitting, acquiring and
constructing the waste treatment facilities which will treat Tenant's Excess
Capacity. The per gallon cost shall be calculated by adding all costs incurred
by Landlord in designing, permitting, acquiring and constructing the waste
treatment facilities (including the value of land contributed by Landlord for
the treatment plant at the per acre price as agreed among Landlord, Uwchlan
Township and the Uwchlan Township Municipal Authority). In calculating any such
fee, the calculation shall, to the extent possible, be based on the same factors
and criteria as are applicable in calculation of reservation and tapping fees
chargeable to developers or potential users (other than Landlord) of the waste
treatment facilities pursuant to any agreements governing the same among
Landlord, Uwchlan Township and the Uwchlan Township Municipal Authority.

     (b)  Tenant's Responsibility Regarding Hazardous Substances.
          ------------------------------------------------------

          (i)  Hazardous Substances. The term "Hazardous Substances," as used in
this Lease, shall include, without limitation, flammables, explosives,
radioactive materials, asbestos, polychorinated biphenyls (PCB's), chemicals
known to cause cancer or reproductive toxicity, pollutants, contaminants,
hazardous wastes, toxic substances or related materials, petroleum and petroleum
products, and substances declared to be hazardous or toxic under any law or
regulation now or hereafter enacted or promulgated by any governmental
authority.

                                      -8-
<PAGE>

          (ii) Tenant's Restrictions. Tenant shall not cause or permit to occur:

               (A)  Any violation of any federal, state, or local law,
ordinance, or regulation now or hereafter enacted, related to environmental
conditions on, under, or about the Space or Center, or arising from Tenant's use
or occupancy of the Leased Space, including, but not limited to, soil and ground
water conditions; or

               (B)  The use, generation, release, manufacture, refining,
production, processing, storage, or disposal of any Hazardous Substance on,
under, or about the Space or Center, except as may be permitted by applicable
laws, rules, ordinances and regulations, and then only in strict accordance with
such laws, rules, ordinances and regulations.

        (iii)  Environmental Clean-Up.

               (A)  Tenant shall, at Tenant's own expense, comply with all laws
regulating the use, generation, storage, transportation, or disposal of
Hazardous Substances ("Laws").

               (B)  Tenant shall, at Tenant's own expense, make all submissions
to, provide all information required by, and comply with all requirements of all
governmental authorities (the "Authorities") under the Laws.

               (C)  Should any Authority demand that a clean-up plan be prepared
and that a clean-up be undertaken because of any deposit, spill, discharge, or
other release of Hazardous Substances that occurs during the Term of this Lease,
at or from the Leased Space, or which arises at any time from Tenant's use or
occupancy of the Leased Space, then Tenant shall, at Tenant's own expense,
prepare and submit the required plans and all related bonds and other financial
assurances; and Tenant shall carry out all such clean-up plans.

               (D)  Tenant shall make available for Landlord's review all
information regarding. the use, generation, storage, transportation, or disposal
of Hazardous Substances that is reasonably requested by Landlord. If Tenant
fails to fulfill any duty imposed under this subsection (iii) within a
reasonable time, Landlord, upon written notice to Tenant, may do so; and in such
case, Tenant shall cooperate with Landlord in order to prepare all documents
Landlord deems necessary or appropriate to determine the applicability of the
Laws to the Leased Space and Tenant's use thereof, and for compliance therewith,
and Tenant shall execute all necessary documents promptly upon Landlord's
request. No such action by Landlord and no attempt made by Landlord to mitigate
damages under any Law shall constitute a waiver of any of Tenant's obligations
under this Subsection (iii).

               (E)  Tenant's obligations and liabilities under this Subsection
(iii) shall survive the expiration of this Lease.

          (iv) Tenant's Indemnity.

               (A)  Tenant shall indemnify, defend, and hold harmless Landlord,
the manager of the Center, and their respective officers, directors,
beneficiaries, shareholders, partners, agents and employees from all fines,
suits, procedures, claims, and actions of every

                                      -9-
<PAGE>

kind, and all costs associated therewith (including attorneys' and consultants'
fees) arising out of or in any way connected with any deposit, spill, discharge,
or other release of Hazardous Substances that occurs during the Term of this
Lease, at or from the Leased Space, or which arises at any time from Tenant's
use or occupancy of the Leased Space, or from Tenant's failure to provide all
information, make all submissions, and take all steps required by all
Authorities under the Laws and all other environmental laws.

               (B)  Tenant's obligations and liabilities under this Subsection
(iv) shall survive the expiration f this Lease.

               (C)  Tenant's indemnity obligation under clause (A) above shall
not apply to Hazardous Substances present prior to the Commencement Date of the
Original Lease and not brought into the Building by Tenant, its contractors and
agents.

     (c)  Attached to this Lease and made part hereof is a Rider regarding
Industrial Waste Discharge within Eagleview Corporate Center.

6.   LATE PAYMENT.

     If any payment required by Tenant under any of the terms hereof shall not
be paid by the date it is due, Tenant shall, upon demand, pay a late charge to
Landlord equal to $.06 for each dollar so due and such late charge shall be
deemed Additional Rent for purposes of this Lease.

7.   CONSTRUCTION OF NEW SPACE.

     (a)  Core and Shell Work. Landlord shall provide, at Landlord's cost and
          -------------------
expenses all labor, materials and expertise necessary for the construction of
the New Building core and shell ("Core and Shell") as described in the core and
shell plans and specifications to be developed by Landlord ("Core and Shell
Plans"). All Core and Shell work shall be done (or caused to be done) in a good
and workmanlike manner in conformity with the Core and Shell Plans and in
compliance with all applicable laws, ordinances, regulations and codes. Landlord
will make available the Core and Shell Plans for comment by Tenant as they are
developed, but Tenant shall not have the right to approve the Core Shell and
Plans, and it shall remain Landlord's responsibility to develop the Core and
Shell Plans, and construct all Core and shall work in accordance with the
preceding sentence.

     (b)  Landlord's Work. (i) Landlord shall provide all labor, materials and
          ---------------
expertise necessary for the improvement of the New Space ("the Landlord's Work),
the pre layout and specification for which are set forth m Exhibits "lA3" and
"lA4" attached hereto. Tenant agrees to furnish to Architect such information as
is necessary to enable the Architect to complete the required architectural
drawings and specifications for the Landlord's Work which shall, to the extent
practicable, be consistent with the preliminary layout and specifications in
Exhibits "1A3" and "1A4". Based upon the information delivered by Tenant,
Landlord shall submit to Tenant schematic plans and outline specifications,
together with a preliminary estimate of the cost of the Landlord's Work (the
"Phase 1 PI"). Following approval of the Phase 1 Plans pursuant to subsection
(ii) below, Landlord shall submit to Tenant preliminary mechanical, electrical
and plumbing plans, and a revised estimate of the cost of the Landlord's Work
(the "Phase 2 Plans"). Following approval of the Phase 2 Plans pursuant to
subsection (ii) below, Landlord shall submit

                                     -10-
<PAGE>

to Tenant final, working construction drawings and a revised estimate of the
cost of the Landlord's Work (the "Phase 3 Plans"). The Phase 1 Plans, Phase 2
Plans and Phase 3 Plans are hereinafter collectively called the "Phase Plans."

     (ii) Upon receipt of each of the Phase 1 Plans and Phase 2 Plans
(collectively the "Preliminary Plans"), Tenant shall have 14 days to review the
same, during which it shall either approve, in writing, the submitted
Preliminary Plans or submit to Landlord changes and modifications thereto. If
Tenant approves the submitted Preliminary Plans or fails to respond to Landlord
within such 14-day period, such documents shall be deemed approved. If, however,
Tenant proposes changes or modifications, the Architect shall revise the
Preliminary Plans to reflect such changes and modifications and such revised
Preliminary Plans shall be delivered to Tenant, together with a revised estimate
of the cost of the Landlord's Work. Upon receipt of the Phase 3 Plans, Tenant
shall have 7 days to review the same, during which period it shall either
approve, in writing, the submitted Phase 3 Plans or submit to Landlord changes
and modifications thereto. If Tenant approves the submitted Preliminary Plans or
fails to respond to Landlord within such 7-day period, such documents shall be
deemed approved. If, however, Tenant proposes changes or modifications, Landlord
shall have the Phase 3 Plans revised to reflect such changes and modifications
and such revised Phase 3 Plans shall be delivered to Tenant, together with a
revised estimate of the cost of the Landlord's Work. Upon Tenant's approval, in
writing, of the revised Phase 3 Plans (which approval shall be deemed given if
Tenant fails to disapprove within five days after Tenant's receipt thereof), the
revised Phase 3 Plans will be deemed approved. At all stages of the design and
planning process, Landlord shall assist Tenant in coordinating any desired
revisions and will provide Tenant with suggestions to facilitate potential cost
savings. The Phase 3 Plans are referred to herein collectively as the "Tenant
Plans."

    (iii) Tenant agrees that it will not withhold or delay approval of any of
the Plans (or any revisions them") which am consistent with the prior phase of
plans, or revisions requested by Tenant. Any and all fees and expenses charged
by the Architect as a result of changes by Tenant in the scope of the Landlord's
Work or the basis of design of the Landlord's Work are in addition to the Fit
Out Cost and shall be paid by Tenant in addition to all other sums payable by
Tenant pursuant to this Lease.

     (iv) Within 5 days after determination of the Tenant Plans, Landlord shall
provide Tenant with a final determination of the cost of the T Landlord's Work,
which amount, when approved in writing by Tenant, shall be deemed to be the Fit-
Out Cost. Landlord and Tenant stipulate and agree that Tenant shall have no
obligation to approve a Fit-Out Cost that is in excess of $1,675,450.00. AU
cost estimates furnished by Landlord shall list the cost for each item or
component of Landlord's Work in reasonable detail. Landlord shall bear the sole
responsibility for insuring that the Tenant Plans conform to the Building Core
and Shell. Landlord shall, in its own name, prepare and award all contracts
('Construction Contracts") with general contractors (unless Landlord shall serve
as the general contractor) and subcontracts and other contracts as may be
necessary to effectuate the Landlord's Work; provided that Landlord shall not
execute (without Tenant's written approval) any Construction Contract that would
cause the cost of the Landlord's Work to exceed the Fit-Out Cost. Landlord
agrees that the cost of the Landlord's Work shall be equal to the actual cost
paid under the Construction Contracts, without any further mark-up or price
increase by Landlord. Tenant acknowledges that the General

                                     -11-
<PAGE>

Contractor is an affiliate of Landlord, and accordingly the cost to Landlord
under the Construction Contract with such General Contractor shall include a
mark-up of ten (10%) percent for profit.

     (c)  Landlord Requirements:
          ---------------------

          (i)  Landlord shall cause the Landlord's Work to be done in a good and
workmanlike manner in conformity with the Tenant Plans and the Construction
Contracts and in compliance with all applicable laws, ordinances, regulations
and codes. Landlord shall cause the Landlord's Work to be carried forward
expeditiously and with adequate work forces so as to achieve Substantial
Completion of the Landlord's Work on or before the Landlord's Work Completion
Date. Landlord shall secure the building permit and all other permits and fees,
licenses and inspections necessary for the proper execution and completion of
the Landlord's Work, the cost of which shall be included in the Fit-Out Cost.
Landlord shall comply with and give all notices required by laws, ordinances,
rules, regulations and lawful orders of public authorities bearing on the
performance of the Landlord's Work. Landlord shall be responsible for
initiating, maintaining and supervising reasonable safety precautions and
programs in connection with the performance of the Landlord's Work. Landlord
shall deliver possession of the Leased Space to Tenant in a broom-swept and
fully serviceable fashion.

         (ii)  Immediately prior to Occupancy Of the New Space by Tenant, Tenant
and Landlord jointly shall inspect the New Space in order to determine and
record its condition and to prepare a comprehensive list of items that have not
been completed (or which have not been correctly or property completed) in
conformity-with the Tenant Plans ("Punch List Items"). Thereafter, Landlord
shall proceed promptly to complete and correct all Punch List Items. Failure to
include an item on the punch list does not alter the responsibility of Landlord
to complete construction of the New Space in accordance with the Tenant Plans.

        (iii)  Landlord shall promptly correct the Landlord's Work rejected by
Tenant because the same has not been executed in accordance with the Tenant
Plans or because of defects in workmanship or materials. Landlord shall bear the
costs of correcting such rejected Landlord's Work. If, within one year after the
Commencement Date, any of the Landlord's Work is found to be not in accordance
with the requirements of the Tenant Plans, Landlord shall correct it promptly
after receipt of written notice from Tenant to do so. Landlord's obligation
under this subsection shall survive Tenant's occupancy of the New Space upon
Substantial Completion. Tenant shall give Landlord notice promptly after
discovery of any condition requiring correction hereunder. If Landlord fails to
correct the Landlord's Work within a reasonable time, Tenant shall provide
Landlord with written notice and reasonable opportunity to cure the same, and if
it is not so cured, Tenant may correct it, in which case Tenant may deduct the
cost and expense of completing such work from the next due installments of
Minimum Annual Rent. Notwithstanding anything contained herein to the contrary,
neither Landlord nor the General Contractor shall be responsible to correct any
alleged defects in Landlord's Work more than one (1) year following the
Commencement Date (the "Warranty Period"), except for latent defects in
existence prior to the Commencement Date, which could not, in the exercise of
reasonable diligence, have been discovered by Tenant prior to the expiration of
the Warranty Period. In the event Landlord or General Contractor receives an
express warranty from any subcontractor or material supplier which extends
beyond the Warranty Period, Landlord shall

                                     -12-
<PAGE>

cooperate with Tenant in Tenant's efforts to enforce such warranties against the
issuers thereof. With respect to Landlord's Work, Tenant acknowledges that the
express warranties provided by this lease are in lieu of any other warranties,
express 'or implied, applicable to the Landlord's Work, and Landlord and General
Contractor DISCLAIM ANY IMPLIED WARRANTIES, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, HABITABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Tenant agrees
that its remedy for breach of any warranty relating to the Landlord's Work is
limited to the cost of replacement or repair of the defect, AND TENANT HEREBY
WAIVES ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES.

     (d)  Tenant Requirements and Rights.
          ------------------------------

          (i)  Tenant shall designate a representative authorized to act on
Tenant's behalf with respect to the Landlord's Work. Tenant shall examine
documents submitted by Landlord and shall render decisions pertaining thereto
promptly to avoid unreasonable delay in the progress of the Landlord's Work.
Additionally, Tenant shall furnish information required of it as promptly and
expeditiously as necessary for the orderly progress of the Landlord's Work. In
this regard, Tenant shall endeavor to render such decisions and furnish such
information within five (5) working days after Landlord's written request for
the same is received by the Tenant representative.

          (ii) During the performance of the Landlord's Work, Tenant, its
employees, agents and contractors, may enter upon the New Space- from time to
time for the purpose of (A) observing and inspecting the execution and progress
of the Landlord's Work, and (B) constructing and completing all work which
Tenant requires for its use and occupancy of the New Space which is not part of
the Landlord's Work, provided that all such work undertaken by Tenant shall be
performed in a manner so as to avoid interference with the performance of the
Landlord's Work.

     (e)  Changes in the Landlord's Work.
          ------------------------------

          (i)  Changes in the Landlord's Work may be accomplished only by (A) a
"Change Order" (defined below) or (B) an "Order for Minor Change" (defined
below). A Change Order shall be based upon agreement between Landlord and
Tenant; an Order for Minor Change may be issued by Landlord alone, subject to
the right of Tenant to dispute the Order. Changes in the Landlord's Work shall
be performed in conformity with the provisions of this Section 7(e), and the
provisions in the Change Order or the Order for Minor Change. Landlord shall
maintain at the Landlord's office, and make available for review by Tenant, a
register of (I) all requests for changes to the Tenant Plans, (II) all such
requests resulting in a Change Order, (III) all Orders for Minor Change.

          (ii) Tenant shall have the right to request changes in the Landlord's
Work by making a written request to Landlord describing the requested change,
provided that Landlord shall not be obliged to execute the requested change
(unless the scope of same is such that, if requested by Landlord, the same would
be a Minor Change in the Tenant Work as described in subparagraph 7(e)(iii)),
unless a Change Order is issued with respect thereto. A "Change Order" is a
written instrument. prepared by Landlord and signed by Landlord and Tenant
stating their agreement upon all of the following: (A) a change in the
Landlord's Work; (B) the extent of the

                                     -13-
<PAGE>

adjustment in the Fit-out Cost; and (C) the extension of the Landlord's Work
Completion Date, if necessary. The Landlord's Work Completion Date shall be
extended by any delays in Landlord's Work occasioned by a request for a change
initiated by Tenant or a Change Order. To the extent any net increase in the Fit
Out Cost as a result of a Change Order would cause the Amortization Base to
exceed $837,725.00., such amount shall be paid by Tenant to Landlord upon
execution of the Change Order, and shall be part of the "Direct Payment Portion"
(as defined below).

         (iii) Landlord shall have the authority to order Minor Changes in the
Landlord's Work not involving any change in the Fit-Out Cost or extension of the
Landlord's Work Completion Date and not inconsistent with the Tenant Plans (a
"Minor Change"). Such Minor Changes in the Landlord's Work shall be effected by
written Order for Minor Change issued by Landlord, which shall be binding on
Tenant unless, within five (5) working days after the same is received by
Tenant, Tenant notifies Landlord that it disputes the Order for Minor Change. In
such event, the Order for Minor Change shall be treated as a request for a
Change Order and shall become effective and binding on Landlord and Tenant only
after mutual agreement of the parties as provided in this subsection 7(e).

     (f)  Payment of Fit-Out Cost
          -----------------------

          (i)  The lesser of one half of the Fit-Out Cost or $837,725.00 is
included within Minimum Annual Rent pursuant to Section 3 (b) above as the New
Space Amortized Fit-Out Rent Portion. The remaining portion of the Fit-Out Cost
(the "Direct Payment Portion") shall be paid by Tenant to Landlord as the
Landlord's Work progresses as follows: Two Hundred Nine Thousand Four Hundred
Thirty One and 25/100 ($209,431.25 ) Dollars ("Initial Payment") has been paid
by Tenant to Landlord on account of the Direct Payment Portion at the time of
the execution of this Lease. The balance of the Direct Payment Portion
(presently estimated at $628,293.75) shall be paid by Tenant to Landlord as
follows: As the Landlord's Work progresses, Landlord shall submit to Tenant,
once every 30 days, an invoice for payment for such portion of the Landlord's
Work which has been substantially completed or for materials delivered to the
site. Such invoice shall be submitted on an AIA form 702/703 or other form
reasonably acceptable to Tenant, and shall include such requisitions for
payment, bills, charges and other supporting documentation as Tenant shall
reasonably request. Tenant shall approve or reject such invoices within five (5)
business days of receipt, or the same shall be deemed approved. Any rejection of
an invoice shall state the reasons therefor with particularity, and Tenant shall
state which sums reflected in the invoice Tenant objects to, and the portion
which is not objected to by Tenant shall be disbursed in accordance with the
provisions below. If Landlord and Tenant cannot agree on whether the Landlord's
Work reflected in an invoice has been substantially completed in accordance with
the Tenant Plans and the other requirements of this Lease, such dispute shall be
decided by the Architect. Upon approval of an invoice, Tenant shall immediately,
pay Landlord one-half of the Fit-Out Cost reflected in such invoice (or at such
time as the total of all invoices equals or exceeds $1,675,450.00, the entire
Fit Out Costs reflected in such invoice). Landlord covenants to pay the
remaining portions of all invoices with its own funds (subject to its right of
reimbursement through the Amortized Fit-Out Rent Portion described above).
Landlord and Tenant agree that Tenant shall have no obligation to approve, and
shall not be liable for the payment of, any invoice that would cause the Fit-Out
Cost to exceed 1,675,450.00, unless such excess results from approved Tenant
Plans or changes to the Tenant Plans requested by Tenant. Upon Substantial
Completion of the Landlord's Work, the

                                     -14-
<PAGE>

actual Fit-Out Cost will be calculated, and the lesser of $837,725.00 or one
half of such Fit-Out Cost will be applied to calculate the Amortized Fit-Out
Rent Portion under Section 3(c), and the balance shall be the Direct Payment
Portion. If, for any reason (i.e., a Change Order), the cost of the Landlord's
Work results in an increase in the initial determination of Fit-Out Cost under
Section 7(b), such excess amount, shall be allocated to the Direct Payment
Portion, and shall be paid immediately to Landlord when such final cost is
determined.

          (ii)  To the extent reasonable, Landlord and Tenant will allocate to
the Direct Payment Portion items of removable personal property and trade
fixtures unique to Tenant's operation included within the Landlord's Work and
Fit-Out Cost. Such item shall be identified in a list to be agreed upon by T
Landlord and Tenant, and the items in such list which hall have an invoice cost
to Landlord not in excess of $100,000.00 in the aggregate, are hereinafter
called 'Trade Fixtures," and shall become the property of Tenant upon payment of
the Direct Payment Portion, subject to the provisions in the following sentence
and the rights of Landlord thereto elsewhere provided in this Lease.
Notwithstanding the foregoing, Tenant shall not remove from the Leased Space,
nor assign, sell, encumber, transfer or grant a security interest in the Trade
Fixtures prior to the expiration of the originally scheduled Term of the Lease,
without Landlord's prior written consent, and in the event of the termination of
this Lease for any reason whatsoever after the Commencement Date, but prior to
the originally scheduled expiration of the Term, title to and the right of
possession of the Trade Fixtures shall vest in Landlord, free and clear of any
right of Tenant or any other party thereto, and Tenant shall, if required by
Landlord, execute a bill of sale or such other document of transfer as Landlord
may require.

          (iii) Notwithstanding anything to the contrary contained herein, all
labor, material and other costs and expenses arising from or relating to
inconsistencies between the Tenant Plans and the Core and Shell Plans shall be
the sole responsibility of Landlord, without recourse to or reimbursement from
Tenant.

          (iv)  Landlord shall keep accurate records of all costs, fees,
disbursements and amounts incurred by it in the performance of the Landlord's
Work and shall furnish Tenant on a monthly basis with true and correct
statements of such costs. Tenant shall have the right to review and contest
Landlord's determination of the cost of the Landlord's Work and to inspect
Landlord's records with respect thereto during normal business hours upon three
(3) days prior written notice. If any such audit shall reveal a discrepancy in
Landlord's determination of the cost of the Landlord's Work, an appropriate
adjustment shall be made to the Fit-Out Cost.

     (g)  Delay Payment.
          -------------

          (i)  If Landlord fails to substantially complete the Landlord's Work
by the Landlord's Work Completion Date, for any reason other than a cause
described in Section 26 below, then Landlord shall pay to Tenant (A) an amount,
if any, equal to the occupancy costs incurred by Tenant for the period from the
Landlord's Work Completion Date until the Commencement Date, in excess of the
rent which would be payable by Tenant under this Lease but for the delay.

          (ii) A `Tenant Delay' is any delay resulting from (i) revisions to any
of the Phase 1, Phase 2 or Phase 3 Plans by Tenant, (ii) the performance or
nonperformance of any

                                     -15-
<PAGE>

work or activity by Tenant or any of its employees, agents or separate
contractors or consultants provided Landlord gives Tenant written notice of such
delay as promptly as possible, but in any event within ten (10) days following
any such delay), and (iii) changes in the Landlord's Work requested by Tenant as
established by written Change Order signed by Landlord and Tenant. The
Landlord's Work Completion Date shall be extended for a "reasonable" period of
time in the event of a Tenant Delay. For the purpose of the preceding sentence,
the term "reasonable' shall be mutually determined by Landlord and Tenant at the
time of the event resulting in a Tenant Delay. Any delay arising from or
relating to inconsistencies between the Tenant Plans and the Core and Shell
Plans shall not constitute a Tenant Delay, unless Landlord notifies Tenant of
such inconsistency at the time of delivery of the Tenant Plans to Tenant, and
the same arises from a request by Tenant with respect to the Tenant Plans.

8.   TENANT'S ALTERATIONS.

     (a)  During the term of this Lease, Tenant shall not make any alterations
or additions to the Leased Space or the Building without the prior written
consent of Landlord, which consent shall not be unreasonably withheld or
delayed. All such work to be done or performed in or about the Building by
Tenant shall be performed (i) at Tenant's sole cost and expense, (ii) in
accordance with the plans and specifications prepared by and at the expense of
Tenant and given to and, approved by Landlord, and (iii) in conformity with all
applicable laws, codes and regulations. During the course of performance of said
work, Tenant will carry or cause to be carried Comprehensive General Liability
insurance, in the minimum limit of $1,000,000.00, naming Landlord as an
additional insured. For the purpose of this Lease, "Minor Tenant Alterations"
shall mean alterations or additions to the Leased Space and the Building which
are not structural in nature, do not affect Building systems, do not involve
partitioning, and the cost for labor, tools, materials (other dm specialized
laboratory equipment), and supplies does not exceed $10,000.00. Tenant shall
have the right to perform Minor Tenant Alterations, the plans and specifications
for which are approved by Landlord pursuant to clause (iii) above, by
contractors or Tenant's employees approved by Landlord. Tenant shall provide
Landlord with as-built drawings of such Minor Tenant Alterations, and shall
reimburse Landlord for the cost of review of the plans and specifications and
inspection of the Minor Tenant Alterations at a rate not to exceed $60 per hour
for personnel employed by Landlord or its affiliates. With respect to any
alterations or additions to the Leased Space other than Minor Tenant
Alterations, such work shall be performed at Tenant's cost by Landlord. Landlord
shall provide Tenant with a fixed price bid to perform such work, and if Tenant
is dissatisfied with such bid, Landlord shall provide an alternative bid on the
basis of the cost of the work plus ten (10%) percent.

     (b)  All alterations, interior decorations, improvements or additions made
to the Leased Space by Tenant, except for movable furniture, equipment and trade
fixtures, shall immediately become Landlord's property. At the expiration of the
Term of this Lease, Tenant shall have the right to remove all movable furniture,
equipment, and trade fixtures installed by Tenant in the Space ("Tenant's
Property"), provided that Tenant repairs any damaged caused to the Leased Space
by said removal, and provided that Tenant shall have no right to sell or dispose
of any decorations, improvements or installed in the Space by Landlord without
the express written consent of Landlord. All of Tenant's Property remaining on
the Leased Space after the expiration of the Lease, or after any sooner
remaining on termination, shall be deemed to be abandoned property and shall
automatically, at Landlord's election, become the property of

                                     -16-
<PAGE>

Landlord. If Landlord shall notify Tenant to remove such property, Tenant shall
do so at its cost and expense prior to the expiration of the Term of the Lease.
If Tenant fails to do so, Tenant shall pay to Landlord the cost of disposal.

9.   MECHANIC'S LIENS.

     Prior to Tenant performing any construction or other work on or about the
Leased Space for which a lien could be filed against the Leased Space or the
Building, Tenant shall enter into a written waiver of liens agreement with the
contractor who is to perform such work, and such written agreement shall be
filed, in accordance with the Mechanics' Lien Law of the state where the
Building is located prior to the commencement of such work. Notwithstanding the
foregoing, if any mechanics' or other lien shall be filed against the Leased
Space or the Building purporting to be for labor or material shed or to be
furnished at the request of the Tenant, then Tenant shall at its expense cause
such lien to be discharged of record by payment, bond or otherwise, within
thirty (30) days after the filing thereof. If Tenant shall fail to cause such
lien to be discharged by payment, bond or otherwise within such period, Landlord
may cause such lien to be discharged by payment, bond or otherwise, without
investigation as to the validity thereof or as to any offsets or defenses
thereto, and Tenant shall, upon demand, reimburse Landlord for all amounts paid
and costs incurred, including attorneys' fees, in having such lien discharged of
record.

10.  CONDITION OF LEASED SPACE.

     Tenant acknowledges and agrees that, except as expressly set forth in this
Lease, there have been no representations or warranties made by or on behalf of
Landlord with respect to the Leased Space or the Building or with respect to the
suitability of either for the conduct of Tenant's business. The taking
possession of the New Space by Tenant shall conclusively establish that the New
Space and the New Building were at such time in satisfactory condition, order
and repair as required by Section 2 hereof, subject to the provisions respecting
latent defects and the punch list in Section 7 hereof. Tenant acknowledges that
it presently occupies the Original Space and that it accepts the condition
thereof.

11.  BUILDING SERVICES.

     Landlord shall provide maintenance to the common areas of the Building and
the Center (including snow removal), and provision of a and dumpster removal
service for normal office trash and rubbish, all as are commercially reasonable,
provided Tenant has that this is a "triple net" and operating expenses, (except
any of the foregoing that are the responsibility of Landlord under the terms of
this Lease). Tenant shall have access to the Leased Space at all (i.e., 24 hours
a day, 365 days a year) during the term of this Lease, but Landlord shall not be
required to provide services beyond normal business hours. Landlord shall not be
liable in damages or otherwise for temporary delay or failure in furnishing any
services or facilities to be provided by Landlord under this Lease or any other
agreement between Tenant and Landlord (or its agents) or implied by law. In no
event shall such delay or failure regardless of cause, constitute an eviction,
disturbance of Tenant's use and possession of the Leased Space, render Landlord
liable to Tenant, authorize abatement of rent, relieve Tenant from performance
of its obligations under this Lease, or result in a termination of this Lease.

                                     -17-
<PAGE>

12.  ASSIGNMENT AND SUBLETTING.

     (a)  Tenant shall not, without the prior written consent of Landlord,
assign or mortgage this Lease or any interest therein or sublet the Leased Space
or any part thereof. For the purposes of this section, the sale or assignment of
a controlling interest in the Tenant corporation shall be deemed an assignment,
but the assignment to a parent or wholly-owned subsidiary of the Tenant shall be
permitted, provided that such assignee assumes the obligations of Tenant and
that such assignment shall not relieve Tenant of its obligations hereunder. With
respect to any assignment or subletting, whether approved by Landlord or not,
any money or other economic consideration received by Tenant as a result of such
subletting or assignment (net of Tenant's costs and expenses), whether
denominated as rent under the sublease or otherwise, which exceeds, in the
aggregate, $22.94 per year multiplied by the square footage of the Leased Space
which is the subject of the sublease or assignment, plus Tenant's Proportionate
Share of Operating Expenses and Real Estate Taxes, shall be payable to Landlord
as Additional Rent under this Lease without affecting or reducing any other
obligation of Tenant hereunder.

     (b)  Regardless of Landlord's consent, no subletting or assignment shall
release Tenant of Tenant's obligation or alter the primary liability of Tenant
to pay the rental and to perform all other obligations to be performed by Tenant
hereunder. The acceptance of rental by Landlord from any other person shall not
be deemed to be a waiver by Landlord of any provision hereof. Consent to one
assignment or subletting shall not be deemed consent to any subsequent
assignment or subletting. In the event of default by any assignee of Tenant or
any successor of Tenant in the performance of any of the terms hereof, Landlord
may proceed directly against Tenant without the necessity of exhausting remedies
against such assignee or successor. Landlord may consent to subsequent
assignment or subletting of this Lease or amendments or modifications to this
Lease with assigned of Tenant, without notifying Tenant, or any successor of
Tenant, and without obtaining its or their consent thereto and such action shall
not relieve Tenant of liability under this

     (c)  Notwithstanding the foregoing limitations on assignment and
subletting, Landlord shall consent to an assignment of this Lease to a lending
institution which provides for Tenant of the Direct Payment Portion, if such
institution's financial statement is reasonably judged by Landlord to be equal
or superior to Tenant's as of the date of the assignment or subletting, and such
institution agrees to assume and be bound by the provisions of this Lease.

                                     -18-
<PAGE>

13.  ACCESS TO LEASED SPACE.

     Landlord, its employees and agents shall be permitted to enter the Leased
Space for the purpose of inspecting the same, showing the Leased Space to
prospective purchasers, tenants and mortgagees, or for making necessary Building
repairs, provided that (i) Landlord shall give Tenant at least 24 hours' prior
written notice of such entry (except in case of an emergency), (ii) a
representative of Tenant shall be present and supervise each such entry, and
(iii) Tenant shall be permitted to deny entry to any portions of the Leased
Space containing confidential or proprietary information, specialized equipment
or hazardous materials. Tenant shall designate an employee to receive alarm or
emergency calls, and provide Landlord with a key to the Leased Space which shall
trigger an alarm upon use, if the same can be reasonably accommodated by
Tenant's security system.

14.  REPAIRS.

     (a)  Landlord shall make all repairs necessary to maintain the roof, load
bearing walls (other than paint and wall coverings on the interior surface of
such walls) floors (other than carpeting, tile and similar floor coverings) and
foundations of the Building, and plumbing and electrical fixtures and equipment
serving portions of the Building in addition to the Leased Space; In no event
shall Landlord be obligated to repair any damage caused by any act, omission or
negligence of the Tenant or its employees, agents, invitees, licensees,
subtenants or contractors. If Landlord fails to effectuate such repairs within a
reasonable time, Tenant shall provide Landlord with written notice and
reasonable opportunity to cure the same, and if it is not so cured, Tenant may
effectuate such repairs, in which case Tenant may deduct the cost and expense of
performing such repairs from the next installments of Minimum Annual Rent due.

     (b)  Except as the Landlord is obligated for repairs as provided above,
Tenant shall make, at its sole cost and expense, all repairs necessary to
maintain the Leased Space, including without limitation, all plumbing, heating,
ventilation, air conditioning and electrical lines, pipes, fixtures and
equipment located within the Leased Space not expressly to be by maintained by
Landlord pursuant to subsection (a) and shall keep the Leased Space and the in
neat and orderly condition normal wear and tear excepted. Without limiting the
generality of the foregoing, Tenant at its expense is specifically to make
promptly all (i) to that portion of any pipes, lines, ducts, wires or conduits
contained within the Space; (ii) to the glass windows, plate glass doors, and
any fixtures or appurtenances composed of glass; (iii) to Tenant's sip; (iv) to
any heating or air conditioning equipment installed in or servicing the Leased
Space; and (v) to the Space or to any part of the Center when such repairs are
necessitated by any act or omission (negligent or otherwise) of Tenant or
Tenant's agents or employees, or by failure of Tenant to perform any of its
obligations under Lease. Tenant at its own expense shall enter into a
maintenance contract with a reputable heating and air conditioning service
company acceptable to Landlord, for the entire Term, and provide Landlord with a
copy of the same. If the Tenant refuses or neglects to make such repairs, or
fails to diligently prosecute the same to completion, or fails to enter into the
aforementioned maintenance contract, after written notice from Landlord of the
need therefor, Landlord, may make such repairs or enter into such maintenance
contract at the expense of Tenant and such expense shall be collectible as
Additional Rent. Any such repairs and any labor performed or materials furnished
in, on or about the Leased Space shall be performed and held by Tenant in strict
compliance with all applicable laws, regulations, ordinances and

                                     -19-
<PAGE>

requirements of all duly constituted authorities or governmental bodies having
jurisdiction over the Building, and the requirements of any board of
underwriters having jurisdiction thereof. Landlord shall have the right to
approve any and all contractors and suppliers to furnish materials and labor for
such repairs. Landlord shall not unreasonably withhold its consent to Tenant's
providing, in lieu of a maintenance contract as required above, a full time,
qualified employee on site who is responsible for maintenance of the heating,
ventilation and air conditioning system.

     (c)  Provided that Landlord shall exercise reasonable efforts to effectuate
its repairs in a manner which will keep at a minimum Landlord's interference
with Tenant's use and occupancy of the Leased Space, Landlord shall not be
liable by reason of any injury to or interference with Tenant's business arising
from the making of any repairs, alterations, additions or improvements in or to
the Leased Space, the Building or Center or to any appurtenances or equipment
therein.

15.  TERMINATION AND EXTENSION.

     Unless renewed or extended by written instrument executed by Landlord and
Tenant, the Term of this Lease shall expire in accordance with Section 2(c)
without notice.

16.  INTENTIONALLY OMITTED.

17.  INDEMNMCATION AND INSURANCE.

     (a)  Tenant covenants and agrees that it shall, without notice or demand
and at its own cost and expense, and save harmless Landlord against and from,
and Landlord shall not be liable to Tenant for, any and all claims by or on
behalf of any person arising in any manner whatsoever from, out of or in
connection with:

          (i)    the use and occupancy of the Space by Tenant, its agents,
employees and invitees,

          (ii)   any failure by Tenant to perform any of the terms or conditions
of this Lease required to be performed by Tenant,

          (iii)  any failure by Tenant to comply with any statutes, regulations,
ordinances or orders of any governmental authority, or

          (iv)   any accident, death, injury, or damage, loss or theft of
property in or about the Space (whether involving property belonging to Tenant
or any other person) resulting from any cause whatsoever, unless such accident,
death, injury, damage, loss or theft is caused by the willful misconduct or sole
negligence of the Landlord, its agents, employees or contractors, or claims
arising from deficiencies in Landlord's performance of Landlord's Work under
this Lease, and from and against all costs, attorney fees, expenses and
liabilities incurred in or as a result of any such claim or action or proceeding
brought against Landlord by reason of any such claim. Tenant, upon notice from
Landlord covenants to resist or defend such action or proceeding by legal
counsel reasonably satisfactory to Landlord.

                                     -20-
<PAGE>

          Tenant shall keep in force public liability insurance with respect to
the Leased Space, including contractual insurance with respect to the covenants
and agreements above (excluding (ii) and (iii) above), with companies and in
form, acceptable to the Landlord to afford protection of not less than One
Million ($1,000,000.00) Dollars with respect to personal injury or death and
property damage, and shall keep in force and effect "all risk" hazard insurance
insuring the personal property of Tenant located in the Leased Space (including
without limitation, the Trade-Fixtures) for the full replacement cost thereof
with companies and in form acceptable to the Landlord. All such insurance
policies obtained by Tenant shall name the Landlord as an additional insured and
loss payee and provide thirty (30) days' notice of cancellation. Copies or
certificates of such policies shall be delivered to Landlord.

          (b)  Landlord shall, without notice or demand and at its own cost and
expense, indemnify and save harmless Tenant against and from, and Tenant shall
not be liable to Landlord for, any and all claims by or on behalf of any person
arising in any manner whatsoever from, out of or in connection with:

               (i)  the location of any Hazardous Substance on, in or about the
Leased Space or the Center prior to the commencement of the Original Lease
(unless attributable solely to Tenant, its agents, employees or contractors),
and

               (ii) the failure of the Building shell work and common areas to
comply with the Americans with Disabilities Act and other applicable statutes,
regulations, ordinances or orders of governmental authority.

          Landlord shall maintain at all times public liability and property
damage and casualty insurance on Building and on the land upon which the
Building is situated in amounts consistent with the amounts of coverage
maintained on similar properties in the suburban Philadelphia region.

          (c)  As to any loss or damage which may occur upon the property of a
party hereto, such party hereby releases the other, to the extent of such
damaged party's insurance indemnities, from any and all liability for such loss
or damage even if such loss or damage shall be brought about by the fault or
negligence of such other party, or the agent or employees of such other party;
provided, however, that this release shall be effective only with respect to
loss or damage occurring during such time as the applicable policies of
insurance shall contain a clause to the effect that this release shall not
affect said policies or the right of the insured to recover thereunder. If any
policy does not contain such a clause, the party shall, at the written request
of the other party to this Um, have such a clause added to said policy if an
endorsement so providing is obtainable, if the same is obtainable at no
additional charge; if there is such a charge, the insured party shall notify the
other, and obtain such clause if such other agrees to pay the additional charge.

18.  FIRE OR OTHER CASUALTY.

     (a)  If the Leased Space or any portion of the Building or common area
necessary to provide Tenant with access to the Leased Space is partially damaged
by fire or other casualty such that (i) such damage can be repaired by Landlord
within 180 days after the date of such

                                     -21-
<PAGE>

casualty, (ii) Tenant is able to conduct its business therein at a reduced level
on a temporary basis, and (iii) insurance proceeds are available to Landlord,
the damages shall be repaired by and at the expense of Landlord and the rent,
until such repairs shall be made, shall be apportioned from the date of such
fire or other casualty according to the part of the Leased Space which is usable
by Tenant.

     (b)  Landlord agrees to repair damage to the Leased Space within a
reasonable period of time but in no event later than 180 days after the date of
the casualty, after receipt from Tenant of written notice of such damage, except
that Tenant agrees to repair and replace its own furniture, furnishings and
equipment, including the Trade Fixtures.

     (c)  If the Leased Space is totally damaged or is rendered wholly
untenantable by fire or other casualty or if, as a result of such casualty,
Tenant shall be deprived of access to the Leased Space for a period reasonably
estimated to exceed 180 days, or if Landlord shall decide not to restore or not
to rebuild the same, then or in any such events Landlord or Tenant may, within
(30) days after such fire or other casualty, give the other written notice of
on, and thereupon the term of this Lease shall expire by lapse of time upon the
third day after such notice is given, and Tenant shall vacate the Leased Space
and surrender the same to Landlord. Upon the termination of this Lease under the
conditions hereinbefore provided, Tenant's liability for rent shall cease as of
the day following the casualty.

19.  CONDEMNATION.

     If the Leased Space or the Building or any material part of either shall be
condemned for public use, then and in that event, upon the vesting of tide to
the same for such public use, this Lease shall terminate, anything herein
contained to the contrary notwithstanding, except that Tenant shall have the
right to prove and collect the value of the trade fixtures installed by it,
including moving expenses. In the event of such termination of this Lease, all
rent paid in advance shall be apportioned as of the date of such termination.
Notwithstanding the foregoing, if only a part of the Leased Space shall be so
taken and the part not so taken shall be sufficient for the operation of
Tenant's business, Tenant, at its election, may retain the part not so taken and
there shall be a proportional reduction in the rent. AU compensation awarded or
paid upon such a total or partial taking of the Leased Space shall belong to and
be the property of the Landlord without any participation by the Tenant,
provided, however, that nothing contained herein shall be construed to preclude
the Tenant from prosecuting any claim directly against the condemning authority
in such condemnation proceedings for loss of business, or depreciation to,
damage to, or cost of removal of, or for the value of stock, trade fixtures,
furniture, and other personal property belonging to the Tenant; provided,
however, that no such claim shall diminish or otherwise adversely affect the
Landlord's award or the award of any mortgagee.

20.  ESTOPPEL CERTIEFICATES.

     At any time, and from time to time, upon the written request of Landlord or
any "Mortgagee" (as defined in section 29 hereof), Tenant, within fifteen (15)
days of the date of such written request, agrees to execute and deliver to
Landlord and/or such Mortgagee, a written statement: (a) ratifying this Lease;
(b) confirming the commencement and expiration dates of the terms of this Lease;
(c) certifying that Tenant is in occupancy of the Leased Space, and that the

                                     -22-
<PAGE>

Um is in full force and effect and has not been modified, assigned, supplemented
or amended except by such writings as shall be stated; (d) certifying that all
conditions and agreements under this Lease to be satisfied or performed by
Landlord have been satisfied and performed except as shall be stated; (e)
certifying that Landlord is not in default under the Lease and there are no
defenses or offsets against the enforcement of this Lease by Landlord, or
stating the defaults and/or defenses claimed by Tenant; (f) reciting the amount
of advance rent, if any, paid by Tenant and the date to which such rent has been
paid; (g) reciting the amount of security deposited with Landlord, if any; and
(h) any other information which Landlord or the Mortgagee shall require. The
failure of Tenant to execute, acknowledge and deliver to Landlord and/or any
Mortgagee a statement in accordance with the provisions herein within the period
set forth herein shall constitute an acknowledgement by Tenant which may be
relied upon by any person holding or in accordance with the an acknowledgment by
to any interest whatsoever the Leased Space or the Building that this Lease has
not been assigned, amended, changed or modified, is in full force and effect and
that the Annual, and Additional Rent have been duly and fully paid not beyond
the respective due dates immediately preceding the date of the request for such
statements and shall constitute as to any persons entitled to rely on such
statements a waiver of any defaults by Landlord or defenses or offsets against
the enforcement of this Lease by Landlord which may exist prior to the date of
the written request.

21.  DEFAULT.

     The occurrence of any of the following shall constitute an "Event of
Default' under this Lease:

     (a) Failure of Tenant to take possession of the New Space within ninety
(90) days after the Commencement Date.

     (b) The vacation or abandonment of the Leased Space by Tenant for a period
in excess of 15 consecutive days.

     (c) A failure by Tenant to pay, when due, any installment of rent hereunder
or any such other sum herein required to be paid by Tenant where such failure
continues for ten (10) days after written notice from Landlord that the same is
due.

     (d) A failure by Tenant to observe and perform any other terms or
conditions of this Lease to be observed or performed by Tenant, where such
failure continues for thirty (30) days after written notice thereof from
Landlord to Tenant; provided, however, that if such failure cannot be cured
within 30 days, such failure shall not be an Event of Default hereunder so long
as within such 30 day period, Tenant commences to cure such failure and
thereafter diligently pursues curing such failure within a period not to exceed
90 days from the date of such notice.

     (e) The making by Tenant of any assignment for the benefit of creditors; an
adjudication that Tenant is bankrupt, insolvent, or unable to pay its debts; the
filing by or against Tenant of a petition in bankruptcy or of a petition for
reorganization or arrangement under any law relating to bankruptcy (unless, in
the case of a petition filed against Tenant, the same is dismissed within sixty
(60) days after the filing thereof); the appointment of a trustee or receiver to
take possession of substantially all of Tenant's assets located in the Leased
Space or of

                                     -23-
<PAGE>

Tenant's interest in this Lease (unless possession is restored to Tenant within
(30) days after such appointment); or the attachment, execution or levy against,
or other judicial seizure of, substantially all of Tenant's assets located in
the Leased Space or of Tenant's interest in this Lease (unless the same is
discharged within thereof).

22.  REMEDIES.

     Upon the occurrence of any Event of Default:

     (a) Landlord may perform for the account of Tenant the cure of any such
Event of Default and immediately recover as Additional Rent any expenditures
made and the amount of any obligations incurred in connection therewith, plus
interest at the Default Rate from the date the obligations are incurred by
Landlord until payment therefor to Landlord, whether before or after entry of
judgment and issuance of execution thereon.

     (b) Landlord may accelerate all Minimum Annual Rent and Additional Rent due
for the balance of the Term of this Lease and declare the same to be immediately
due and payable;

     (c) In determining the amount of any future payments due Landlord relating
to Operating Expenses and/or Real Estate Taxes, Landlord may make such
determination based upon the most recent estimates of Operating Expenses and/or
Real Estate Taxes available;

     (d) Landlord, at its option, may serve notice upon Tenant that this Lease
and the then unexpired term hereof shall cease and expire and become absolutely
void on the date specified in such notice, to be not less than five (5) days
after the date of such notice without any right on the part of the Tenant to
save the forfeiture by payment of any sum due or by the performance of any term
or condition broken; and, thereupon and at the expiration of the time limit in
such notice, this Lease and the Term hereof, as well as the right, title and
interest of the Tenant hereunder, shall wholly cease and expire and become void
in the same manner and with the same force and effect (except as to Tenant's
liability) as if the date fixed in such notice were the date herein granted for
expiration of the Term of this Lease. Thereupon, Tenant shall immediately quit
and surrender to Landlord the Leased Space, and Landlord may enter into and
repossess the Leased Space by summary proceedings, detainer, ejectment or
otherwise and remove all occupants thereof and, at Landlord's option, any
property thereon without being liable to indictment, prosecution or damages
therefor. No such expiration or termination of this Lease shall relieve Tenant
of its liability and obligations under this Lease; whether or not the Leased
Space shall be relet; provided, however, that in the event Landlord relets the
Leased Space prior to the originally scheduled expiration of the Term
("Replacement Rent"), and Tenant has theretofore paid accelerated Minimum Annual
Rent and Additional Rent for the entire Term of the Lease, Landlord shall
reimburse Tenant the amount of the Replacement Rent, reduced by all costs and
expenses incurred by Landlord in connection with such reletting, including
without limitation those items described in subsection (e) below;

     (e) Landlord may, at any time after the occurrence and continuance of any
Event of Default and (i) the abandonment of the Leased Space by Tenant, or (ii)
entry of a judgment or order for possession in favor of Landlord, re-enter and
repossess the Leased Space and any part thereof and attempt in its own name, as
agent for Tenant if this Lease not be terminated, or on its

                                     -24-
<PAGE>

own if this Lease be terminated, to relet all or any pan of the Space for and
upon such terms and to such persons and for such period or periods as Landlord,
in its sole discretion, shall determine, including a term beyond the termination
of this Lease; and Landlord shall not be required to accept any tenant offered
by Tenant or observe any instruction given by Tenant about such reletting. For
the purpose of such reletting, Landlord may decorate or make repairs, changes,
alterations or additions in or to the Leased Space to the extent deemed by
Landlord desirable or convenient; and the cost of such decoration, repairs,
changes, alterations or additions shall be charged to and be payable by Tenant
as Additional Rent hereunder, as well as any reasonable brokerage and attorneys
fees incurred by Landlord; and any sums collected by Landlord from any new
tenant obtained shall be credited against the balance of the rent due hereunder
as aforesaid. Tenant shall pay to Landlord monthly, on the days when the rent
would have been payable under this Lease, the amount due hereunder less the
amount obtained by Landlord from such new tenant;

     (f) Landlord shall have the right of injunction, in the event of a breach
or threatened breach by Tenant of any of the terms and conditions hereof, to
restrain the same and the right to invoke any remedy allowed by law or in
equity, whether or not other remedies, indemnities or reimbursements are herein
provided. The rights and remedies given to Landlord in this Lease are distinct,
separate and cumulative remedies; and no one of them, whether or not exercised
by Landlord, shall be deemed to be in exclusion of any of the others.

23.  CONFESSION OF JUDGMENT.

     WHEN THIS LEASE SHALL BE TERMINATED BY COVENANT OR CONDITION BROKEN, EITHER
DURING THE ORIGINAL TERM OR ANY RENEWALS OR EXTENSIONS THEREOF, AND ALSO WHEN
AND AFTER THE TERM HEREBY CREATED OR, ANY RENEWAL OR EXTENSION THEREOF SHALL
HAVE EXPIRED, IT SHALL BE LAWFUL FOR ANY ATTORNEY OF ANY COURT OF RECORD AS
ATTORNEY FOR TENANT TO FILE AN AGREEMENT FOR ENTERING IN ANY COMPETENT COURT AN
AMICABLE ACTION FOR JUDGMENT IN EJECTMENT AGAINST TENANT AND ALL PERSONS CLABMG
UNDER TENANT, AND A JUDGMENT FOR THE RECOVERY BY LANDLORD OF POSSESSION MAY
ISSUE FOR WITHOUT ANY PRIOR WRITTEN OR PROCEEDINGS WHATSOEVER. IF FOR ANY
REASON AFTER SUCH ACTION SHALL HAVE BEEN COMMENCED, IT SHALL BE CANCELED OR
SUSPENDED AND POSSESSION OF THE LEASED SPACE REMAINS IN OR IS RESTORED TO
TENANT, LANDLORD SHALL HAVE THE RIGHT UPON ANY SUBSEQUENT DEFAULT OR TERMINATION
OF TERM LEASE, OR ANY RENEWAL OR EXTENSION HEREOF, TO BRING ONE OR MORE ANUCABLE
ACTIONS IN EJECTMENT AS HEREINBEFORE SET FORTH TO RECOVER POSSESSION OF THE
LEASED SPACE. IF IN ANY AMICABLE ACTION IN EJECTMENT, LANDLORD SHALL CAUSE TO BE
FILED IN SUCH ACTION AN AFFIDAVIT SETTING FORTH THE FACTS NECESSARY TO
AUTHORIZE THE ENTRY OF JUDGMENT AND IF A TRUE COPY OF THIS LEASE (AND THE TRUTH
OF THE COPY STATED IN SUCH AFFIDAVIT SHALL BE. SUFFICIENT PROOF) BE FILED IT
SHALL NOT BE NECESSARY TO FILE THE ORIGINAL AS A WARRANT OF ATTORNEY, ANY LAW,
RULE OF COURT, CUSTOM OR PRACTICE TO THE

                                     -25-
<PAGE>

CONTRARY NOT WITHSTANDING. TENANT EXPRESSLY RELEASES TO LANDLORD, AND TO ANY AND
ALL ATTORNEYS WHO MAY APPEAR FOR TENANT, ALL ERRORS IN THE SAID PROCEEDINGS, AND
ALL LIABILITY THEREFOR. TENANT EXPRESSLY WAIVES THE BENEFIT OF ALL LAWS, NOW OR
HEREAFTER IN FORCE, EXEMPTING ANY GOODS WITHIN THE LEASED SPACE OR ELSEWHERE
FROM DISTRAINT, LEVY OR SALE.

24.  WAIVER.

     The failure or delay on the part of Landlord to enforce or exercise at any
time any of the terms and conditions of this Lease shall in no way be construed
to be a waiver thereof, nor in any way to affect the validity of this Lease or
any part hereof, or the right of Landlord to thereafter enforce each and every
such term or condition. No waiver by Landlord of any breach of this Lease shall
be held to be a waiver of any other or subsequent breach. The receipt by
Landlord of rent at a time when the rent is in default under this Lease shall
not be construed as a waiver of such default. The receipt by Landlord of a
lesser amount than the rent due shall not be construed to be other than a
payment on account of the rent then due, nor shall any statement on Tenant's
check or any letter accompanying Tenant's check to be deemed an accord and
satisfaction, and Landlord may accept such payment without prejudice to
Landlord's right to recover the balance of the rent due or to pursue any other
remedies provided in this Lease. No act or thing done by this Lease shall be
deemed an acceptance or a surrender of the Leased Space, and no agreement to
accept such a surrender shall be valid unless in writing and_ signed by
Landlord.

25.  QUIET ENJOYMENT.

     If and so long as Tenant pays the rent reserved hereunder and observes and
performs all the terms and conditions on Tenant's part to be observed and
performed hereunder, Tenant shaft and may peaceably and quietly have, hold and
enjoy the Leased Space for the entire Term hereof, subject to all of the
provisions of this Lease.

26.  FORCE MAJEURE.

     Time periods for Landlord's performance of its obligations (including
without limitation Landlord's construction obligations) under any of the terms
of this Lease shall be extended for periods of time during which the Landlord's
performance is prevented due to circumstances beyond the Landlord's control,
including without limitation, strikes, embargoes, governmental regulations, acts
of God, war or other strife or Tenant Delays.

27.  SUCCESSORS.

     The respective rights and obligations provided in this Lease shall bind and
shall inure to the parties hereto, and their successors and permitted assigns.

28.  LANLORD'S LIABILITY.

     Landlord's responsibility under this Lease shall be limited to its interest
in the Leased Space and in the Building, and no members of Landlord's
partnership shall be personally liable hereunder. Tenant agrees to took solely
to Landlord's interest in the Leased Space and in the

                                     -26-
<PAGE>

Building for the collection of any judgment, and, in entering any such judgment,
the person entering the same shall request the prothonotary to mark the judgment
index accordingly. If the Leased Space or the Building is transferred or
conveyed, Landlord shall be relieved of aid covenants and obligations under this
Lease thereafter, provided that notice of said transfer or conveyance is given
to Tenant by Landlord and Landlord's successor expressly agrees to assume
Landlord's obligations hereunder.

29.  SUBORDINATION.

     Tenant agrees: (a) that, except as hereinafter provided, this Lease is, and
all of Tenant's rights hereunder are and shall always be, subject and
subordinate to any mortgage, leases of Landlord's property (in sale-leaseback)
pursuant to which Landlord has or shall retain the right of possession of the
Leased Space (and/or the Building) or security instruments (collectively called
"Mortgage") that now exist, or may hereafter be placed upon the Leased Space or
the Building, or any part thereof and all advances made or to be made thereunder
and extensions thereof; and (b) that if the holder of any such Mortgage
("Mortgagee") or if the purchaser at any foreclosure sale or at any sale under a
power of sale contained in any Mortgage shall at its sole option so request,
Tenant will attorn to, and recognize such Mortgagee or purchaser, as the case
may be, as Landlord under this Lease for the balance then remaining of the term
of this Lease, subject to all terms of this Lease; and (c) that the aforesaid
provisions shall be self-operative and no further ins t or document shall be
necessary unless required by any such Mortgagee or purchaser. Notwithstanding
anything to the contrary set forth above, any Mortgagee may at any time
subordinate its Mortgage to this Lease, without Tenant's consent, by execution
of a written document subordinating such Mortgage to this Lease to the extent
set forth therein, and upon this Lease shall be deemed prior to such Mortgage to
the extent set forth in such written document without regard to their respective
dates of execution, delivery and/or recording and in that event, to the extent
set forth in such written document such Mortgagee shall have the same rights
with respect to this Lease as though this Lease had been executed add a
memorandum thereof recorded prior to the execution, delivery and recording of
the Mortgage as though this Lease had been assigned to such Mortgagee. Should
Landlord or any Mortgagee or purchaser desire confirmation of either such
subordination or such attornment, as the case may be, Tenant upon written
request, and from time to time, will execute and deliver without charge and in
form satisfactory to Landlord, to the Mortgagee or the purchaser all instruments
and/or documents that may be required to acknowledge such subordination and/or
agreement to attorn, in recordable form within fifteen (15) days following a
request therefor from Landlord. In the event Tenant fails to execute and deliver
the instruments and documents as provided for herein within the time period set
forth, Tenant does hereby make, constitute and appoint Landlord or such
Mortgagee or purchaser, as the case may be, as Tenant's attorney-in-fact and in
its name, place and stead to do so, or Landlord may treat such failure as an
event of default. The aforesaid power of attorney is given as security coupled
with an interest and is irrevocable. Tenant shall agree to any reasonable
changes to this Lease as may be required by a Mortgagee, which changes do not
materially alter the non-economic terms, or alter in any way the economic terms,
of this Lease.,

     Landlord shall use its best efforts to obtain and furnish to Tenant,
simultaneously with Tenant's execution of this Lease, an agreement ("Non-
Disturbance Agreement") executed and acknowledged by the holder(s) of any
mortgage now encumbering the Building ("Existing. Holder") whereby each Existing
Holder agrees to not disturb Tenant in its rights, use and

                                     -27-
<PAGE>

possession of the Leased Space, the Building and the Center under this Lease or
to terminate this Lease, except to the extent permitted to Landlord by the terms
of this Lease, notwithstanding the foreclosure or the enforcement of the
mortgage or termination or other enforcement of an underlying lease or
installment purchase agreement. Landlord shall also use its best efforts to
obtain and furnish to Tenant a Non-Disturbance Agreement from the holder(s) of
any mortgage encumbering the Building given by Landlord after the date hereof.

     In connection with any financing obtained by Landlord to construct the Core
and Shell and/or to perform Landlord's Work hereunder, if the institution
providing such financing to Landlord shall require any modifications to this
Lease to accommodate such financing, Tenant shall not unreasonably withhold or
delay its consent to such modifications to be reflected in an amendment to the
Lease, provided that Tenant shall not be obligated to execute any such amendment
which would diminish any of Tenant's rights or Landlord's duties hereunder, or
expand the liability or obligations of Tenant under this Lease. Tenant shall
supply such reasonable information regarding its operations as such institution
may require as a condition to such financing.

30.  SUBSTITUTE SPACE.

     INTENTIONALLY DELETED.

31.  RULES AND REGULATIONS.

     Tenant agrees to comply with the reasonable rules and regulations
established by Landlord from time to time and delivered in writing to Tenant,
which Landlord agrees will be applied uniformly to all tenants. The existing
rules and regulations are attached hereto as bit "C".

32.  GOVERNING LAW.

     This Lease shall be governed by and construed in accordance with the laws
of the state in which the Building is located.

33.  SEVERABILITY.

     If any provisions of this Lease shall prove to be invalid, void or illegal,
it shall in no way affect any other provision hereof and the remaining
provisions shall nevertheless remain in full force and effect.

34.  HOLDING OVER.

     If Tenant shall, with the consent of Landlord, hold over after the
expiration of the term hereof, such tenancy shall be deemed a month-to-month
tenancy, which tenancy may be terminated as provided by applicable state law.
During such tenancy, Tenant agrees to pay to Landlord the fair market value for
the Leased Space, as reasonably determined by Landlord, and to be bound by all
the terms and conditions herein. If Landlord shall not give written consent to
such hold over, such tenancy may be terminated as above provided, and until
Tenant has vacated the Leased Space, it agrees to pay to Landlord rent at a
monthly rental double the rate payable by Tenant at the expiration of the Term
of this Lease.

                                     -28-
<PAGE>

35.  NOTICES.

     All notices and statements required or permitted under this Lease shall be
in writing, delivered in person or sent by United States Registered or Certified
Mail, postage prepaid, by Federal Express or other recognized overnight courier
service, or by hand delivery, addressed as follows:

     As to Tenant:              3-Dimensional Pharmaceuticals, Inc.
                                        665 Stockton Drive
                                        Suite 104
                                        Exton, PA 19341
                                        Attention:   Mr. Thomas Stagnaro
                                                     President


     With a copy to:            Edward J. Matey, Jr. Esquire
                                        Morgan, Lewis & Bockius, LLP
                                        2000 One Logan Square
                                        Philadelphia, PA 19103


     As to Landlord:            Eagleview Technology Partner
                                        c/o The Hankin Group
                                        P.O. Box 562
                                        717 Constitution Drive
                                        Exton, PA 19341
                                        Attention:   Robert S. Hankin, Partner

     With a copy to:            Edward J. Hollin, Esquire
                                        Riley, Riper, Hollin & Colagreco
                                        P.O. Box 568
                                        240 Daylesford Plaza
                                        Paoli, PA 19301


Either party may at any time, in the manner set forth for giving notices to the
other, designate a different address to which notices to it shall be sent.

36.  BROKERS.

     Tenant represents and warrants to Landlord that Tenant has not dealt with
any broker, firm, company or person in connection with the negotiation for or
the obtaining of this Lease, and Tenant shall indemnify, defend and hold
Landlord harmless from and against any claim by any person ( claiming a
commission or other form of compensation by virtue of having dealt with Tenant
with regard to this Lease, and any attorneys' fees or other expenses incurred by
Landlord in connection therewith.

                                     -29-
<PAGE>

37.  SIGNS.

     Tenant shall not, without the prior written consent of Landlord, paint,
place or erect any sign on the exterior doors or walls of the Leased Space or of
the Building or Center.

38.  SECURITY DEPOSIT; SECURITY INTEREST.

     (a) Landlord acknowledges receipt of the t3r Deposit for the Original
Space. On or before the Commencement Date, Tenant agrees to deposit with
Landlord, , an additions sum sufficient to the Security Deposit to a sum equal
to one monthly installment of Minimum Annual Rent and Additional Rent, to be
held by Landlord as security for the faithful performance of all the terms and
conditions of this Lease ("Security Deposit"). Upon the occurrence of an Event
of Default, Landlord shall have the right, at any time and from dm to time
during the continuance of such Event of Default, to apply the Security Deposit
or any part thereof, for the purpose of curing any such default or for the
purpose of reimbursing Landlord for any damage or costs occasioned by such
default, but the right of Landlord to apply the Security Deposit shall not
affect any other remedies available to Landlord under this Lease or under
applicable law. If the Security Deposit, or any part thereof, is so applied by
Landlord, Tenant shall, within three (3) days after demand, deposit additional
funds with Landlord to restore the Security Deposit, and failure to do so shall
constitute a default under this Lease.

     If the Tenant shall have faithfully complied with all the terms and
conditions of this Lease, the Security Deposit (without interest unless required
by law) shall be refunded to Tenant within (30) days after the expiration or
sooner determination of this- Lease provided, however, that Tenant first shall
have vacated the Leased Space and surrendered possession thereof to the Landlord
by delivery of keys, in accordance with the Lease provisions and shall have
returned the Leased Space to Landlord in the condition required hereunder.

     Nothing herein contained shall require Landlord to hold the sums so
deposited as a trust fund, nor establish any relationship other than that of
debtor and creditor with respect to said funds so deposited.

     If Landlord shall assign or otherwise transfer its interest in this Lease
to a successor who agrees m writing to assume all of Landlord's obligations
under this Lease, Landlord shall have the right to transfer the Security Deposit
to the assignee or other transferee of such interest (with like right of
transfer to any subsequent assignee or other transferee) and upon such transfer,
Landlord shall be released and relieved from all liability and/or responsibility
with respect to this Security Deposit and/or the return or application thereof.

     (b) As security for Tenant's performance of its obligations under this
Lease, Tenant hereby grants to Landlord a security interest under the Uniform
Commercial Code in all of Tenant's goods and property, on or about the Leased
Space, now owned or hereafter acquired, including without limitation, the Trade
Fixtures and the 'Trade Fixtures" as de under the Original Lease. Tenant shall
upon request by Landlord, execute such financing statements and other
instruments as Landlord may require in order to perfect the lien of such
security interest, and Tenant hereby appoints Landlord (and any assignee of
Landlord's rights under this Lease) as T's attorney in to execute on behalf of
Tenant, such financing statements and other instruments so

                                     -30-
<PAGE>

requested by Landlord, it being intended that such power of attorney be coupled
with an interest and irrevocable. Landlord agrees that the lien of the security
interest granted pursuant to this section, is, with the exception of Landlord's
security interest and right in the Trade Fixtures, and the "Trade Fixtures"
under the Original Lease hereby made under, subject and subordinate to any
security interest which Tenant has granted or may hereafter grant to a bank,
savings and loan institution, pension fund or institutional or equipment lender
in the business of making commercial loans, which security interest is intended
to secure an obligation of Tenant incurred in connection with the financing of
Tenant's working capital needs, or inventory or equipment to be utilized at the
Leased Space. Although the foregoing subordination provisions are intended to be
self executing, if requested by any bank, savings and loan institution, pension
fund or institutional lender in the business of making commercial loans,
Landlord shall execute a separate subordination agreement to confirm the
foregoing, upon payment of a processing fee of $250.00.

     Landlord acknowledges that Tenant may utilize a third party to provide
financing for certain equipment to be located in the Leased Space other than the
Trade Fixtures (the Financed Equipment"), and the "Trade Fixtures" under the
Original Lease. Tenant shall cause such third party lender . to execute and
deliver a subordination agreement for the benefit of Landlord in the form
attached hereto as Exhibit "D."

39.  USE OF INFORMATION IN ADVERTISING.

     Landlord and any leasing agent employed by Landlord shall be permitted to
utilize the name of Tenant, and other general public information about the
Tenant, in advertising and promotional material utilized by them, provided that
such use is authorized in writing by Tenant.

40.  CAPTIONS.

     The title to sections of this Lease are for convenience of reference only,
and are not to be construed as defining, limiting or modifying the scope or
intent of any of the terms and conditions of this Lease.

41.  ENTERE AGREEMEENT.

     This Lease, and the Exhibits and documents specifically referenced herein,
contains all covenants and agreements between Landlord and Tenant relating in
any manner to the rental, use and occupancy of the Leased Space and Tenant's use
of the Building and the Center and other matters set forth in this Lease. No
prior agreement or understanding pertaining to the same shall be valid or of any
force or effect and the terms, covenants and conditions of this Lease shall not
be altered, modified or added to except in writing signed by Landlord and
Tenant.

42.    RIGHT OF FIRST REFUSAL.

       If at any am during the term of the Lease, Landlord receives a request
for a proposal from a prospective tenant for other space in the Building,
Landlord shall notify Tenant in writing of the same (hereafter a "Landlord's
Notice"). The Landlord's Notice shall contain a description of the space, and
the economic terms under which Landlord would propose to lease the same to the
third party. If within five (5) business days following receipt of a Landlord's
Notice, Tenant

                                     -31-
<PAGE>

desires to expand into the space in the Building which is the subject of the
Landlord's Notice, Tenant shall notify Landlord in writing of Tenant's desire
and requirements (a "Request for Proposal"), which Request for Proposal shall
make specific reference to this section of this Lease. Landlord, upon receipt of
such Request for Proposal, shall provide to Tenant a written outline of terms,
which shall be generally consistent with the terms contained in the Landlord's
Notice, including without limitation Landlord's reasonably estimated value of
concessions, which outline is not intended to be an offer creating a power of
acceptance, but which shall be the framework for negotiations between Landlord
and Tenant for a lease of such available space ("Expansion Proposal"). Landlord
and Tenant shall thereupon endeavor to consummate a lease embodying the terms of
such Expansion Proposal, and such other terms and conditions as may be desired
and agreed upon by the parties, within thirty (30) days following Landlord's
issuance of the Expansion Proposal. In the event that for any reason, Tenant
does not issue a Request for Proposal within five (5) business days after
receipt of a Landlord's Notice, Tenant shall have no rights with respect to the
space which was the subject of Landlord's Notice, unless Landlord fails to
execute a lease for such space with the prospective tenant, in which event
Tenant's right to receive a Landlord's Notice shall apply to the next request
for a proposal received by Landlord from a prospective Tenant for such space. If
following Tenant's issuance of a Request for Proposal, Landlord and Tenant do
not execute a lease pursuant to an Expansion Proposal within such (30) day
period, Landlord shall thereafter be permitted to lease the space described in
the Expansion Proposal, and Tenant shall thereafter have no rights whatsoever
with respect to such space, and Landlord shall not thereafter be obligated to
provide a Landlord's Notice, or an Expansion Proposal in response to any
subsequent request or inquiry by Tenant pertaining to such space thereafter.

43.  OPTION TO CANCEL.

     Provided that there exists no Event of Default by Tenant under this Lease,
nor any event which, following the issuance of notice, the passage of time, or
both, would be an Event of Default, Tenant shall have the right to terminate
this Lease, effective five (5) years prior to the scheduled expiration of the
Term (the "Early Termination Date"), by Tenant's delivering to Landlord written
notice of its election to terminate this Lease not later than six (6) months
prior to such Early Termination Date. Landlord shall thereafter notify Tenant in
writing of the termination fee payable by Tenant (the 'Termination Fee"), which
shall be an amount equal to the present value as calculated by Landlord of the
Minimum Annual Rent and Additional Rent for the five (5) years of the full ten
(10) year Term of this Lease commencing on the Commencement Date, utilizing an
interest factor equal to the then current yield on US Treasury securities having
a maturity date closest to the scheduled date of expiration of the Term of this
Lease. In calculating Additional Rent for future periods as a component of the
Termination Fee, Landlord shall have the right to estimate reasonable future
increases in Tenant's Proportionate Share of Operating Expenses and Real Estate
Taxes, based upon historical data and information known to Tenant. Landlord's
calculation of the Termination Fee shall not be disturbed absent manifest abuse
of discretion. The Termination Fee shall be due and payable to Landlord within
ten (10) days following Landlord's notice to Tenant of the amount thereof.
Notwithstanding any such termination by Tenant, Tenant shall make all payments
of Minimum Annual Rent and Additional Rent through the Early Termination Date,
and all provisions of this Lease with respect to Tenant's obligation to vacate
and restore the Leased Space shall apply. Upon an early termination, all Trade
Fixtures under this Lease and the Original Lease shall become the property

                                     -32-
<PAGE>

of Landlord. Tenant's failure to exercise its option to terminate and pay the
Termination Fee in strict accordance with the provisions of this section, time
being of the essence hereof, shall be deemed a waiver of its right to early
termination.

44.  RIGHT OF FIRST REFUSAL TO PURCHASE THE BUILDING.

     If at any time during the Term of the Lease, Landlord receives a proposal
from a prospective purchaser of the Building to purchase the same which Landlord
would be willing to accept, Landlord shall notify Tenant in writing of the game
(hereafter a "Landlord's Sale Notice"). The Landlord's Sale Notice shall contain
a description of the economic terms under which Landlord would propose to sell
the same to the third party. If within five (5) business days following receipt
of a Landlord's Notice, Tenant desires to purchase the Building which is the
subject of the Landlord's Sale Notice, Tenant shall notify Landlord in writing
of Tenant's desire ("Tenant's Purchase Notice"). Landlord, upon receipt of such
Tenant's Purchase Notice, shall tender to Tenant a written agreement of sale,
which shall be generally consistent with the terms contained in the Landlord's
Sale Notice. Landlord and Tenant shall thereupon endeavor to consummate an
agreement of sale embodying the terms of such Landlord's Sale Notice within
fifteen (15) days following Landlord's delivery of the draft agreement of sale.
In the event that for any reason, Tenant does not issue A Tenant's Purchase
Notice within such five (5) business day period, or Landlord and Tenant do not
execute an agreement of sale within such fifteen (15) day period, Landlord shall
thereafter be permitted to sell the Building, and Tenant shall thereafter have
no rights whatsoever with respect to purchasing the Building, and Landlord shall
not thereafter be obligated to provide a Landlord's Sale Notice to Tenant, and
this right of first refusal shall be of no force and effect. This right of first
refusal shall not apply to a sale or transfer to an affiliate of Landlord, or in
connection with a financing transaction by way of sale and leaseback or the
like, whereby Landlord or its affiliate retains the economic benefits of
ownership.

45.  COOPERATION OF TENANT.

     Tenant acknowledges that the New Space is an extension of the Original
Space. Tenant shall cooperate with Landlord and take all actions needed to
assist Landlord to separate the New Building from the Original Building in
accordance with the Pennsylvania Uniform Planned Community Act or the
Pennsylvania Condominium Act or otherwise, in order to enable the Building and
the Original Building to be treated as separate "units" or "parcels" which may
be independently owned, mortgaged or conveyed. Landlord shall pay all costs to
file any required documents and Landlord's attorney's fees for the preparation
of said required documents.

                                     -33-
<PAGE>

     IN WITNESS WHEREOF, the parties have caused this Amended and Restated Lease
to be duly executed the day and year first above written, intending to be
legally bound hereby.

                                        LANDLORD
                                        EAGLEVIEW TECHNOLOGY PARTNERS
                                        a Pennsylvania limited Partnership


                                        BY: HANKIN TECHNOLOGY PARTNERSHIP,
                                        General Partner

                                        BY: HANKIN PROPERTIES PARTNERSHIP
                                        its partner


                                        BY: /s/ Robert S. Hankin
                                           ----------------------------------
                                        ROBERT S. HANKIN, Partner


                                        BY: THE HANKIN GROUP, its Partner


                                        BY: /s/ Robert S. Hankin
                                           ----------------------------------
                                        ROBERT S. HANKIN, Partner

                                        TENANT:
                                        3-DIMENSIONAL PHARMACEUTICALS,
                                        INC., a corporation organized and
                                        existing under the laws of Delaware


                                        BY: /s/
                                           ----------------------------------


     The undersigned, a limited partner of Landlord, hereby executes this
document to evidence its consent thereto, but such execution shall not subject
the undersigned to any liability hereunder for any reason, including without
limitation any non-performance of any obligation of Landlord hereunder.

                                        CHESTER COUNTY DEVELOPMENT COUNCIL



                                        BY: /s/
                                           ----------------------------------

                                     -34-
<PAGE>

                             SCHEDULE OF EXHIBITS

         1A1      Land Development Plan

         1A-2     Building Plans showing Original Building

         1A3      Preliminary Building Plan showing New Space

         1A4      Preliminary Specifications for New Space

         C        Rules and Regulations

         D        Form Subordination Agreement

                                      -1-
<PAGE>

                                   EXHIBIT C
                                   ---------

                             RULES AND REGULATIONS
                             ---------------------

1.   DEFINITIONS.
     -----------

     Wherever in these Rules and Regulations the word "Tenant" is used, it shall
be taken to apply to and include the Tenant and his agents, employees, invitees,
licensees, subtenants and contractors, and is to be deemed of such number and
gender as the circumstances require. The word "room" is to be taken to include
the space covered by the Lease. The word "Landlord" shall be taken to include
the employees and agents of Landlord. Wherever terms of these Rules and
Regulations conflict with terms of the Lease the terms of the Lease shall
govern.

2.   OBSTRUCTION.
     -----------

     The streets, sidewalks, entrances, halls, passages, elevators, stairways
and other common areas provided by Landlord shall not be obstructed by Tenant,
or used by it for any other purposes than for ingress and egress.

3.   WASHROOMS.
     ---------

     Toilet rooms, water-closets and other water apparatus shall not be used for
any purposes other than those for which they were constructed.

4.   GENERAL PROHIBITIONS.
     --------------------

     In order to insure proper use and care of the Leased Space Tenant shall
not:

     (a)  Keep animals or birds in the Leased Space (except laboratory animals
for testing purposes in accordance with applicable laws, ordinances and
regulations may be kept with Landlord's consent, which shall not be unreasonably
withheld).

     (b)  Use rooms as sleeping apartments.

     (c)  Allow any sign, advertisement or notice to be fixed to the outside of
Building, except as provided in the Lease.

     (d)  Make noises or disturbances of any kind so as to unreasonably disturb
other tenants or tend to injure the reputation of the Building or Center.

     (e)  Mark or, defile elevators, water-closets, toilet rooms, walls,
windows, doors or any other part of the Building or Center.

     (f)  Except as may be approved by Landlord, place anything on the outside
of the Building, including roof setbacks, window ledges and other projections;
or drop anything from the windows, stairways or parapets; or place trash or
other matter in the balls, stairways, elevators or light wells of the Building.

                                      -1-
<PAGE>

     (g)  Cover or obstruct any window, skylight, door or transom that admits
light, except for permitted mini-blinds on windows, permitted signs or notices.

     (h)  Interfere with the heating or cooling apparatus.

     (i)  Install any shades, blinds, or awnings without consent of Landlord.

     (j)  Give its employees or other persons permission to go upon the roof of
the Building without the written consent of Landlord, except in connection with
performance of Tenant's maintenance obligations.

5.   BUSINESS MACHINES.
     -----------------

     Business machines and mechanical equipment which cause vibration, noise,
cold or heat that may be transmitted to Building structure or to any area
outside the Leased Space shall be placed and maintained by Tenant, at its sole
cost and expense, in settings of cork, rubber, or spring type vibration
eliminators sufficient to absorb and prevent such vibration, noise, cold or
heat.

6.   RIGHTS RESERVED TO LANDLORD.
     ---------------------------

     Without abatement or diminution in rent, Landlord reserves and shall have
the following additional rights:

     (a)  To install and maintain a sign or signs on the exterior of the
Building.

                                      -2-
<PAGE>

                                   EXHIBIT D
                                   ---------

                            SUBORDINATION AGREEMENT
                            -----------------------

     THIS SUBORDINATION AGREEMENT, (this "Agreement") is made this __ day of
____, 200_, by and among _________, a ________ corporation (the _____ ), a
Pennsylvania partnership (the _______) and 3-Dimentional Pharmaceuticals, Inc.,
a Delaware corporation (the "Debtor").

                              B A C K G R O U N D

     ___________ has made or intends to enter into a lease agreement ("Lease")
with the Debtor for premises to be constructed by ____________ at Lot 28,
Eagleview Corporate Center, Uwchlan Township, Chester County, Pennsylvania (the
premises which are or will be the subject of the Lease being hereinafter called
the "Leased Space"). Pursuant to the Lease, Debtor has granted to ___________ a
security interest under the Pennsylvania Uniform Commercial Code, in all
personal property owned by Debtor and now or hereafter located at the Leased
Space, to further secure all obligations of Debtor to Hankin under the Lease.
The personal property encumbered by Hankin's security interest includes, without
limitation, those items of personal property defined as "Trade Fixtures" in the
Lease, which are more fully listed in Exhibit "A" attached hereto (if such list
has not been prepared as of the date hereof, Hankin and Debtor shall prepare and
initial such list, which shall then become part of this Agreement as Exhibit A).
The "Trade Fixtures" as defined in the Lease are referred to herein as "Trade
Fixtures."

     ___________ has executed, or intends to execute, an equipment lease or
leases (collectively the "Equipment Lease") with Debtor, for a total rental of
__________ ($_______ ) Dollars. The property which is the subject of the
Equipment Lease is or will be located at the Leased Space, and is collectively
called the "Non-Trade Fixture Personalty." The Non-Trade Fixture Personalty is
more fully listed in Exhibit "B" attached hereto (if such list has not been
prepared as of the date hereof, _____________ and Debtor shall prepare and
initial such list, which shall then become part of this Agreement as Exhibit B).
In the event of any inconsistency between Exhibits A and B such that any
personal property would appear to be both Trade Fixtures and Non-Trade Fixture
Personalty, such personal property shall be deemed part of Trade Fixtures only,
except that the parties agree that the total cost of Trade Fixtures shall not
exceed $100,000.00. In addition, ___________ has made, or intends to make an
unsecured loan to Debtor in the stated principal amount of $_______ (the "______
Loan"). The documents evidencing the Loan are hereinafter called the Loan
Documents.

     Debtor, Hankin and _______ acknowledge and agree that Hankin would not
enter into the Lease with Debtor, and _________ would not enter into the
Equipment Lease to Debtor, but for the covenants of as set forth in this
Agreement; it being agreed that the Lease benefits ____________ and the
Equipment Lease benefits Hankin.

     The parties desire to evidence their agreements as to the subordination of
some of the rights of Comdisco to the rights of Hankin, the subordination of
some of the rights of Hankin to the rights of ________ as more fully set forth
below.

                                      -1-
<PAGE>

     NOW, THEREFORE, the parties hereto, each intending to be legally bound
hereby, agree as follows:

                                  AGREEMENTS

     NOW, THEREFORE, in consideration of the premises, One Dollar ($1.00) and
for other good and valuable consideration, the receipt and sufficiency of which
are acknowledge, the parties agree as follows:

     1.   Priority of Hankin as to Trade Fixtures. Hankin shall have the first
          ---------------------------------------
priority lien on and security interest in the Trade Fixtures. __________ shall
have no property rights in, lien on or security interest in the Trade Fixtures,
and hereby waives the right to levy, execute upon or assert any right in the
Trade Fixtures pursuant to any judgment obtained against Debtor or otherwise, it
being intended that any and all interest of Hankin in the Trade Fixtures shall
be free and clear of any interest of Comdisco therein. Hankin's rights shall
apply regardless of the perfection, nonperfection, cessation of perfection or
order of perfection of the parties' respective interests. _________ agrees that
it shall give actual notice of the limitations on __________ right to levy upon
or execute against Trade Fixtures, upon any default under the Equipment Lease or
Loan Documents, to any assignee or third party acquiring any subsequent assignee
of the lessor's or lender's interest in the Equipment Lease or Loan Documents
respectively. Hankin hereby consents to the performance by ___________ of any of
Debtor's obligations under the Lease, and the assignment by Debtor to
___________ of its interest in the Lease, provided that _________ financial
statement is reasonably judged by Hankin to be equal or superior to Debtor's as
of the date of the assignment, and ________ agrees to assume and be bound by the
provisions of the Lease.

     2.   Priority of Comdisco as to Non-Trade Fixture Personalty. Any and all
          -------------------------------------------------------
right, title and interest of Hankin the Non-Trade Fixture Personalty is under,
subject and subordinate to rights of ________ therein pursuant to the Equipment
Lease. Hankin shall have a lien on and security interest in the rights of Debtor
in the Non-Trade Fixture Personalty pursuant to the Equipment Lease, subject and
subordinate to _______`s rights therein. This priority shall apply regardless of
the perfection, nonperfection, cessation of perfection or order of perfection of
the parties' respective interests. Nothing contained herein shall be deemed to
limit any rights obtained by _________ as a permitted assignee to Debtor's
rights under the Lease (in accordance with Section 12(c) thereof), to retain
sublease rentals to which the "Tenant" under the Lease is entitled.

     3.   Control of Property. Until all of the Debtor's obligations (whether
          -------------------
pre-existing or hereafter incurred) to Hankin have been performed or paid in
full (including, but not limited to, the payment of all Minimum Annual Rent and
Additional Rent which the Debtor is obligated to pay to Hankin), Hankin shall
control the disposition of and the exercise of remedies with respect to the
Trade Fixtures in the event of a default by the Debtor in any of its obligations
to Hankin. Debtor and ___________ do hereby waive any and all claims against
Hankin which it may now or hereafter have on account of the Hankin's action in
using or disposing of all or any of the Trade Fixtures. __________ waives any
right to control to timing, nature or extent of Hankin's collection efforts
against the Debtor, including disposition of the Trade Fixtures. Hankin may
exercise or refrain from exercising its rights against the Debtor or the Trade
Fixtures Personalty within the Leased Space., and shall permit Comdisco to enter
the Leased Space upon reasonable prior

                                      -2-
<PAGE>

notice to Hankin for the purpose of exercising its rights under the Equipment
Lease. The Non-Trade Fixture Personalty shall not be considered part of real
property or a fixture, regardless of whether or by what means it is or may
become affixed to real property. In exercising its rights to remove the Non-
Trade Fixture Personalty pursuant to the Equipment Lease, Comdisco shall, at its
sole cost and expense, repair any damage to the Leased Space or the building of
which it is a part caused by Comdisco's negligence or failure to observe
reasonable precautions as Hankin may require, in the removal of the Non-Trade
Fixture Personalty.

     4.   Miscellaneous. No waiver of any of its rights and remedies hereunder
          -------------
and no modification or amendment of this Agreement shall be deemed to be made
unless the same shall be in writing, duly by the parties hereto, and each such
waiver, if any, shall apply only with respect to the specific instance involved
and shall in no way impair the rights and remedies of the parties hereunder in
other respects at any other time. This Agreement shall be binding upon and
benefit the parties and their respective successors and assigns. __________
irrevocably consents and submits to the jurisdiction and venue of the Court of
Common Pleas of Chester County, Pennsylvania, and of any other state or federal
court sitting in the Commonwealth of Pennsylvania over any suit, action or
proceeding arising out of or relating to this Agreement. ____________
irrevocably waives, to the fullest extent permitted by law, any objection that
it may now or hereafter have to the laying of the venue of any such suit, action
or proceeding brought in any such court and any claim that any such suit, action
or proceeding brought in any such court has been brought in an inconvenient
forum. The section headings of this Agreement are for convenience only and shall
not limit or otherwise affect any of the terms hereof. This Agreement shall be
deemed executed and delivered in and shall be construed, governed and enforced
in accordance with the laws of the Commonwealth of Pennsylvania in effect from
time to time.

                                      -3-
<PAGE>

     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed,
under seal, on the date and year first above written.

WITNESS/ATTEST:


_____________________________           BY:_______________________(SEAL)
                                        NAME:
                                        TITLE:




_____________________________           BY:_______________________(SEAL)
                                        NAME:
                                        TITLE:




WITNESS/ATTEST:                         3-DIMENSIONAL PHARMACEUTICALS, INC.



_____________________________           BY:_______________________(SEAL)
                                        NAME:
                                        TITLE:

                                      -4-
<PAGE>

STATE OF                      :

                              :        SS

COUNTY OF                     :

     On this __ day of _______, 200_, before me, the undersigned, a Notary
Public of the State of ___________, personally appeared _____________, who
acknowledged himself/herself to be the ____________ of ________________, a
corporation and that he/she as such partner, being duly authorized to do so,
executed the foregoing agreement for the purposes therein contained by signing
the name of the said entity by himself/herself as _________________.

     As witness my hand and Notary Public.

                                             __________________________

     My commission expires: _____________________



STATE OF                      :

                              :        SS

COUNTY OF                     :

     On this __ day of _______, 200_, before me, the undersigned, a Notary
Public of the State of ___________, personally appeared _____________, who
acknowledged himself/herself to be a partner of ________________, a
Pennsylvania partnership, and that he/she as such partner, being duly authorized
to do so, executed the foregoing agreement for the purposes therein contained by
signing the name of the said entity by himself/herself as partner.

     As witness my hand and Notary Public.

                                             __________________________

     My commission expires: _____________________
<PAGE>

STATE OF                 :

                         :    SS

COUNTY OF                :

     On this day of ______, 200_, before me, the undersigned, a Notary Public of
the State of _______, personally appeared ________, who acknowledged
himself/herself to be the of ___________, a corporation and that he/she as such
________, being duly authorized to do so, executed the foregoing agreement for
the purposes therein contained by signing the name of the said entity by
himself/herself as ____________.

     As witness my hand and Notary Public.


                                   _________________________

     My commission expires:_________________
<PAGE>

                      RIDER TO LEASE OR AGREEMENT OF SALE

                     REGARDING INDUSTRIAL WASTE DISCHARGE

                       WITHIN EAGLEVIEW CORPORATE CENTER


                                  BACKGROUND
                                  ----------


          Eagleview Corporate Center Association("Association") owns a
wastewater treatment facility known as the Eagleview Wastewater Treatment
Facility (the "EWTF"). The Association entered into an agreement ("Treatment
Agreement") with Uwchlan Township (collectively the "Municipality") for the
treatment of wastewater generated within the drainage basin of the EWTF.

          The Treatment Agreement requires the Association to establish uniform
acceptability standards for waste discharges to the EWTF and stipulates that no
connection for waste discharge other than sanitary sewage shall be made without
the written consent of the Association, and the Treatment Agreement requires the
Association to use its best efforts to provide a wastewater influent to the EWTF
meeting certain quality standards.

          The Association has adopted standards for the discharge of wastewater
to the sewer systems tributary to the EWTF and procedures for the approval of
industrial waste discharge.

          By virtue of the lease or agreement of sale to which this Rider is
attached, the tenant or buyer thereunder (hereafter the "Industrial Discharger")
will become an occupant of Eagleview Corporate Center and a potential discharger
of waste into the EWTF. The purpose of this Rider is to incorporate this Rider
into the said lease or agreement of sale, as applicable, and by executing such
lease or agreement of sale, the Industrial Discharger shall be obligated as set
forth below.

          NOW, THEREFORE, for one dollar and other good and valuable
consideration, the receipt of which is hereby acknowledged, the Industrial
Discharger intending to be legally found, hereby covenants and agrees as
follows:

                                       2
<PAGE>

          1.   AUTHORIZATION.  Upon receiving possession of the property which
               -------------
is the  subject of its lease or agreement of sale (the "Effective Date"), the
Industrial Discharger shall be permitted to discharge the volume specified in
Appendix C to the Municipality's sanitary sewer system, from its facilities
located at the site specified in Appendix C, subject to the terms and conditions
of this Rider. The Industrial Discharger agrees to comply with all of the
provisions of this Rider. The Industrial Discharger remains fully responsible
for its discharge and all applicable statutes, resolutions, rules and
regulations and the Association and Municipality assume no responsibility or
liability therefor. Further, the Industrial Discharger agrees to indemnify and
hold harmless the Association and Municipality from all actions, causes of
action, manners of suit or liability resulting from the Industrial Discharger's
discharge into the Municipality's sewer system or the EWTF.

          2.   TERM.  The provisions of this Rider shall become effective on the
               ----
Effective Date, and shall remain in effect for a one-year period. If during the
term or any renewal term the Association or the Municipality elects not to
cancel this Rider on or before its anniversary, this Rider shall automatically
renew itself for another period of one year or until the Industrial Discharger
is no longer an occupant in Eagleview Corporate Center. Notwithstanding any
termination of this Agreement, such termination shall not terminate the
indemnification obligations of the Industrial Discharger for discharge occurring
prior to termination. If this Rider is attached to an agreement of sale, the
Industrial Discharger agrees that its obligations hereunder shall be referenced
in its deed, it being agreed that the same shall survive closing and delivery of
the deed, and shall run with the land.

          3.   TRANSFER.  The Industrial Discharger's rights hereunder are not
               --------
transferable except to a successor of the Industrial Discharger who assumes all
of the obligations of the Industrial Discharger hereunder and only with the
written approval of the Municipality and the Association. No such transfer or
assumption shall discharge the Industrial Discharger of liability for violation
of this Rider.

          4.   INCORPORATED DOCUMENTS. The following documents and requirements
               ----------------------
are incorporated into this Rider as if they were written herein and the
Industrial Discharger agrees to comply, at its expense, with their provisions:

          (a)  Specific requirements set forth in Appendix C hereto, as the same
may be amended from time to time.

                                       3
<PAGE>

          (b)  Laws and regulations pertaining to industrial waste, including
applicable Federal Categorical Pretreatment Standards, as enacted or adopted by
any governmental entity.

          5.   CONFLICTING REQUIREMENTS.  In the event of an conflict between or
               -------------------------
among statutes, resolutions or regulations, prohibitions, limitations, or
conditions applicable to the Industrial Discharger, the Industrial Discharger
shall comply with the more stringent requirements.

          6.   WASTEWATER DISCHARGE LIMITS.
               ---------------------------

          (a)  The wastewater discharged by the Industrial Discharger shall
conform at all times to the requirements and wastewater discharge limitations
established by the Association, as amended from time to time, and to the
requirements and wastewater discharge limitations established by the
Municipality, as amended from time to time.

          (b)  The current wastewater discharge requirements and quality and
quantity limitations of the Association are set forth in Appendix B.

          (c)  The current wastewater discharge requirements and quality and
quantity limitations of the Municipality are set forth in Appendix A.

          (d)  As the Association or the Municipality amend their discharge
requirements or quality and quantity limitations, Appendices A and B shall be
amended, as applicable, and the amended Appendices shall be attached hereto. The
Industrial Discharger shall be informed by the Association or Municipality as
appropriate of any changes to the discharge requirements or quality or quantity
limitations in Appendices A and B at least thirty days prior to the effective
date of change. The Association and Municipality shall use their best efforts to
inform the Industrial Discharger at least sixty days prior to the effective
date, in the event that any such changes require major changes in pretreatment
by the Industrial Discharger. If the public health and safety permit, and the
Industrial Discharger's failure to comply with the amended discharge
requirements does not itself or with other failures to comply place the
Association or Municipality in substantial danger of violating any agreement,
permit, regulation or law, then the Industrial Discharger shall be allowed a
reasonable extension of time to comply with the changes, provided the Industrial
Discharger requests such an extension and submits to the

                                       4
<PAGE>

Association and the Municipality an implementation schedule within the thirty
(30) day period preceding the effective date of the change.

          7.   PRETREATMENT.  The Industrial Discharger shall provide any
               ------------
necessary wastewater treatment to achieve compliance with the discharge
limitations specified in this Rider. The right to discharge wastewater into the
Municipality's collection system is contingent upon the Industrial Discharger
providing such pretreatment. Any facilities required to pretreat wastewater to a
level acceptable to the Association or the Municipality shall be provided,
operated, and maintained at the Industrial Discharger's expense. Detailed plans
showing the pretreatment facilities and operating procedures shall be submitted
to the Association and the Municipality before construction of the facility. In
no event will the review of such plans and operating procedures by the
Association and Municipality relieve the Industrial Discharger from
responsibility for the efficacy of the pretreatment facility and the quality and
quantity of its effluent.

          8.   MONITORING REQUIREMENTS.
               -----------------------

          (a)  Wastewater Sampling Manhole.  A suitable manhole shall be
               ---------------------------
installed at the location specified in Appendix C to facilitate observation,
sampling, and measuring of the wastewater discharge. The Manhole shall be
installed and maintained in a safe condition at the expense of the Industrial
Discharger and shall be accessible at all times to persons authorized by the
Association or the Municipality. The Industrial Discharger hereby consents to
the entry upon its land, and agrees to facilitate such entry, by representatives
of the Association and Municipality, and consents to the use of the manhole for
observation, sampling, and measuring of the wastewater discharge at any time.

          (b)  Sample Collection.  The industrial waste discharged into the
               -----------------
sanitary sewers shall be sampled and analyzed by and at the expense of the
Industrial Discharger. Frequency of sampling and analysis shall be during the
months of March, June, September, and December. The sampling and analysis shall
be representative of conditions occurring during the calendar quarter in which
the sample is taken. The Industrial Discharger shall submit to the Association
and the Municipality, within 15 days of receipt of the results of the laboratory
analysis, a discharge monitoring report. The monitoring report shall include the
date, specific place, method, and time of sampling and the names of the person
or persons who took the samples; a copy of the original laboratory report
listing the results of the analyses, the dates the analyses were performed, the
names of the person or persons who performed the analyses, and the analytical
methods used; an estimate of the average daily volume of industrial wastewater
discharged during the reporting period from the Industrial Discharger's
facilities at the site specified in Appendix C; and a certification signed by an
authorized representative of the

                                       5
<PAGE>

Industrial Discharger, that the information provided, based on the
representative's knowledge and belief, is true and correct.

          If the Industrial Discharger sample and/or analyzes for any pollutant
more frequently than required by this Agreement, the Industrial Discharger shall
include the results of any observation or analysis in its discharge monitoring
report.

          All samples are to be time composited samples collected during the
regular industrial waste discharge hours not to exceed 24 hours. The Industrial
Discharger shall follow the proper sample preservation techniques set forth in
40 C.F.R. Part 136 and amendments thereto. The Industrial Discharger shall
obtain written approval from the Association for the analytical laboratory to be
used, prior to submitting its samples to the laboratory for analysis. A
composite sample shall consist of a collection of equal volume grab samples
combined in a single container. Maximum interval between individual grab samples
shall conform to the following schedule:

     Total Industrial Discharge Between             Maximum Interval Samples
Duration in 24-Hours                                    (Minutes)

     10-24 hours (including 10)                               60
     4 to 10 hours (including 4, not including 10)            30
     Less than 4 hours                                        15


          (c)  Analysis Parameters.
               -------------------

               (1)  The quarterly wastewater samples must be analyzed for the
following substances and characteristics:

               5-Day Biochemical Oxygen Demand

               Chemical Oxygen Demand

                                       6
<PAGE>

               pH

               Suspended Solids

               Total Kjeldahl Nitrogen

               (2)  Once per calendar year during the quarterly sampling,
wastewater samples must also be analyzed for the following substances:

               Benzidine

               Bromoform

               3, 3-Dichlorobenzidine

               Chlordane

               Chloroform

               Chlorodibromomenthane

               Chromium, VI

               Dishlorobromomethane

               Methyl Bromide

               Methyl Chloride

               Heptachlor

               All analyses shall be performed using methods approved by the
United States Environmental Protection Agency and the Pennsylvania Department of
Environmental Resources for NPDES reporting.

          9.   NON-COMPLIANCE REPORTING.  The Industrial Discharger shall notify
               ------------------------
the Association and the Municipality of any non-complying discharge within 24
hours of becoming aware of the non-compliance. The Industrial Discharger shall
also repeat any sampling and analysis by which it became aware of non-complying
discharge and submit the results of the second analysis to the Association and
the Municipality within 15 days after

                                       7
<PAGE>

becoming aware of the non-compliance. The Industrial Discharger shall provide a
written report to the Association and Municipality within 10 days of receipt of
a laboratory analysis indicating a non-compliance discharge. The report shall
state the nature of the non-compliance, the reason for the non-compliance, and
the steps being taken or to be taken to bring the discharge into compliance. The
report shall also set forth a reasonable compliance schedule listing the actions
to be taken and the date by which they will be taken.

          10.  WASTE CHARACTERISTIC CHANGE. Any proposed changes in facilities,
               ---------------------------
process, or flow which increase the volume of wastewater discharged or the
quality of the discharge must be reported to the Association and the
Municipality at least ninety (90) days prior to such a change. If required by
the Association or Municipality, the Industrial Discharger shall apply for a new
Industrial Waste Discharge Agreement which reflects the proposed changes.

          11.  RIGHT OF ENTRY. Any duly authorized representative of the
               --------------
Association or the Municipality, bearing proper credentials and identification,
shall be permitted at any reasonable time without prior notice to enter upon all
properties served by the Association's treatment plant for the purpose of
inspecting, observing, measuring, sampling and testing.

          12.  FILES.  All records and information resulting from the monitoring
               -----
activities required by this Agreement shall be retained permanently by the
Industrial Discharger.

          13.  DISCHARGE DILUTION.  The Industrial Discharger shall not increase
               ------------------
the use of process waster, or in any way, attempt to dilute a discharge as a
partial or complete substitute for adequate pretreatment to achieve compliance
with the limitations established by the Association, or the Municipality, or as
set forth in this Agreement.

          14.  PERMIT SUSPENSION.  This Rider and the authorization to discharge
               ------------------
may be cancelled by the Association or the Municipality for any of the following
causes:

          (a)  Failure of the Industrial Discharger to accurately report
wastewater characteristics;

                                       8
<PAGE>

          (b)  Failure of the Industrial Discharger to report significant
changes in operation which affect wastewater characteristics;

          (c)  Refusal of access to the Industrial Discharger's premises for the
purposes of observing, sampling, or measuring the wastewater discharge; or

          (d)  Any violation of any requirement of this Industrial Waste
Discharge Rider; or

          (e)  Any default by the Industrial Discharger under the lease or
agreement of sale from which the Industrial Discharger's occupancy rights in
Eagleview Corporate Center arises.

          If the Industrial Discharger is notified of a cancellation of its
rights under this Industrial Waste Discharge Rider, it shall immediately stop
the discharge of all industrial wastewater into the Municipality's sewer system.

          15.  FEES AND EXPENSES.  In the event of any change in the
               -----------------
characteristics and quantity of wastewater from those represented by Industrial
Discharger to be discharged by it upon the Effective Date, or as may be
disclosed on Appendix C, the Industrial Discharger shall pay all of the expenses
incurred by the Municipality in its review and approval of such changes, and of
modifications to this Industrial Waste Discharge Rider and of those expenses
incurred on account of the Association's review and the approval of the same
within thirty days of receipt of a bill therefor.

          The Industrial Discharger shall reimburse the Association and the
Municipality, as applicable, within 30 days of invoice, for expenses incurred by
those bodies for monitoring, inspecting, sampling, and testing (including
laboratory analyses) the industrial waste discharge, authorized by this Rider,
as necessary to determine the Industrial Discharger's compliance with the
requirements of the Association, the Municipality, and this Rider.

          The Industrial Discharger shall also reimburse the Association and
Municipality within thirty days of invoice for the expenses (including
attorney's fee) incurred by the Association and/or Municipality in enforcing
this Rider. Enforcing this Rider for the purposes of

                                       9
<PAGE>

the preceding sentence shall include without limitation not only litigation,
administrative action, or the like but actions including demands for compliance,
investigations to determine compliance, and any other action caused by the
Industrial Discharger's failure to comply with any part of this Rider.

          16.  SURCHARGE.  The Industrial Discharger shall be subject to the
               ---------
imposition and payment of a surcharge for extra-strength waste for 5-Day BOD
concentrations in excess of 300 mg/1 or suspended solids concentrations in
excess of 320 mg/1 or Total Kjeldahl Nitrogen concentrations greater than 45
mg/1. The surcharge calculation shall be based on the following:

          (a)  The average of all 5-Day BOD, suspended solids and Total Kjeldahl
Nitrogen sample results for the billing quarter, in the Association's records,
including the sample results submitted by the Industrial Discharger and results
obtained from the Association's and/or the Municipality's sampling.

          (b)  The average wastewater flow for the billing quarter, as
determined from water consumption records for the Industrial Discharger.

          (c)  The Association's surcharge formulas.

          (d)  For industries with multiple wastewater discharge locations,
appropriate adjustments to the surcharge formula will be made by the Association
for wastewater flows not included in the sampling program.

          (e)  The surcharge shall be collected by the Municipality and paid
over to the Association.

          17.  MEASUREMENT OF WASTEWATER VOLUME. The Industrial Discharger may
               --------------------------------
install, at its expense, a wastewater flow meter to measure continuously the
volume of its discharge to the sanitary sewer system. Plans and specifications
for the complete metering facility shall be submitted to the Municipality and
the Association for approval prior to installation.

                                      10
<PAGE>

          In the absence of a suitable wastewater flow meter, wastewater flows
shall be assumed to equal the metered water usage. Where all of the water used
is metered and obtained from a third party, the volume of water usage shall be
determined from the third party's meter readings.


          In cases where the Industrial Discharger has sources of water supply
in addition to or other than the third party's supply, the Industrial
Discharger, at its own expense, shall install a meter or meters, suitable to the
Association and the Municipality, to meter the total volume of water usage.


          18.  SLUG DISCHARGES.
               ---------------


          (a)  The Industrial Discharger shall provide and maintain at its own
expense facilities and management practice adequate to prevent a slug discharge
of any regulated or prohibited substance to the sewer system. For the purpose of
this Rider, a slug discharge is any discharge of a regulated or prohibited
substance of a non-routine, episodic nature, including but not limited to an
accidental spill or a non-customary batch discharge. If the Association
determines that a slug control plan is needed, the Industrial Discharger shall,
within ninety days of receipt of the notice, prepare a plan and submit it to the
Association. The plan shall contain, at a minimum, the following elements:


          (1)  Description of the discharge practices, including non-routine,
batch discharges;


          (2)  Description of stored chemicals;


          (3)  Slug discharge notification procedures;


          (4)  Procedures and facilities to prevent slug discharges.

                                      11
<PAGE>

          (b)  In the case of a slug discharge to the sewer system, the
Industrial Discharger shall immediately telephone and notify the EWTF at (215)
458-1900 and the Municipality at the telephone number set forth in Appendix C of
the incident. The notification shall include information regarding the location
of the discharge, the type of pollutants involved, the concentration and volume
of the discharge and corrective actions taken and planned.


          (c)  Within five calendar days following a slug discharge, the
Industrial Discharger shall submit to the Association and to the Municipality a
detailed written report describing the cause of the discharge and the measures
to be taken by the Industrial Discharger to prevent similar occurrences. Such
notification shall not relieve the Industrial Discharger of any expense, loss,
damages, or other liability which may be incurred as a result of the slug
discharge.


          (d)  A notice shall be permanently posted on the Industrial
Discharger's bulletin board or other prominent place advising employees whom to
call in the event of a slug discharge. The Industrial Discharger shall ensure
that all of its employees who may cause or suffer such a slug discharge to occur
are specifically advised of the emergency notification procedure.


          19.  SPECIAL REQUIREMENTS.
               --------------------


          The Industrial Discharger agrees to adhere to the Special Requirements
in Appendix C, attached hereto.


          20.  ASSOCIATION'S AND  MUNICIPALITY'S  RIGHTS TO ENFORCE.  The
               ----------------------------------------------------
Association and Municipality are intended beneficiaries of the provisions of
this Rider, and shall have the right to enforce the same against the Industrial
Discharger, notwithstanding the fact that they are not parties to the lease or
agreement of sale to which it is attached.

                                      12
<PAGE>

          IN WITNESS WHEREOF, the Industrial Discharger has executed this
Industrial Waste Discharge Agreement as of the day and year first set forth
herein.


                                        INDUSTRIAL DISCHARGER:




     WITNESS:




     ________________________           BY: ____________________________________

                                            F. Raymond Salemme, Ph.D.

                                            President & Chief Executive Officer

                                            3-Dimensional Pharmaceuticals, Inc.

                                      13
<PAGE>

                                  APPENDIX A

                            DISCHARGE REQUIREMENTS

                     AND QUANTITY AND QUALITY LIMITATIONS

                  OF THE DOWNINGTOWN AREA REGIONAL AUTHORITY



I.   The following qualitative limits shall apply to the wastewater discharge to
     the sanitary sewer system.


     ITEM                                     PARTS PER MILLION
     ----                                     -----------------

1.  Arsenic                                         0.0

2.  Barium                                          2.0

3.  Beryllium                                       1.0

4.  Cadmium                                         0.1

5.  Chromium (hexavalent)                           1.0

6.  Chromium (trivalent)                            1.0

7.  Cobalt                                          0.5

8.  Copper                                          1.0

9.  Cyanides (as CN)                                0.5

10. Iron                                            5.0

11. Lead                                            0.1

12. Manganese                                       1.0

13. Mercury                                         0.0

14. Nickel                                          2.0

15. Phenols                                         1.0
<PAGE>

                                  APPENDIX A

                                   (Cont'd)

16. Selenium                                                0.0

17. Zinc                                                    1.0



II. Industrial Discharger shall not discharge nor cause to be discharged, any
    of the following described substances, materials, or wastes into the
    sanitary sewer system:


1. Any cooling water, either polluted or unpolluted from industrial or
   commercial processes.


2. Any ashes, cinders, sand, mud, straw, shavings, metal, glass, rags, feathers,
   fur, plastics, wood, paunch manure, butchers offal, hair or other solid or
   viscous substance capable of causing obstruction to the flow in the sanitary
   sewers or the interference with the proper operation of the sewage treatment
   plant.


3. Any inert, insoluble solids such as: asphalt, clay, slag, and mill scale, or
   sludges and slurries.


4. Any waters or waste containing radioactive isocopes.


5. Any vapor or steam.


6. Any liquid having a temperature higher than one hundred forty (140) degrees
   Fahrenheit.


7. Any fluid waste containing in excess of one hundred 9100) parts per million
   of fat, oil, wax, grease, either vegetable or mineral, or containing
   substance s which may solidify between thirty-two (32) and one hundred (100)
   degrees Fahrenheit.

                                       2
<PAGE>

                                  APPENDIX A

                                   (Cont'd)

8.  Gasoline, naptha, fuel oil or other volatile, explosive or flammable
    substance which by reason of its nature or quality may cause fire or
    explosion or be in any way injurious to persons, to the sanitary sewers or
    to the wastewater treatment facilities.


9.  Any unshredded garbage. The installation and operation of any garbage
    grinder equipped with a motor of three quarter (3/4) horsepower or greater
    shall be subject to review and approval by the Authority.


10. Any fluid having a pH lower than six (6.0) and higher than nine (9.0).


11. Any wastewater containing any substances which are not compatible to
    treatment or reduction by the biochemical wastewater treatment processes
    employed or are amenable to the treatment only to such a degree that the
    effluent of the treatment works cannot meet the requirements of agencies
    having jurisdiction over the discharge to the receiving stream.


12. Any waste collected from septic tanks, cesspools, holding tanks, privies, or
    chemical or portable toilets.


III. The Discharger shall comply with the mass loading limits for 5-Day
     Biochemical Oxygen Demand, Suspended Solids, Total Kjeldahl Nitrogen, and
     Chemical oxygen Demand. The magnitude of the allowable loading shall depend
     on the establishment's average daily industrial waste discharge volume for
     the calendar quarter according to the following:


1.  For Industrial Waste discharges less than 17,000 gpd, the daily loading
    shall not exceed 140 pounds per day of 5-Day Biochemical Oxygen demand, 140
    pounds per day of Suspended Solids, 15 pounds per day of Total Kjeldahl
    Nitrogen, and 280 pounds per day of Chemical Oxygen Demand.


2.  For Industrial Waste discharges greater than 17,000 gpd, the daily loading
    limit, in units of pounds per day, shall be established in accordance with
    the following formulas:

                                       3
<PAGE>

                                  APPENDIX A

                                   (Cont'd)

     (a) BOD5 Limit - 8,340 Q

     (b) Suspended Solids Limit - 8,340 Q

     (c) Total Kjeldahl Limit - 625 Q

     (d) Chemical Oxygen Demand Limit - 16,680 Q


   where Q = Allowable Industrial Waste discharge volume, in units of million
   gallons per day, as established in the Industrial Waste Discharge Agreement


     In order to assure the full utilization of the DRWPCC's permitted hydraulic
capacity and to protect the quality of the DRWPCC's effluent, DARA will
periodically review the adequacy of the mass loading limits and may, from time
to time, adjust the mass loading limit formulas.

                                       4
<PAGE>

                                                                      Appendix B






                          INDUSTRIAL WASTE ORDINANCE


                                    OF THE


                            BOROUGH OF DOWNINGTOWN
<PAGE>

     Enacted August 14, 1974
<PAGE>

     ACCEPTANCE OF INDUSTRIAL WASTES AND _______________________

(ILLEGIBLE PORTION OF PAGE - TOP OF PAGE CUT OFF WHEN COPYING)

     PROHIBITING THE DISCHARGE OF CERTAIN TYPES OF WASTE INTO THE DOWNINGTOWN
REGIONAL WASTEWATER SYSTEM; REQUIRING PRELIMINARY TREATMENT OF CERTAIN
INDUSTRIAL WASTES; IMPOSING CERTAIN CONDITIONS IN CONNECTION WITH PRELIMINARY
TREATMENT: PROVIDING THE BASIS FOR SEWER RENTALS OR CHARGES FOR THE USE OF THE
SYSTEM AND THE HANDLING AND/OR TREATMENT OF INDUSTRIAL WASTES: REQUIRING THE
EXECUTION OF A WRITTEN AGREEMENT PRIOR TO ACCEPTANCE OF INDUSTRIAL WASTE:
PROVIDING FOR PENALTIES AND SURCHARGES.


          WHEREAS: The economy and desirability of the treatment of combined
industrial waste and sanitary sewage is recognized, not all types or unlimited
quantities of industrial waste can be so treated; and


          WHEREAS: It shall be the established policy of the Borough of
Downingtown to admit to the fullest extent practicable those types and
quantities of industrial wastes that (1) are not harmful to the structures,
collection system, processes, personnel or the operation of the Downingtown
Regional Waster Pollution Control Facilities, or (2) are not specifically
prohibited by this ordinance, the Commonwealth of Pennsylvania - Department of
Environmental Resources, the United States Environmental Protection Agency or
any other legal regulatory agencies with jurisdiction concerning these matters;
and


          WHEREAS: It is recognized that to provide this service, above normal
operating effort and facility utilization may be required, the cost of which
must be borne by the organization receiving the benefits;


          NOW, THEREFORE, BE IT ENACTED AND ORDAINED by the Mayor and Borough
Council of the Borough of Downingtown and it is hereby enacted by the authority
of the same:


     SECTION I. DEFINITIONS
                -----------


     As used herein, the following terms shall have the meanings stated:

                                       2
<PAGE>

     1.   "Borough" shall mean the Borough of Downingtown, Chester County,
           -------
Pennsylvania.


     2.   "Consulting Engineer" shall mean the engineer retained by the
           -------------------
Borough, versed in Sanitary Engineering.


     3.   "Person" shall mean any individual, group, company, association,
           ------
society or corporation applying for permission to connect or use the Downingtown
Regional Wastewater system.


     4.   "Downingtown Regional Wastewater System" shall mean the treatment
           --------------------------------------
facilities, pumping station, interceptor lines, meter pits and appurtenance
_________ (blank from top of page cut off on xerox copy) purpose of receiving,
conveying and treating wastewater from Downingtown and outlying communities
connected to the Downingtown Regional System by Agreement.


     5.   "Wastewater" shall mean the normal water borne waste from a household,
           ----------
and toilet wastes from residences, business buildings, institutions, commercial
and industrial establishments.


     6.   "Sanitary Sewers" shall mean the system of pipes and facilities
           ---------------
operated by the Borough for the collection of domestic wastewater and acceptable
industrial wastes in and for the Borough of Downingtown.


     7.   "Industrial Waste" shall mean any solids, liquids, or gaseous
           ----------------
substance or form of energy rejected or escaping from any industrial,
manufacturing trade or business process or from the development, recovery or
processing of natural resources and distinct from wastewater.


     8.   "Commercial Establishment" shall mean any structure intended to be
           ------------------------
used wholly or in part for the purpose of carrying on a trade, business, or
profession or for social, amusement, religious, educational, charitable or
public uses.

                                       3
<PAGE>

     9.   "Industrial Establishment" shall mean any structures intended to be
           ------------------------
used wholly or in part for the manufacturing, fabricating, storing, or
warehousing, processing, cleaning, laundering or assembling of any product,
commodity or article.


     10.  "Private dwelling or living unit" shall mean any structure intended to
           -------------------------------
be occupied as a whole by one family or an apartment intended to be occupied by
one family or any other one-family living unit.


     11.  "Average daily flow" shall mean the past quarters' total wastewater
           ------------------
divided by 91.25.


     12.  "Downingtown Regional Water Pollution Control Center" shall mean all
           ---------------------------------------------------
the facilities for treating and disposing of wastewater, as are required to meet
the requirements set forth by the Pennsylvania Department of Environmental
Resources or agency holding jurisdiction.


     13.  "Compatible Pollutant" shall mean biochemical oxygen demand, suspended
           --------------------
solids, pH, and fecal coliform bacteria, plus additional pollutants the
Downingtown Regional Water Pollution Control Center was designed to treat, and
in fact does remove to a substantial degree. The term substantial degree is not
                                                      -----------
subject to precise definition, but generally contemplates removals in the order
of 80 percent or greater. Minor incidental removals in the order of 10 to 30
percent are not considered substantial. Examples of the additional pollutants
which may be considered compatible, but which must be evaluated on an individual
basis, include:


     14.  (BLANK from top of page cut off in xeroxing)

     Fats, oils, and greases of animal or vegetable origin


     15.  "Incompatible Pollutant" shall mean any pollutant which is not defined
           ----------------------
as a compatible pollutant.

                                       4
<PAGE>

     16.  "Regulatory Agency" shall mean the Pennsylvania Department of
           -----------------
Environmental Resources, its agents or other agency holding jurisdiction with
regard to the enforcement of the terms of any Permit given for permission to
continue operating at the Downingtown Regional Water Pollution Control Center.


     17.  "Major Contributing Industry" shall mean an industry that (1) has a
           ---------------------------
flow of 50,000 gallons or more per average work day; or (2) has a flow greater
than five percent of the flow carried by the municipal system receiving the
waste; or (3) has in its waste a toxic pollutant in toxic amounts as defined in
standards issued by Regulatory Agencies; or (4) has a significant impact, in
standards issued by Regulatory Agencies; or (4)has a significant impact, either
singly or in combination with other contributing industries, on the wastewater
facilities or on the quality of the effluent from that treatment works.


     18.  "Pretreatment" shall mean treatment of wastes from industrial sources
           ------------
before their introduction into the sanitary sewers or wastewater mains.


     19.  "Suspended Solids" shall mean the solids that either float on the
           ----------------
surface or are in suspension in water, wastewater or other liquids which are
removed by laboratory filtration.


     20.  "BOD (Biochemical Oxygen Demand)" shall mean the quantity of oxygen
           ------------------------------
expressed in parts per million (milligrams per liter) by weight, utilized in the
biochemical oxidation of organic matter under laboratory procedure that shall be
found in the latest revised edition of Standard Methods.


     21.  "Chlorine Demand" shall mean the amount of Chlorine in parts per
           ---------------
million (milligrams per liter) by weight, which must be added to the wastewater
to produce a specified residual chlorine content or to meet the requirements of
some other objective, in accordance with procedures set forth in Standard
Methods.


     22.  "pH" shall mean the logarithm of the reciprocal of the hydrogen-ion
           --
concentration expressed in moles per liter and indicate the degree of acidity or
alkalinity of a substance.


     23.  "PPM" (parts per million) shall be synonymous with milligrams per
           ---
liter for purposes of this Ordinance. The unit shall be a weight to weight
ratio: the parts per million of a

                                       5
<PAGE>

substance multiplied by the factor 8.343 shall be equivalent to pounds of
substance per million gallons of wastewater.


     24.  "Standard Methods" shall mean the laboratory and analytical
           ----------------
__________________ (blank from top of page cut off when xeroxed) American Public
Health Association, the American Water Works Association and the Water Pollution
Control Federation.


     25.  "Garbage" shall mean the solid waste from the domestic and commercial
           -------
preparation, cooking and disposal of food, and from the handling, storage and
sale of produce.


     26.  "Slug" shall mean any discharge of wastewater or waste exceeding a
           ----
concentration or flow greater than five times that of an average 24-hour
discharge, which is discharged for a period of 15 minutes or more duration.


     27.  "Surcharge" shall mean the additional charge in excess of the basic
           ---------
charge and never less than the basic charge for the treatment of industrial
waste, based upon the extra strength of waste applied as a factor against
charges for sanitary sewage.


     28.  "Shall" is mandatory, "May" is permissive.
           -----


     SECTION II. ADMISSIONOF INDUSTRIAL WASTE
                 ----------------------------


          1.   (a)  In order to control the admission of industrial waste or any
other waste not defined either as sanitary wastewater or a compatible pollutant
for discharge into the sanitary sewer system, the written approval of the
Borough must be obtained prior to the discharge of such waste, and as evidenced
in writing by an industrial waste discharge agreement.


               (b)  As not all waste can be satisfactorily treated at the
wastewater treatment facilities, pretreatment may be required before acceptance
into the sanitary sewers. Any waste containing substances which are not
compatible to treatment or reduction by the biological treatment processes
employed or are amendable only to such a degree that the

                                       6
<PAGE>

treatment works effluent cannot meet the required degree of purity required by
Regulatory Agencies having jurisdiction over the discharge to the stream, such
waste will require pre-treatment to the degree as negotiated by the agreement.


          2.   (a)  Each industry making application for permission to discharge
an industrial waste into the sanitary sewers shall furnish complete information
as to the quantity of such waste, the nature and quality of materials therein
and the characteristics thereof. Such application shall be the basis for
negotiation of an agreement.


               (b)  Any person, firm or corporation presently discharging
industrial waste into the sanitary sewers, shall within 90 days after
notification by the Borough, file an application for the continued use of the
sanitary sewers and submit the information required in paragraph 2(a) for
consideration for an agreement.


               (c)  Except by special permission, the average daily flow of any
single waste shall be limited to .5% of the average daily flow received by the
treatment facilities, _______________ (blank from top of page cut off when
xeroxed) waste can be discharged into the sanitary sewers shall be a the
discretion of the Borough or the Consulting Engineer.


               (d)  Adequate means shall be provided at each industrial
connection with the wastewater main for periodic sampling. A suitable manhole
shall be installed in the building's sewer line discharging the waste into the
wastewater main to facilitate observation, sampling and measure of the waste
being discharged. Such manhole shall be constructed in accordance with the plans
and specifications approved by the Borough. The manhole shall be installed and
maintained in a safe condition at the expense of the Owner and to be so located
as to be accessible at all times to authorized employees of the Borough without
the consent of the Owner. Samples for the determination of all characteristics
and concentrations of the waste shall be collected in such a manner as to be
representative of the actual quality of the waste, and "Standards Methods of
Analysis" shall be used.


               (e)  Any authorized employee of the Borough bearing proper
credentials and identification shall be permitted to enter upon any private
property discharging industrial waste into the wastewater main at any time for
the purpose of observation, measuring, sampling, repair and maintenance of any
portion of the wastewater main which is an obligation of the Borough.

                                       7
<PAGE>

               (f)  No person shall maliciously, willfully, or negligently
break, uncover, deface or tamper with any structure, appurtenance or equipment
which is part of the Borough's Wastewater System. Any person violating the
provision shall be subject to a fine of not less than ten ($10.00) dollars nor
more than one thousand ($1,000.00) dollars plus all costs incurred in
restoration, repair and/or regulatory agency fines placed against the Borough.


               (g)  The Borough reserves the right to cancel any agreement
between the industry and the Borough upon the industry's violation of the
conditions of this Ordinance or the Agreement. Agreements for industrial
water(?) will be written for a one-year period. If the Borough elects not to
cancel the agreement on or before its anniversary, the agreement will
automatically renew itself for another period of one (1) year.


     SECTION III. DISCHARGES OF PROHIBITED WASTES
                  -------------------------------


          Except as otherwise provided in this Ordinance no person shall
discharge nor cause to be discharged any of the following described substances,
materials or wastes into the sanitary sewers.


     1. Any cooling water, either polluted or unpolluted from industrial or
  commercial processes.


     2. Any ashes, cinders, sand, mud, straw, shavings, metal, glass, rags,
  feathers, fur, plastics, wood, paunch manure, butchers offal, hair or any
  other solids or viscous substance capable of causing obstruction to the flow
  in the wastewater ________________ (blank from top of page cut off when
  xeroxed) the Downingtown Regional Wastewater System.


     3. Any inert insoluble solids such as: asphalt, clay, slag, and mil scale,
  or sludges and slurries.


     4. Any waters or waste containing radioactive isotopes.


     5. Any vapor or steam.

                                       8
<PAGE>

     6. Any liquid having a temperature higher than one hundred forty (140)
  degrees Fahrenheit.


     7. Any fluid waste containing in excess of one hundred (100) parts per
  million of fat, oil, wax, grease, either vegetable or mineral, or containing
  substances which may solidify between thirty-two (320 and one hundred (100)
  degrees F.


     8. Gasoline, naptha, fuel oil or other volatile, explosive or flammable
  substance which by reason of its nature or quality may cause fire or explosion
  or be in any way injurious to persons, to the sanitary sewers or to the
  wastewater treatment facilities.


     9. Any unshredded garbage. The installation and operation of any garbage
  grinder equipped with a motor of three quarter (3/4) horsepower or greater
  shall be subject to review and approval by the Borough.


     10. Any fluid having a pH lower than five and five-tenths (5.5) and higher
  than eight and five-tenths (8.5).


     11. Any waste water containing any substances which are not compatible to
  treatment or reduction by the biochemical waste water treatment processes
  employed or are amenable to the treatment only to such a degree that the
  effluent of the treatment works cannot meet the requirements of agencies
  having jurisdiction over the discharge to the receiving stream.


     SECTION IV. QUALITATIVE LIMITS
                 ------------------


          The following limits shall be applied to all industrial waste
discharges to the wastewater system of the Borough:

                                       9
<PAGE>

      ITEM                                                   PARTS PER MILLION
      ----                                                   -----------------

1.  Arsenic                                                        0.05

2.  Barium                                                          2.0

3.  Beryllium                                                       1.0

4.  Biochemical Oxygen Demand (Total)                            1000.0

5.  Bromides                                                      250.0

6.  Cadmium                                                         0.1

7.  Chemical Oxygen Demand                                       2000.0

8.  Chlorides                                                     500.0

9.  Chlorine Demand (15 minutes)                                   50.0

10. Chromium (hexavalent)                                           1.0

11. Chromium(trivalent)                                             1.0

12. Cobalt                                                          0.5

13. Copper                                                          1.0

14. Cyanides (as CN)                                                0.5

15. Fluorides                                                      10.0

16. Hydrogen Sulfides                                               0.1

17. Iron                                                            5.0

18. Lead                                                            0.1

19. Manganese                                                       1.0

20. Mercury                                                        0.05

21. Nickel                                                          2.0

22. Ammonia Nitrogen (as N)                                        30.0

                                      10
<PAGE>

23. Nitrate Nitrogen (as N)                                            10.0

24. Phenols                                                            0.05

25. Phosphates (as PO4)                                                50.0

26. Selenium                                                           0.05

27. Sulfates                                                          500.0

28. Suspended Solids                                                 1000.0

29. Tin                                                                 2.0

30. Total Dissolved Solids                                           1000.0

31. Zinc                                                                1.0


          Limits subject to further reduction as required of the Borough by
Regulatory Agencies or as technical revelations may dictate.


          The industrial waste discharged into the sanitary sewers shall be
sampled and analyzed by and at the expense of the discharger and results of
laboratory analyses shall be submitted to the Borough within fifteen (15) days.
Frequency of sampling and analysis shall be quarterly (4 times per year) as a
minimum. Discharges having a significant contribution to the system, or which
are variable in composition, will require more frequent monitoring, possibly
monthly, weekly or daily. The requirement shall be incorporated into the
discharge Agreement.


          The laboratory analyses shall be made on a representative composite
wastewater sample, and all analytical procedures shall be consistent with the
latest revised edition of Standard Methods. The choices of analytical laboratory
shall be subject to approval by the Borough.


     SECTION V. SOURCES OF INDUSTRIAL WASTES
                ----------------------------


          The following industries are generally significant sources of
industrial waste and re included herein for guidance. This list is by no means
complete as it is not practical to itemize all industrial activities:

                                      11
<PAGE>

     Paper and Allied Products

     Dairy Products

     Textiles

     Seafoods

     Pharmaceuticals

     Leather Tanning and Finishing

     Sugar

     Petroleum Refining

     Meat Products

     Grain Milling

     Fruit and Vegetables

     Beverages

     Plastic and Synthetic Materials

     Blast Furnaces, Steel Works, and Rolling and Finishing

     Organic Chemicals

     Metal Finishing and Electroplating

     Inorganic Fertilizers

     Electric and Steam Generation

     Aluminum

     Flat Glass, Cement, Lime, Concrete Products, Gypsum, and Asbestos

     Inorganic Chemicals

     Industrial Gas Products

     Food Processing or Products

                                      12
<PAGE>

     SECTION VI. MEASURING VOLUMES FOR THE PURPOSES
                 ----------------------------------

                 OF RENTAL RATES AND SURCHARGES
                 ------------------------------


          A.   Methods of Measuring Volumes:
               ----------------------------


               1.   Whenever a person purchases all water used from the Borough
and discharges the same volume as Domestic and/or Industrial Waste into the
Wastewater System, the volume of water used, as determined from meter readings
of the Borough, shall be used in computing the wastewater rentals.


               2.   In cases where persons have sources of water supply in
addition to or other than the Borough and discharge Domestic Wastewater and/or
Industrial Wastewater into the Wastewater System, those persons shall permit the
Borough to install a meter on such additional or other source of supply. The
total amount of water consumed, as shown by these meter readings, will be used
in computing the wastewater rentals.



         [page cut off at top]



     any part of the water so used is not discharged into the wastewater system,
the quantity of water used to determine the wastewater rentals shall be computed
by one of the following methods:


          Method No. 1 - By placing a meter or measuring device on the
          ------------
     wastewater connection. The readings from the meter or measuring device
     shall be used in computing the wastewater rentals.


          Method No. 2 - By placing a meter or measuring device on the effluent
          ------------
     not discharging into the Wastewater System. The reading from this meter or
     measuring device will then be deducted from the total water meter readings,
     and the remainder will be used in computing the wastewater rentals.

                                      13
<PAGE>

          Method 3 - When, in the opinion of the superintendent of the
          --------
     Wastewater Department, it is not practical to install measuring devices to
     determine continuously the quantity of water discharged or not discharged
     into the Wastewater System, the Superintendent of the Wastewater Department
     will determine, in such manner and by such method as he may prescribe, the
     percentage of total water used which is discharged into the Wastewater
     System and the quantity of water used to compute the wastewater rentals
     shall be the percentage so determined. Any dispute as to the percentage of
     such discharge determined by the Superintendent of the Wastewater
     Department shall be submitted to the Borough Council, whose decision on the
     matter shall be final for the current calendar year.


          B.   Measuring Devices
               ------------


               All meters or measuring devices required to be used under the
provisions of this Ordinance (except those provided by the Borough for a normal
water service) shall be furnished and installed by the Borough at the expense of
the property owner. All such meters or measuring devices shall be under the
control of the Borough and may be tested, inspected or repaired by the Borough
employees whenever the Superintendent of the Wastewater Department shall deem
necessary. The Owner of the property upon which such measuring device is
installed shall be responsible for its maintenance and safekeeping, and all
repairs thereto shall be made by the Borough, at the property owner's expense,
whether such repairs are made necessary by ordinary wear and tear or other
causes. Bills for such installation and repairs shall be due and payable at the
same time and collected in the same manner as are the bills for Wastewater
services: such bills from and after their due date, shall institute a lien upon
the property upon which such measuring device is installed.


          C.   Meter Readings
               --------------


               The Borough shall be responsible for the reading of all meters or
measuring devices, and they shall be made available to Borough employees for
meter reading at any reasonable time.


          SECTION VII.   MISCELLANEOUS PROVISIONS
                         ------------------------

                                      14
<PAGE>

          Changes in classification, additional classification and modification
of the definition of industrial waste customer, time and methods of payments,
penalties, delinquent wastewater rentals, liens, and enforcement shall be
consistent and in accordance with the Basic Rate Ordinance of the Borough, as it
may from time to time be amended.


          In the event that an industry illegally discharges its waste into the
wastewater system which causes damage to the system or the wastewater treatment
facilities or to any employee thereof, or the discharge of any substance that
damages the receiving stream, the Industry shall be liable for the damage
thereof; this shall include all costs incurred for restoration, replacement,
fines, etc. The limit of the damage shall be determined by the Borough and the
Industry shall be billed therefor. Legal action may be taken to enforce
collection and/or the Borough may resort to the termination of their connection
to the wastewater system, and/or shall institute a lien upon the industrial
property making said illegal discharges.


     SECTION VIII.  SURCHARGE FORMULA
                    -----------------


          Industrial waste of unusual strength or character accepted by the
Borough for treatment shall be subject to a surcharge to be paid by the industry
concerned. The basic rate for the purpose of surcharge calculation shall be the
rate per thousand gallons as set forth in the Rate Ordinance for wastewater.


          The magnitude of the surcharge is based upon the degree to which the
waste exceeds the strength of normal sanitary sewage. These normal values are:


               (a)  A 5-day, 20(degree)C. BOD of 240 ppm.


               (b)  A suspended solids content of 300 ppm.


               (c)  A fats, oils, and grease concentration of 100.


               (d)  A chlorine demand of 20 ppm.

                                      15
<PAGE>

<TABLE>
<S>                   <C>
     Surcharge Factor - 1 - (0.45) A-240 + (0.41) B-300 - (0.10) C-100 - (0.04) D-20

                                   -----          -----          -----          ----

                                    240            300            100            20
</TABLE>



     Where Q = Water usage in gallons per quarter

           A = BODs in ppm

           B = Suspended solids in ppm

           C = Fats, oils and grease in ppm

           D = Chlorine demand in ppm


     The surcharge factor shall not be less than one (1) nor shall any term in
the factor be negative.


               (e)  Waste containing substances or materials beyond those
contained in the surcharge formula and which are acceptable for treatment by the
Borough, but with extra care and costs, the Borough may accept such waste after
a study of the waste has been made and a special surcharge cost term has been
established.


               (f)  In order to ascertain the strength of every industrial
waste, the Borough shall cause appropriate analysis to be made of each and every
industrial waste entering the sanitary sewer system at least four times each
year, the average of which shall be used to establish the surcharge.

                                      16
<PAGE>

     SECTION IX. VALIDITY
                 --------


          The provisions of this Ordinance are several and if any provision or
part thereof shall be held illegal, invalid or unconstitutional, it shall not
affect or impair any remaining provisions or parts of this ordinance. It is
hereby declared to be the legislative intent that this ordinance would have been
adopted if such invalid or unconstitutional provisions had not been included
therein.


               All ordinances or parts of ordinances inconsistent hereto are
hereby repealed.


               Adopted this ___ day of ___________, 1974.



                                                            /s/
                                                         -----------------------

                                                            President of Council



     Attest:    /s/
             -------------------

                   Secretary


                    Approved this ___ day of ___________, 1974.



                                                               /s/
                                                         -----------------------

                                                            Mayor



                                  APPENDIX C
                                  ----------


                             SPECIFIC REQUIREMENTS
                             ---------------------

                                      17
<PAGE>

          1.   The volume of discharge permitted hereunder and referred to in
Section 1 is 200 qpd.


          2.   The site referred to in Sections 1 and 8(b) of this Industrial
Waste Discharge Agreement is the Metzeler Motorcycle Tire North America
Corporation facility located at Suite 106, 400 Eagleview Boulevard, Exton, PA
19341.


     3.   The Resolution of the Authority referred to in Section 4(a) of this
Industrial Waste Discharge Agreement was adopted on February 19, 1990.


          4.   The Ordinance of the Municipality referred to in Section 4(b) of
this Industrial Waste Discharge Agreement was enacted on May 29, 1990.


        **5.   The sampling manhole referred to in Section 8(a) of this
Industrial Waste Discharge Agreement has been installed in the sewer line from
400 Eagleview Boulevard prior to the point where the line connects to the
Municipality's sanitary sewer system.


          6.   In addition to the substances and characteristics listed in
Section 8(c)(1), the Industrial Discharger shall also have the quarterly
wastewater sample analyzed, at its own expense, for the following:


               Color

               Silver

               Toluene

               Trichlorethane

               Trichloroethene
<PAGE>

          7.   The telephone number of the Municipality referred to in Section
18(b) is (215) 363-9450.
<PAGE>

                      3-DIMENSIONAL PHARMACEUTICALS, INC.

                              PHASE II EXPANSION




                                BASIS OF DESIGN




                            BCE PROJECT NO. 307118





                        BALA CONSULTING ENGINEERS, INC.

                         231 Clarksville Road, Suite I

                            Lawrenceville, NJ 08648

                           Revised: October 31, 1997
<PAGE>

                               TABLE OF CONTENTS


                                                                   Pages
                                                                   -----

     EXECUTIVE SUMMARY                                               1

     ARCHITECTURAL                                                 2-7

     HEATING, VENTILATING AND AIR CONDITIONING                    8-22

                                      -i-
<PAGE>

     EXECUTIVE SUMMARY
--------------------------------------------------------------------------------

     3-Dimensional Pharmaceuticals, Inc. (3-DP) is contracting with The Hankin
Group to construct an addition to their headquarters facility which contains
their administrative and laboratory functions. The first phase of this work was
completed in 1995. The second phase addition is expected to begin construction
around September of this year, for an occupancy the first quarter next year. The
fit-out of this phase is to allow a complete operation including programmed
expansion through the year 2002. This will require an additional 15,000 square
feet of building area added to the existing 15,000 square feet.

     The tone of the first phase has been successful, and the same design is to
continue. The new facility expresses an approach of the 21St century, by being a
facility which expresses their highly technical nature. This Basis of Design
will focus on the expansion of the interior environment Electrical
considerations are not a part of this report.

     This building continues to be a non-smoking facility. A smoking area will
be designated on the grounds.
<PAGE>

         ARCHITECTURAL
--------------------------------------------------------------------------------

         OFFICE FACILITIES

         It continues to be the 3-DP philosophy to take a team approach in
research. They state all the staff are in this venture together. Because of this
philosophy the appearance of offices is to reflect their uniformity. Each person
will have a standard office format in which they can perform their functions.
All offices, and work stations will have computer terminals connected to the
in-house network systems. During the programming phase of this work, flexibility
is to be considered, however, the privacy of researchers is also to be
respected.

         Executive Offices 31 through 37 will be demolished and moved to the new
addition. There will be 10 new Executive Offices including relocated offices for
the CEO, CFO and the CSO. An additional 9 offices are needed for PhD's at 8'xlO'
each.

         All new administrative and laboratory offices will have the standard
Eagle view carpet. New executive offices will receive upgraded carpet similar to
that found in existing executive offices. Walls will be low luster painted
gypsum wall board, and the ceilings will be acoustic ceiling panels on a
suspended exposed painted metal grid.

         Administration:
         --------------

                  Population:       9

                  Area:    910 square feet

                  Offices are to be provided for the CFO at 120 square feet and
         an adjoining 230 square foot office. There are to be seven (7)
         additional administrative offices of 80 square feet each.

         Research Offices:
         ----------------

                  Population:       7

                  Area:    600 square feet

                  Offices are to be 120 square feet for the senior chemist and
         six (6) PhD offices at 80 square feet each.

         Administrators Offices:
         ----------------------

                  Population:       2

                  Area:    220 square feet

                  The CFO administrator is to have a 120 square foot open
         cubical and the senior scientist is to have an open cubical of 100
         square feet

         Open Office Area:
         ----------------

                                      -2-

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         ARCHITECTURAL
--------------------------------------------------------------------------------


                  Population:       40

                  Area:    1,940 square feet

                  Open office is required to serve the laboratories in the
         addition. This Open Office Area is split between the Chemistry Lab (28
         people) and the Biology Lab (12 people).

         Facilities Manager's Office:
         ---------------------------

                  Population:       I

                  Area:    200 square feet

                  The facilities manager requires a private office. Finishes are
         to be similar to the adjacent corridor space. This office will be near
         the Mechanical Room.


         LABORATORY FACILITIES

         Chemistry Laboratory:

         The wet chemistry laboratory will be an open laboratory of 2,700 square
feet. The wet laboratory requires 5-foot entries from a service corridor, and
3-foot entries from the office area. The service corridor to the laboratories is
to be 8 feet in width. The service exit corridor is to be 9 feet in width. Each
lab will have vinyl composition tile flooring, epoxy painted gypsum board walls,
and NRC 60 minimum vinyl faced acoustic ceiling panels, in a suspended exposed
painted metal gild. Standard metal benches will have epoxy resin bench tops at
36" nominal height Services to the chemistry laboratories will include hot and
cold water to three (3) laboratory sinks, and cold water and oil-free instrument
grade compressed air to each of the twelve (12) chemical fume hoods. A vented
solvent storage cabinet will be located under six (6) hoods and a vented acid
cabinet under the six (6) adjoining fume hoods. Each hood will have two (2) cup
sinks with cold water and compressed air as standard. Laboratory vacuum and
inert gas services to fume hoods can be provided as an Owner-approved option.
Each hood will also have two (2), 120V, 20A duplex service outlets.

         Optional vacuum will be Centralized in a building system or independent
near laboratory fume hoods. If requested by Owner, inert gas piping can be
provided from the manifold in the Service Corridor to the wall side benches or
located independently within the laboratories. The three (3) epoxy resin sinks
will each have an eye wash. The laboratory will also have access to safety
showers in the Corridor.

         There will be twelve (12) 8-foot fume hoods in the chemistry
laboratory. The laboratory is to have space for robotics to be added.

                                      -3-

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         ARCHITECTURAL
--------------------------------------------------------------------------------


         Biology Laboratory

         This new 900 square foot laboratory requires three (3) sinks with hot
and cold water, an 8'-O" fume hood with two (2) cup sinks, cold water and
compressed air. Electrically, the fume hood requires two (2) 120V 20 AMP duplex
service outlets. The fume hood will have a vented solvent storage cabinet below.

         Solvents will be based on common Biology Lab usage. Radioisotopes may
also be used in trace amounts.


         NMR Laboratory

         A 230 square foot NMR laboratory will be located away from movable
metal objects and car traffic. It will be located on an outside wall with an
exterior warning barrier for the magnetic field. This laboratory will contain a
sensitive imaging device.


         Environmental Cold Room Laboratory

         A second environmental cold room is needed to supplement the existing
cold room. Approximately 100 square feet is needed. A 10-foot bench is also
required.


         BUILDING SUPPORT SPACES
         -----------------------

         Existing Building Modifications:

         Break Room:
         ----------

                  Population:       I

                  Area:    150 square feet

                  Provide an office for the CSO at the existing break room area.
         The balance of the break room will be used as is and providing an exit
         to the building.

         Library:
         -------

                  Population:       2

                  Area:    200 square feet

                  Provide two (2) offices for Laboratory 18 and relocate the
library.

         Existing Main Conference Room:
         -----------------------------

                  Expand the conference room 160 square feet.

                                      -4-

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         ARCHITECTURAL
--------------------------------------------------------------------------------


         Coffee Areas:
         ------------

                  Population:       0

                  Area:    Existing

                  Relocate the coffee area next to the expanded conference room.
         The area will remain approximately 60 square feet at the former office
         area.

         Laboratory Storage:
         ------------------

                  Population: 0

                  Area:    Existing

                  A new laboratory storage room will take approximately 125
         square feet of former office area.

         Archive Mobile Storage:
         ----------------------

                  Population:       0

                  Area:    Existing

                  310 square feet of former office area will be used for a
         mobile storage filing system. This system is track mounted and lockable
         when not in use.

         Administrator to the CEO:
         ------------------------

                  Population:       1

                  Area:    Existing

                  Will be relocated to permit corridor passage to the addition.
         It will remain at approximately 120 square feet

         Business Development Office:
         ---------------------------

                  Population:       1

                  Area:    Existing

                  The Business Development Office will be located at the current
         CEO office. The CEO will move to the adjoining office. No physical plan
         changes are required.

                                      -5-

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         ARCHITECTURAL
--------------------------------------------------------------------------------

         Storage:
         -------

                  Population:       0

                  Area:    Existing

                  Building storage is to have access to the main service
         corridor. The space will be approximately 100 square feet.

         Addition:
         --------

         Meeting Room:
         ------------

                  Population:       0

                  Area:    900 square feet.

                  This space is needed to seat up to 100 people for
         presentation. The space is also to contain 100 linear feet of shelving
         for library reference. Off of the meeting room will be a kitchenette to
         serve the space as a break room. 50 square feet is required to contain
         casework with a sink and a refrigerator/freezer.

         Computational Room:
         ------------------

                  Population:       0

                  Area:    150 square feet

                  Data transmission lines, servers, and telephone lines will be
         housed in this space. This server room is to be networked with the
         present computational room.

         Chemical Storage Room:
         ---------------------

                  Population:       0

                  Area:    70 square feet

                  The chemical storage room is to have 3-60 gallon vented
         solvent storage cabinets. Floor and shelf space is needed for other
         chemicals.

         Mechanical Room:
         ---------------

                  Population:       0

                  Area:    450 square feet

                  A Mechanical Room will contain boiler equipment, hot water
         heater and motor control centers for roof top equipment

         Toilet Rooms:
         ------------

                                      -6-

<PAGE>

         ARCHITECTURAL
--------------------------------------------------------------------------------


         The male and female toilet rooms are to have four (4) stalls each. They
will have Ceramic tile floors and painted wails with ceramic tile behind the
water closets.

         The existing loading dock and janitor's closet will serve this
addition.

                                      -7-

<PAGE>

         ARCHITECTURAL
--------------------------------------------------------------------------------


         GENERAL

         Systems will be designed In accordance with the latest applicable
Codes, Standards, and Authorities having jurisdiction and In accordance with
current engineering practices. Items denoted with an asterisk (*) represent
specific Owner requirements.

         DESIGN CRITERIA

         Ambient Weather Criteria: Outdoor ambient conditions used for the
         ------------------------
         design of the HVAC systems will be based on tabulated data for West
         Chester, Pennsylvania from the 1993 ASHRAE Handbook -Fundamentals.

                  Administrative Office Areas:

                  Winter:
                  ------

                  Dry bulb:         13(degree)F (97.5% frequency of occurrence)

                  Humidity:         0 grains per pound of dry air

                  Wind:             15 mph

                  Summer:
                  ------

                  Dry bulb:         89(degree)F (2.5% frequency of occurrence)

                  Wet bulb:         74(degree)F (coincident with design dry
                                    bulb)

                  Mean daily range: 20(degree)F

                  Wind:             7.5 mph

                  Laboratory Areas:

                  Winter:
                  ------

                  Dry bulb:         9(degree)F (99% frequency of occurrence)

                  Humidity:         0 grains per pound of dry air

                  Wind:             15mph

                  Summer:
                  ------

                  Dry bulb:         92(degree)F (1% frequency of occurrence)

                  Wet bulb:         75(degree)F (coincident with design dry
                                    bulb)

                  Mean daily range: 20(degree)F

                  Wet bulb for

<PAGE>

         ARCHITECTURAL
--------------------------------------------------------------------------------

                  evaporative cooling:      77(degree)F (1% frequency of
                                            occurrence)

                  Dry bulb:         85(degree)F (assumed coincident with design
                                    wet bulb)

                  Wind:    7.5 mph

         Space Temperature and Humidity: These criteria indicate indoor design
         ------------------------------
conditions to be maintained within the building when outdoor conditions are
within the limits described above.


         Offices, Office Support, Conference Rooms:

         Summer:  75(degree)F db/50% RH (+3(degree)F db,+/-10% RH)

         Winter.  70(degree)F db/30% RH (+10% RH)


         Laboratories, Lab Support Areas:

         Summer:  72(degree)F db/50% RH (+3(degree)F db,+7.5% RH)

         Winter:  70(degree)F db135% RH (+7.5% RH)


         Mechanical and Electrical Equipment Rooms:

         Summer   105(degree)F db maximum (ventilated to maintain temperatures
10(degree)F above ambient)

         Winter            60(degree)F db minimum


         Internal Load Criteria

         People:

                                    Sensible Heat Gain          Latent Heat Gain
                    Area            BTU/H                       BTU/H
                    ----            -----                       -----

                    Offices         250                         200
                    Laboratories    250                         250


         Lighting:

                                    Heat Gain
                    Area            Watts/Sq. Ft.
                    ----            -------------

                    Offices         2.0
                    Laboratories    2.5
                    Corridors       1.0

<PAGE>

         ARCHITECTURAL
--------------------------------------------------------------------------------


         Equipment:

                                    Heat Gain
                    Area            Watts/Sq. Ft.
                    ----            -------------

                    Offices             3.5
                    Laboratories        10.0
                    Corridors           0.0


         Where available, specific heat gain data and use schedules for actual
equipment will be used.


         Ventilation Criteria

         In general, laboratory areas shall be supplied with 100% outdoor air
and shall be exhausted. Supply air rates shall be based on sensible cooling
load, minimum dilution ventilation requirements, and/or exhaust air
requirements, whichever is greatest

         Outdoor air supply rates for other areas shall be based on minimum
dilution ventilation requirements for occupant comfort, occupant density,
pressurization criteria, and/or exhaust air requirements. Outdoor air shall be
provided at a minimum rate of 20 cubic feet per minute (CFM) per person or 0.2
CFM per square foot, whichever is greater.


         Air Motion Criteria

         The Room Data Sheets at the end of this section list the recommended
minimum room air motion for human comfort in occupied air conditioned spaces, or
for dilution or removal of odors. The tables list these quantities in air
changes per hour (ACPH) based on total airflow through each type of space. In
variable air volume conditioned areas, air motion and ventilation rates may fall
below these rates under part load conditions.


         Pressurization Criteria

         To control the migration of odors and contaminant, all systems shall be
designed to attain desirable pressure levels within the rooms relative to all
adjacent areas. Refer to the Room Data Sheets for individual room pressure
requirements. In general, the following guidelines will apply:

         .   Laboratories will be under negative pressure relative to adjacent
areas.

         .   The White Laboratory will be under positive pressure relative to
adjacent areas.

         .   Exterior zones will generally be under positive pressure relative
to the outdoors.

         If the laboratory air system design permits a reduction in airflow
during "unoccupied" hours, the relative directions of airflow between spaces
will remain consistent with "occupied" operation.

<PAGE>

         ARCHITECTURAL
--------------------------------------------------------------------------------


         Filtration Criteria

         Air handling units serving laboratory and lab support areas shall
supply air through 30% ASHRAE efficient prefilters and, as a minimum, 85% ASHRAE
efficient afterfilters. Exhaust air subject to contamination by potentially
hazardous gases or particulate materials shall be filtered through high
efficiency particulate air (HEPA) filters, activated carbon filters or fume
scrubbers prior to discharge to the atmosphere. (Note: To date, Owner has not
identified any requirements for special exhaust air filtration or scrubbing).

         Air handling units serving administrative office areas shall supply air
through 30% ASHRAE efficient prefilters.

         Units serving mechanical and electrical equipment rooms shall supply
air through 30% ASHRAE efficient filters.


         Acoustical Criteria

         The following noise criteria will be used in the mechanical design of
the spaces identified. These NC ratings do not take into account any noise
generated by operating machinery or activities planned within the space. Where
applicable, air silencers will be used.

                 Space                                       Design NC Rating
                 -----                                       ----------------

                 Laboratories                                NC-55
                 General Offices                             NC-40
                 Conference Rooms                            NC-35



         Environmental Control Zone Criteria

         In general, individual thermostat control shall be provided for each
laboratory. During occupied hours, minimum air change rates shall be maintained.
Room temperature control shall be accomplished by modulating a terminal reheat
coil control valve via a wall-mounted thermostat Exhaust airflow shall exceed
supply airflow to assure negative pressure within the laboratories relative to
adjacent spaces.

         Moisture addition required for relative humidity control shall be
provided at the central station air handling units and shall satisfy the
requirements for the majority of space served. No individual room humidity
control shall be provided. During unoccupied hours, supply and exhaust airflows
may be reduced provided that negative room pressure is maintained within the
laboratories.


         Building Operating Schedule

                  Offices           10 hrs./day      5 days/week

                  Laboratories      10 hrs./day      5 days/week

<PAGE>

         ARCHITECTURAL
--------------------------------------------------------------------------------


         Supply and exhaust air quantities may be reduced in non-critical areas
during unoccupied periods.

         Space pressurization criteria must be maintained and space conditions
must remain between 65-85(degree)F.


         Fume and Exhaust Hood Criteria

         In general, fume hood design criteria shall be based on achieving 0.10
ppm control level as tested per ASHRAE Standard 110-1985, Method of Testing
                                                          -----------------
Performance of Laboratory Fume Hoods. Fume hood face velocity shall be based on
------------------------------------
the guidelines established by the American Conference of Governmental Industrial
Hygienists (ACGIH) in the 20th edition of Industrial Ventilation which
                                          ----------------------
recommends an average face velocity of 100 feet per minute (FPM) for all fume
hood applications, provided that hoods are located in low traffic areas away
from doors and trafficways, and that no equipment in the hood is closer than six
inches to the face of the hood.

         Bench hoods will feature a vertical or combination sash configuration.
Supply and exhaust systems shall be designed to achieve an average face velocity
of 100 FPM with the sash half open.

         All constant volume fume hoods shall come equipped with self-contained
bypass make-up air controls. Each fume hood shall be equipped with a visual
and/or audible alarm device to detect low face velocity. Biological safety
cabinets shall be Class II, Type B3 in accordance with the National Sanitation
Foundation (NSF) Standard 49. Biological safety cabinets shall be designed for
an average face velocity of 100 FPM, or per manufacturer's recommendations.
Flammable storage cabinets (if required) in laboratories shall be vented to the
outdoors through a direct connection to the exhaust system or through fume hoods
located above the cabinets.


         Air Distribution Criteria

         All ductwork construction shall be based on SMACNA duct pressure
classification. Exposed supply air ductwork in laboratories shall be constructed
of stainless steel. All other supply ductwork shall be galvanized steel. -

         General room exhaust ductwork shall be constructed of galvanized steel
with the following exceptions:

         . Fume hood exhaust 304L stainless steel.

         . Flammable room exhaust - 304L stainless steel for corrosive solvents
(if applicable).

         . Moisture laden exhaust - 316L stainless steel (if applicable).

         Fume hood exhaust fans shall be AMCA Type B spark resistant
construction. Fume hood exhaust discharge shall be at the highest elevation of
the building. Outdoor air intakes and exhaust discharges shall be located to
minimize cross-contamination potential in this and other buildings. The
discharge shall be directed vertically upward at a minimum velocity of 3000 FPM
<PAGE>

         ARCHITECTURAL
--------------------------------------------------------------------------------

during occupied hours. The discharge nozzle shall be high enough to exit
effluents into the dilution wake zone as determined in a wind wake analysis.

         Future Expansion Criteria

         Laboratory HVAC equipment sizes listed in Appendix A have no allowance
for future expansion. In order to make provisions to add four (4) fume hoods to
Laboratory 63 and expand the new biology laboratory to include five (5)
additional fume hoods, the. new laboratory HVAC system capacity will have to be
increased. The anticipated increase in air flow quantity as a result of the
above mentioned fume hood additions will be approximately 10,000 cfm. The
following system components will require an increase in size: air handling unit,
exhaust fans, chiller, steam boiler and hot water generating equipment, pumps,
and all of their related appurtenances (i.e. piping, ductwork, electrical
services, etc.). Appendix B represents equipment sizes which allow for the
future fume hood additions.

         SYSTEMS DESCRIPTION

         Heating Systems

         A new packaged, gas-fired, steel, Scotch-type horizontal fire-tube
boiler, located within the new Mechanical Equipment Room, will generate low
pressure (15 psig) steam for air handling unit preheat coils and humidification.

         Low pressure condensate from preheat coils and humidifiers will be
returned to the boiler feed unit located in the Mechanical Equipment Room.

         Laboratory supply air terminals will use hot water coils to reheat
conditioned supply air to maintain minimum space temperature. Two options were
considered for hot water generation. In option 1, two (2) gas-fired, finned
copper water-tube boilers, each sized for 50% of the peak demand, will generate
hot water for reheat coils. Each boiler will come equipped with a two-stage gas
valve, resulting in a four-stage system.

         In option 2, two (2) shell and tube heat exchangers, each sized for 50%
of the peak demand, will use low pressure (15 psig) steam to generate hot water
for reheat systems. Each heat exchanger will incorporate a parallel control
valve arrangement to provide more accurate control at part-load conditions and
assure that steam is available during valve maintenance or failure. This design
will require an increase in the steam boiler output of approximately 40%. This
design will also allow the interconnection of the new and existing steam boilers
which will provide added reliability should one of the boilers fail.

         In either option two (2) constant speed hot water pumps (one active;
one standby) will circulate constant temperature hot water to laboratory supply
air reheat coils. Two-way control valves will modulate hot water flow to
maintain space temperature. Pressure relief valves controlled by a differential
pressure sensor located at the most hydraulically remote terminals will bypass
water during reduced load periods.
<PAGE>

         ARCHITECTURAL
--------------------------------------------------------------------------------

         Heat Exchanger Design (Option 2):

         Advantages:
         ----------

         .        The. heat exchangers will require less maintenance than the
hot water boilers.

         Disadvantages:
         -------------

 .        Higher operating costs due to the fact that the large steam boiler will
         have to be operational during the spring and summer seasons to provide
         hot water for reheat


 .        Because the boiler will have to be capable to modulate down to low
         loads (possibly 10%) the equipment costs, hence installation costs,
         will be higher.

         Recommendations:
         ---------------

 .        It is recommended that the boiler method for generating hot water be
         installed in the new addition because of the economic gains associated
         with the lower operating and installation costs.



         Cooling Systems

         Laboratory air handling unit cooling coils will use a 30% propylene
glycol/water solution. The propylene glycol solution affords a high degree of
reliability and maximum freeze protection for 100% outdoor air systems.

         Constant speed centrifugal pumps located in the Mechanical Equipment
Room will circulate (42(degree) F) chilled water from a pad-mounted air-cooled
chiller located adjacent to the building to rooftop air handling units.

         The system will include one (1) nominal 130-ton air-cooled water
chiller sized for 100% of the peak demand. The new water chiller will be an R-22
packaged electric motor driven reciprocating vapor compression chiller, with
solenoid-actuated control valves for capacity control. The new chiller Will
include hot gas bypass for low load stability and factory designed
microprocessor based controls tied to the building automation control system for
performance monitoring.

         The new water chiller will have constant flow evaporator flow rate. The
evaporator flow rate will be 2 gpm/ton of rated cooling capacity.

         The chiller will be started and stopped locally or remotely, through
the Facility Management System (FMS), but not without operator confirmation. The
plant automation controls will start the chilled water pump associated with each
chiller, and modulate the chilled water flow control valves during chiller
operation.

         Two chilled water operating sequences are possible. In option 1, the
base design, the new chiller will serve as a stand-alone system for the new
expansion. This system is comprised of one
<PAGE>

         ARCHITECTURAL
--------------------------------------------------------------------------------


(I) packaged air-cooled chiller and two (2) constant speed primary chilled water
circulating pumps (one active; one standby).

         In option 2, the new and the existing chillers will operate in
parallel. This configuration will match the number of chillers (compressors)
operating to the laboratory cooling load requirements. For example, during
periods of reduced cooling load which occur during mild outdoor air temperatures
or during a reduction in the laboratory fume hood exhaust and supply air flow,
only one chiller will be required to operate. Upon an increase in chilled water
demand, both chillers will operate. In addition, piping the chillers in parallel
will afford added reliability by allowing selected laboratories to remain in
operation should one of the chillers fail. This design includes one (1) packaged
air-cooled chiller, one (1) constant speed primary chilled water circulating
pump, and two (2) constant speed chilled water booster pumps.


         Parallel Chiller Design (Option 1):

         Advantages:
         ----------

 .        Improves chilled water efficiency during off peak cooling load
         conditions resulting in lower energy costs.

 .        Provides partial backup of chilled water generation capability In the
         event of a failure of any one chiller.

         Disadvantages:
         -------------

 .        Higher installation costs, as compared to the base chiller design. This
         is due to the additional chilled water piping, an extra primary chilled
         water pump and some added automatic temperature control work.

 .        May have a impact on lab operations due to the fact that the existing
         chilled water system will need to be shut down in order to complete
         the necessary piping tie-ins and control
         work. This will depend on what time of the year the tie-ins are done
         (i.e. spring / summer or fall / winter).

         Recommendations:
         ---------------

 .        Because of the factors of added reliability and higher operating
         efficiencies, the installation of the new chiller in parallel with the
         existing chiller is recommended.


         Air Handling Systems

         Office and Office Support Areas:

         All administrative office and office support systems will be
single-zoned, constant volume. Air handling system will be a single-package,
rooftop-mounted, combination air-to-air direct-expansion (DX) cooling system and
gas-fired heating system, complete with automatic controls.
<PAGE>

         ARCHITECTURAL
--------------------------------------------------------------------------------


         In the unoccupied mode, the FMS will deenergize the air conditioning
unit

         When the outdoor air temperature is lower than the return air
temperature the economizer will control the air handling unit to use up to 100%
outdoor air to minimize the load. Coupled with each unit will be a centrifugal
return or relief air fan.

         Laboratory Areas:

         The laboratory air handling system will be 100% outdoor air,
variable-air-volume terminal reheat The air handling unit will provide constant
550 F temperature air to air terminals. A pressure independent
variable-air-volume terminal will deliver a varying airflow to the laboratory
areas. A room thermostat will modulate a two-way terminal reheat coil control
valve to maintain room temperature set point Exhaust airflow will exceed supply
airflow to assure negative pressure within the space relative to adjacent
corridors to prevent particulate, fume and odor migration from laboratories and
pilot plant areas to adjacent spaces. In the unoccupied mode, supply and exhaust
airflows may be reduced by indexing the supply and exhaust terminal boxes to a
lower setting. Settings will assure that the system maintains negative room
pressure within the space during unoccupied periods.

         Each laboratory will be provided with a dedicated variable-air-volume
supply air terminal with a hot water reheat coil. Each fume hood will be
provided with a dedicated variable-air-volume exhaust air terminal.

         Moisture addition (steam injection) required for relative humidity
control will be provided at the air handling unit and will satisfy the
requirements for the majority of spaces served. No individual room humidity
control will be provided.

         A variable-air-volume, draw-through air handling unit will service the
laboratory space and will include the following components:

         1.       Outdoor air dampers

         2.       Prefilters - 30% efficient

         3.       Final Filters - 85% efficient

         4.       Access section

         5.       Steam integral face and bypass (IFB) preheat coil

         6.       Access section

         7.       Glycol/chilled water cooling coil

         8.       Centrifugal supply fan with variable inlet vanes

         9.       Sound attenuator (located in supply ductwork)
<PAGE>

         ARCHITECTURAL
--------------------------------------------------------------------------------

         10.      Airflow measuring station (located in supply ductwork)

         11.      Humidifier (located in supply ductwork)

         Coupled with the unit will be a centrifugal exhaust fan(s) with
variable inlet vanes.

         Night setback will be used to reduce the airflow to approximately 50%
for energy savings, however, pressure differentials will be maintained 24 hours
a day.

         Mechanical/Electrical Equipment Room Heating and Ventilating System:

         Heating and ventilating units and exhaust fans will provide ventilation
in mechanical/electrical equipment rooms.


         Control System

         General:

         Each office air conditioning unit shall include a stand alone automatic
temperature control system factory installed by the air conditioning unit
manufacturer. The laboratory control system shall be an extension of the
existing Facility Management System (EMS) and the Phoenix Controls laboratory
airflow control system defined as follows:

         Scope:

         The requirements of the laboratory control system will include the
design of a complete stand alone, automated temperature control system made up
of distributed digital controllers (DiDC) networked together to provide
automated control and monitoring of various mechanical and electrical equipment.
The EMS controllers will be electronic, with the majority of control devices
(dampers and valves) being pneumatically actuated. Each DiDC will include all
hardware, software, signal conditioning and termination devices to provide full
monitoring and control. All controllers will be furnished with emergency power
from dedicated emergency power panels.

         Networked controllers will be connected by a communication data
highway. Each DiDC will be capable of peer-to-peer communication for sharing of
point status and value information.

         Communication from one DiDC to another will not depend on a central
host computer. The optimum system architecture will be configured during the
design development.

         Where required, electronic-to-pneumatic (EIP) interface panels shall be
provided adjacent to each DiDC. This panel will contain all l/P, PIT
transducers, solenoid valves, pressure gauges, as well as interfacing relays.

         Installation requirements of this project with respect to the FMS will
require a complete turnkey approach with selected contractor.

         System Requirements:
<PAGE>

         ARCHITECTURAL
--------------------------------------------------------------------------------

         The application of electronic distributed digital control and pneumatic
control loops for the main HVAC systems and associated areas served are as
follows:

         Laboratory air handling unit (AHU) and associated exhaust fan(s) will
         be controlled by a dedicated DiDC. Typical parameters to be controlled
         and monitored include temperature, humidity, airflow/pressurization,
         start-stop, safety shutdown (low temperature, high static and fire
         alarm interface).

         General Zone Control: Laboratories, offices, and support areas will be
         controlled by traditional pneumatic controls with an alternate to
         evaluate electronic DDC control.

         The FMS will control and/or monitor the following equipment

         .        Air handling unit and exhaust fans

         .        Water chiller(s)

         .        Steam to water heat exchangers

         .        Pumps

         .        Airflow/pressurization control

         .        Miscellaneous: to be defined

         AHU duct airflow/pressure control shall be performed and integrated
with the FMS. All components for this control (airflow stations, differential
pressure transmitters and probes) will be electronic devices.

         Air Distribution Systems:

         Preheat, cooling and primary humidification control shall be provided
for the laboratory air handling system. Supply or exhaust system duct pressure
or airflow shall be controlled by the FMS via variable inlet vanes.

         Exhaust fans shall have isolation dampers with end switches to be
hardwired to fan starter in order to prevent fan from operating when damper is
closed.

         Laboratory air handling unit and associated exhaust fans will be
interlocked via software within DIDC. The FMS will perform automated system
startup. Hardwire control interlocks are necessary for all safety devices
(freeze-thermostat, smoke detection, high static pressure, and damper end
switches).

         Note: The EMS shall provide sequential startup of systems for demand
control upon return of utility power after a power failure. The FMS will also
provide prioritized startup of systems designated to operate on emergency power.

         Control Devices:
<PAGE>

         ARCHITECTURAL
--------------------------------------------------------------------------------

         All temperature sensing for the HVAC systems will be accomplished using
either electronic RTD sensors with transmitters (critical areas) or thermistors
(non-critical areas).

         Duct-mounted electronic relative humidity sensors will be used to
control AHU discharge humidification. A pneumatic high limit safety will be
incorporated to prevent supersaturation of the air.

         Steam control valves at heat exchangers will be industrial quality.
Cooling coil, reheat and preheat valves will be commercial grade. Reheat control
valves applied to the laboratories, and office areas will be commercial grade.

         Flange type tow leakage dampers will be specified for all applications.

         A centralized compressed air system will be provided in the Mechanical
Equipment Room along with a central refrigerated drier system.

         Temperature Control Zones:

         The following spaces will receive individual thermostatic control:
         Laboratories, main conference room, mechanical equipment rooms, and any
         other spaces with equipment load equivalent of 5 watts per square foot
         or greater which may vary independently with time and usage.

         Offices shall be grouped wherever possible for optimizing quantity of
         individual thermostatic controlled rooms. Perimeter office and support
         areas will be grouped by orientation exposure under one thermostatic
         control zone for an area no greater than 750 sq. ft. Interior office
         and support areas will be grouped under one thermostatic control zone
         for an area not greater than 1,500 sq. ft. -

         Temperature/Air Quantity Setback: This will be provided for various
laboratory, conference and office areas identified in the design development
process.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.35
<SEQUENCE>16
<FILENAME>0016.txt
<DESCRIPTION>COLLABORATION AGREEMENT
<TEXT>

<PAGE>

                                                                   EXHIBIT 10.35


                               DISCOVERWORKS(TM)
                    DRUG DISCOVERY COLLABORATION AGREEMENT


THIS DISCOVERWORKS(TM) DRUG DISCOVERY COLLABORATION AGREEMENT is made as of July
7, 2000 by and between 3-Dimensional Pharmaceuticals, Inc., a Delaware
corporation having its principal place of business at Eagleview Corporate
Center, 665 Stockton Drive, Suite 104, Exton, PA 19341 ("3DP"), and Bristol-
Myers Squibb Company, a Delaware corporation having its principal place of
business at Route 206 & Province Line Road, P.O. Box 4000, Princeton, New Jersey
08543 ("BMS"). 3DP and BMS may be referred to herein as a "Party" or,
collectively, as the "Parties."

WHEREAS, 3DP is engaged in discovery research for a variety of biologically-
active compounds and the development of technologies to facilitate such
research, and 3DP has developed and is patenting systems for identifying and
generating chemical compounds having desired pharmaceutical properties;

WHEREAS, BMS is a major pharmaceutical company engaged in research, development
and commercialization of biologically-active compounds for the treatment of
human diseases;

WHEREAS, 3DP and BMS desire to enter into a research and development
collaboration to identify Initial Hits, Improved Hits, Program Lead Compounds
and Pre-Clinical Lead Compounds (as such terms are defined herein) active
against selected targets, and suitable, if required, for medicinal chemistry
optimization, that may be developed and commercialized by BMS;

NOW, THEREFORE, in consideration of the various promises and undertakings set
forth herein, the Parties agree as follows:

                                   ARTICLE 1

                                  DEFINITIONS

The terms in this Agreement with initial letters capitalized, whether used in
the singular or the plural, shall have the meaning set forth below or, if not
listed below, the meaning designated in places throughout this Agreement.

     1.1  "Active Compound" means a Program Lead Compound or a Pre-Clinical Lead
          Compound identified in the course of the Research Program, or a
          compound further optimized from such a Program Lead Compound or a Pre-
          Clinical Lead Compound.

     1.2  "Affiliate" means, with respect to either Party, any corporation or
          other business entity, which controls, is controlled by, or is under
          common control with such Party. A corporation or other entity shall be
          regarded as in control of another corporation or entity if it owns or
          directly or indirectly controls at least fifty percent (50%) of the
          voting stock or other ownership interest of the other corporation or
          entity (or alternatively, if it owns the maximum such ownership
          interest permitted by law), or if it possesses, directly or
          indirectly, the power to direct or cause the direction of the
          management and policies of the corporation or other entity or the
          power to elect

**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission. The omitted
    portions have been filed separately with the Commission.

<PAGE>

          or appoint at least fifty percent (50%) of the members of the
          governing body of the corporation or other entity.

     1.3  "Agreement" means this DiscoverWorks(TM) Drug Discovery Collaboration
          Agreement, including its Exhibits, as may be amended from time to
          time.

     1.4  "Back-up Compound" means a compound identified in the course of the
          Research Program which has activity against a Target in a Target
          Field, that is intended to be reserved as a back-up for an Active
          Compound or Licensed Product having activity against the same Target
          in the same Target Field, and is not intended to be developed or
          commercialized unless development and/or commercialization of such
          Active Compound or Licensed Product is terminated.

     1.5  "BMS" means Bristol-Myers Squibb Company, as identified above, and is
          understood to include its Affiliates, when appropriate.

     1.6  "Chemical Optimization" means the design, synthesis and identification
          of Improved Hits, Program Lead Compounds and Pre-Clinical Lead
          Compounds using DiscoverWorks Technology and other technologies
          selected by the JSMC.

     1.7  "Combination Product" means a Licensed Product that includes one or
          more active ingredients other than an Active Compound.

     1.8  "Confidential Information" means all technical and/or commercial
          information that has or could have value or utility in a Party's
          business, or the unauthorized disclosure of which could be detrimental
          to the Party's interests, including information, inventions, Know-how,
          data and materials relating to the Research Program or to the Licensed
          Products, and shall include, without limitation, research, technical,
          clinical development, manufacturing, marketing, financial, personnel
          and other business information and plans, whether in oral, written,
          graphic or electronic form, except to the extent that it can be
          established by the Receiving Party (as defined in Section 7.1) that
          such Confidential Information: (a) was already known to the Receiving
          Party, other than under an obligation of confidentiality from the
          Disclosing Party (as defined in Section 7.1); (b) was generally
          available to the public or otherwise part of the public domain at the
          time of its disclosure to the Receiving Party; (c) became generally
          available to the public or otherwise part of the public domain after
          its disclosure and other than through any act or omission of the
          Receiving Party in breach of this Agreement; (d) was subsequently
          lawfully disclosed to the Receiving Party by a Third Party; (e) can be
          shown by written records to have been independently developed by or
          for the Receiving Party without reference to the Confidential
          Information received from the Disclosing Party and without breach of
          any of the provisions of this Agreement; or (f) is information that
          the Disclosing Party has specifically agreed in writing that the
          Receiving Party may disclose.


** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       2
<PAGE>

     1.9   "Contract Year" means a twelve (12)-month period beginning upon the
           Effective Date or an anniversary thereof.

     1.10  "DirectedDiversity(R) Technology" means the descriptions, figures and
           claims of: (a) the Patent Rights identified in EXHIBIT A, and (b)
           associated proprietary 3DP Know-how used to identify potential
           therapeutic compounds.

     1.11  "DiscoverWorks Technology" means DirectedDiversity(R) Technology and
           ThermoFluor(R) Technology."

     1.12  "ECN" or "Early Candidate Nomination" means documentation within
           which an Active Compound is nominated for clinical development by BMS
           pursuant to technical criteria established by the JMSC upon selection
           of the Target against which such a compound is active, or as soon
           thereafter as practical, and pursuant to the then-applicable internal
           policies and procedures of BMS.

     1.13  "Effective Date" means the later of: (a) the date of this Agreement
           as set forth above; or (b) the date on which all of the following
           documents between the Parties have been executed: this Agreement, the
           GPCR License and User Agreement, the DiscoverWorks(TM) Nonexclusive
           License and Purchase Agreement, and the PERT Internal Use License and
           Option Agreement.

     1.14  "Extended Research Term" means a period of time, mutually agreed upon
           by the Parties, following conclusion of the Research Term (as defined
           below), or of an earlier Extended Research Term, during which the
           Research Program is conducted.

     1.15  "Field" means the research, development and commercialization of
           chemical compounds for use in therapeutic and diagnostic products,
           except for use in the treatment or cure of [**].

     1.16  "First Commercial Sale" means, with respect to a given Licensed
           Product, the first sale for use or consumption by the public of such
           Licensed Product in a country after all required approvals, including
           marketing and pricing approvals, have been granted by the applicable
           governmental drug regulatory agency of such country. "First
           Commercial Sale" shall not include the sale of any Licensed Product
           for use in clinical trials or for compassionate use prior to the
           grant of an NDA.

     1.17  "Focused Library" means a library of compounds selected from the 3DP
           Synthetically Accessible Library and synthesized by 3DP using
           DirectedDiversity(R) Technology.

     1.18  "FTE" means a full time equivalent scientific employee (i.e., one
           full-time or multiple part-time employees aggregating to one full-
           time employee) employed by 3DP and assigned to work on the Research
           Program (or on development of ThermoFluor(R) II Instruments under the
           License Agreement, where applicable) with such time and effort to
           constitute one employee working on

** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       3
<PAGE>

           the Research Program (or under the License Agreement, where
           applicable) on a full-time basis consistent with normal business and
           scientific practice (at least forty (40) hours per week of dedicated
           effort; on an annual basis, at least forty (40) hours per week of
           dedicated effort for at least forty-eight (48) weeks per year). In no
           event, does an FTE include a subcontractor.

     1.19  "Improved Hit" means a compound resulting from the Chemical
           Optimization of an Initial Hit that demonstrates improved
           pharmacological and/or physical properties compared to those of the
           corresponding Initial Hit, as determined and agreed upon by the JSMC.

     1.20  "IND" means an application to be filed with the applicable regulatory
           authority in a Major Country before the commencement of clinical
           trials. In the U.S., IND means an Investigational New Drug
           Application, or its equivalent, in the Food and Drug Administration
           or successor agency.

     1.21  "Initial Hit" means a compound in the 3DP Probe Library that [**],
           as measured using ThermoFluor(R) Technology.

     1.22  "Joint Steering and Management Committee" or "JSMC" shall have the
           meaning and roles ascribed to it in Article 4.

     1.23  "JRT" shall have the meaning ascribed to such term in Section 3.3.

     1.24  "Know-how" means unpatented technical and other information which is
           not in the public domain, including information comprising or
           relating to concepts, discoveries, inventions, data, designs,
           formulae, ideas, methods, models, assays, research plans, procedures,
           designs for experiments and tests and results of experimentation and
           testing (including results of research or development) processes
           (including manufacturing processes, specifications and techniques),
           laboratory records, chemical, pharmacological, toxicological,
           clinical, analytical and quality control data, trial data, case
           report forms, data analyses, reports or summaries and information
           contained in submissions to, and information from, ethical committees
           and regulatory authorities.

     1.25  "License Agreement" means the DiscoverWorks Nonexclusive License and
           Purchase Agreement entered into by the Parties and dated of even date
           herewith.

     1.26  "Licensed Product" means any commercial product containing an Active
           Compound as an active ingredient.

     1.27  "Major Country" means the United States, Japan, the United Kingdom,
           France, Germany, Italy or Spain.

     1.28  "NDA" means an application for the final approval required for
           authorization for marketing of a Licensed Product in a Major Country
           (including applicable regulatory, marketing and pricing

** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       4
<PAGE>

         approval), in accordance with the applicable laws and regulations of a
         given country. In the U.S., NDA means a New Drug Application, or its
         equivalent, in the Food and Drug Administration or successor agency.

   1.29  "Net Sales" means the aggregate gross invoiced price of Licensed
         Product sold in the Territory by BMS, its Affiliates and any licensees
         or sublicensees, to an independent Third Party, including but not
         limited to distributors, in bona fide, arms-length transactions, after
         deduction of the following items (to the extent actually incurred): (i)
         customary trade, quantity and cash discounts, wholesaler-charge backs,
         or rebates (including rebates to governmental agencies and government-
         mandated and managed healthcare negotiated rebates); (ii) customary
         credits or allowances for rejection or return of previously sold
         Licensed Products; (iii) any direct tax, duties, tariffs, surcharges or
         government charge (other than an income tax) levied on the sale,
         importation, exportation, transportation or delivery of a Licensed
         Product and borne by the seller thereof; (iv) retroactive price
         reductions; and (v) any charge for freight, insurance or other
         transportation charges, if separately stated. Such amounts shall be
         determined from the books and records of BMS, its Affiliates and any
         licensees or sublicensees, as the case may be, which books are
         maintained in accordance with the generally accepted accounting
         principles, consistently applied. Any sales for resale of Licensed
         Products by BMS, its Affiliates or any licensees or sublicensees to
         another Affiliate, licensee or sublicensee of BMS shall not result in
         any Net Sales. In such case, Net Sales shall occur upon such other
         Affiliate's, licensee's or sublicensee's sale of such Licensed Product
         to an independent Third Party. Further, the disposition of Licensed
         Products for, or the use of Licensed Products in, pre-clinical or
         clinical trials, seeding or other market-focused trials or free samples
         shall not result in any Net Sales.

         In the event that all the active ingredients of a Combination Product
         are also sold separately and in identical strengths to those contained
         in the Combination Product, then Net Sales shall be calculated as set
         forth above on the basis of the gross invoice price of a Licensed
         Product containing the same weight of Active Compound sold
         independently [ A ] divided by the sum of the gross invoice price of
         each of the active ingredients contained in the Combination Product
         sold independently [ B + A ], multiplied by the gross invoice price of
         the Combination Product, as shown by the following formula:

         Net Sales = [ A ]__ x [gross invoice price of the Combination Product]
                    ---------
                    [ B + A ]

         In the event that the Active Compound and/or any of the other active
         ingredients of a Combination Product are not sold separately in
         identical strengths to those contained in the Combination Product, then
         the Parties agree to negotiate in good faith the calculation of Net
         Sales with regard to such Combination Product based upon the relative
         value of the active ingredients as determined by the Parties hereto in
         good faith.

** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       5
<PAGE>

     1.30  "Patent Rights" means all U. S. patent applications or issued
           patents, including, but not limited to, provisionals, divisionals,
           continuations, continuations-in-part, reissues, reexaminations, and
           extensions derived therefrom, such as patent term restorations,
           supplementary protection certificates, etc., as well as all foreign
           patents (including PCTs) and foreign patent counterparts to the
           foregoing.

     1.31  "Pre-Clinical Lead Compound" means a further-optimized Program Lead
           Compound that is the subject of any ECN and that the JSMC determines
           possesses the pharmacological, toxicological, pharmacokinetic and
           pharmaceutical properties from preliminary studies that are
           indicative of a high probability for successful development, and that
           the JSMC recommends for evaluation as a potential clinical candidate.
           Pre-Clinical Lead Compounds will meet specific program objectives as
           determined and defined by the JSMC.

     1.32  "Program Lead Compound" means a compound that meets Target-specific
           criteria, as determined by the JSMC, indicating that the compound is
           suitable for optimization and has a high potential to lead to the
           identification of a Pre-Clinical Lead Compound.

     1.33  "Research Plan" means the detailed description of the research and
           development activities of the Parties for particular Targets in the
           performance of the Research Program, including an allocation of FTEs
           to be used for various tasks and a timeline for such tasks. A draft
           of the Research Plan is attached hereto as EXHIBIT C. The JSMC shall
           finalize the Research Plan for the first Contract Year within 30 days
           after the Effective Date. Thereafter, the Research Plan shall be
           updated by the JSMC in writing as changes are made to the Research
           Program on at least an annual basis.

     1.34  "Research Program" means the collaborative discovery and optimization
           activities of the Parties, as described in Article 2, that are
           intended to lead to the discovery of Initial Hits, Improved Hits,
           Program Lead Compounds and Pre-Clinical Lead Compounds.

     1.35  "Research Program Know-how" means Know-how conceived or developed
           during the conduct of the Research Program and relates to Improved
           Hits, Program Lead Compounds, Pre-Clinical Lead Compounds and/or
           Licensed Products.

     1.36  "Research Program Patent Rights" means those Patent Rights that claim
           discoveries or inventions that are conceived in the course of the
           Research Program and reduced to practice during either the term of
           the Research Program or a period of one-year following the
           termination of the Research Program, regardless of their ownership.

     1.37  "Research Term" means the period, from the Effective Date through the
           third anniversary thereof, during which the Research Program is
           conducted.

** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       6
<PAGE>

     1.38  "Stage I" means the research activities undertaken by the Parties
           pursuant to Article 2 as part of the Research Program.

     1.39  "Stage II" means the research activities undertaken by the Parties
           pursuant to Article 2 as part of the Research Program.

     1.40  "Stage III" means the research activities undertaken by the Parties
           pursuant to Article 2 as part of the Research Program.

     1.41  "Synthetically Accessible Library" means 3DP's virtual compound
           library from which 3DP Probe Libraries have been selected, and from
           which Focused Libraries will be selected.

     1.42  "Target" means a protein against which Initial Hits, Improved Hits,
           Program Lead Compounds and Pre-Clinical Lead Compounds are to be
           developed. Until March 7, 2003, Target shall not include the use of
           any proteins to discover or develop a drug that exerts a therapeutic
           effect in Hepatitis C infection, and no more than three Targets in
           total may involve antiviral Targets.

     1.43  "Target Field" with respect to each Target means the disease state(s)
           that are a focus of a collaborative research effort by the Parties
           pursuant to the Research Program with the objective of identifying
           compounds with potential diagnostic and/or therapeutic utility for
           the treatment/management of said disease state(s), as determined by
           the JSMC pursuant to Section 2.1. For example, a program focused on
           the discovery of a novel thrombin inhibitor would be within the
           Target Field of anticoagulants. Therefore, other protease inhibitors
           that are not anticoagulants would be outside the Target Field. For
           purposes of this definition, anti-infectives shall be considered a
           single Target Field.

     1.44  "Territory" means the entire world.

     1.45  "ThermoFluor(R) Technology" means (a) the Patent Rights identified in
           EXHIBIT B, and (b) associated proprietary 3DP Know-how used to
           evaluate ligand-binding parameters.

     1.46  "Third Party" means an individual, corporation or other entity other
           than a Party or any of its Affiliates.

     1.47  "3DP Probe Library" means 3DP's collection of approximately [**]
           small molecule chemical compounds that have been synthesized by 3DP
           for the purpose of screening new Targets and against which Targets
           are screened to identify Initial Hits.

     1.48  "Valid Claim" means a claim of a Patent Right that has not lapsed or
           become abandoned or been declared invalid or unenforceable by a court
           or agency of competent jurisdiction from which no appeal can be or
           has been taken.


** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       7
<PAGE>

                                   ARTICLE 2

                               RESEARCH PROGRAM

     STAGE I -- INITIAL SCREENING AND CHEMICAL OPTIMIZATION


     2.1  Supply of Targets. BMS shall supply 3DP with [**] Targets during each
          Contract Year. The actual number of Targets to be provided to 3DP
          under this Section shall be determined by the JSMC in connection with
          preparation of the Research Plan for such Contract Year. Such Targets
          shall be supplied in the form of [**]. During the [**] Contract Year
          of the Research Program all Targets must be derived from [**]. After
          the [**] Contract Year, Targets may be derived from any organism;
          however, any Targets may be disapproved by 3DP solely in order to
          avoid potential conflicts with respect to prior contractual
          obligations and current internal 3DP programs. In connection with the
          selection and approval of Targets to be included as part of the
          Research Program, the JSMC shall determine the Target Field relating
          to such Target.

     2.2  Initial Screening and Initial Hits. Depending on the nature and source
          of each Target, 3DP shall screen the Target against a screening
          library, created from the 3DP Probe Library, totaling no more than
          [**] compounds per Target that are selected by [**] to identify
          Initial Hits. The JSMC may ask 3DP to screen [**] from the 3DP Probe
          Library [**]. This additional screening, if any, shall be subject to
          the overall disposition of Research Program FTE resources as
          determined by the JSMC, and 3DP's screening capacity available to the
          Research Program.

     2.3  Initial Chemical Optimization. At the request of the JSMC, 3DP will
          initially undertake [**] Chemical Optimization of Initial Hits for any
          Target, synthesizing Focused Libraries containing up to [**] to be
          screened against the Target, in order to identify Improved Hits. 3DP
          will undertake additional rounds of Chemical Optimization of Initial
          Hits, as requested by the JSMC, following the first [**] Chemical
          Optimization, subject to the number of FTE's available under the
          Research Program and 3DP's capacity available to the Research Program.
          The precise number of such compounds in any such Focused Libraries,
          the number of rounds of Chemical Optimization and the extent of any
          additional screening of the 3DP Probe Libraries as described above in
          each Contract Year will be determined by the JSMC, taking into
          consideration the total number of Targets selected and approved by the
          JSMC for evaluation in Stage I of the Research Program.

     2.4  Site of Stage I Activities. All Research Program activities to be
          conducted in Stage I of the Research Program shall be performed at
          3DP.

     2.5  Additional Targets and Extended Term for Research Program. An increase
          in the number of Targets being screened by 3DP beyond [**] at any
          given time during the Research Program, or an extension of the
          Research Program beyond the initial three-year term may be requested
          by BMS. In the case of such additional Targets, where possible, the
          JSMC shall agree upon a reallocation of FTEs to be used under the
          Research Program. Otherwise, or in the case of an


** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       8
<PAGE>

          extension of the Research Term (as hereinafter defined), the Parties
          shall negotiate in good faith for sixty (60) days to reach agreement
          on a fair and equitable increase in the compensation to 3DP for such
          additional Targets or extended Research Term.

     STAGE II - PROGRAM LEAD COMPOUND IDENTIFICATION

     2.6  Commencement of Stage II. Stage II shall commence upon the achievement
          of a level of success in Stage I of the Research Program to be
          determined by the JSMC.

     2.7  Selection of Hits for Continued Optimization. The JSMC shall select
          some or all of the Improved Hits on a Target-by-Target basis for
          further rounds of Chemical Optimization in this Stage II of the
          Research Program. Such Chemical Optimization may utilize, by mutual
          agreement, DirectedDiversity(R) Technology and ThermoFluor(R)
          Technology, or a suitable biochemical or biological high throughput
          screen. Any portion of such optimization may be undertaken by either
          3DP or BMS, as determined by the JSMC.

     2.8  No Grant of License to DiscoverWorks Technology. Notwithstanding any
          provision to the contrary in this Agreement, no license to any portion
          of the DiscoverWorks Technology, including any related Know-how, is
          hereby granted by 3DP to BMS under this Agreement or otherwise, except
          as specifically provided for under the License Agreement.

     2.9  Site of Stage II Activities. The JSMC shall determine the site of
          Stage II activities.

     2.10 Continued Optimization at 3DP. If Stage II is conducted on any Initial
          Hit or Improved Hit at 3DP, 3DP will perform iterative rounds of
          Chemical Optimization, subject to the number of FTE's available under
          the Research Program and 3DP's capacity available to the Research
          Program and as otherwise directed by the JSMC, until:

          2.10.1  a Program Lead Compound is identified; or

          2.10.2  a maximum of [**] total rounds of Chemical Optimization are
                  performed (including the rounds of initial Chemical
                  Optimization in Stage I of the Research Program); or

          2.10.3  a maximum of [**] novel compounds contained in Focused
                  Libraries are synthesized and screened using ThermoFluor(R)
                  Technology or another high throughput screen in Stage II of
                  the Research Program from the Synthetically Accessible
                  Library.

     STAGE III - PRE-CLINICAL LEAD COMPOUND IDENTIFICATION

     2.11 Development by 3DP of Pre-Clinical Lead Compounds. For at least two
          Targets screened during the Research Term, BMS agrees that a Program
          Lead Compound may be further


** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       9
<PAGE>


          optimized by 3DP to produce a Pre-Clinical Lead Compound(s), to
          specifications and on a project timetable to be reasonably agreed upon
          by both 3DP and BMS. [**] of such Targets may be selected by 3DP for
          review and approval by the JSMC. Additional Targets shall be selected
          by BMS for review and approval by the JSMC. For such Program Lead
          Compounds to be further developed by 3DP, 3DP will be responsible for
          selection and synthesis of compounds or libraries, and BMS will be
          responsible for associated biological testing.


     2.12 BMS Support for Pre-Clinical Lead Compounds. BMS shall provide
          additional FTE support on a per Target basis, as determined by BMS, or
          the FTE's currently being supported by BMS at that time shall be
          reallocated, as determined by the JSMC, in order to allow for
          execution of appropriate work by 3DP for Stage III activities. The
          technical composition of this FTE team shall be determined by the
          JSMC, consistent with 3DP's FTE allocation to the Research Program.

                                   ARTICLE 3

                       RESEARCH AND DEVELOPMENT EFFORTS

     3.1  Research Efforts. Each Party shall use good faith commercially
          reasonable efforts to perform its responsibilities under this
          Agreement. As used herein, the term "commercially reasonable efforts"
          will mean efforts consistent with such Party's prudent scientific and
          business judgment in accordance with its internal practices as applied
          to other programs of similar scientific and commercial potential.

     3.2  Allocation and Support of FTEs. Throughout the term of the Research
          Program, including any extensions thereof, 3DP shall assign the number
          of FTE qualified scientists specified in the Research Plan to perform
          the work set forth in the Research Plan and BMS will provide funding
          to 3DP as set forth below during the term of the Research Program to
          support qualified FTEs at 3DP. Both Parties acknowledge and agree
          that, during the initial three-year term of the Research Program or
          such shorter period as provided in the License Agreement, [**] of the
          FTEs to be supported by BMS pursuant to Section 5.2 shall be
          designated by the JSMC to [**] which are being licensed by 3DP to BMS
          pursuant to the License Agreement. Other than the research funding
          provided by BMS to 3DP under Article 5, and except as otherwise
          specifically agreed in writing by 3DP and BMS, each Party shall be
          responsible for all costs and expenses it incurs in its performance of
          the Research Program.

     3.3  Disclosure of Results; Reports. The JSMC will provide quarterly
          written reports to the Parties presenting a meaningful summary of the
          work performed on the Research Program. In addition, on reasonable
          request by BMS, 3DP will make presentations of its activities under
          this Agreement to inform BMS of the details of the work done under
          this Agreement. Know-how and other information regarding the Research
          Program disclosed by one Party to the other Party pursuant hereto may
          be used only in accordance with the rights granted under this
          Agreement. Within thirty (30) days following the end of each calendar
          quarter, the Parties shall each exchange and provide to the JSMC a
          written report summarizing in reasonable detail the work performed by
          it under the Research Program during the preceding calendar quarter.
          The JSMC shall direct the formation of a Joint Research Team ("JRT")
          with equal membership from 3DP and BMS. The JRT shall be responsible
          for the day-to-day scientific direction of the Research


** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       10
<PAGE>

          Program. The JRT shall meet at least monthly and shall establish
          appropriate electronic communication links for data transfer and team
          discussions. The JRT shall submit monthly reports to the JSMC.

     3.4  Insurance. Prior to the performance of any services under this
          Agreement by 3DP, 3DP, at its own cost and expense, shall provide and
          maintain insurance as described below with insurers rated A-, Class X
          or better by A.M. Best Company: Commercial General Liability insurance
          on an occurrence basis with a minimum limit for bodily injury,
          property damage and personal injury of $2,000,000 per occurrence and
          an aggregate amount of $5,000,000. Prior to the performance of any
          services under this Agreement by 3DP, 3DP shall deliver to BMS
          certificates of insurance evidencing the above coverage. BMS shall
          maintain appropriate insurance with respect to its activities
          hereunder, in amounts customary in the pharmaceutical industry.

     3.5  Continuing Report Responsibility. For each compound identified as [**]
          for as long as such compound remains in one of these categories under
          the control of BMS or an Affiliate or sublicensee thereof, and for so
          long as it is subject to the provisions of Section 5.6, Section 5.7 or
          Section 5.8, BMS shall, on a quarterly basis, provide a summary report
          of its activities, and/or those of its Affiliates and sublicensees,
          toward the development, use and/or commercialization of such compound.
          If appropriate, BMS shall also report that [**] under the Research
          Program, and subject to the provisions of this Agreement, which is
          actually being developed and/or commercialized by BMS and/or its
          Affiliates and/or sublicensees. BMS will provide timely notice, in
          good faith, of its [**] and/or its Affiliates' and sublicensees'
          activities toward the development, use and/or commercialization of
          [**] as well as the [**] under the Research Program that is [**] in
          lieu of such [**].


     3.6  Material Transfer. In order to facilitate the Research Program, either
          Party (a "Supplying Party") may provide to the other Party (a
          "Receiving Party") certain biological materials or chemical compounds
          (collectively, the "Substances") owned by or licensed to the Supplying
          Party (other than under this Agreement) and available for use by that
          Supplying Party in furtherance of the Research Program. Except as
          otherwise provided under this Agreement, all Substances delivered to
          the Receiving Party shall remain the sole property of the Supplying
          Party, shall be used only in furtherance of the Research Program and
          solely under the control of the Receiving Party, shall not be used or
          delivered to or for the benefit of any Third Party without the prior
          written consent of the Supplying Party and shall not be used in
          research or testing involving human subjects. Because not all of their
          characteristics may be known, the Substances supplied under this
          Section 3.6 must be used with prudence and appropriate caution in any
          experimental work. THE SUBSTANCES ARE PROVIDED "AS IS" AND WITHOUT ANY
          REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT
          LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR
          ANY PARTICULAR PURPOSE OR ANY WARRANTY THAT THE USE OF THE SUBSTANCES
          WILL NOT INFRINGE OR VIOLATE ANY PATENT OR OTHER PROPRIETARY RIGHTS OF
          ANY THIRD PARTY.

     3.7  Liability. Each Party shall be responsible for, and hereby assumes,
          any and all risks of personal injury or property damage attributable
          to the gross negligent or willful acts or omissions, during


** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       11
<PAGE>

          the term of the Research Program, of that Party or its Affiliates, and
          their respective directors, officers, employees and agents.

                                   ARTICLE 4

                          RESEARCH PROGRAM GOVERNANCE

     4.1  Joint Steering and Management Committee. 3DP and BMS agree to
          establish a Joint Steering and Management Committee (the "JSMC"), and
          shall each designate three members selected by their respective R&D
          management to form the JSMC. The chairperson of the JSMC shall be
          designated annually on an alternating basis between the Parties. The
          initial chairperson shall be selected by BMS. The Party not
          designating the chairperson shall designate one of its representative
          members as secretary to the JSMC for such year. Each Party may replace
          its representatives at any time, upon notice to the other Party. Any
          member of the JSMC may designate a substitute to attend and perform
          the functions of that member at any meeting of the JSMC. Each Party
          may, in its discretion, invite non-member representatives of such
          Party to attend meetings of the JSMC.

     4.2  Responsibilities of the JSMC.  The JSMC shall be responsible for:

          4.2.1  Adopting, reviewing and amending the Research Plan to implement
                 the Research Program;

          4.2.2  Establishing the JRT;

          4.2.3  Monitoring the progress of research in the Research Program;

          4.2.4  Reviewing and approving initial Targets and any subsequent
                 Target selection, and defining the Target Field for each such
                 Target;

          4.2.5  Selecting of the technical criteria for nomination of a
                 compound for ECN upon adoption of a Target for the Research
                 Program, or as soon thereafter as practical;

          4.2.6  Directing the Chemical Optimization efforts;

          4.2.7  Agreeing on and adopting criteria for the designation of
                 Initial Hits, Improved Hits, Program Lead Compounds and Pre-
                 Clinical Lead Compounds;

          4.2.8  Selecting Improved Hits to be advanced to Stage II;

          4.2.9  Selecting Program Lead Compounds to be advanced for biological
                 testing; and

** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       12
<PAGE>

          4.2.10  Reviewing and approving publications and other public
                  disclosures related to the subject matter of the Research
                  Program.

     4.3  JSMC Meetings. During the Research Term, the JSMC shall meet in person
          or by teleconference on a calendar quarter basis (provided that at
          least two meetings per year shall be in person) or more frequently as
          necessary and as may be agreed upon, with each Party bearing all
          travel and related costs for its representatives. Thereafter, the JSMC
          shall meet on an ad hoc basis as needed to perform the
          responsibilities designated to the JSMC. In addition to periodic
          meetings, the members of the JSMC shall communicate regularly by
          electronic mail or facsimile, as deemed necessary or appropriate.
          Minutes of the meetings of the JSMC will be generated and circulated
          to its members within two weeks following the JSMC meeting

     4.4  JSMC Decision-Making Process. Each Party shall have one vote in all
          matters decided by the JSMC, and decisions by the JSMC shall be made
          by consensus. The Parties shall attempt to resolve any disagreement
          among members of the JSMC within the JSMC based on the efficient
          achievement of the objectives of this Agreement. Any disagreement that
          cannot be resolved by a majority vote of the JSMC shall be referred to
          the Chief Executive Officer of 3DP or a comparable position selected
          by 3DP from time to time, and the Senior Vice President of Early
          Discovery and Applied Technology for BMS, or a comparable position
          selected by BMS from time to time, for resolution as set forth below.
          It is the intent of the Parties to resolve issues through the JSMC
          whenever possible and to refer issues to the specified officers of 3DP
          and BMS only when resolution through the JSMC cannot be achieved. In
          the event that the specified officers of 3DP and BMS cannot reach
          agreement within fifteen (15) days after a matter is referred to them
          for resolution, then the specified officer of BMS shall make the
          decision; provided, however, with respect to matters governed by
          Section 4.5 of this Agreement, in the event that the specified
          officers of 3DP and BMS cannot reach agreement within fifteen (15)
          days after a matter is referred to them for resolution, the parties
          will enter into dispute resolution in accordance with Article 13 of
          this Agreement (it being agreed that the more formal dispute
          resolution required pursuant to Article 13 will be followed even
          though the personnel on the dispute resolution panel may be the same
          personnel required to make decisions under this Section 4.4).

     4.5  Allocation of FTEs to Screening and Development. In furtherance of the
          provisions of Article 2, the Parties acknowledge and agree that the
          JSMC's allocation of FTEs under the Research Program will change from
          time to time to meet the needs of the Research Program and will
          depend, in part, upon the Research Program's success in finding Pre-
          Clinical Lead Compounds and the timing of such success. It is the
          intent of the Parties to allocate the work being performed by the FTEs
          to allow for the performance of all Stages of the Research Program in
          a manner that is equitable to both Parties. Subject to the foregoing,
          the Parties agree that to the extent feasible and desired by 3DP, up
          to [**] of the Targets screened during the initial Research


** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       13
<PAGE>

          Term that lead to Program Lead Compounds may be further optimized by
          3DP to produce a Pre-Clinical Lead Compound.

     4.6  Minutes of Meetings. Within two (2) weeks after each JSMC meeting, the
          secretary of the JSMC shall prepare and distribute minutes of the
          meeting, which shall provide a description in reasonable detail of the
          discussions had at the meeting and a list of any actions, decisions or
          determinations approved by the JSMC. The secretary shall be
          responsible for circulation of all draft and final minutes. Draft
          minutes shall be first circulated to the chairperson, edited by the
          chairperson and then circulated in final draft form to all members of
          the JSMC sufficiently in advance of the next meeting to allow adequate
          review and comment prior to the meeting. Minutes shall be approved or
          disapproved, and revised as necessary, at the next meeting Final
          minutes shall be distributed to the members of the JSMC.

     4.7  Management of Matters Outside the Jurisdiction of the JSMC. Matters
          outside the scope of the Research Program and internal to each Party
          are not under the purview of the JSMC. Such matters include, but are
          not limited to the following: internal personnel policies and
          programs; budgeting, finance, commercial and marketing strategies; and
          business decisions. However, the Parties agree to communicate with
          each other promptly on those matters which, while outside the scope of
          the Research Program, nevertheless may reasonably be expected to
          influence the conduct or term of the Research Program or the intended
          commercialization of any Pre-Clinical Lead Compound(s).

                                   ARTICLE 5

                                FINANCIAL TERMS

     5.1  Technology Access Fee. BMS agrees to pay a nonrefundable technology
          access fee of [**] within thirty (30) days after the Effective Date.

     5.2  FTE Reimbursement Fees.

          5.2.1  BMS agrees to pay 3DP in advance, on a calendar quarterly basis
                 for the staff allocated by 3DP for the services to be provided
                 under this Agreement. Such research funding shall be payable by
                 BMS to 3DP in four quarterly installments during the term of
                 the Research Program within 30 days of the start of the
                 calendar quarter. Any payment for a portion of a quarterly
                 period shall be made on a pro rata basis.

          5.2.2  During the first six (6) months of the Research Term, BMS shall
                 pay 3DP for [**] FTEs. During the second six months of the
                 Research Term, BMS shall pay 3DP for [**] FTEs. During each of
                 the second and third years of the Term, BMS shall pay 3DP for
                 [**] FTEs. These services will be compensated by BMS at a rate
                 of [**] per FTE per year.


**Certain portions of this Exhibit have been omitted upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       14
<PAGE>

     5.3  Costs. Except as provided in this Section 5.3, or as may be agreed
          from time to time by the Parties in writing, 3DP and BMS will each
          bear all of its own expenses incurred in connection with the Research
          Program. Notwithstanding the foregoing, depending on the total number
          of Targets designated and the number of FTEs reasonably necessary to
          meet the objectives of this Agreement, BMS and 3DP shall negotiate in
          good faith with respect to the payment by BMS of additional
          compensation to 3DP in a form to be agreed upon by the Parties, such
          as a lump sum payment or quarterly support payments by BMS for
          additional FTEs at 3DP; provided that BMS shall not be obligated to
          fund any additional FTEs without BMS's prior written consent.

     5.4  Extended Term Fees. The level of reimbursement for FTEs in any
          Extended Research Term shall be negotiated in good faith by the
          Parties.

     5.5  Fees for Early Termination of the Research Program. If BMS terminates
          the Research Program without cause, pursuant to the provisions of
          Section 10.3, prior to the end of the Research Term, or prior to the
          end of any Extended Research Term, BMS agrees to pay to 3DP the
          balance of any financial support otherwise due for the initial
          Research Term, or fifty percent (50%) of the balance of any financial
          support otherwise due for the current Extended Research Term, as the
          case may be.

     5.6  Milestone Payments for Pre-Clinical Lead Compounds Developed by BMS
          from Improved Hits Discovered by 3DP and Further Developed by BMS. BMS
          shall pay 3DP the following milestones and royalty rate, in lieu of
          those provided in Section 5.7 or Section 5.8, on any Pre-Clinical Lead
          Compound developed by BMS from an Improved Hit discovered by 3DP and
          thereafter developed by BMS:

          5.6.1  Upon selection of such Pre-clinical Lead Compound (including
                 being the subject of an ECN), [**];

          5.6.2  Upon submission of an IND, [**];

          5.6.3  Upon commencement of Phase III clinical trials, [**];

          5.6.4  Upon filing of a NDA, [**]; and

          5.6.5  A royalty rate of [**] of Net Sales.

     5.7  Milestone Payments for Pre-Clinical Lead Compounds Developed by BMS
          from Program Lead Compounds Discovered by 3DP. BMS shall pay 3DP the
          following milestones and royalty rate, in lieu of those provided in
          Section 5.6 or 5.8, on any Pre-Clinical Lead Compound developed by BMS
          from a Program Lead Compound identified by 3DP:


**Certain portions of this Exhibit have been omitted upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       15
<PAGE>

          5.7.1  Upon selection of such Pre-clinical Lead Compound (including
                 being the subject of an ECN), [**];

          5.7.2  Upon submission of an IND, [**];

          5.7.3  Upon commencement of Phase III clinical trials, [**];

          5.7.4  Upon filing of a NDA, [**]; and

          5.7.5  A royalty rate of [**] of Net Sales.

     5.8  Milestone Payments for Pre-Clinical Lead Compounds Developed by 3DP.
          BMS shall pay 3DP the following milestones and royalty rate, in lieu
          of those provided in Section 5.6 and 5.7 on any Pre-Clinical Lead
          Compound developed by 3DP:

          5.8.1  Upon selection of such Pre-Clinical Lead Compound, [**] for the
                 first compound selected for activity against a specific Target,
                 and [**] for each subsequent compound selected for activity
                 against the same Target;

          5.8.2  Upon submission of an IND, [**] for the first compound selected
                 for activity against a specific Target, and [**] for each
                 subsequent compound selected for activity against the same
                 Target;

          5.8.3  Upon commencement of Phase III clinical trials, [**] for the
                 first compound selected for activity against a specific Target,
                 and [**] for each subsequent compound selected for activity
                 against the same Target;

          5.8.4  Upon filing of an NDA, [**] for the first compound selected for
                 activity against a specific Target, and [**] for each
                 subsequent compound selected for activity against the same
                 Target; and

          5.8.5  A royalty rate of [**] of Net Sales on annual Net Sales up to
                 and including [**] and [**] of Net Sales on annual Net Sales in
                 excess of [**].

     5.9  Milestone Payment Credit. In the event that any milestone payment is
          made pursuant to Sections 5.6, 5.7 or 5.8 with respect to a Pre-
          Clinical Lead Compound selected for development (an "Original
          Compound"), where, after the payment of any such milestones, such
          development terminates and, at any time after such termination, a
          Back-up Compound is selected for development (a "Replacement
          Compound"), then BMS shall be entitled to a credit against milestone
          payments due with respect to the Replacement Compound, in the amount
          equal to all


**Certain portions of this Exhibit have been omitted upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       16
<PAGE>

          milestone payments actually paid with respect to the Original Compound
          prior to termination of development of such Original Compound.

     5.10 Royalty Reduction in the Absence of Patent Protection. The royalty
          amounts set forth above shall be reduced by [**] on a country-by-
          country basis at any such time that there are no Patent Rights
          containing a Valid Claim with respect to the Active Compound which is
          an ingredient of such Licensed Product in such country.

     5.11 Royalty Period. The royalty payments set forth above shall be payable
          for each Licensed Product on a product-by-product and country-by-
          country basis from the time of First Commercial Sale of Licensed
          Product in such country until the later of: (a) ten (10) years from
          the time of First Commercial Sale of Licensed Product in such country;
          or (b) until the last-to-expire or -lapse of Patent Rights containing
          a Valid Claim with respect to the Active Compound which is an
          ingredient of such Licensed Product in such country.

     5.12 Royalty Conditions. The royalties under this Article 5 shall be
          subject to the following conditions:

          5.12.1  Only one royalty shall be due with respect to the same unit of
                  Licensed Product; and

          5.12.2  No royalties shall be due upon the sale or other transfer
                  among BMS, its Affiliates or licensees, but in such cases the
                  royalty shall be due and calculated upon BMS's or its
                  Affiliate's or licensee's Net Sales of Licensed Product to the
                  first independent Third Party.

     5.13 Third Party Patent Rights. In the event that during the term of the
          royalty obligation for a Licensed Product under this Article 5, a
          Third Party shall control an issued patent or patents in any country
          covering the sale of a Licensed Product, and in the reasonable
          judgment of BMS, it would be impractical or impossible for BMS (or its
          Affiliates or licensees or sublicensees) to continue to sell the
          Licensed Product without obtaining a royalty bearing license from such
          Third Party, then, after giving 3DP notice and a reasonable
          opportunity to comment thereon, and after taking due consideration of
          3DP's comments, BMS shall be entitled to a credit against the
          royalties due hereunder with respect to such country in an amount
          equal to [**] of the royalty paid to such Third Party, said credit not
          to exceed [**] of the royalty otherwise due under this Agreement,
          arising from the sale of the Licensed Product in said country.
          However, the foregoing royalty credit shall only be available when the
          total royalty obligation owed by BMS (or its Affiliates or licensees
          or sublicensees) to unaffiliated third parties exceeds [**] of Net
          Sales of Licensed Product.

     5.14 Mode of Payment.  All payments to 3DP hereunder shall be made by wire
          transfer of United States Dollars in the requisite amount to such bank
          account as 3DP may from time to time

**Certain portions of this Exhibit have been omitted upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       17
<PAGE>

          designate by notice to BMS. Milestone payments shall be made within
          sixty (60) days of occurrence of the relevant milestone event and
          royalty payments for a given calendar quarter shall be made within
          sixty (60) days following the end of the calendar quarter. Payments
          shall be free and clear of any taxes (other than withholding and other
          taxes imposed on 3DP), fees or charges, to the extent applicable. For
          purposes of computing royalty payments for Net Sales made outside of
          the United States, such royalties shall be converted into U.S.
          Dollars, by applying the rate of exchange as used by BMS's global
          accounting system which reflects the average exchange rate for the
          applicable payment period.

     5.15 Records Retention. With respect to any products for which royalties
          are due pursuant to this Agreement, BMS and its Affiliates and any
          licensees or sublicensees shall keep records, for two years, of such
          Net Sales in sufficient detail to confirm the accuracy of the royalty
          calculations hereunder. At the request of 3DP, BMS shall permit an
          independent certified accountant of nationally recognized standing
          appointed by 3DP and reasonably acceptable to BMS, at reasonable times
          and upon reasonable notice, to examine these records solely to the
          extent necessary to verify such calculations. Such investigation shall
          be at the expense of 3DP unless it reveals a discrepancy in BMS's
          favor of more than ten percent, in which event it shall be at BMS's
          expense.

     5.16 Taxes. The Party receiving royalties and other payments under this
          Agreement shall pay any and all taxes levied on account of such
          payment. If any taxes are required to be withheld by the paying Party,
          it shall: (a) deduct such taxes from the remitting payment, (b) pay
          the taxes, in a timely manner, to the proper taxing authority, and (c)
          send proof of payment to the other Party and certify its receipt by
          the taxing authority within sixty (60) days following such payment.

                                   ARTICLE 6

                      OWNERSHIP; GRANT OF LICENSE RIGHTS

     6.1  Ownership of Libraries.

          6.1.1  3DP shall retain its ownership rights in the 3DP Probe Library
                 and the Synthetically Accessible Library and shall have
                 ownership rights as to BMS in any Focused Library developed by
                 3DP pursuant to this Agreement.

          6.1.2  Notwithstanding the provisions of Section 6.1.1, all Focused
                 Library compounds shall be available to the Parties for
                 research and development activities contemplated by the
                 Research Program in the Field during the term of the Research
                 Program.


           6.1.3 In the event that [**] based on [**] as part of the Research
                 Program, BMS shall have [**] and shall have [**] in such
                 compounds; however, BMS shall not [**] against the [**]
                 pursuant to this Agreement.

**Certain portions of this Exhibit have been omitted upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       18
<PAGE>


     6.2  Ownership of Targets. BMS shall retain any proprietary rights BMS may
          have in any Targets BMS provides to 3DP pursuant to this agreement
          until [**] and 3DP shall have a right to use such Targets solely for
          the purpose of performing its obligations under the Research Program
          pursuant to the terms of this Agreement.

     6.3  Ownership of Initial Hits. 3DP shall retain any proprietary rights,
          title and interest in and appurtenant to the Initial Hits that it may
          have had; however, [**]. In order for the activities in Section 2.3
          to be undertaken, the JSMC may review data produced in the course of
          the Research Program associated with such Initial Hits.

     6.4  Ownership of Improved Hits. 3DP shall retain any proprietary rights,
          title and interest in and appurtenant to the Improved Hits that it may
          have had provided, however, BMS shall have an exclusive, worldwide
          license, as to 3DP with the right to sublicense, to develop, make,
          have made, use, and commercialize Improved Hits against the specified
          Target of such Improved Hits. Such license and any sublicenses
          thereunder, shall terminate, and 3DP shall regain its original rights,
          when BMS ceases developing or commercializing any Improved Hit,
          Program Lead Compound or Pre-Clinical Lead Compound against its
          Target.

     6.5  Ownership of Program Lead Compounds and Pre-Clinical Lead Compounds.
          All right, title and interest in and appurtenant to each Program Lead
          Compound and each Pre-Clinical Lead Compound shall be owned, as to
          3DP, by BMS; provided, however, that if a Program Lead Compound or a
          Pre-Clinical Lead Compound, as the case may be, is developed to its
          respective status by 3DP, then 3DP shall have ownership rights as to
          BMS, to such Program Lead Compound or such Pre-Clinical Lead Compound,
          and BMS shall have an exclusive, worldwide license, as to 3DP, with
          right to sublicense (subject to the provisions of Section 6.6.), to
          develop, make, have made, use, and commercialize such Program Lead
          Compound or such Pre-Clinical Lead Compound.

     6.6  Development of Compounds Not Selected for Stage II or for Stage III.
          In the event that [**] to negotiate in good faith with [**] on a
          Target-by-Target basis, [**] against the applicable Target, and
          commercialize such compound, including confidentiality,
          indemnification, diligence requirements, and [**] in connection with
          such rights, upon commercialization of a product containing such a
          compound.


     6.7  License to BMS under Patent Rights and Know-how. Subject to the other
          provisions of this Agreement, 3DP hereby grants to BMS such rights
          that it has to grant a worldwide, exclusive license, with right to
          sublicense, to develop, make, have made, use, sell, offer for sale,
          have sold, import and have imported Licensed Products, under any
          Patent Rights owned by 3DP that would otherwise be infringed by BMS
          but for this license, including Research Program Patent Rights, and
          under the Know-how developed by 3DP relating to the Licensed Products,
          including the Research Program Know-how.

     6.8  Rights of 3DP to Focused Library Compounds after Termination of the
          Research Program. After a period of [**] following termination of the
          Research Program, 3DP shall have the unencumbered right, as to BMS, to
          evaluate and/or develop compounds in any Focused Library that are not
          being developed by either Party pursuant to this Agreement. However,
          during the term of this Agreement as provided in Article 10, 3DP shall
          not have the right to evaluate and/or develop compounds in any Focused
          Library against any Target in respect of which BMS is developing,
          manufacturing or selling a Licensed Product under this Agreement.

                                   ARTICLE 7

                           CONFIDENTIAL INFORMATION

     7.1  Confidentiality Obligations. The Parties agree that, for the term of
          this Agreement and for ten (10) years thereafter, either Party (a
          "Receiving Party") that receives Confidential Information from the
          other Party (a "Disclosing Party") shall keep, and shall endeavor to
          ensure that its officers, directors and employees keep, confidential
          and shall not publish or otherwise disclose and shall not use for any
          purpose (except as expressly permitted hereunder) any Confidential
          Information furnished to it by its Disclosing Party pursuant to this
          Agreement (including without limitation, Know-how). The obligations of
          confidentiality and non-use set forth in this Section 7.1 shall also
          apply to biological material and chemical compounds and associated
          information (including, without limitation, Know-how) disclosed by one
          Party to the other prior to or during the Term; provided however, that
          such obligation of confidentiality and non-use shall not apply


**Certain portions of this Exhibit have been omitted upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       19
<PAGE>

          to BMS with respect to compounds that are assigned to BMS or
          exclusively licensed to BMS by 3DP.

     7.2  Written Assurances and Permitted Uses of Confidential Information.

          7.2.1  Each Party shall inform its employees and consultants who
                 perform substantial work on the Research Program, of the
                 obligations of confidentiality specified in Section 7.1 and all
                 such persons shall be bound by the terms of confidentiality set
                 forth therein.

          7.2.2  The Receiving Party may disclose the Disclosing Party's
                 Confidential Information to the extent the Receiving Party is
                 compelled to disclose such information by a judicial or
                 administrative authority of competent jurisdiction, including
                 but not limited to submitting information to tax authorities or
                 to comply with any discovery or similar request for production
                 of documents in litigation or similar alternative dispute
                 resolution proceedings, provided however, that in such case the
                 Receiving Party shall give notice, in a timely fashion, to the
                 Disclosing Party so that the Disclosing Party may seek a
                 protective order or other remedy from said authority. In any
                 event, the Receiving Party shall disclose only that portion of
                 the Confidential Information that, in the opinion of its legal
                 counsel, is legally required to be disclosed and will exercise
                 reasonable efforts to ensure that any such information so
                 disclosed will be accorded confidential treatment by said court
                 or tribunal.

          7.2.3  To the extent it is reasonably necessary or appropriate to
                 fulfill its obligations and exercising its rights under this
                 Agreement, either Party may disclose Confidential Information
                 to its Affiliates on a need-to-know basis on condition that
                 such Affiliates agree to keep the Confidential Information
                 confidential for the same time periods and to the same extent
                 as such Party is required to keep the Confidential Information
                 confidential under this Agreement.

          7.2.4  To the extent that it is reasonably necessary or appropriate to
                 fulfill its obligations, either Party may disclose Confidential
                 Information to the U.S. Patent and Trademark Office, the
                 foreign counterparts thereof, in order to comply with the rules
                 governing disclosure of material information during patent
                 examination.

          7.2.5  The existence and the terms and conditions of this Agreement
                 which the Parties have not specifically agreed to disclose
                 pursuant to this Section 7.2 shall be treated by each Party as
                 Confidential Information of the other Party.

     7.3  Permitted Disclosures for Business Development Purposes.
          Notwithstanding the foregoing, or any other provision in this
          Agreement to the contrary, 3DP may describe the financial terms of
          this Agreement in confidence, in connection with capital raising or
          financing activities; provided


**Certain portions of this Exhibit have been omitted upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       20
<PAGE>

          however, that any such recipient of such Confidential Information
          shall agree in writing to keep such terms confidential for the same
          time periods and to the same extent as 3DP is required to keep
          Confidential Information confidential under this Agreement.
          Furthermore, BMS acknowledges that 3DP may be obligated to disclose
          terms of this Agreement and make public a copy of this Agreement in
          the event it files a registration statement with respect to its shares
          or it becomes a public company as required by applicable U.S. law;
          provided however, that the terms and this Agreement and the copy
          submitted to the applicable governmental agency shall be redacted such
          that the extent of any such disclosure shall be limited to that which
          in the opinion of 3DP's legal counsel is legally required to be
          disclosed.

     7.4  Notification. Both Parties recognize that each may wish to publish the
          results of their work relating to the Research Program. However, both
          Parties also recognize the importance of acquiring patent protection
          on Licensed Products. Consequently, neither Party shall make any
          publication relating to any Licensed Product until Phase II clinical
          trials with respect to such Licensed Product have commenced and,
          thereafter, any proposed publication by either Party shall comply with
          this Article 7. At least sixty (60) days before a manuscript is to be
          submitted to a publisher, the publishing Party will provide the JSMC
          with a copy of the manuscript. If the publishing Party wishes to make
          an oral presentation, it will provide the JSMC with a copy of the
          abstract (if one is submitted) at least sixty (60) days before it is
          to be submitted. The publishing Party will also provide to the JSMC a
          copy of the text of the presentation, including all slides, posters
          and any other visual aids, at least sixty (60) days before the
          presentation is made.

     7.5  Review of Proposed Publications. The JSMC will review the manuscript,
          abstract, text or any other material provided under Section 7.4 to
          determine if patentable subject matter is disclosed. The JSMC will
          notify the publishing Party within thirty (30) days of receipt of the
          proposed publication if the JSMC determines that patentable subject
          matter is or may be disclosed, or if the JSMC believes Confidential
          Information or proprietary information is or may be disclosed. If it
          is determined by the JSMC that patent applications should be filed,
          the publishing Party shall delay its publication or presentation for a
          period not to exceed 90 days from the JSMC's receipt of the proposed
          publication to allow time for the filing of patent applications
          covering patentable subject matter. In the event that the delay needed
          to complete the filing of any necessary patent application will exceed
          the ninety (90)-day period, the Parties will discuss the need for
          obtaining an extension of the publication delay beyond the ninety
          (90)-day period. If it is determined by the JSMC that confidential or
          proprietary information is being disclosed, the JSMC will consult to
          arrive at an agreement on mutually acceptable modifications to the
          proposed publication to avoid such disclosure. The publishing Party of
          any manuscript, text or oral presentation will acknowledge the other
          Party for its contribution to the material being published or
          presented and to the Research Program.


**Certain portions of this Exhibit have been omitted upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       21
<PAGE>

                                   ARTICLE 8

                    PATENT RIGHTS AND INTELLECTUAL PROPERTY

     8.1  Title to Patent Rights. Subject to the other provisions of this
          Agreement, and any independent rights in others, the ownership of
          Research Program Patent Rights shall be determined in accordance with
          the principles of inventorship and ownership as prescribed by U.S.
          patent law. Thus, the Parties contemplate that Research Program Patent
          Rights may be jointly owned by both Parties or owned solely by one
          Party.

     8.2  Filing of Patent Applications and Expenses.

          8.2.1  BMS has the right but not the obligation to pursue and maintain
                 Research Program Patent Rights that claim Licensed Products at
                 its own cost.

          8.2.2  Where there is co-ownership of such Research Program Patent
                 Rights, BMS shall regularly provide 3DP with copies of all
                 patent office filings and other material submissions and
                 correspondence with various patent offices, in sufficient time
                 to allow for review and comment.

     8.3  Enforcement of Issued Patent Rights. If either Party considers that a
          Valid Claim of any of the issued Research Program Patent Rights
          claiming the manufacture, use or sale of Licensed Products is being
          infringed by a Third Party, it shall notify the other Party and
          provide it with any evidence of such infringement which is reasonably
          available. BMS shall have the right but not the obligation, at its own
          expense, to attempt to remove such infringement by commercially
          appropriate steps, including a lawsuit. If required by law, 3DP shall
          join such suit as a Party, at BMS's expense. In the event BMS fails to
          take commercially appropriate steps with respect to such infringement
          within six (6) months following notice of such infringement, 3DP shall
          have the right to do so at its expense, provided that BMS shall not be
          required to enforce such Research Program Patent Rights against more
          than one entity or in more than one country at any one time.

     8.4  Recovery of Damages. Any amounts recovered by BMS pursuant to Section
          8.3, whether by settlement or judgment shall be reported as Net Sales
          for the purpose of calculating any applicable royalties to 3DP, after
          deduction of BMS's reasonable expenses in making such recovery. If 3DP
          enforces such Research Program Patent Rights pursuant to the
          provisions of Section 8.3, then 3DP shall retain any amounts recovered
          thereby.

     8.5  Assistance. The Party not enforcing the Research Program Patent Rights
          pursuant to Section 8.3, shall provide reasonable assistance to the
          other Party, including providing access to relevant

**Certain portions of this Exhibit have been omitted upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       22
<PAGE>

          documents and other evidence and making its employees available,
          subject to the enforcing Party's reimbursement of any out-of-pocket
          expenses incurred by the other Party.

     8.6  Third Party Patent Rights. If any warning letter or other notice of
          infringement is received by a Party, or action, suit or proceeding is
          brought against a Party alleging infringement of a patent of any Third
          Party in the manufacture, use or sale of a Licensed Product or in the
          conduct of the Research Program, the Parties shall promptly discuss
          and decide the best way to respond.

                                   ARTICLE 9

                                INDEMNIFICATION

     9.1  Indemnification by BMS. BMS shall indemnify, defend and hold 3DP and
          its agents, employees and directors (the "3DP Indemnitees") harmless
          from and against any and all liability, damage, loss, cost or expense
          (including reasonable attorneys' fees) arising out of Third Party
          claims or lawsuits related to (a) BMS's performance of its obligations
          under this Agreement; or (b) product liability for bodily injury
          and/or property damage related to BMS's development activities with
          compounds identified under the Research Program and/or with Licensed
          Products; or (c) the manufacture, use or sale of Licensed Products by
          BMS and its Affiliates, sublicensees, distributors and agents, except
          to the extent such claims or suits result from the breach of any of
          the provisions of this Agreement, gross negligence or willful
          misconduct of the 3DP Indemnitees. Upon the assertion of any such
          claim or suit, the 3DP Indemnitees shall promptly notify BMS thereof
          and shall permit BMS to assume direction and control of the defense of
          the claim (including the selection of counsel and the right to settle
          it at the sole discretion of BMS, provided that such settlement does
          not impose any material obligation on the 3DP Indemnitees), and shall
          cooperate as requested (at the expense of BMS) in the defense of the
          claim.

     9.2  Indemnification By 3DP. 3DP shall indemnify, defend and hold BMS and
          its agents, employees and directors (the "BMS Indemnitees") harmless
          from and against any and all liability, damage, loss, cost or expense
          (including reasonable attorneys' fees) arising out of Third Party
          claims or lawsuits related to 3DP's performance of its obligations
          under this Agreement, except to the extent that such claims or suits
          result from the breach of any of the provisions of this Agreement,
          gross negligence or willful misconduct of the BMS Indemnitees. Upon
          the assertion of any such claim or suit, the BMS Indemnitees shall
          promptly notify 3DP thereof and shall permit 3DP to assume direction
          and control of the defense of the claim (including the selection of
          counsel and the right to settle it at the sole discretion of 3DP,
          provided that such settlement does not impose any material obligation
          on the BMS Indemnitees), and shall cooperate as requested (at the
          expense of 3DP) in the defense of the claim.

**Certain portions of this Exhibit have been omitted upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       23
<PAGE>

                                  ARTICLE 10

                             TERM AND TERMINATION

     10.1  Term of Research Program. The Research Program shall commence upon
           the Effective Date, and unless earlier terminated as provided herein,
           shall expire on the third anniversary of the Effective Date, subject
           to any extension thereto.

     10.2  Term of Agreement. This Agreement shall commence upon the Effective
           Date and shall terminate: (a) thirty (30) days after notice, in good
           faith, by one Party to the other Party, following the termination or
           expiration of the Research Term or any Extended Research Term, if no
           compound, which was identified as an Initial Hit, or at least one
           optimized or developed successor thereto, is being diligently
           optimized, developed, commercialized and/or sold by BMS or 3DP, or
           (b) upon the identification and commercialization of one or more
           Licensed Products, upon expiration of the royalty period, as to each
           Licensed Product in each country in the Territory, as provided in
           Section 5.11.

     10.3  Termination of the Research Program Without Cause. Subject to the
           provisions of Section 5.5, BMS may terminate the Research Program
           upon ninety (90)-days advance written notice during the Research Term
           or any Extended Research Term.

     10.4  Termination Due to Acquisition. During the Research Term or any
           Extended Research Term, if any major pharmaceutical company, which in
           the good faith determination of BMS, is a competitor of BMS closes on
           an acquisition of 3DP (whether through merger, consolidation or
           acquisition, directly or indirectly, of stock representing fifty
           percent (50%) or more of the outstanding voting stock or other equity
           securities of 3DP, sale of all or substantially all the assets of 3DP
           or otherwise), BMS may terminate the Research Program, but not the
           other provisions of this Agreement, effective thirty (30) days after
           written notice is transmitted to 3DP, its parent, successor, or the
           surviving or new entity, as the case may be, provided such notice
           shall not be sent until the actual closing date of such transaction.
           In such case, no termination fees shall be due, but BMS shall
           continue to fund the Research Program until the effective date of its
           termination.

     10.5  Breach. The failure by a Party to comply with any of the material
           obligations contained in this Agreement shall entitle the other Party
           to give notice to have the default cured. If such default is not
           cured within sixty (60) days after the receipt of such notice, or
           diligent steps are not taken to cure if by its nature such default
           could not be cured within sixty (60) days, the notifying Party shall
           be entitled, without prejudice to any of its other rights conferred
           on it by this Agreement, and in addition to any other remedies that
           may be available to it, to terminate the Research Program and/or this
           Agreement, provided, however, that such right to terminate shall be
           stayed in the event that, during such sixty (60)-day period, the
           Party alleged to have been in default


**Certain portions of this Exhibit have been omitted upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       24
<PAGE>

           shall have: (a) initiated arbitration in accordance with Article 13,
           below, with respect to the alleged default, and (b) diligently and in
           good faith cooperated in the prompt resolution of such arbitration
           proceedings.

     10.6  No Waiver. The right of a Party to terminate the Research Program
           and/or this Agreement, as provided in this Article 10, shall not be
           affected in any way by its waiver or failure to take action with
           respect to any prior default.

     10.7  Insolvency or Bankruptcy.

           10.7.1   Either Party may, in addition to any other remedies
                    available by law or in equity, terminate the Research
                    Program and/or this Agreement by written notice to the other
                    Party in the event the latter Party shall have become
                    insolvent or bankrupt, or shall have an assignment for the
                    benefit of its creditors, or there shall have been appointed
                    a trustee or receiver of the other Party or for all or a
                    substantial part of its property or any case or proceeding
                    shall have been commenced or other action taken by or
                    against the other Party in bankruptcy or seeking
                    reorganization, liquidation, dissolution, winding-up,
                    arrangement or readjustment of its debts or any other relief
                    under any bankruptcy, insolvency, reorganization or other
                    similar act or law of any jurisdiction now or hereafter in
                    effect, or there shall have been issued a warrant of
                    attachment, execution, distraint or similar process against
                    any substantial part of the property of the other Party, and
                    any such event shall have continued for ninety (90) days
                    undismissed, unbonded and undischarged.

          10.7.2    All rights and licenses granted under or pursuant to this
                    Agreement by BMS or 3DP are, and shall otherwise be deemed
                    to be, for purposes of Section 365(n) of the U.S. Bankruptcy
                    Code, licenses of right to "Intellectual Property" as
                    defined under Section 101 of the U.S. Bankruptcy Code. The
                    Parties agree that the Parties as licensees of such rights
                    under this Agreement, shall retain and may fully exercise
                    all of their rights and elections under the U.S. Bankruptcy
                    Code. The Parties further agree that, in the event of the
                    commencement of a bankruptcy proceeding by or against either
                    Party under the U.S. Bankruptcy Code, the Party hereto which
                    is not a party to such proceeding shall be entitled to a
                    complete duplicate of (or complete access to, as
                    appropriate) any such intellectual property and all
                    embodiments of such intellectual property, and same, if not
                    already in their possession, shall be promptly delivered to
                    them (a) upon any such commencement of a bankruptcy
                    proceeding upon their written request therefor, unless the
                    Party subject to such proceedings elects to continue to
                    perform all of their obligations under this Agreement or (b)
                    if not delivered under (a) above, upon the rejection of this
                    Agreement by or on behalf of the Party subject to such
                    proceeding upon written request therefor by a nonsubject
                    Party.


**Certain portions of this Exhibit have been omitted upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       25
<PAGE>

     10.8   Consequences of Termination of the Research Program.

            10.8.1   In the event of termination of the Research Program by BMS
                     pursuant to the provisions of Sections 10.4, 10.5 and/or
                     10.7, 3DP shall (i) promptly transfer to BMS copies,
                     whether in written or electronic form, of all data,
                     reports, records and materials (including any Research
                     Program Know-how) in 3DP's possession or control which
                     relate to the Research Program; (ii) return to BMS all
                     relevant records and materials, whether in written or
                     electronic form, in 3DP's possession or control containing
                     Confidential Information of BMS; and (iii) furnish to BMS
                     all unused Substances provided to 3DP by BMS in connection
                     with the Research Program. Thereafter, BMS shall have no
                     further obligation to fund the Research Program, but the
                     remainder of the Agreement shall remain in force and effect
                     until expiration of the term of the Agreement, unless it is
                     sooner terminated as provided in this Agreement.

           10.8.2    In the event of termination of the Research Program by 3DP
                     pursuant to this Article 10, or if BMS terminates the
                     Research Program pursuant to the provisions of Section
                     10.3, BMS shall (i) promptly transfer to 3DP copies,
                     whether in written or electronic form, of all data,
                     reports, records and materials (including any Research
                     Program Know-how) in BMS's possession or control which
                     relate to the Research Program; (ii) return to 3DP all
                     relevant records and materials, whether in written or
                     electronic form, in BMS's possession or control containing
                     Confidential Information of 3DP; and (iii) furnish to 3DP
                     all unused Substances provided to BMS by 3DP in connection
                     with the Research Program. Thereafter, the remainder of the
                     Agreement shall remain in force and effect until expiration
                     of the term of the Agreement, unless it is sooner
                     terminated as provided in this Agreement.

           10.8.3    Either Party's termination of the Research Program pursuant
                     to Section 10.3, 10.4, 10.5 and/or 10.7 shall be without
                     prejudice to, and shall not affect, any of the Parties'
                     respective rights and obligations under this Agreement that
                     do not specifically relate to the Research Program. Without
                     limiting the generality of the foregoing, BMS's rights to
                     exploit the Licensed Products under any Research Program
                     Patent Rights and Research Program Know-how, if such
                     licenses are in operation, in accordance with the terms of
                     this Agreement, shall not be affected by any such
                     termination.

      10.9  Consequences of Termination of this Agreement. Upon termination of
            this Agreement, all remaining records and materials in a Party's
            possession or control containing the other Party's Confidential
            Information and to which the former Party does not retain rights
            hereunder shall promptly be returned.

      10.10 Survival of Obligations. The termination or expiration of this
            Agreement shall not relieve the Parties of any obligations accruing
            prior to such termination, and any such termination shall be


**Certain portions of this Exhibit have been omitted upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       26
<PAGE>

          without prejudice to the rights of either Party against the other. The
          provisions of Section 3.7, Section 5.15, Section 5.16, Section 6.1
          through 6.5, Article 7, Article 8, Article 9, Section 10.8, Section
          12.7, Article 13 and Article 14 (except Section 14.7) shall survive
          any termination of this Agreement.

                                  ARTICLE 11

        DEVELOPMENT, REGULATORY AND COMMERCIALIZATION RESPONSIBILITIES

     11.1  BMS Responsibilities. BMS shall be responsible for all development,
           regulatory filings and related submissions that are made in
           connection with the commercialization of Licensed Products developed
           by BMS and all commercialization activities with respect to Licensed
           Products, and shall do so at BMS's sole discretion and expense.

     11.2  3DP Responsibilities. 3DP shall be responsible for all development,
           regulatory filings and related submissions that are made in
           connection with the commercialization of Licensed Products developed
           by 3DP, and all commercialization activities with respect to Licensed
           Products, and shall do so at 3DP's sole discretion and expense.

                                  ARTICLE 12

                        REPRESENTATIONS AND WARRANTIES

     12.1  Authority. Each Party represents and warrants that as of the
           Effective Date it has the full right, power and authority to enter
           into this Agreement and that this Agreement has been duly executed by
           such Party and constitutes a legal, valid and binding obligation of
           such Party, enforceable in accordance with its terms.

     12.2  Commercially Reasonable Efforts. Each Party represents and warrants
           that it will use good faith commercially reasonable and diligent
           efforts to perform its obligations under this Agreement and/or
           develop and to commercialize Licensed Products, consistent with sound
           business judgment.

     12.3  No Conflicts. Each Party represents and warrants that the execution,
           delivery and performance of this Agreement does not conflict with, or
           constitute a breach or default under any of its charter or
           organizational documents, any law, order, judgment or governmental
           rule or regulation applicable to it, or any material agreement,
           contract, commitment or instrument to which it is a party.

**Certain portions of this Exhibit have been omitted upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       27
<PAGE>

     12.4  No Existing Third Party Rights. Each Party represents and warrants
           that its obligations under this Agreement are not encumbered by any
           rights granted by such Party to any Third Parties that are or may be
           inconsistent with the rights and licenses granted in this Agreement

     12.5  Permitted Use of Targets. BMS represents and warrants that it has the
           legal right to use and permit 3DP to use all Targets provided to 3DP
           for Research Program activities under this Agreement.

     12.6  Continuing Representations. The representations and warranties of
           each Party contained in this Article 12 shall survive the execution
           and delivery of this Agreement and shall remain true and correct at
           all times during the Term with the same effect as if made on and as
           of such later date.

     12.7  Disclaimer of Warranties. 3DP MAKES NO REPRESENTATIONS AND EXTENDS NO
           WARRANTIES OR CONDITIONS OF ANY KIND, EITHER EXPRESS OR IMPLIED, WITH
           RESPECT TO THE 3DP DISCOVERWORKS(R) TECHNOLOGY, INCLUDING, BUT NOT
           LIMITED TO, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
           PURPOSE. IN PARTICULAR, 3DP OFFERS NO REPRESENTATION OR WARRANTY THAT
           THE USE OF ALL OR ANY PART OF THE 3DP DISCOVERWORKS(R) TECHNOLOGY
           UNDER THIS AGREEMENT WILL RESULT IN THE DISCOVERY OR THE SUCCESSFUL
           COMMERCIALIZATION OF A LICENSED PRODUCT FOR USE AGAINST THE TARGET IN
           THE FIELD.

                                  ARTICLE 13

                              DISPUTE RESOLUTION

Any dispute concerning or arising out of this Agreement or concerning the
existence or validity hereof shall be determined by the following procedure:

     13.1  Dispute Resolution Process. Both Parties understand and appreciate
           that their long term mutual interest will be best served by affecting
           a rapid and fair resolution of any claims or disputes which may arise
           out of services performed under this Agreement or from any dispute
           concerning the terms of this Agreement. Therefore, both Parties agree
           to use their best efforts to resolve all such disputes as rapidly as
           possible on a fair and equitable basis. Toward this end, both Parties
           agree to develop and follow a process for presenting, rapidly
           assessing, and settling claims on a fair and equitable basis that
           takes into account the precise subject and nature of the dispute.

     13.2  Dispute Resolution Panel. If any dispute or claim arising under this
           Agreement cannot be readily resolved by the Parties pursuant to the
           process described above, then the Parties agree to refer the matter
           to a panel consisting of the Chief Executive Officer of 3DP and the
           Senior Vice


**Certain portions of this Exhibit have been omitted upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       28
<PAGE>

          President of Early Discovery and Applied Technology for BMS, or a
          comparable position selected by either Party from time to time, for
          review and a non-binding resolution. A copy of the terms of this
          Agreement, agreed upon facts (and areas of disagreement), and concise
          summary of the basis for each side's contentions will be provided to
          both such officers who shall review the same, confer and attempt to
          reach a mutual resolution of the issue.

     13.3 Arbitration. If the matter has not been resolved utilizing the
          foregoing process and the Parties are unwilling to accept the non-
          binding decision of the indicated panel, either or both Parties may
          elect to pursue definitive resolution through binding arbitration,
          which the Parties agree to accept in lieu of litigation or other
          legally available remedies (with the exception of injunctive relief
          where such relief is necessary to protect a Party from irreparable
          harm pending the outcome of any such arbitration proceeding). Binding
          arbitration shall be settled in accordance with the Commercial
          Arbitration Rules of the American Arbitration Association by a panel
          of three arbitrators chosen in accordance with these Rules. As set
          forth in Section 14.15, this Agreement shall be governed by and
          construed in accordance with the substantive laws of the State of
          Delaware without regard to the conflicts of laws provisions of
          Delaware. The arbitration will be held in Wilmington, Delaware.
          Judgment upon the award rendered may be entered in any court having
          jurisdiction and the Parties hereby consent to the said jurisdiction
          and venue, and further irrevocably waive any objection which either
          Party may have now or hereafter to the laying of venue of any
          proceedings in said courts and to any claim that such proceedings have
          been brought in an inconvenient forum, and further irrevocably agree
          that a judgment or order in any such proceeding shall be conclusive
          and binding upon the Parties and may be enforced in the courts of any
          other jurisdiction.

                                  ARTICLE 14

                           MISCELLANEOUS PROVISIONS

     14.1 Entire Agreement. This Agreement, and the GPCR License and User
          Agreement, the DiscoverWorks(TM) Nonexclusive License and Purchase
          Agreement, the PERT Internal Use License and Option Agreement entered
          into simultaneously with this Agreement, and each of the Exhibits
          thereto constitute and contain the entire understanding and agreement
          of the Parties respecting the subject matter of this Agreement and
          cancels and supersedes any all prior negotiations, correspondence,
          understandings and agreements between the Parties, whether oral or
          written, regarding such subject matter.

     14.2 Further Actions. Each Party agrees to execute, acknowledge and deliver
          such further instruments and to do all such other acts as may be
          necessary or appropriate in order to carry out the purposes and intent
          of this Agreement.

** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       29
<PAGE>

     14.3 Binding Effect. This Agreement and the rights granted herein shall be
          binding upon and shall inure to the benefit of 3DP, BMS and their
          successors and permitted assigns.

     14.4 Assignment. Neither Party shall assign this Agreement without the
          prior written consent of the other Party; provided, however, that
          either Party may assign this Agreement without the prior written
          consent of the other Party in connection with the sale or transfer of
          substantially all of its assets that relate to this Agreement, or in
          the event of its merger or consolidation or change of control or
          similar transaction. Any permitted assignee shall assume all
          obligations of its assignor under this Agreement.

     14.5 No Implied Licenses. No rights to any other patents, Know-how or
          technical information, or other intellectual property rights, other
          than as explicitly identified herein, are granted or deemed granted by
          this Agreement. No right, expressed or implied, is granted by this
          Agreement to a Party to use in any manner the name or any other trade
          name or trademark of the other Party in connection with the
          performance of this Agreement.

     14.6 No Waiver. No waiver, modification or amendment of any provision of
          this Agreement shall be valid or effective unless made in writing and
          signed by a duly authorized officer of each Party. The failure of
          either Party to assert a right hereunder or to insist upon compliance
          with any term or condition of this Agreement shall not constitute a
          waiver of that right or excuse a similar subsequent failure to perform
          any such term or condition.

     14.7 Restrictions on Unsolicited Activities. BMS agrees that, during the
          Term of this Agreement, without the prior written consent of the board
          of directors of 3DP, neither BMS nor any of its Affiliates will (i)
          purchase, offer or agree to purchase, or announce an intention to
          purchase, directly or indirectly, any securities or assets of 3DP or
          its subsidiaries; (ii) make, or in any way participate, directly or
          indirectly, in any "solicitation" of "proxies" to vote or "consents"
          (as such terms are used in the rules and regulations of the Securities
          and Exchange Commission), or seek to advise or influence any person
          with respect to the voting of any voting securities of 3DP; (iii)
          initiate or support, directly or indirectly, any stockholder proposal
          with respect to 3DP; (iv) directly or indirectly make any public
          announcement with respect to, or submit a proposal for, or offer of
          (with or without conditions) any extraordinary transaction involving
          3DP or its securities or assets or any subsidiary thereof, or of any
          successor to or person in control of 3DP or any of its businesses, or
          any assets of 3DP or any subsidiary or division thereof or of any such
          successor or controlling person; or (v) form, join or in any way
          participate in a "group" as defined in Section 13(d)(3) of the
          Securities Exchange Act of 1934, as amended (the "Exchange Act") in
          connection with any of the foregoing. Nothing contained in this
          Section 14.7 shall prohibit the ownership by BMS of up to 1% of any
          class of securities of 3DP which are registered pursuant to the
          Exchange Act; provided, however, that BMS hereby acknowledges that it
          is aware that the United States securities laws prohibit any person
          who has material non-public information about a company from
          purchasing or selling securities of such company, or from
          communicating such


** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       30
<PAGE>

          information to any other person under circumstances in which it is
          reasonably foreseeable that such person is likely to purchase or sell
          such securities.

    14.8  Force Majeure. The failure of a Party to perform any obligation under
          this Agreement by reason of acts of God, acts of governments, riots,
          wars, strikes, accidents or deficiencies in materials or
          transportation or other causes of a similar magnitude beyond its
          control shall not be deemed to be a breach of this Agreement.

    14.9  Independent Contractors. Both Parties are independent contractors
          under this Agreement. Nothing contained in this Agreement is intended
          nor is to be construed so as to constitute 3DP or BMS as partners or
          joint venturers with respect to this Agreement. Neither Party shall
          have any express or implied right or authority to assume or create any
          obligations on behalf of or in the name of the other Party or to bind
          the other Party to any other contract, agreement or undertaking with
          any Third Party.

    14.10 Notices and Deliveries. Any formal notices, request, delivery,
          approval or consent required or permitted to be given under this
          Agreement shall be in writing and shall be deemed to have been
          sufficiently given when it is received, whether delivered in person,
          transmitted by facsimile with contemporaneous confirmation, delivered
          by registered letter (or its equivalent) or delivered by overnight
          courier service (receipt required), to the Party to which it is
          directed at its address shown below or such other address as such
          Party shall have last given by notice to the other Parties.

          If to BMS:


          Bristol-Myers Squibb Company
          Route 206 & Province Line Road
          P.O. Box 4000
          Princeton, New Jersey 08543
          ATTN: Vice President and Senior Counsel,
                Pharmaceutical Research Institute

          If to 3DP:                             with a copy to:

          3-Dimensional Pharmaceuticals, Inc.    Morgan, Lewis & Bockius LLP
          Eagleview Corporate Center             502 Carnegie Center
          665 Stockton Drive, Suite 104          Princeton, New Jersey 08540
          Exton, PA  10341
          ATTN: Chief Executive Officer          ATTN: Randall B. Sunberg, Esq.


** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       31
<PAGE>

    14.11 Public Announcements. The Parties shall consult with each other and
          reach mutual written agreement before making any public announcement
          concerning this Agreement or its subject matter. Notwithstanding the
          foregoing, the Parties may disclose the existence and general nature
          of this Agreement and may make disclosures for purposes of satisfying
          legal and regulatory requirements in accordance with Article 7;
          however, neither Party shall use the name of the other Party for
          promotional purposes.

    14.12 Headings. The captions to the sections and articles in this Agreement
          are not a part of this Agreement, and are included merely for
          convenience of reference only and shall not affect its meaning or
          interpretation.

    14.13 Severability. If any provision of this Agreement becomes or is
          declared by a court of competent jurisdiction to be illegal,
          unenforceable or void, this Agreement shall continue in full force and
          effect without said provision, so long as the Agreement, taking into
          account said voided provision(s), continues to provide the Parties
          with the same practical economic benefits as the Agreement containing
          said voided provision(s) did on the Effective Date. If, after taking
          into account said voided provision(s), the Parties are unable to
          realize the practical economic benefit contemplated on the Effective
          Date, the Parties shall negotiate in good faith to amend this
          Agreement to reestablish the practical economic benefit provided the
          Parties on the Effective Date.

    14.14 No Consequential Damages. IN NO EVENT SHALL EITHER PARTY OR ANY OF ITS
          RESPECTIVE AFFILIATES BE LIABLE TO THE OTHER PARTY OR ANY OF ITS
          AFFILIATES FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES,
          WHETHER IN CONTRACT, WARRANTY, TORT, NEGLIGENCE, STRICT LIABILITY OR
          OTHERWISE, INCLUDING, BUT NOT LIMITED TO, LOSS OF PROFITS OR REVENUE,
          OR CLAIMS OF CUSTOMERS OF ANY OF THEM OR OTHER THIRD PARTIES FOR SUCH
          OR OTHER DAMAGES.

    14.15 Applicable Law. This Agreement shall be governed by and interpreted in
          accordance with the laws of the State of Delaware without reference to
          its conflicts of laws provisions.

    14.16 Advice of Counsel. BMS and 3DP have each consulted with counsel of
          their choice regarding this Agreement, and each acknowledges and
          agrees that this Agreement shall not be deemed to have been drafted by
          one Party or another and will be construed accordingly.

    14.17 Counterparts. This Agreement may be executed in counterparts, or
          facsimile versions, each of which shall be deemed to be an original,
          and both of which together shall be deemed to be one and the same
          agreement.


** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       32
<PAGE>

     IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
by their respective duly authorized officers as of the date first above written,
each copy of which shall for all purposes be deemed to be an original.



3-DIMENSIONAL PHARMACEUTICALS, INC.            BRISTOL-MYERS SQUIBB COMPANY

By:  /s/ David C. U'Prichard                   By:   /s/ Marilyn Hartig

Name:  David C. U'Prichard, Ph.D.              Name:  Marilyn Hartig, Ph.D.

Title: Chief Executive Officer                 Title:  VP, External Sciences
                                                        & Technology

** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       33
<PAGE>

                                   EXHIBIT A

                      DIRECTED DIVERSITY(R) PATENT RIGHTS

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                  Patent No.         Issue Date

   SKGF Ref.                         Title                        Serial           Filing       (if applicable)         (if
                                                                  Number            Date                             applicable)

-----------------------------------------------------------------------------------------------------------------------------------
<S>               <C>                                             <C>            <C>            <C>                  <C>
 1503.0010000     System and Method of Automatically              08/306,915     09/16/94       5,463,564            10/31/95
                  Generating Chemical Compounds with Desired
                  Properties

-----------------------------------------------------------------------------------------------------------------------------------
 1503.0010001     System and Method  of Automatically             08/535,822     09/28/95       5,574,656            11/12/96
                  Generating Chemical Compounds with Desired
                  Properties

-----------------------------------------------------------------------------------------------------------------------------------
 1503.0010002     System and Method of Automatically              08/698,246     08/15/96       5,684,711            11/04/97
                  Generating Chemical Compounds with Desired
                  Properties

-----------------------------------------------------------------------------------------------------------------------------------
 1503.0010003     System, Method and Computer Program             08/904,737     08/01/97       5,901,069            05/04/99
                  Product for At Least Partially
                  Automatically Generating Chemical
                  Compounds with Desired Properties From a
                  List of Potential Chemical Compounds to
                  Synthesize

-----------------------------------------------------------------------------------------------------------------------------------
 [**]             [**]                                            [**]           [**]

-----------------------------------------------------------------------------------------------------------------------------------
 1503.001AU00     System and Method of Automatically              36280/95       09/11/95       688598               09/17/98
                  Generating Chemical Compounds with Desired
                  Properties

----------------------------------------------------------------------------------------------------------------------------------
 1503.001AU10     System and Method of Automatically              71886/98       01/12/98       710152               01/20/00
                  Generating Chemical Compounds with Desired
                  Properties

----------------------------------------------------------------------------------------------------------------------------------
 [**]             [**]                                            [**]           [**]

----------------------------------------------------------------------------------------------------------------------------------
 1503.001EP00     System and Method of Automatically              95933748.6     09/11/95       0781436              07/02/97
                  Generating Chemical Compounds with Desired                                    (Published)          (Publication
                  Properties                                                                                         date)

----------------------------------------------------------------------------------------------------------------------------------
 [**]             [**]                                            [**]           [**]

----------------------------------------------------------------------------------------------------------------------------------
 1503.001IL00     System and Method of Automatically              115292         09/14/95       115292               10/28/99
                  Generating Chemical Compounds with Desired
                  Properties

----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       34
<PAGE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                  Patent No.         Issue Date

   SKGF Ref.                         Title                        Serial           Filing       (if applicable)         (if
                                                                  Number            Date                             applicable)

-----------------------------------------------------------------------------------------------------------------------------------
<S>               <C>                                             <C>            <C>            <C>                  <C>
 1503.001IL10     Computer Based System and Method of             125017         06/19/98       125017               10/28/99
                  Automatically Generating Chemical Compounds

-----------------------------------------------------------------------------------------------------------------------------------
 [**]             [**]                                            [**]           [**]

-----------------------------------------------------------------------------------------------------------------------------------
 1503.001JP00     System and Method of Automatically              510247/1996    09/11/95       505832/1998          06/09/98
                  Generating Chemical Compounds with Desired                                    (Published)         (Publication
                  Properties                                                                                         date)

----------------------------------------------------------------------------------------------------------------------------------
 1503.001PC00     System and Method of Automatically              PCT/US95/      09/11/95       WO 96/08781          03/21/96
 (Now in Nat      Generating Chemical Compounds with Desired
 Phase)           Properties                                      11365                         (Published)         (Publication
                                                                                                                     date)

---------------------------------------------------------------------------------------------------------------------------------
  [**]            [**]                                            [**]           [**]

---------------------------------------------------------------------------------------------------------------------------------
  [**]            [**]                                            [**]           [**]

---------------------------------------------------------------------------------------------------------------------------------
  [**]            [**]                                            [**]           [**]

---------------------------------------------------------------------------------------------------------------------------------
  [**]            [**]                                            [**]           [**]

---------------------------------------------------------------------------------------------------------------------------------
  [**]            [**]                                            [**]           [**]

 ---------------------------------------------------------------------------------------------------------------------------------
  [**]            [**]

---------------------------------------------------------------------------------------------------------------------------------
  [**]            [**]                                            [**]           [**]

----------------------------------------------------------------------------------------------------------------------------------
  [**]            [**]                                            [**]           [**]

----------------------------------------------------------------------------------------------------------------------------------
  [**]            [**]                                            [**]           [**]

---------------------------------------------------------------------------------------------------------------------------------
  [**]            [**]                                            [**]           [**]
</TABLE>

** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       35
<PAGE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                  Patent No.         Issue Date

   SKGF Ref.                         Title                        Serial           Filing       (if applicable)         (if
                                                                  Number            Date                             applicable)

-----------------------------------------------------------------------------------------------------------------------------------
<S>               <C>                                             <C>            <C>            <C>                  <C>
 1503.020EP01     System, Method and Computer Program             97948320.3     11/04/97       0935784              08/18/99
                  Product for Identifying Chemical Compounds                                    (Published)          (Publication
                  Having Desired Properties                                                                          date)

----------------------------------------------------------------------------------------------------------------------------------
 1503.020EP02     System, Method, and Computer Program            97946679.4     11/04/97       0935789              08/18/99
                  Product for the Visualization and                                             (Published)          (Publication
                  Interactive Processing and Analysis of                                                              date)
                  Chemical Data

---------------------------------------------------------------------------------------------------------------------------------
 [**]             [**]                                            [**]           [**]

---------------------------------------------------------------------------------------------------------------------------------
 [**]             [**]                                            [**]           [**]

---------------------------------------------------------------------------------------------------------------------------------
 [**]             [**]                                            [**]           [**]

---------------------------------------------------------------------------------------------------------------------------------
 [**]             [**]                                            [**]           [**]

---------------------------------------------------------------------------------------------------------------------------------
 1503.020PC01     System, Method and Computer Program             PCT/US97/      11/04/97       WO 98/20437          05/14/98
 (Now in Nat      Product for Identifying Chemical Compounds      20918                         (Published)          (Publication
 Phase)           Having Desired Properties                                                                          date)

---------------------------------------------------------------------------------------------------------------------------------
 1503.020PC02     System, Method, and Computer Program            PCT/US97/      11/04/97       WO 98/20459          05/14/98
 (Now in Nat      Product for the Visualization and               20919                         (Published)          (Publication
 Phase)           Interactive Processing and Analysis of                                                             date)
                  Chemical Data

---------------------------------------------------------------------------------------------------------------------------------
 1503.020PC03     System, Method, and Computer Program            PCT/US99/      05/07/99       WO 99/57686          11/11/99
                  Product for Representing Proximity Data in      09963                         (Published)          (Publication
                  A Multi-dimensional Space                                                                          date)

----------------------------------------------------------------------------------------------------------------------------------
 [**]             [**]                                            [**]           [**]

---------------------------------------------------------------------------------------------------------------------------------
 [**]             [**]                                            [**]           [**]

---------------------------------------------------------------------------------------------------------------------------------
 [**]             [**]


----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Exhibit A

** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       36
<PAGE>

                                   EXHIBIT B

                          THERMOFLUOR(R)PATENT RIGHTS

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                  Patent No.         Issue Date

   SKGF Ref.                         Title                        Serial           Filing       (if applicable)         (if
                                                                  Number            Date                             applicable)

-----------------------------------------------------------------------------------------------------------------------------------
<S>                    <C>                                        <C>            <C>            <C>                  <C>
 1503.0110001          Microplate Thermal Shift Assay for         08/853,464     05/09/97       6,020,141            02/01/00
                       Ligand Development and
                       Multi-variable Protein Chemistry
                       Optimization

---------------------------------------------------------------------------------------------------------------------------------
 1503.0110002          Microplate Thermal Shift Assay for         08/853,459     05/09/97       6,036,920            03/14/00
                       Ligand Development and
                       Multi-variable Protein Chemistry
                       Optimization

---------------------------------------------------------------------------------------------------------------------------------
 [**]                  [**]                                       [**]           [**]

---------------------------------------------------------------------------------------------------------------------------------
 [**]                  [**]                                       [**]           [**]

---------------------------------------------------------------------------------------------------------------------------------
 [**]                  [**]                                       [**]           [**]

---------------------------------------------------------------------------------------------------------------------------------
 [**]                  [**]                                       [**]           [**]

---------------------------------------------------------------------------------------------------------------------------------
 [**]                  [**]                                       [**]           [**]

---------------------------------------------------------------------------------------------------------------------------------
 [**]                  [**]                                       [**]           [**]

---------------------------------------------------------------------------------------------------------------------------------
 [**]                  [**]                                       [**]           [**]

---------------------------------------------------------------------------------------------------------------------------------
 [**]                  [**]

--------------------------------------------------------------------------------------------------------------------------------
 [**]                  [**]                                       [**]           [**]

--------------------------------------------------------------------------------------------------------------------------------
 [**]                  [**]                                       [**]           [**]

---------------------------------------------------------------------------------------------------------------------------------
 1503.011EP03          Microplate Thermal Shift Assay and         97927628.4     05/09/97       0914608              05/12/99
                       Apparatus for Ligand Development                                         (Published)          (Publication
                       and Multi-variable Protein                                                                     date)
                       Chemistry Optimization
</TABLE>

** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       37
<PAGE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                  Patent No.         Issue Date

   SKGF Ref.                         Title                        Serial           Filing       (if applicable)         (if
                                                                  Number            Date                             applicable)

-----------------------------------------------------------------------------------------------------------------------------------
<S>                    <C>                                       <C>            <C>            <C>                  <C>
 1503.011HU03          Microplate Thermal Shift Assay and         P9902418       05/09/97       P9902418             11/29/99
                       Apparatus for Ligand Development                                         (Published)          (Publication
                       and Multi-variable Protein                                                                    date)
                       Chemistry Optimization

---------------------------------------------------------------------------------------------------------------------------------
 [**]                  [**]                                       [**]           [**]

---------------------------------------------------------------------------------------------------------------------------------
 [**]                  [**]                                       [**]           [**]

---------------------------------------------------------------------------------------------------------------------------------
 [**]                  [**]                                       [**]           [**]

---------------------------------------------------------------------------------------------------------------------------------
 [**]                  [**]                                       [**]           [**]

---------------------------------------------------------------------------------------------------------------------------------
 1503.011PC03          Microplate Thermal Shift Assay and         PCT/US97/08    05/09/97       WO 97/42500          11/13/97
                       Apparatus for Ligand Development           154                           (Published)          (Publication
                       and Multi-variable Protein                                                                    date)
                       Chemistry Optimization

---------------------------------------------------------------------------------------------------------------------------------
 [**]                  [**]                                       [**]           [**]

---------------------------------------------------------------------------------------------------------------------------------
 [**]                  [**]

---------------------------------------------------------------------------------------------------------------------------------
 [**]                  [**]                                       [**]

---------------------------------------------------------------------------------------------------------------------------------
 1503.031PC01          High Throughput Method for                 PCT/US98/24    11/12/98       WO 99/24050          05/20/99
 (Now in Nat Phase)    Functionally Classifying Proteins          035                           (Published)          (Publication
                                                                                                                     date)

---------------------------------------------------------------------------------------------------------------------------------
 [**]                  [**]                                       [**]           [**]

---------------------------------------------------------------------------------------------------------------------------------
 [**]                  [**]                                       [**]           [**]

---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       38
<PAGE>

                                   EXHIBIT C

                             RESEARCH PLAN OUTLINE

  [**]






** This page and portions of the next page of this Exhibit have been omitted
based upon a request for confidential treatment that has been filed with
the Commission. The omitted pages have been filed separately with the
Commission.

                                       39
<PAGE>

                                   Exhibit C

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                             [**]                [**]                [**]

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--------------------------------------------------------------------------------
   [**]   [**]         7/2

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   [**]    [**]                          9/18

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   [**]    [**]                                    11/9

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---------------------


** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       40
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.36
<SEQUENCE>17
<FILENAME>0017.txt
<DESCRIPTION>PURCHASE AGREEMENT BTWN THE COMPANY & BRISTOL MEYERS
<TEXT>

<PAGE>

                                                                   EXHIBIT 10.36

                               DISCOVERWORKS(TM)
                  NONEXCLUSIVE LICENSE AND PURCHASE AGREEMENT

THIS DISCOVERWORKS(TM) NONEXCLUSIVE LICENSE AND PURCHASE AGREEMENT is made as of
July 7, 2000, by and between 3-Dimensional Pharmaceuticals, Inc., a Delaware
corporation having its principal place of business at Eagleview Corporate
Center, 665 Stockton Drive, Suite 104, Exton, PA 19341 ("3DP"), and Bristol-
Myers Squibb Company, a Delaware corporation having its principal place of
business at Route 206 & Province Line Road, P.O. Box 4000, Princeton, New Jersey
08543 ("BMS").  Either 3DP or BMS may be referred to herein as a "Party" or,
collectively, they may be referred to as the "Parties."

                                   RECITALS
                                   --------

WHEREAS, 3DP has developed and patented certain technology known as
DirectedDiversity(R), which generates and identifies chemical compounds having
desired biological, chemical and other properties;

WHEREAS, 3DP has developed and patented certain technology and processes known
as ThermoFluor(R) Protein Characterization and Screening Technology, which
provides a useful readout for target characterization and compound library
screening;

WHEREAS, BMS is engaged in research and development of biologically active
compounds for the treatment of human disease;

WHEREAS, BMS wishes to license certain DirectedDiversity(R) patent rights and
ThermoFluor(R) technology from 3DP for DiscoverWorks(TM), on a nonexclusive
basis;

WHEREAS, BMS also wishes to purchase from 3DP certain ThermoFluor(R)
instruments; and

WHEREAS, the Parties desire to enter into this Agreement to set forth the
licensing and purchase terms for such rights;

NOW, THEREFORE, in consideration of the various promises and undertakings set
forth herein, and intending to be legally bound, the Parties agree as follows:

                                   ARTICLE 1

                                  DEFINITIONS

The terms in this Agreement with initial letters capitalized, whether used in
the singular or the plural, shall have the meaning set forth below or, if not
listed below, the meaning designated in places throughout this Agreement.

     1.1  "Affiliate" means with respect to either Party, any corporation or
          other business entity, which controls, is controlled by, or is under
          common control with such

**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission. The omitted
    portions have been filed separately with the Commission

                                       1
<PAGE>

          Party. A corporation or other entity shall be regarded as in control
          of another corporation or entity if it owns or directly or indirectly
          controls at least fifty (50%) of the voting stock or other ownership
          interest of the other corporation or entity (or alternatively, if it
          owns the maximum such ownership interest permitted by law), or if it
          possesses, directly or indirectly, the power to direct or cause the
          direction of the management and policies of the corporation or other
          entity or the power to elect or appoint at least fifty (50%) of the
          members of the governing body of the corporation or other entity.

     1.2  "Agreement" means this DiscoverWorks(TM) Nonexclusive License and
          Purchase Agreement including its Exhibits, as may be amended from time
          to time.

     1.3  "BMS Site" means only (a) the BMS pharmaceutical research and
          development facilities located in Lawrenceville, New Jersey, U.S.A.;
          Hopewell, New Jersey, U.S.A.; Wallingford, Connecticut, U.S.A.;
          Candiac, Quebec, Canada; (b) [**] in the United States, Canada or a
          country in the European Union, [**], excepting [**] that has been [**]
          and [**] prior to the practice of any license granted hereunder [**]
          and (c) [**] in the United States, Canada or a country in the European
          Union, [**] prior to the practice of any license granted hereunder.

     1.4  "Collaboration Agreement" means the DiscoverWorks(TM) Drug Discovery
          Collaboration Agreement entered into between the Parties and dated of
          even date herewith.

     1.5  "Confidential Information" means all technical and/or commercial
          information that has or could have commercial value or other utility
          in a Party's business, or the unauthorized disclosure of which could
          be detrimental to the Party's interests, including information,
          inventions, data, and materials relating to the DirectedDiversity(R)
          Patent Rights or to the ThermoFluor(R) Technology, and Know-how, and
          shall include, without limitation, whether in oral, written, graphic
          or electronic form, research, technical, manufacturing, marketing,
          financial, personnel and other business information and plans;
          chemical, pharmacological, toxicological, clinical, analytical and
          quality control data; case report forms, data and analysis; and
          reports or summaries and information contained in and submissions to
          and information from ethical committees and regulatory authorities,
          except to the extent that the Party receiving the Confidential
          Information (the "Receiving Party") from the other Party (the
          "Disclosing Party") can establish that such Confidential Information:
          (a) was already known to the Receiving Party, other than under a
          continuing obligation of confidentiality to the Disclosing Party; (b)
          was generally available to the public or otherwise part of the public
          domain at the time of its disclosure to the Receiving Party; (c)
          became generally available to the public or otherwise part of the
          public domain after its original disclosure to the Receiving Party,
          and other than through any act or omission of the Receiving Party in
          breach of this Agreement; (d) was subsequently lawfully disclosed to
          the Receiving Party by a Third Party; (e) can be shown by written
          records to have been independently developed by or for the Receiving
          Party without benefit of the Confidential Information received from
          the Disclosing Party, and without breach of any of the provisions of
          this Agreement;

**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission. The omitted
    portions have been filed separately with the Commission

                                       2
<PAGE>

          or (f) the Disclosing Party has specifically agreed, in writing, that
          the Receiving Party may disclose such Confidential Information.

     1.6  "DirectedDiversity(R) Field" means the research, development and
          commercialization of chemical compounds for use in pharmaceutical and
          diagnostic products.

     1.7  "DirectedDiversity(R) Patent Rights" means 3DP's U.S. and Canadian
          patent applications or issued patents, as well as those for one or
          more countries of the European Patent Community, all of which are
          identified in EXHIBIT A, including any divisionals, continuations,
          reissues, and reexaminations thereof, any patents issuing therefrom,
          and any extensions and supplementary protection certificates based
          thereon.

     1.8  "DiscoverWorks"(TM) means the technology platform consisting of the
          DirectedDiversity(R) Patent Rights and the ThermoFluor(R) Technology.

     1.9  "Effective Date" means the later of: (a) the date of this Agreement as
          set forth above; or (b) the date which all of the following documents
          between the Parties have been executed: this Agreement, the GPCR
          License and User Agreement, the DiscoverWorks(TM) Drug Discovery
          Collaboration Agreement, and the PERT Internal Use License and Option
          Agreement.

     1.10 "FTE" means a full time equivalent scientific employee (i.e., one
          full-time, or multiple part-time employees aggregating to one full-
          time employee) employed by 3DP and assigned to work on the development
          of or training on Instruments with such time and effort to constitute
          one employee working on development of or training on Instruments on a
          full time basis consistent with normal business and scientific
          practice (at least forty (40) hours per week of dedicated effort; on
          an annual basis, such weekly effort for at least forty-eight (48)
          weeks per year). In no event, does an FTE include a subcontractor.

     1.11 "Improvement" means any inventions and/or discoveries that result in
          improvements or enhancements to the ThermoFluor(R) Technology or to
          previous Improvements, made by 3DP or BMS, whether patented or
          unpatented, conceived or first reduced to practice during the term of
          this Agreement.

     1.12 "Instrument" means a ThermoFluor(R) I Instrument or a ThermoFluor(R)
          II Instrument, or any successor to or modification of either.

     1.13 "Intellectual Property" means any and all patents, copyrights, design
          rights, mask work rights, trademarks, service marks, as well as any
          registrations and applications to register any such rights, rights in
          the nature of any of the aforementioned rights, trade secrets, Know-
          how, and any other intellectual or

**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission. The omitted
    portions have been filed separately with the Commission

                                       3
<PAGE>

          industrial property rights of any kind whatsoever in the United
          States, Canada or the European Patent Community.

     1.14 "Know-how" means unpatented technical and other information which is
          not in the public domain, including information comprising or relating
          to concepts, discoveries, inventions, data, designs, formulae, ideas,
          methods, models, assays, research plans, procedures, designs for
          experiments and tests, and results of experimentation and testing
          (including results of research or development), processes (including
          manufacturing processes, specifications and techniques), and
          laboratory records.

     1.15 "Manufactured Cost" shall mean the fully-allocated standard cost of:
          (i) the direct raw materials cost of materials actually used in the
          manufacture of an Instrument; (ii) the direct labor cost for producing
          the Instrument; (iii) the direct operating costs of buildings,
          resources and equipment dedicated to, as well as allocated
          depreciation and repairs and maintenance for the building and
          equipment actually used in, such production; and (iv) any quality and
          in-process control in producing the Instrument.

     1.16 "Object Code" means machine-executable computer software code in
          binary form.

     1.17 "Scriptgen Patent Rights" means the U.S. and Canadian patent
          applications or issued patents as well as those for one or more
          members of the European Patent Community, all of which are identified
          in EXHIBIT B, including any divisionals, continuations, continuations-
          in-part, reissues, reexaminations and renewals thereof, any patents
          issuing therefrom, and extensions and supplementary protection
          certificates based thereon, filed or granted to Scriptgen
          Pharmaceuticals, Inc.

     1.18 "Source Code" means computer software source code for the
          ThermoFluor(R) Software.

     1.19 "ThermoFluor(R) Field" means the research, development and
          commercialization of chemical compounds for use in therapeutic and
          diagnostic products, except that during the period from the Effective
          Date until March 7, 2003, it shall not include the use of any proteins
          to discover or develop a drug that exerts a therapeutic effect in
          hepatitis C infection, nor include other anti-viral targets, except in
          connection with Improved Hits, as defined in the Collaboration
          Agreement.

     1.20 "ThermoFluor(R) I Instrument" means the current production format
          instrument produced by 3DP and/or contractors (or such modifications
          or improvements developed and implemented by 3DP prior to the initial
          installations at BMS), based on [**] well sample plates, and requiring
          approximately [**] hours to cycle each plate.

**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission. The omitted
    portions have been filed separately with the Commission

                                       4
<PAGE>

     1.21 "ThermoFluor(R) II Instrument" means an instrument that produces:

               (a)   detection sensitivity and intraplate detection precision at
                     least equivalent to the performance of ThermoFluor(R) I
                     Instruments;

                (b)  support for reading [**] microtitre plates, allowing a
                     [**];

                (c)  approximately a [**] decrease in target protein consumption
                     per well relative to ThermoFluor(R) I Instruments; and

                (d)  a remote communications interface and a mechanical
                     interface which will allow integration with a plate stacker
                     or a larger automated screening system.

     1.21 "ThermoFluor(R) Patent Rights" means 3DP's U.S., Canadian and European
          Patent Community ("EPC") patent applications or patents issued in the
          United States, Canada, and one or more countries of the EPC, as
          identified in EXHIBIT C, including any divisionals, continuations,
          reissues and reexaminations thereof, any patents issuing therefrom,
          and extensions based thereon.

     1.22 "ThermoFluor(R) Software" means computer Object Code required for
          processing raw fluorescent image data and reducing such data to
          protein melting point values and melting point shifts, associated
          thermodynamic parameters, and ligand binding constants and includes a
          Graphical User Interface for setting experimental run parameters
          (unless otherwise implemented through a programmable logic controller
          integrated as part of the Instruments) and flexibly viewing and
          manipulating data, and runs in a Windows NT Environment and writes
          output data tables.

     1.23 "ThermoFluor(R) Technology" means the ThermoFluor(R) Patent Rights,
          the ThermoFluor(R) Software, the proprietary 3DP Know-how used to
          evaluate ligand-binding parameters, and other Intellectual Property
          related thereto.

     1.24 "Third Party" means any person or entity other than a Party or any of
          its Affiliates.

     1.25 "Update" means any bug fix, improvement, enhancement, update or
          upgrade, and any successor version of the ThermoFluor(R) Software
          created by 3DP in the normal course of its business.

**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission. The omitted
    portions have been filed separately with the Commission

                                       5
<PAGE>

                                   ARTICLE 2

                      DIRECTEDDIVERSITY(R) PATENT LICENSE

     2.1  Nonexclusive DirectedDiversity(R) Patent License. Subject to the terms
          and conditions of this Agreement, 3DP hereby grants BMS and its
          Affiliates a nontransferable, nonsublicensable, nonexclusive,
          nonroyalty-bearing license at the BMS Sites under the
          DirectedDiversity(R) Patent Rights solely in direct support of BMS's
          and its Affiliates' internal pharmaceutical research and development
          activities in the DirectedDiversity(R) Field which shall be deemed to
          include any research and development activities being undertaken [**]
          during the term of the Agreement.

     2.2  Limitations on DirectedDiversity(R) Patent Rights License Grant.
          Including, without limitation, in connection with activities expressly
          permitted under Section 2.1:

          2.2.1  BMS and its Affiliates may not operate under the
                 DirectedDiversity(R) Patent Rights on behalf of any Third
                 Parties such as, for example, in connection with providing
                 research or development services to any Third Party on a
                 contractual basis;

          2.2.2  Subject to the provisions of Section 12.4, BMS and its
                 Affiliates may not assign or sublicense its license to the
                 DirectedDiversity(R) Patent Rights to any Third Party; and

          2.2.3  BMS and its Affiliates may not provide services to any Third
                 Party with respect to DirectedDiversity(R) Patent Rights.

     2.3  3DP Retained Rights. Any rights of 3DP not expressly granted to BMS
          and its Affiliates under the provisions of this Article 2 shall be
          retained by 3DP, including, without limitation, 3DP's right to exploit
          the DirectedDiversity(R) Patent Rights for any application within or
          outside the DirectedDiversity(R) Field.

     2.4  License Fee.

          2.4.1  In consideration of the license grants provided for in this
                 Article 2 for the four named BMS Sites[**], BMS agrees to pay
                 to 3DP a nonrefundable license fee of [**] within thirty (30)
                 days of the Effective Date.

          2.4.2  In consideration of the license grants provided for in this
                 Article 2 for[**], BMS shall pay to 3DP a nonrefundable license
                 fee of [**] within thirty (30) days of BMS notifying 3DP that
                 it intends to practice the DirectedDiversity(R) Patent Rights
                 at such BMS Site.

**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission. The omitted
    portions have been filed separately with the Commission

                                       6
<PAGE>

                                   ARTICLE 3

                                  INSTRUMENTS

     3.1  ThermoFluor(R) I Instruments.

          3.1.1  BMS will purchase, within [**] of the Effective Date, at least
                 [**] ThermoFluor(R) I Instruments from 3DP, at a cost of [**]
                 with payment of [**] due upon order, and [**] due upon
                 delivery.

          3.1.2  The cost per ThermoFluor(R) I Instruments shall be indexed
                 annually to the U.S. Consumer Price Index (CPI) and adjusted
                 for each ThermoFluor(R) Instrument ordered beginning with the
                 first quarter of the year 2001.

          3.1.3  3DP shall, at BMS's request, deliver up to the first [**] of
                 such purchased ThermoFluor(R) I Instruments within [**] from
                 the date such ThermoFluor(R) I Instruments are ordered.
                 Additional ThermoFluor(R) I Instruments shall be delivered to
                 BMS on a schedule mutually agreed upon by the Parties after
                 such [**] period.

     3.2  ThermoFluor(R) II Instruments.

          3.2.1  BMS may purchase ThermoFluor(R) II Instruments from 3DP at
                 3DP's Manufactured Cost of each ThermoFluor(R) II Instrument,
                 plus [**], per ThermoFluor(R) II Instrument.

          3.2.2  As of the Effective Date of the Agreement, pursuant to the
                 terms of the Collaboration Agreement, [**] of the FTEs being
                 funded by BMS, according to the provisions of the Collaboration
                 Agreement, shall work at 3DP on the development of [**] or
                 until the [**] of the Agreement, whichever is the sooner, but
                 in no event sooner, than the [**]. These services shall be
                 compensated by BMS, as provided in the Collaboration Agreement.

          3.2.3  ThermoFluor(R) II Instruments shall be delivered to BMS on a
                 schedule mutually agreed upon by the Parties.

     3.3  Other Instruments. BMS shall have the right to define criteria and/or
          specifications to 3DP for an Instrument that is neither strictly a
          ThermoFluor(R) I Instrument nor strictly a ThermoFluor(R) II
          Instrument, and if 3DP is able to provide such an Instrument, the
          parties will negotiate in good faith on a price and delivery schedule
          that will apply to such an Instrument.

     3.4  Fees.

          3.4.1  In consideration of the rights granted in this Article 3 for
                 the BMS Sites described in Sections 1.3(a) and 1.3(b), BMS
                 agrees to pay to 3DP a nonrefundable fee of [**] within thirty
                 (30) days of the Effective Date.

**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission. The omitted
    portions have been filed separately with the Commission

                                       8
<PAGE>

          3.4.2  In consideration of the rights granted in this Article 3 for
                 each BMS Site described in Section 1.3(c), BMS shall pay to 3DP
                 a nonrefundable fee of [**] within thirty (30) days of the
                 Effective Date.

          3.4.3  If BMS purchases more than [**] Instruments, BMS shall pay 3DP
                 an additional fee of [**] per Instrument, for each Instrument
                 purchased beyond the initial [**] Instruments.

          3.4.4  BMS may request that 3DP supply integrated sample handling
                 robotics for Instruments sold to BMS. Supply by 3DP of
                 integrated sample handling robotics for any Instrument shall be
                 at an agreed upon cost for each Instrument.

     3.5  Most Favored [**] Provisions. If, during the Term of this Agreement
          [**] at the same time, all other conditions being equal, 3DP shall
          grant the equivalent favorable financial terms to BMS for the same
          time period, [**], and such more favorable financial terms, with due
          consideration of both [**].

     3.6  Nonexclusive ThermoFluor(R) Technology License. Subject to the terms
          and conditions of this Agreement, 3DP hereby grants BMS and its
          Affiliates a nontransferable, nonsublicensable, nonexclusive,
          nonroyalty-bearing license at the BMS Sites under: (a) the
          ThermoFluor(R) Technology and (b) any Improvements to the
          ThermoFluor(R) Technology or any Improvements thereto made by or for
          3DP [**] or for which 3DP otherwise acquires the right to grant such a
          license [**], and under all patent, copyright, trademark, trade secret
          and other Intellectual Property rights inherent therein and
          appurtenant thereto; which license shall be solely for BMS's and its
          Affiliates' internal business purposes of using the Instruments
          within, and subject to the use restrictions in, the ThermoFluor(R)
          Field which shall be deemed to include any research and development
          activities being undertaken [**] over the term of the Agreement.

     3.7  Grantback Rights to Improvements to the ThermoFluor(R) Technology. For
          a period of [**] from the Effective Date, BMS and its Affiliates agree
          that each will promptly make full written disclosure to 3DP of any and
          all Improvements that BMS or its Affiliates conceives or makes or has
          made to the ThermoFluor(R) Technology and to any Improvements thereto.
          BMS and its Affiliates hereby grant to 3DP, or its designee, a semi-
          exclusive (exclusive except as to BMS and its Affiliates), perpetual,
          non-royalty-bearing license, including the right to transfer and
          sublicense such license, to all of BMS's and its Affiliates' worldwide
          right, title, and interest in and to any and all Improvements, solely
          for use with applications involving ThermoFluor(R) Technology and/or
          Instruments, and under all patent, copyright, trademark, trade secret
          and other Intellectual Property rights inherent therein and
          appurtenant thereto.

     3.8  Transfer of Improvements to BMS. For a period of [**] after the
          Effective Date, 3DP agrees that it will promptly make full written
          disclosure to BMS of any and all Improvements that 3DP conceives or
          makes or has made to the ThermoFluor(R) Technology and to any
          improvements thereto and/or which 3DP has the right to provide
          hereunder, and 3DP will facilitate the transfer of such

**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission. The omitted
    portions have been filed separately with the Commission

                                       8
<PAGE>

          Improvements to BMS. Such transfer shall occur no later than six (6)
          months after such Improvements have been validated by 3DP.

     3.9  Ownership; 3DP Retained Rights.  3DP shall solely (as to BMS) own all
          Intellectual Property rights in the ThermoFluor(R) Technology and
          Improvements it makes or has made or receives rights thereto (other
          than to Improvements made exclusively by BMS or jointly by BMS and
          3DP).  BMS does not acquire any rights in the ThermoFluor(R)
          Technology or Improvements made exclusively by 3DP thereto, other than
          those license rights expressly specified in this Agreement.  Any
          Improvement made jointly by 3DP and BMS shall be owned jointly by 3DP
          and BMS.

     3.10 Nonexclusive Scriptgen Patent Rights Sublicense. Subject to the terms
          and conditions of this Agreement, 3DP hereby grants BMS and its
          Affiliates a nontransferable, nonsublicensable, nonexclusive, non-
          royalty-bearing sublicense at the BMS Sites under the Scriptgen Patent
          Rights solely for BMS's and its Affiliates' internal business purposes
          of using the Instruments within, and subject to the use restrictions
          in, the ThermoFluor(R) Field which shall be deemed to include any
          research and development activities being undertaken [**] during the
          term of this Agreement.

     3.11 Limitations on ThermoFluor(R) Technology License and the Scriptgen
          Patent Rights Sublicense. Except as permitted under Sections 3.5 and
          3.9:

          3.11.1  BMS and its Affiliates may not operate under the
                  ThermoFluor(R) Technology and/or the Scriptgen Patent Rights
                  on behalf of any Third Party, such as, for example, in
                  connection with providing research or development services to
                  any Third Party on a contractual basis.

          3.11.2  BMS and its Affiliates may not sublicense or assign the
                  Scriptgen Patent Rights and may not transfer or share the
                  ThermoFluor(R) Technology with any Third Party.

          3.11.3  BMS and its Affiliates may not provide services to any Third
                  Party with respect to the ThermoFluor(R) Technology or the
                  Scriptgen Patent Rights.

          3.11.4  Notwithstanding the purchase of the Instruments or the license
                  grants in Sections 3.5 and 3.9, in no event shall BMS or its
                  Affiliates be permitted to use the Instruments, the
                  ThermoFluor(R) Technology or the Scriptgen Patent Rights with
                  any [**].

          3.11.5  No rights to manufacture, modify or develop Instruments are
                  granted by this Agreement.

     3.12 ThermoFluor(R) Software Restrictions. Except as may be permitted
          pursuant to the terms of the escrow agreement entered into among 3DP,
          BMS and the Escrow Agent pursuant to Section 4.4, BMS shall not: (a)
          exceed the scope of the license

**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission. The omitted
    portions have been filed separately with the Commission

                                      10
<PAGE>

          granted in this Article 3; (b) reverse engineer, decompile,
          disassemble or otherwise attempt to learn the source code, structure,
          algorithms or ideas underlying the ThermoFluor(R) Software; (c) tamper
          with, alter, adjust, add to, copy or disseminate the ThermoFluor(R)
          Software; (d) modify, translate or create derivative works based on
          the ThermoFluor(R) Software without the prior written consent of 3DP;
          (e) possess or use the ThermoFluor(R) Software or any portion thereof,
          other than in machine-readable Object Code; or (f) remove any
          copyright, trademark, patent or other proprietary notices which appear
          on the ThermoFluor(R) Software or copies thereof.

     3.13 Packaging and Delivery.

          3.13.1  Unless BMS reasonably requests otherwise, all Instruments
                  purchased by BMS shall be packed for shipment and stored in
                  accordance with 3DP's then-standard commercial practices. It
                  is BMS's obligation to notify 3DP of any special packaging
                  requirements, which requirements 3DP shall use reasonable
                  efforts to comply with at BMS's sole expense.

          3.13.2  All deliveries of the Instruments by 3DP to BMS under this
                  Agreement shall be F.O.B., 3DP's distribution center for the
                  Instruments. Title and risk of loss, delay or damage shall
                  pass from 3DP to BMS at the time of delivery of each shipment
                  of the Instruments to the originating carrier at 3DP's
                  manufacturing or storage facility. Deliveries will be made
                  "Freight Collect" with all freight insurances, duties,
                  customs, import fee, brokerage charges, documentation, and
                  related costs to be paid by BMS.

          3.13.3  Upon receipt of each Instrument, BMS agrees to inspect,
                  promptly and thoroughly, such Instruments for any damage or
                  defects in materials and workmanship. In the event that any
                  Instrument is damaged or contains defects in materials or
                  workmanship, BMS shall promptly provide 3DP with written
                  notice thereof. Such notice must be received by 3DP within
                  thirty (30) business days after the date BMS receives the
                  Instruments and must specify, with particularity, the manner
                  in which the Instrument is damaged or defective. In the
                  absence of such notification within said period of time, BMS
                  shall be deemed to have accepted the Instruments as undamaged
                  and without defects, and all claims with respect thereto,
                  except for claims of defects that could not reasonably have
                  been discovered by a thorough inspection of the Instruments,
                  shall be deemed waived by BMS, irrespective of whether the
                  facts giving rise to such claims shall have been discovered.

          3.13.4  Notwithstanding anything to the contrary in this Agreement or
                  otherwise, BMS's sole remedy and 3DP's sole responsibility
                  with respect to any Instrument that is damaged or defective,
                  as a result of any 3DP action or negligence, or any other
                  liability, shall be to repair or replace the damaged

**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission. The omitted
    portions have been filed separately with the Commission

                                      10
<PAGE>

                  or defective Instrument, or to refund the price paid by BMS
                  therefor. 3DP shall be obligated to pay for or to reimburse
                  BMS for any freight or insurance costs associated with the
                  return to 3DP of any Instruments that are damaged or
                  defective, provided that such return and the method thereof is
                  authorized in advance by 3DP.

     3.14 Instrument Warranty. 3DP warrants to BMS good title to each Instrument
          at the time of delivery thereof to BMS.

     3.15 Disclaimer.  EXCEPT AS SET FORTH IN SECTION 3.13, 3DP PROVIDES THE
          THERMOFLUOR(R) SOFTWARE AND INSTRUMENTS "AS IS" AND WITHOUT WARRANTY,
          AND 3DP DISCLAIMS ANY AND ALL OTHER WARRANTIES, CONDITIONS, OR
          REPRESENTATIONS (EXPRESS OR IMPLIED, STATUTORY, ORAL OR WRITTEN),
          INCLUDING, BUT NOT LIMITED TO, ANY AND ALL IMPLIED WARRANTIES OF
          CONDITION, PERFORMANCE, SATISFACTORY QUALITY, TITLE, NONINFRINGEMENT,
          MERCHANTABILITY, OR FITNESS OR SUITABILITY FOR ANY PURPOSE (WHETHER OR
          NOT 3DP KNOWS, HAS REASON TO KNOW, HAS BEEN ADVISED, OR IS OTHERWISE
          IN FACT AWARE OF ANY SUCH PURPOSE), WHETHER ALLEGED TO ARISE BY LAW,
          BY REASON OF CUSTOM OR USAGE IN THE TRADE, OR BY COURSE OF DEALING.

                                   ARTICLE 4

                          OBLIGATIONS OF THE PARTIES

     4.1  Efforts. Each party shall use good faith, commercially-reasonable
          efforts to perform its responsibilities under this Agreement. As used
          herein, the term "commercially-reasonable efforts" will mean efforts
          consistent with such Party's prudent scientific and business judgment
          in accordance with its internal practices as applied to other programs
          of similar scientific and commercial potential.

     4.2  Training; Support; Maintenance. 3DP will provide up to [**] days of
          training, by telephone, or for BMS Sites in the United States,
          personal training at such BMS Site (with BMS promptly reimbursing 3DP
          for out-of-pocket business travel and living expenses related to such
          travel, and scheduling each visit to use at least one full day of
          training at a BMS Site) to BMS per each Instrument purchased by BMS,
          up to a maximum of [**] days, until the [**] anniversary of the
          Effective Date. 3DP will provide additional training and support as
          requested by BMS at a cost to be negotiated by the Parties in good
          faith. The Parties acknowledge that service and maintenance on the
          Instruments purchased by BMS may be provided through a contract with a
          Third Party.

**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission. The omitted
    portions have been filed separately with the Commission

                                      11
<PAGE>

     4.3  Updates. 3DP shall provide Updates to the ThermoFluor(R) Software to
          BMS without additional charge to BMS, as they are released by 3DP from
          time to time, until the fourth anniversary of the Effective Date.

     4.4  Disclosure of Results; Reports. BMS shall supply to 3DP, at a minimum,
          quarterly written reports presenting a meaningful summary of the work
          performed under the ThermoFluor(R) Technology, as well as with the
          Instruments.

     4.5  Escrow of Source Code. Promptly after the Effective Date, 3DP shall
          deposit with a Third Party, mutually-acceptable to the Parties (the
          "Escrow Agent"), a copy of the ThermoFluor(R) Source Code. Pursuant to
          an agreement to be entered into among 3DP, BMS and the Escrow Agent,
          the Escrow Agent shall release such Source Code to BMS in the event
          3DP: (i) files a petition for bankruptcy; (ii) has such a petition
          filed against it which has not been dismissed within ninety (90) days;
          (iii) becomes insolvent; (iv) makes an assignment for the benefit of
          creditors or other equitable arrangement or composition; (v) ceases
          doing business; or (vi) ceases to support or maintain the
          ThermoFluor(R) Software. 3DP shall bear all costs and expenses with
          respect to such escrow arrangement. Following the initial deposit, 3DP
          shall be obligated to notify BMS of any update to the Source Code held
          in escrow at least every calendar quarter through the fourth
          anniversary of the Effective Date.

                                   ARTICLE 5

                                 PAYMENT TERMS

     5.1  Mode of Payment. All payments to 3DP hereunder shall be made by wire
          transfer of United States Dollars in the requisite amount to such bank
          account as 3DP may designate by timely notice to BMS. Payments shall
          be free and clear of any taxes, fees or charges, to the extent
          applicable.

     5.2  Late Payments. All amounts payable by BMS hereunder, shall be paid by
          BMS to 3DP in full, without any right of set-off or deduction. BMS
          shall pay interest on all amounts past due at the annual rate of one
          percent (1%) over the prime rate of interest reported in The Wall
          Street Journal for the date such amount was due.


                                   ARTICLE 6

                                CONFIDENTIALITY

     6.1  Confidentiality Obligations. The Parties agree that, for the term of
          this Agreement and for ten (10) years thereafter, each Party, as a
          Receiving Party, that receives Confidential Information from the other
          Party, shall keep, and shall take

**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission. The omitted
    portions have been filed separately with the Commission

                                      12
<PAGE>

          steps, not fewer than it takes to protects its own valuable,
          proprietary information, and not less than reasonable measures, to
          attempt to ensure that its officers, directors and employees keep,
          confidential, and shall not publish or otherwise disclose, and shall
          not use for any purpose (except as expressly permitted hereunder) any
          Confidential Information (including without limitation, Know-how)
          furnished to it by its Disclosing Party pursuant to this Agreement.

     6.2  Written Assurances and Permitted Uses of Confidential Information.

          6.2.1  The Receiving Party may disclose the Disclosing Party's
                 Confidential Information to the extent the Receiving Party is
                 compelled to disclose such information by a judicial or
                 administrative authority of competent jurisdiction, including
                 but not limited to submitting information to tax authorities or
                 to comply with any discovery or similar request for production
                 of documents in litigation or similar alternative dispute
                 resolution proceedings, provided however, that in such case,
                 the Receiving Party shall timely give notice to the Disclosing
                 Party so that the Disclosing Party may seek a protective order
                 or other remedy from said authority. In any event, the
                 Receiving Party shall disclose only that portion of the
                 Confidential Information that, in the opinion of its legal
                 counsel, is legally required to be disclosed, and will exercise
                 reasonable efforts to ensure that any such information so
                 disclosed will be accorded confidential treatment by said court
                 or tribunal.

          6.2.2  The existence and the terms and conditions of this Agreement
                 which the Parties have not specifically agreed to disclose
                 pursuant to this Section 6.2 shall be treated by each Party as
                 Confidential Information of the other Party.

          6.2.3  To the extent that it is reasonably necessary or appropriate to
                 fulfill its obligations to comply with the rules controlling
                 disclosure of material information during patent examination,
                 either Party may disclose Confidential Information received
                 from the other Party to the United States Patent & Trademark
                 Office or the Canadian or the European Patent Offices.

     6.3  Permitted Disclosures for Business Development Purposes.
          Notwithstanding the foregoing, or any other provision in this
          Agreement to the contrary, 3DP may describe the financial terms of
          this Agreement in confidence, in connection with capital raising or
          financing activities; provided, however, any such recipient of such
          Confidential Information shall agree in writing to keep such terms
          confidential for the same time periods and to an equivalent extent as
          3DP is required to keep Confidential Information confidential under
          this Agreement. Furthermore, BMS acknowledges that 3DP may be
          obligated to disclose terms of this Agreement and make public a copy
          of this Agreement in the event it files a

**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission. The omitted
    portions have been filed separately with the Commission

                                      13

<PAGE>

          registration statement with respect to its shares or it becomes a
          public company as required by applicable U.S. law; provided however,
          the terms of this Agreement and the copy submitted to the applicable
          governmental agency shall be redacted such that the extent of any such
          disclosure shall be limited to that which in the reasonable opinion of
          3DP's legal counsel is legally required to be disclosed.

                                   ARTICLE 7

                        PATENT RIGHTS AND INFRINGEMENT

     7.1  DirectedDiversity(R) Patent Rights and ThermoFluor(R) Patent Rights.
          3DP agrees to use commercially-reasonable efforts to prepare, file,
          prosecute and maintain the DirectedDiversity(R) Patent Rights and the
          ThermoFluor(R) Patent Rights, at 3DP's expense, in a manner deemed
          appropriate in 3DP's sole judgment, and use commercially-reasonable
          efforts to decide whether to file, and, if so, to prepare, file,
          prosecute and maintain any jointly-owned patent rights, as anticipated
          in Section 3.8, at equally-shared expense, with due consideration of
          BMS's input, but in a manner deemed appropriate in 3DP's sole
          judgment. 3DP agrees to keep BMS materially advised of the status of
          all relevant DirectedDiversity(R) Patent Rights and the ThermoFluor(R)
          Patent Rights, and jointly-owned patent rights, upon reasonable
          written request from BMS.

     7.2  BMS Patent Rights. BMS agrees to keep 3DP materially advised of the
          status of all patent rights filed by or granted to BMS and/or its
          Affiliates which are based on, derived from, improvements of and/or
          related to DirectedDiversity(R) Patent Rights and/or ThermoFluor(R)
          Technology, and under which 3DP has rights, according to the
          provisions of Section 2.2.

     7.3  Cooperation. Each Party agrees to endeavor in good faith to coordinate
          its efforts with the other Party in order to minimize or avoid
          interference with the patent prosecution or rights of the other Party
          with respect to patent rights under which the other Party has a
          license.

     7.4  Infringement by Third Parties. In the event that BMS becomes aware of
          any infringement by one or more Third Parties of any of the patents
          within DirectedDiversity(R) Patent Rights or within the ThermoFluor(R)
          Patent Rights, or of any rights in the ThermoFluor(R) Software, BMS
          shall promptly notify 3DP. 3DP shall respond to any such infringement
          by Third Parties in a manner deemed appropriate by 3DP, in its sole
          judgment.

     7.5  Third Party Patent Rights.  If any warning letter or other notice of
          infringement is received by a Party, or action, suit or proceeding is
          brought against a Party alleging infringement of a patent of any Third
          Party with respect to operations under the DirectedDiversity(R) Patent
          Rights or the ThermoFluor(R) Technology,

**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission. The omitted
    portions have been filed separately with the Commission

                                      14
<PAGE>

          the Parties shall promptly discuss and decide what response is in the
          best interests of the Parties.

                                   ARTICLE 8

                        REPRESENTATIONS AND WARRANTIES

     8.1  Authority. Each Party represents and warrants that it has the full
          right, power and authority to execute, deliver and perform its
          obligations pursuant to this Agreement.

     8.2  No Conflicts.  Each Party represents and warrants that the execution,
          delivery and performance of this Agreement does not conflict with, or
          constitute a breach or default under any of its charter or
          organizational documents, any law, order, judgment or governmental
          rule or regulation applicable to it, or any material agreement,
          contract, commitment or instrument to which it is a party.

     8.3  No Unauthorized Operations Under DirectedDiversity(R) Patent Rights
          and the ThermoFluor(R) Technology. BMS represents and warrants that it
          will not operate, or permit another, about which it has knowledge and
          with which it has a relationship, to operate, under the
          DirectedDiversity(R) Patent Rights or the ThermoFluor(R) Technology at
          any site that is not a BMS Site.

     8.4  Patents. 3DP represents and warrants that Exhibit A and Exhibit C are
          accurate and complete, and identify all patent rights owned by 3DP, as
          of the Effective Date, which are believed necessary for the use of the
          methods and technology claimed in the DirectedDiversity(R) Patent
          Rights and the ThermoFluor(R) Patent Rights, in accordance with the
          licenses granted hereunder. [**] 3DP has not conducted, and is not
          obliged to conduct, either a search for, or an analysis of, United
          States patents, Canadian patents and/or patents issued to members of
          the European Patent Community, that may be infringed by the practice
          of any Instrument, as anticipated in this Agreement, [**].

     8.5  Disclaimer of Warranties. EXCEPT AS SET FORTH IN SECTION 3.13, 3DP
          MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OR CONDITIONS OF
          ANY KIND, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE
          DIRECTEDDIVERSITY(R) PATENT RIGHTS, THE THERMOFLUOR(R) TECHNOLOGY, OR
          THE INSTRUMENTS INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF
          MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

                                   ARTICLE 9

                             TERM AND TERMINATION

     9.1  Term.  This Agreement shall commence upon the Effective Date and shall
          expire upon the expiration of all of the licenses granted in Article 2
          and Article 3.  The license grant to BMS pursuant to Article 2 shall
          terminate upon the expiration or lapse of the last-to-expire
          DirectedDiversity(R) Patent Rights listed in Exhibit A,

**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission. The omitted
    portions have been filed separately with the Commission

                                      15
<PAGE>

          and the license grant to BMS pursuant to Article 3 shall terminate
          upon the expiration or lapse of the last-to-expire ThermoFluor(R)
          Patent Rights listed in EXHIBIT C.

     9.2  Termination for Breach. The failure by a Party to comply with any of
          the material obligations contained in this Agreement shall entitle the
          other Party to give notice to the allegedly breaching Party to have
          the default cured. If such default is not cured within sixty (60) days
          after the receipt of such notice, or diligent and ongoing steps are
          not taken to cure, if by its nature such default could not be cured
          within sixty (60) days, the notifying Party shall be entitled, without
          prejudice to any of its other rights conferred on it by this
          Agreement, and in addition to any other remedies that may be available
          to it, to terminate this Agreement, provided, however, that such right
          to terminate shall be stayed in the event that, during such sixty (60)
          day period, the Party alleged to have been in default shall have: (a)
          initiated arbitration in accordance with the provisions of Section
          10.1, below, with respect to the alleged default, and (b) diligently
          and in good faith cooperated in the prompt resolution of such
          arbitration proceedings.

     9.3  No Waiver. The right of a Party to terminate this Agreement, as
          provided in Section 9.2, shall not be affected in any way by its
          waiver or failure to take action with respect to any prior default.

     9.4  Insolvency or Bankruptcy.

          9.4.1  Either Party may, in addition to any other remedies available
                 by law or in equity, terminate this Agreement by written notice
                 to the other Party in the event that the latter Party shall
                 have become insolvent or bankrupt, or shall have an assignment
                 for the benefit of its creditors, or there shall have been
                 appointed a trustee or receiver of the other Party or for all
                 or a substantial part of its property, or any case or
                 proceeding shall have been commenced or other action taken by
                 or against the other Party in bankruptcy or seeking
                 reorganization, liquidation, dissolution, winding-up,
                 arrangement or readjustment of its debts or any other relief
                 under any bankruptcy, insolvency, reorganization or other
                 similar act or law of any jurisdiction now or hereafter in
                 effect, or there shall have been issued a warrant of
                 attachment, execution, distraint or similar process against any
                 substantial part of the property of the other Party, and any
                 such event shall have continued for 90 days undismissed,
                 unbonded and undischarged.

          9.4.2  All rights and licenses granted under or pursuant to this
                 Agreement by BMS or 3DP are, and shall otherwise be deemed to
                 be, for purposes of Section 365(n) of the U.S. Bankruptcy Code,
                 licenses of right to "Intellectual Property," as defined under
                 Section 101 of the U.S. Bankruptcy Code. The Parties agree that
                 the Parties, as licensees of such rights under this Agreement,
                 shall retain and may fully exercise all of their

**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission. The omitted
    portions have been filed separately with the Commission

                                      16
<PAGE>

               rights and elections under the U.S. Bankruptcy Code. The Parties
               further agree that, in the event of the commencement of a
               bankruptcy proceeding by or against either Party under the U.S.
               Bankruptcy Code, the Party hereto which is not a party to such
               proceeding shall be entitled to a complete duplicate of (or
               complete access to, as appropriate) any such intellectual
               property and all embodiments of such relevant intellectual
               property, and same, if not already in their possession, shall be
               promptly delivered to them (i) upon any such commencement of a
               bankruptcy proceeding upon their written request therefor, unless
               the Party subject to such proceedings elects to continue to
               perform all of their obligations under this Agreement, or (ii) if
               not delivered under (i) above, upon the rejection of this
               Agreement by or on behalf of the Party subject to such proceeding
               upon written request therefor by a nonsubject Party.

     9.5  Survival of Obligations. The termination or expiration of this
          Agreement shall not relieve the Parties of any obligations accruing
          prior to such termination, and any such termination shall be without
          prejudice to the rights of either Party against the other. The
          provisions of Section 2.3, Section 3.6, Section 3.7, Section 3.8,
          Section 3.13, Section 3.14, Section 4.5, Section 5.2, Article 6,
          Section 8.5, Section 9.5, Article 10, Article 11 and Article 12
          (except Section 12.5) shall survive any termination of this Agreement.

     9.6  Return of Confidential Information. Upon termination of this Agreement
          by 3DP pursuant to Section 9.2 or 9.4, BMS will promptly return all
          3DP Confidential Information related to ThermoFluor(R) Technology
          transferred to it under this Agreement, whether in oral, written,
          graphic or electronic form, and will cease all use of ThermoFluor(R)
          Technology; provided, however, that BMS shall thereafter continue to
          have all rights to use any information or results obtained by BMS from
          its use of ThermoFluor(R) Technology during the term of this
          Agreement, and 3DP will return all BMS Confidential Information
          received hereunder. Notwithstanding the provisions above in Section
          9.6, BMS may retain and use 3DP Confidential Information related to
          ThermoFluor(R) Technology solely with respect to the Instruments it
          has purchased from 3DP hereunder, but not to build or modify any
          Instrument, or any instrument performing the same or similar function
          to an Instrument, and not to disclose to or use such information for
          any Third Party.

**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission. The omitted
    portions have been filed separately with the Commission

                                      17
<PAGE>

                                   ARTICLE 10

                               DISPUTE RESOLUTION

10.1    Dispute Resolution. Any dispute concerning or arising out of this
        Agreement or concerning the existence or validity hereof, shall be
        determined by the following procedure.

        10.1.1  Both Parties understand and appreciate that their long term
                mutual interest will be best served by affecting a rapid and
                fair resolution of any claims or disputes which may arise out of
                services performed under this Agreement or from any dispute
                concerning the terms of this Agreement. Therefore, both Parties
                agree to use their reasonable best efforts to resolve all such
                disputes as rapidly as practicable on a fair and equitable
                basis. Toward this end, both Parties agree to develop and follow
                a process for presenting, rapidly assessing, and settling claims
                on a fair and equitable basis that takes into account the
                precise subject and nature of the dispute.

        10.1.2  If any dispute or claim arising under this Agreement cannot be
                readily resolved by the Parties pursuant to the process
                described above, then the Parties agree to refer the matter to a
                panel consisting of the Chief Executive Officer of 3DP, and the
                Senior Vice President of Early Discovery and Applied Technology
                for BMS, or a comparable position selected by either Party from
                time to time, for review and a non-binding resolution. A copy of
                the terms of this Agreement, agreed upon facts (and areas of
                disagreement), and concise summary of the basis for each side's
                contentions will be provided to both such representatives who
                shall review the same, confer, and attempt to reach a mutual
                resolution of the issue.

        10.1.3  If the matter has not been resolved utilizing the foregoing
                process, and the Parties are unwilling to accept the non-binding
                decision of the indicated panel, either or both Parties may
                elect to pursue definitive resolution through binding
                arbitration, which the Parties agree to accept in lieu of
                litigation or other legally-available remedies (with the
                exception of injunctive relief where such relief is necessary to
                protect a Party from irreparable harm pending the outcome of any
                such arbitration proceeding). Binding arbitration shall be
                settled in accordance with the Commercial Arbitration Rules of
                the American Arbitration Association by a panel of three
                arbitrators chosen in accordance with these Rules. This
                Agreement shall be governed by and construed in accordance with
                the substantive laws of the State of Delaware, without regard to
                the conflicts of laws provisions of Delaware. The arbitration
                will be held in Wilmington, Delaware. Judgment upon the award
                rendered may be entered in any court having jurisdiction and the
                Parties hereby consent to the said

**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission.  The omitted
    portions have been filed separately with the Commission

                                      18
<PAGE>

                    jurisdiction and venue, and further irrevocably waive any
                    objection which either Party may have now or hereafter to
                    the laying of venue of any proceedings in said courts and to
                    any claim that such proceedings have been brought in an
                    inconvenient forum, and further irrevocably agree that a
                    judgment or order in any such proceeding shall be conclusive
                    and binding upon the Parties and may be enforced in the
                    courts of any other jurisdiction.

                                   ARTICLE 11

                                INDEMNIFICATION

        11.1    Indemnification of 3DP. BMS shall indemnify and defend 3DP and
                its Affiliates, and the directors, officers, employees, agents
                and counsel of 3DP and such Affiliates, and the successors and
                assigns of any of the foregoing (the "3DP Indemnitees"), and
                hold the 3DP Indemnitees harmless from and against any and all
                losses resulting from any claim, suit or proceeding brought by
                one or more Third Parties against a 3DP Indemnitee, arising from
                or occurring as a result of the operations by BMS under the
                DirectedDiversity(R) Patent Rights or the ThermoFluor(R)
                Technology or use of the Instruments, or the discovery,
                evaluation, manufacture, import, use, offer for sale or sale of
                products developed in whole or in part through the operations by
                BMS under the DirectedDiversity(R) Patent Rights and the
                ThermoFluor(R) Technology or use of the Instruments, except to
                the extent any such claim, suit or proceeding results from the
                breach of any of the provisions of this Agreement, gross
                negligence or willful misconduct of 3DP.

        11.2    Procedure. Any of the 3DP Indemnitees that intends to claim
                indemnification under this Article 11 shall promptly notify BMS
                (the "Indemnitor") in writing of any liability, damage, loss,
                cost and/or expense (including reasonable attorneys' fees)
                arising out of Third Party claims or lawsuits in respect of
                which the 3DP Indemnitee intends to claim such indemnification,
                and shall permit the Indemnitor to assume direction and control
                of the defense of the claim (including the selection of counsel,
                reasonably acceptable to the 3DP Indemnitee, and the right to
                negotiate a settlement, at the discretion of the Indemnitor,
                provided that such settlement does not impose any material
                obligation or detriment on the 3DP Indemnitee), and shall
                cooperate as requested (at the expense of the Indemnitor) in the
                defense of the claim; provided, however, that a 3DP Indemnitee
                shall have the right to retain its own counsel, with the fees
                and expenses to be paid by such 3DP Indemnitee. The failure to
                deliver written notice to the Indemnitor within a reasonable
                time after the commencement of any such action, if prejudicial
                to its ability to defend such action, shall relieve the
                Indemnitor of any liability to the 3DP Indemnitee under this
                Article 11. At the Indemnitor's request, the 3DP Indemnitee
                under this Article 11, and its employees and agents, shall
                cooperate

**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission.  The omitted
    portions have been filed separately with the Commission

                                      19
<PAGE>

                fully with the Indemnitor and its legal representatives in the
                investigation of any loss covered by this indemnification and
                provide true, correct and complete information with respect
                thereto.

                                  ARTICLE 12

                                 MISCELLANEOUS

        12.1    Entire Agreement. This Agreement, and the DiscoverWorks Drug
                Discovery Collaboration Agreement, the GPCR License And User
                Agreement and the PERT Internal Use License and Option
                Agreement, all entered into simultaneously with this Agreement,
                constitute and contain the entire understanding and agreement of
                the Parties respecting the subject matters of these respective
                agreements, and cancel and supersede any and all prior
                negotiations, correspondence, understandings and agreements
                between the Parties, whether oral or written, regarding such
                subject matters.

        12.2    Further Actions. Each Party agrees to execute, acknowledge and
                deliver such further instruments and to do all such other acts
                as may be necessary or appropriate in order to carry out the
                purposes and intent of this Agreement.

        12.3    Binding Effect. This Agreement and the rights granted herein
                shall be binding upon and shall inure to the benefit of 3DP,
                BMS, and their successors and permitted assigns.

        12.4    Assignment. Neither Party shall assign this Agreement without
                the prior written consent of the other Party; provided, however,
                that either Party may assign this Agreement without the prior
                written consent of the other Party in connection with the sale
                or transfer of substantially all of its assets that relate to
                this Agreement, or in the event of its merger or consolidation
                or change of control or similar transaction. Any permitted
                assignee shall assume all obligations of its assignor under this
                Agreement.

        12.5    Restrictions on Unsolicited Activities. In consideration of the
                licenses granted hereunder, BMS agrees that for the term of this
                Agreement, without the prior written consent of the board of
                directors of 3DP, neither BMS nor any of its respective
                Affiliates (including any person or entity directly or
                indirectly, through one or more intermediaries, controlling one
                of these entities, or controlled by one of these entities or
                under common control with one of these entities) will (i)
                purchase, offer or agree to purchase, or announce an intention
                to purchase, directly or indirectly, any securities or assets of
                3DP; (ii) make, or in any way participate, directly or
                indirectly, in any "solicitation" of "proxies" to vote or
                "consents" (as such terms are used in the rules and regulations
                of the Securities

**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission.  The omitted
    portions have been filed separately with the Commission

                                      20
<PAGE>

                and Exchange Commission), or seek to advise or influence any
                person with respect to the voting of any voting securities of
                3DP or any Affiliate thereof; (iii) initiate or support,
                directly or indirectly, any stockholder proposal with respect to
                3DP; (iv) directly or indirectly make any public announcement
                with respect to, or submit a proposal for, or offer of (with or
                without conditions) any extraordinary transaction involving 3DP
                or its securities or assets, or any Affiliate thereof, or of any
                successor to or person in control of 3DP or any of its
                businesses, or any assets of 3DP any Affiliate or division
                thereof, or of any such successor or controlling person; or (v)
                form, join or in any way participate in a "group" as defined in
                Section 13(d)(3) of the Exchange Act in connection with any of
                the foregoing. Nothing contained in this Section 12.5 shall
                prohibit the ownership by BMS of up to 1% of any class of
                securities of 3DP which are registered pursuant to the Exchange
                Act.

        12.6    No Implied Licenses. No rights to any other patents, Know-how or
                technical information, or other Intellectual Property rights,
                other than as explicitly identified herein, are granted or
                deemed granted by this Agreement. No right, expressed or
                implied, is granted by this Agreement to a Party to use in any
                manner the name or any other trade name or trademark of the
                other Party in connection with the performance of this
                Agreement.

        12.7    No Waiver. No waiver, modification or amendment of any provision
                of this Agreement shall be valid or effective unless made in
                writing and signed by a duly authorized officer of each Party.
                The failure of either Party to assert a right hereunder or to
                insist upon compliance with any term or condition of this
                Agreement shall not constitute a waiver of that right or excuse
                a similar subsequent failure to perform any such term or
                condition.

        12.8    Force Majeure. The failure of a Party to perform any obligation
                under this Agreement by reason of acts of God, acts of
                governments, riots, wars, strikes, accidents or deficiencies in
                materials or transportation or other causes of a similar
                magnitude beyond its control shall not be deemed to be a breach
                of this Agreement.

        12.9    Independent Contractors. Both Parties are independent
                contractors under this Agreement. Nothing contained in this
                Agreement is intended nor is to be construed so as to constitute
                3DP or BMS as partners or joint venturers with respect to this
                Agreement. Neither Party shall have any express or implied right
                or authority to assume or create any obligations on behalf of or
                in the name of the other Party or to bind the other Party to any
                other contract, agreement, or undertaking with any Third Party.

        12.10   Notices and Deliveries. Any formal notices, request, delivery,
                approval or consent required or permitted to be given under this
                Agreement shall be in writing and shall be deemed to have been
                sufficiently given when it is received, whether

**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission.  The omitted
    portions have been filed separately with the Commission

                                      21
<PAGE>

                delivered in person, transmitted by facsimile with
                contemporaneous confirmation, delivered by registered letter (or
                its equivalent) or delivered by overnight courier service
                (receipt required), to the Party to which it is directed at its
                address shown below or such other address as such Party shall
                have last given by notice to the other Parties.

                If to BMS:

                Bristol-Myers Squibb Company
                Route 206 & Province Line Road
                P.O. Box 4000
                Princeton, New Jersey 08543
                ATTN:  Vice President and Senior Counsel
                       Pharmaceutical Research Institute


                If to 3DP:                           with a copy to:

                3-Dimensional Pharmaceuticals, Inc.  Morgan, Lewis & Bockius LLP
                Eagleview Corporate Center           502 Carnegie Center
                665 Stockton Drive, Suite 104        Princeton, New Jersey 08540
                Exton, PA  10341
                ATTN: Chief Executive Officer        ATTN: Randall B. Sunberg,
                                                           Esq.

        12.11   Public Announcements. The Parties shall consult with each other
                and reach mutual written agreement before making any public
                announcement concerning this Agreement or its subject matter.
                Notwithstanding the foregoing, the Parties may disclose the
                existence and general nature of this Agreement and may make
                disclosures for purposes of satisfying legal and regulatory
                requirements in accordance with Article 6; however, neither
                Party shall use the name of the other Party for promotional
                purposes.

        12.12   Headings. The captions to the sections in this Agreement are not
                a part of this Agreement, and are included merely for
                convenience of reference only and shall not affect its meaning
                or interpretation.

        12.13   Severability. If any provision of this Agreement becomes or is
                declared by a court of competent jurisdiction to be illegal,
                unenforceable or void, this Agreement shall continue in full
                force and effect without said provision, so long as the
                Agreement, taking into account said voided provision(s),
                continues to provide the Parties with the same practical
                economic benefits as the Agreement containing said voided
                provision(s) did on the Effective Date. If, after taking into
                account said voided provision(s), the Parties are unable to
                realize the practical economic benefit contemplated on the
                Effective Date, the Parties shall negotiate

**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission.  The omitted
    portions have been filed separately with the Commission

                                      22
<PAGE>

                in good faith to amend this Agreement to reestablish the
                practical economic benefit provided the Parties on the Effective
                Date.

        12.14   No Consequential Damages. IN NO EVENT SHALL EITHER PARTY OR ANY
                OF ITS RESPECTIVE AFFILIATES BE LIABLE TO THE OTHER PARTY OR ANY
                OF ITS AFFILIATES FOR SPECIAL, INDIRECT, INCIDENTAL OR
                CONSEQUENTIAL DAMAGES, WHETHER IN CONTRACT, WARRANTY, TORT,
                NEGLIGENCE, STRICT LIABILITY OR OTHERWISE, INCLUDING, BUT NOT
                LIMITED TO, LOSS OF PROFITS OR REVENUE, OR CLAIMS OF CUSTOMERS
                OF ANY OF THEM OR OTHER THIRD PARTIES FOR SUCH OTHER DAMAGES.

        12.15   Applicable Law. This Agreement shall be governed by and
                interpreted in accordance with the laws of the State of
                Delaware, without reference to its conflicts of laws provisions.

        12.16   Advice of Counsel. BMS and 3DP have each consulted with counsel
                of their choice regarding this Agreement, and each acknowledges
                and agrees that this Agreement shall not be deemed to have been
                drafted by one party or another and will be construed
                accordingly.

        12.17   Counterparts. This Agreement may be executed in counterparts, or
                facsimile versions, each of which shall be deemed to be an
                original, and both of which together shall be deemed to be one
                and the same agreement.

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their respective duly authorized officers as of the date first above written,
each copy of which shall for all purposes be deemed to be an original.


3-DIMENSIONAL PHARMACEUTICALS, INC.          BRISTOL-MYERS SQUIBB COMPANY

By:  /s/ David C. U'Prichard                 By:   /s/ Marilyn Hartig

Name:  David C. U'Prichard, Ph.D.            Name:  Marilyn Hartig, Ph.D.

Title: Chief Executive Officer               Title:  VP, External Sciences
                                                      & Technology

**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission.  The omitted
    portions have been filed separately with the Commission

                                      23
<PAGE>

                                   EXHIBIT A
                      DIRECTED DIVERSITY(R) PATENT RIGHTS

<TABLE>
<CAPTION>
                                                                                               Patent No.         Issue Date
    SKGF Ref.                       Title                  Serial Number    Filing Date     (if applicable)    (if applicable)
------------------------------------------------------------------------------------------------------------------------------
<S>                 <C>                                    <C>             <C>             <C>                 <C>
1503.0010000        System and Method of Automatically         08/306,915        09/16/94     5,463,564          10/31/95
                    Generating Chemical Compounds with
                    Desired Properties
------------------------------------------------------------------------------------------------------------------------------
1503.0010001        System and Method  of Automatically        08/535,822        09/28/95     5,574,656          11/12/96
                    Generating Chemical Compounds with
                    Desired Properties
------------------------------------------------------------------------------------------------------------------------------
1503.0010002        System and Method of Automatically         08/698,246        08/15/96     5,684,711          11/04/97
                    Generating Chemical Compounds with
                    Desired Properties
------------------------------------------------------------------------------------------------------------------------------
1503.0010003        System, Method and Computer Program        08/904,737        08/01/97     5,901,069          05/04/99
                    Product for At Least Partially
                    Automatically Generating Chemical
                    Compounds with Desired Properties
                    From a List of Potential Chemical
                    Compounds to Synthesize
------------------------------------------------------------------------------------------------------------------------------
[**]                [**]                                       [**]              [**]
------------------------------------------------------------------------------------------------------------------------------
[**]                [**]                                       [**]              [**]
------------------------------------------------------------------------------------------------------------------------------
1503.001EP00        System and Method of Automatically         95933748.6        09/11/95     0781436            07/02/97
                    Generating Chemical Compounds with                                        (Published)        (Publication
                    Desired Properties                                                                           date)
------------------------------------------------------------------------------------------------------------------------------
[**]                [**]                                       [**]              [**]
------------------------------------------------------------------------------------------------------------------------------
[**]                [**]                                       [**]              [**]
------------------------------------------------------------------------------------------------------------------------------
[**]                [**]                                       [**]              [**]
------------------------------------------------------------------------------------------------------------------------------
[**]                [**]                                       [**]              [**]
------------------------------------------------------------------------------------------------------------------------------
[**]                [**]                                       [**]              [**]
------------------------------------------------------------------------------------------------------------------------------
[**]                [**]                                       [**]              [**]
------------------------------------------------------------------------------------------------------------------------------
[**]                [**]                                       [**]              [**]
------------------------------------------------------------------------------------------------------------------------------
1503.020EP01        System, Method and Computer Program        97948320.3        11/04/97     0935784            08/18/99
                    Product for Identifying Chemical                                          (Published)        (Publication
                    Compounds Having Desired Properties                                                          date)
------------------------------------------------------------------------------------------------------------------------------
1503.020EP02        System, Method, and Computer Program       97946679.4        11/04/97     0935789            08/18/99
                    Product for the Visualization and                                         (Published)        (Publication
                    Interactive Processing and Analysis                                                          date)
                    of Chemical Data
</TABLE>

**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission.  The omitted
    portions have been filed separately with the Commission

                                      24
<PAGE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------
1503.020PC03        System, Method, and Computer Program   PCT/US99/09963       05/07/99       WO 99/57686       11/11/99
                    Product for Representing Proximity                                         (Published)       (Publication
                    Data in A Multi-dimensional Space                                                            date)
------------------------------------------------------------------------------------------------------------------------------
<S>                 <C>                                    <C>                  <C>            <C>               <C>
[**]                [**]                                   [**]                 [**]
------------------------------------------------------------------------------------------------------------------------------
[**]                [**]                                   [**]                 [**]
------------------------------------------------------------------------------------------------------------------------------
[**]                [**]                                   [**]                 [**]
------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Exhibit A

**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission.  The omitted
    portions have been filed separately with the Commission

                                      25
<PAGE>

                                   EXHIBIT B

                            Scriptgen Patent Rights
                            -----------------------

United States Patent No. 5, 585, 277

United States Patent No. 5, 679, 582

International Patent Application PCT/US96/19698


**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission.  The omitted
    portions have been filed separately with the Commission


                                      26
<PAGE>

                                   EXHIBIT C
                         THERMOFLUOR(R) PATENT RIGHTS

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Patent No.       Issue Date
      SKGF Ref.                           Title                        Serial Number  Filing Date  (if applicable)   (if applicable)
------------------------------------------------------------------------------------------------------------------------------------
<S>                 <C>                                                <C>            <C>          <C>               <C>
1503.0110001        Microplate Thermal Shift Assay for Ligand          08/853,464     05/09/97     6,020,141         02/01/00
                    Development and Multi-variable Protein Chemistry
                    Optimization
------------------------------------------------------------------------------------------------------------------------------------
1503.0110002        Microplate Thermal Shift Assay for Ligand          08/853,459     05/09/97     6,036,920         03/14/00
                    Development and Multi-variable Protein Chemistry
                    Optimization
------------------------------------------------------------------------------------------------------------------------------------
[**]                [**]                                               [**]           [**]
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1503.011EP03        Microplate Thermal Shift Assay and Apparatus for   97927628.4     05/09/97     0914608           05/12/99
                    Ligand Development and Multi-variable Protein                                  (Published)       (Publication
                    Chemistry Optimization                                                                           date)
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1503.031PC01        High Throughput Method for Functionally            PCT/US98/24035 11/12/98     WO 99/24050       05/20/99
(Now in Nat Phase)  Classifying Proteins                                                           (Published)       (Publication
                                                                                                                     date)
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</TABLE>

**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission.  The omitted
    portions have been filed separately with the Commission

                                      27
<PAGE>

                                  EXHIBIT D.1

[**]


                                  EXHIBIT D.2

[**]


**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission.  The omitted
    portions have been filed separately with the Commission

                                      28
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.37
<SEQUENCE>18
<FILENAME>0018.txt
<DESCRIPTION>USER AGMNT BTWN THE COMPANY & BRISTOL MEYERS
<TEXT>

<PAGE>

                                                                   EXHIBIT 10.37

                        GPCR LICENSE AND USER AGREEMENT

THIS GPCR LICENSE AND USER AGREEMENT is made and entered into as of July 7,
2000, by and between 3-Dimensional Pharmaceuticals, Inc., a Delaware corporation
with an office at Eagleview Corporate Center, 665 Stockton Drive, Suite 104,
Exton, PA 19341 ("3DP"), and Bristol-Myers Squibb Company, a Delaware
corporation having a principal place of business at Route 206, P.O. Box 4000,
Princeton, New Jersey 08543 ("BMS").  3DP and BMS may be referred to herein as a
"Party" or, collectively, as the "Parties."

                                  BACKGROUND

WHEREAS, 3DP owns or controls certain proprietary rights and know-how relating
to certain GPCR Structures, GPCR Homology Models and related analysis
technologies; and

WHEREAS, 3DP has compiled and is compiling, and owns, certain information and
data regarding certain GPCR Structures and GPCR Homology Models in a proprietary
database which may be useful in the study of biological phenomena and design and
discovery of new pharmaceutical and diagnostic products; and

WHEREAS, BMS desires to obtain access to 3DP's Proteomica Database, and to
obtain certain licenses under certain of 3DP's proprietary rights and know-how,
to conduct research and development with respect to certain GPCR Structures that
have applicability in the development and commercialization of diagnostics and
pharmaceuticals.

NOW THEREFORE, in consideration of the covenants, representations and warranties
contained herein, and intending to be legally bound hereby, the Parties agree as
follows:

                                   ARTICLE 1

                                  DEFINITIONS

In addition to the capitalized terms defined throughout this Agreement, the
following terms when used herein shall have the respective meanings assigned to
them below:

     1.1  "Access Term" means the period commencing on the commencement of
          Contract Year One and ending on termination or expiration of this
          Agreement, during which BMS shall have access to the Proteomica
          Database under the terms and conditions of this Agreement.

     1.2  "Affiliate" means, with respect to either Party, any corporation or
          other business entity which controls, is controlled by, or is under
          common control with such Party. A corporation or other entity shall be
          regarded as in control of another corporation or other entity if it
          owns or directly or indirectly controls at least 50% of the voting
          stock or other ownership interest of the other corporation or entity
          (or alternatively, if it owns the maximum such ownership interest
          permitted by law), or if it possesses, directly or indirectly, the
          power to direct or cause the direction of the management and policies
          of the corporation or other entity, or the

**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission. The omitted
    portions have been filed separately with the Commission.

<PAGE>

          power to elect or appoint at least 50% of the members of the governing
          body of the corporation or other entity.

     1.3  "Agreement" means this GPCR License and User Agreement including its
          Exhibits, as may be amended from time to time.

     1.4  "BMS Preferred Target List" means the list of GPCR targets set forth
          as Exhibit B, as such list may be amended from time to time by BMS in
             ---------
          its sole determination. While the GPCR targets [**] the content of
          the BMS Preferred Target List, and that [**].

     1.5  "BMS Site" means only (a) the BMS pharmaceutical research and
          development facilities located in Lawrenceville, New Jersey, U.S.A.;
          Hopewell, New Jersey, U.S.A.; Wallingford, Connecticut, U.S.A.;
          Candiac, Quebec, Canada; (b) [**] in the United States, Canada or a
          country in the European Union, [**] excepting [**] that has been [**],
          and [**] prior to BMS having access to the Proteomica(TM) Database at
          [**] and (c) [**] in the United States, Canada or a country in the
          European Union [**] prior to BMS having access to the Proteomica(TM)
          Database [**].

     1.6  "Business Day" means any day, Monday through Friday, on which banking
          institutions in New York, New York are open for business.

     1.7  "Confidential Information" means all proprietary technical and/or
          commercial information that has or could have commercial value or
          other utility in a Party's business, or the unauthorized disclosure of
          which could be detrimental to the Party's interests, including
          information, inventions, know-how, data and materials relating to the
          Database Information and shall include without limitation research,
          technical, clinical development, manufacturing, marketing, financial,
          personnel and other business information and plans, whether in oral,
          written, graphic or electronic form, except to the extent that it can
          be established by the Receiving Party (as defined in Section 7.4) that
          such Confidential Information: (a) was already known to the Receiving
          Party, other than under an obligation of confidentiality from the
          Disclosing Party; (b) was generally available to the public or
          otherwise part of the public domain at the time of its disclosure to
          the Receiving Party; (c) became generally available to the public or
          otherwise part of the public domain after its disclosure and other
          than through any act or omission of the Receiving Party in breach of
          this Agreement; (d) was subsequently lawfully disclosed to the
          Receiving Party by a Third Party; (e) can be shown by written records
          to have been independently developed by the Receiving Party without
          reference to the Confidential Information received from the Disclosing
          Party (as defined in Section 7.4) and without breach of any of the
          provisions of this Agreement; or (f) is information that the
          Disclosing Party has specifically agreed in writing that the Receiving
          Party may disclose. For the purposes of this Agreement, the BMS
          Preferred Target List shall be presumed to be Confidential Information
          of BMS and the Proteomica Database shall be presumed Confidential
          Information of 3DP.

**   Certain portions of this Exhibit have been omitted based upon a request for
     confidential treatment that has been filed with the Commission. The omitted
     portions have been filed separately with the Commission.

                                       2

<PAGE>

     1.8  "Contract Year One" means the one year period commencing on the date
          on which a Proteomica(TM) Database is installed at any BMS Site by 3DP
          containing: (i) the [**] for at least [**] and (ii) an initial set of
          at least [**] provided that BMS retains the right to accept [**] than
          that defined as [**] in which case Contract Year One shall commence.

     1.9  "Contract Year Three" means the one-year period commencing immediately
          following the end of Contract Year Two.

     1.10 "Contract Year Two" means the one-year period commencing immediately
          following the end of Contract Year One.

     1.11 "Control" or "Controlled" means possession of the ability to grant a
          license or sublicense of any patent rights, Know-how or other
          intangible rights as provided for herein without violating the terms
          of any contract or other agreement with a Third Party.

     1.12 "Database Information" means all or any part of the information
          associated with individual GPCR Structures and GPCR Homology Models in
          the Proteomica(TM) Database, but does not include [**] including, but
          not necessarily limited to, [**].

     1.13 "Documentation" means all documentation, technical manuals, operator
          and user manuals, flow diagrams, file descriptions and other written
          information describing the functions, operational characteristics and
          specifications of the software associated with the Proteomica(TM)
          Database, or explaining how to install, use maintain and/or support
          the Proteomica(TM) Database, as the same may be provided by 3DP and
          amended by 3DP from time to time in connection with its release of any
          maintenance updates and upgrades. The Parties acknowledge that all or
          part of such documentation may be electronic.

     1.14 "Effective Date" means the later of: (a) date of this Agreement as set
          forth above; or (b) the date on which all of the following documents
          between the Parties have been executed: this Agreement, the 3DP PERT
          Internal Use License and Option Agreement, the DiscoverWorks(TM)
          Nonexclusive License and Purchase Agreement, and the DiscoverWorks
          Drug Discovery Collaboration Agreement.

     1.15 "GPCR" means G-Protein Coupled Receptor.

     1.16 "GPCR Class" means a collection of one or more GPCR Sequences
          comprising a distinct subfamily of the entire GPCR family of gene
          products, as defined in Exhibit A, that uses a classification based on
                                  ---------
          [**].

     1.17 "GPCR Higher Resolution Structure" means a GPCR Structure refined
          against a data set of [**].

     1.18 "GPCR Homology Model" means a three-dimensional structure of a GPCR
          that is defined by a set of atomic x, y, z coordinates derived from an
          experimentally

**   Certain portions of this Exhibit have been omitted based upon a request for
     confidential treatment that has been filed with the Commission. The omitted
     portions have been filed separately with the Commission.

                                       3

<PAGE>

          determined GPCR Structure, by comparison of the GPCR Sequence
          associated with the experimentally determined GPCR Structure with a
          Putative GPCR Sequence or different GPCR Sequence.

     1.19 "GPCR Sequence" means the cDNA sequence that corresponds to the gene
          for a GPCR that is characterized and defined by being the
          physiological receptor for an endogenous ligand or exogenous compound.

     1.20 "GPCR Structure" means a set of atomic x, y, z coordinates and (B)-
          factors, in 3DP's Control, for an experimentally determined three-
          dimensional structure of a gene product corresponding to a particular
          GPCR Sequence, together with certain structure determination
          statistics [**] to allow users the opportunity to access the quality
          of such a GPCR Structure. GPCR Structure may be derived from, among
          other things, the GPCR Sequence of a native ("apo-", unliganded) GPCR,
          or of [**] of such GPCR. A GPCR Structure may also be derived from the
          co-crystallization of such GPCR with a small molecule ligand or
          another protein, from a post-translational modification of such GPCR,
          or from the soaking of an apo-receptor crystal with a small molecule
          ligand. A GPCR Structure will be determined from [**].

     1.21 "GPCR Suite" means a collection of two or more GPCR Structures for a
          particular GPCR that may preferably include representatives of the
          following [**].

     1.22 "Know-how" means unpatented technical and other information which is
          not in the public domain relating to GPCR Structures in the Proteomica
          Database, specifically limited to [**].

     1.23 "Person" or "person" means any corporation, partnership, limited
          liability company, joint venture, other entity or natural person.

     1.24 "Proteomica Database" means 3DP's proprietary database containing
          Database Information pertaining to one or more GPCR Structures for one
          or more particular GPCRs and [**] GPCR Homology Models derived from
          GPCR Structures.

     1.25 "Putative GPCR Sequence" means a cDNA sequence that represents a gene
          and, by virtue of sequence homology with cDNA sequences of known
          GPCRs, is generally believed to express a gene product that is a
          member of the GPCR family of gene products.

     1.26 "Third Party" means any person or entity other than a Party.

     1.27 "3DP Consulting Services" means 3DP's services to provide general
          training in the use of the Proteomica(TM) Database and to provide
          consultation to BMS at its request with regard to access and use of
          data pertaining to particular GPCR Structures and GPCR Homology
          Models.

     1.28 "3DP Interfaces" means the software that provides (a) the content and
          aggregation interface for the Proteomica(TM) Database (used in
          conjunction with external browser software) and the functional modules
          incorporated therein, (b) the associated analytic and data processing
          engines used to process and analyze

**   Certain portions of this Exhibit have been omitted based upon a request for
     confidential treatment that has been filed with the Commission. The omitted
     portions have been filed separately with the Commission.

                                       4

<PAGE>

          the data, (c) the ad-hoc query tool, and (d) any maintenance updates
          and upgrades developed, created or owned by 3DP during the term of
          this Agreement and provided to BMS.


                                   ARTICLE 2

                 OWNERSHIP; ACCESS TO THE PROTEOMICA DATABASE.

     2.1  Access Grant.  3DP hereby grants to BMS and its Affiliates a non-
          transferable, royalty-free, non-exclusive license, without the right
          of sublicense, to have installed, use, execute and access the
          Proteomica(TM) Database at BMS Sites solely for the purpose of BMS's
          internal research use in the Field (which shall be deemed to include
          any research and development activities being undertaken [**] for the
          Access Term. In furtherance of this access grant, and in no event
          later than the commencement of Contract Year One, 3DP shall provide
          the Proteomica(TM) Database to BMS in machine readable form and the
          then-current Know-how and Documentation.

     2.2  Inclusion of GPCR Structures in Proteomica(TM) Database.  Upon the
          commencement of Contract year One: (a) from time to time, [**] GPCR
          structures except those obtained through collaborations with Third
          Parties, [**] shall be included in the Proteomica(TM) Database that is
          accessible to BMS, and at such time 3DP will provide BMS [**] (b) in
          the event that 3DP solves any GPCR Structure [**] with or without a
          ligand [**] 3DP shall include such GPCR Structure in the
          Proteomica(TM) Database within [**] of 3DP solving such GPCR
          Structure, and at such time 3DP will provide BMS with [**] and (c) in
          the event that [**] 3DP shall use all reasonable efforts [**] and 3DP
          shall [**] include such GPCR Structures in the Proteomica(TM) Database
          installed at BMS. 3DP shall provide to BMS, reasonably upon BMS'
          request, [**].

     2.3  Ownership of Proteomica(TM) Database. BMS hereby acknowledges that (a)
          3DP has expended significant resources and efforts to develop the
          Proteomica(TM) Database and the Database Information, (b) the
          Proteomica(TM) Database represents a highly valuable and confidential
          asset, and is a principal product of 3DP, (c) 3DP is willing to grant
          BMS access to the Proteomica(TM) Database in reliance upon the
          assurance by BMS that it shall use all reasonable efforts (including
          not less than those efforts that BMS uses to protect its own
          confidential information of like character) to protect the
          Proteomica(TM) Database from unauthorized disclosure and use at each
          BMS Site, and (d) the Proteomica(TM) Database is, and at all times
          during the term of this Agreement shall remain, the sole and exclusive
          property of 3DP.

     2.4  Use at a BMS Site.

          2.4.1     While 3DP anticipates that access to the Proteomica(TM)
                    Database shall be accomplished over extranet or other secure
                    internet access, if the Proteomica(TM) Database is installed
                    at any BMS Site, then the Proteomica(TM) Database shall only
                    be installed at the BMS Sites on designated 3DP approved
                    client computers, such approval not to be unreasonably
                    withheld or delayed.

          2.4.2     BMS will install the Proteomica(TM) Database on approved
                    computers in a manner, and taking such security measures and
                    back-up procedures, as BMS uses internally for its own
                    internally-developed proprietary software and information
                    control.

**   Certain portions of this Exhibit have been omitted based upon a request for
     confidential treatment that has been filed with the Commission. The omitted
     portions have been filed separately with the Commission.

                                       5

<PAGE>

          2.4.3     All Proteomica(TM) Database access shall be consistent with
                    the terms set forth in Exhibit C.
                                           ---------

     2.5  Use Restrictions.  Except as permitted under Section 2.1 and 2.3:

          2.5.1     BMS shall have the right to use the Proteomica(TM) Database
                    and Database Information solely for its own internal use by
                    Authorized Personnel of BMS and not as any part of providing
                    separate services or sublicenses to any Third Party
                    (including, without limitation, providing, directly or
                    indirectly, the same or similar services to any Third
                    Party). Such use shall only take place at a BMS Site in
                    accordance with the terms and conditions of this Agreement
                    for the Access Term. "Authorized Personnel" shall refer to
                    BMS employees, BMS temporary employees and BMS consultants
                    who have signed an agreement with BMS in which such person
                    acknowledges such person's obligation to protect the
                    Proteomica(TM) Database and Database Information.

          2.5.2     BMS shall have no access to or right to use the
                    Proteomica(TM) Database except at any BMS Site under the
                    terms and conditions of this Agreement.

          2.5.3     Except as otherwise agreed by 3DP in writing, and except as
                    provided in Section 2.5.4, BMS shall not (i) reverse
                    engineer, decompile, disassemble, re-engineer or otherwise
                    recreate or permit or assist others to recreate the
                    Proteomica(TM) Database or its structural framework or
                    distribute copies (by any means whatsoever whether now known
                    or hereafter invented) of the Proteomica(TM) Database,
                    including any substantial portion of the Database
                    Information from any field of the database, for any purpose
                    except as expressly permitted under this Agreement; (ii)
                    develop any products for commercial sale that are the same
                    or similar to the Proteomica(TM) Database and (iii) except
                    through the use of 3DP personnel, BMS shall not modify,
                    enhance or otherwise change the Proteomica(TM) Database.

          2.5.4     BMS retains the right to create for its internal use
                    databases of protein structures that may include GPCR
                    structures. Any GPCR structures that have been obtained
                    through the Proteomica(TM) Database will be treated under
                    the same conditions of confidentiality.

          2.5.5     BMS shall comply with all other use restrictions contained
                    in Exhibit C. Exhibit C shall be prepared by, and reasonably
                       ---------  ---------
                    agreed upon, the Parties, and appended to this Agreement, as
                    soon as reasonably necessary prior to the first installation
                    of the Proteomica(TM) Database at a BMS Site.

     2.6  Third Party Components.  Unless stated otherwise and agreed to by the
          Parties in writing, 3DP shall be responsible for securing all licenses
          required from Third Parties for the incorporation of Third Party
          Software Components for use in

**   Certain portions of this Exhibit have been omitted based upon a request for
     confidential treatment that has been filed with the Commission. The omitted
     portions have been filed separately with the Commission.

                                       6
<PAGE>

          conjunction with the Proteomica(TM) Database, and for paying all
          license and other fees in connection therewith. As used herein, "Third
          Party Software Components" means Third Party software tools that 3DP
          either licenses in or otherwise approves for inclusion in the
          Proteomica(TM) Database.

     2.7  Loss, Theft, Unauthorized Disclosure or Use. BMS promptly shall notify
          3DP of any loss, theft or unauthorized disclosure or use of the
          Proteomica(TM) Database or the Database Information that comes to
          BMS's attention.

     2.8  3DP Retained Rights. Any rights of 3DP not expressly granted to BMS
          under the provisions of this Agreement shall be retained by 3DP.

     2.9  Pre-Release Prior to Publication of BMS GPCR Structures. In the event
          that BMS intends to publish any GPCR Structures solved by BMS, BMS
          shall make such GPCR Structures available to 3DP for inclusion in the
          Proteomica(TM) Database as soon as reasonably practicable and in no
          event later than [**] prior to any public release of such GPCR
          Structures by BMS under Section 7.3. [**]

                                   ARTICLE 3

            PROGRAM DIRECTORS; DEVELOPMENT PROTEOMICA(TM) DATABASE

     3.1  Program Directors.

          3.1.1     Upon commencement of the Access Term, each Party will
                    provide the other, in writing, with the name of its "Program
                    Director." The Program Directors will act as the primary
                    liaison in coordinating the activities under this Agreement.

          3.1.2     The Program Directors will serve to (i) oversee and
                    coordinate the installation and usage of the Proteomica(TM)
                    Database at the BMS Sites; (ii) monitor adherence to the
                    user terms and conditions set forth in this Agreement; and
                    (iii) require all employees and consultants who have access
                    to the Proteomica(TM) Database at a BMS Site to execute, and
                    monitor adherence to, the user terms and conditions set
                    forth in Exhibit C.
                             ---------

          3.1.3     The Program Directors shall meet with such frequency and at
                    such time and location as may be reasonably necessary to
                    accomplish installation of and access to the Proteomica(TM)
                    Database.

          3.1.4     Each Party shall bear the costs and expenses of its
                    respective Program Director.

**   Certain portions of this Exhibit have been omitted based upon a request for
     confidential treatment that has been filed with the Commission. The omitted
     portions have been filed separately with the Commission.

                                       7
<PAGE>

     3.2  Proteomica(TM) Database Development. 3DP shall use commercially
          reasonable efforts to develop the Proteomica(TM) Database in a manner
          reasonably consistent with the following three year development
          program:

          3.2.1     In Contract Year One, 3DP will use commercially reasonable
                    efforts to constitute the first GPCR Suite, add additional
                    GPCR Structures and/or GPCR Suites, and increase the number
                    of GPCR Homology Models in the Proteomica(TM) Database.

          3.2.2     In Contract Year Two, 3DP will use commercially reasonable
                    efforts to [**] and the number of GPCR Structures, GPCR
                    Suites and GPCR Homology Models in the Proteomica(TM)
                    Database.

          3.2.3     In Contract Year Three, 3DP will use commercially reasonable
                    efforts to [**] and to enhance the number of GPCR
                    Structures, GPCR Suites and GPCR Homology Models in the
                    Proteomica(TM) Database and specifically [**].

          3.2.4     3DP shall have sole discretion in all development decisions
                    relating to the Proteomica(TM) Database; provided, however,
                    3DP shall work with BMS and other subscribers of the
                    Proteomica(TM) Database to obtain meaningful input regarding
                    the further development of the Proteomica(TM) Database, in
                    terms of the choice of both GPCR Structures and GPCR
                    Homology Models.

     3.3  Testing During the Course of the Proteomica(TM) Development Program.
          BMS acknowledges that the 3DP Interface provided under this Agreement
          may be pre-commercial release Beta versions, and that BMS's access may
          be to a developmental test site for the Proteomica(TM) Database.

     3.4  Installation.  At dates and times mutually acceptable, 3DP agrees to
          provide BMS with on-site access to the Proteomica(TM) Database at the
          BMS Sites.

                                   ARTICLE 4

             PROTEOMICA DATABASE MAINTENANCE AND SUPPORT SERVICES

     4.1  General Obligation. 3DP shall use commercially reasonable efforts to
          provide BMS with maintenance and support services for the
          Proteomica(TM) Database all as specified in this Article 4
          ("Maintenance and Support Services").

     4.2  Correction of Nonconformities. BMS shall promptly notify 3DP, in
          writing or by telephone (confirmed in writing), of any nonconformity
          in the 3DP Interfaces. 3DP will respond to and correct any confirmed
          nonconformities in the 3DP Interfaces within a reasonable time and as
          prioritized by the Program Directors.

     4.3  Maintenance Updates. 3DP shall provide BMS with any known solutions to
          problems occurring with the 3DP Interfaces, including, without
          limitation, any maintenance updates, at the time 3DP first releases
          corresponding solutions and maintenance updates for 3DP Interface. BMS
          agrees to accept all solutions and installations of maintenance
          updates.

**   Certain portions of this Exhibit have been omitted based upon a request for
     confidential treatment that has been filed with the Commission. The omitted
     portions have been filed separately with the Commission.

                                       8
<PAGE>

     4.4  Training and Consulting Services. 3DP shall provide up to an aggregate
          of [**] of (i) training and support services to qualified BMS
          personnel during [**] pertaining to the operation and support of the
          Proteomica(TM) Database, at no additional charge to BMS, and (ii)
          Consulting Services (pursuant to Article 5). Any such training and
          support will be provided at such times and in such places and in such
          form as may be mutually agreeable to the Parties.

     4.5  Remote Access.  If necessary, each Party shall provide the other with
          reasonable access, via modem, the Internet or some other remote
          communications method mutually agreed-upon by the Parties, to such
          Party's development, data and/or application servers for the sole and
          limited purpose of assisting the other Party in fulfilling its
          obligations under this Agreement.  Said access shall be subject to
          each Party's reasonable standards and procedures for the security of
          computer systems and data.

     4.6  Reuse of Developed Code. 3DP shall be free, at any time, to
          incorporate software code written by 3DP in the course of implementing
          the Proteomica(TM) Database in any product, including a standard
          Proteomica(TM) Database, or a customized or modified version thereof.
          No compensation shall be due to BMS for any such reuse of software
          code written by 3DP in performing services for BMS hereunder.

                                   ARTICLE 5

                            3DP CONSULTING SERVICES

     5.1  Performance of Consulting Services.  In addition to the training and
          support services provided in Section 4.4, 3DP will provide BMS with
          3DP Consulting Services as specifically set forth in work orders
          agreed to in writing by the Parties and attached hereto from time to
          time (each, a "Work Order").  Such Work Orders shall specify, at a
          minimum, the scope of work to be performed, the timeline, any 3DP
          Consulting Services' deliverables, any BMS participation or inputs
          required, and fees due from BMS for such 3DP Consulting Services.  3DP
          shall use commercially reasonable efforts to complete performance of
          the relevant 3DP Consulting Services on or before the targeted date(s)
          for completion set forth in the timeline.

     5.2  Provision of 3DP Services.  All 3DP Consulting Services required to be
          delivered by 3DP to BMS under any Work Order shall be delivered to BMS
          as specified in the applicable Work Order or as otherwise mutually
          agreed to by the Parties in writing.

**   Certain portions of this Exhibit have been omitted based upon a request for
     confidential treatment that has been filed with the Commission. The omitted
     portions have been filed separately with the Commission.


                                       9

<PAGE>

                                   ARTICLE 6

                               FEES AND PAYMENTS


     6.1  User Fees and Expenses. BMS will pay 3DP an "Annual User Fee" for
          access to the Proteomica(TM) Database at BMS Sites described in
          Sections 1.5(a) and 1.5(b), in accordance with the following schedule:

          6.1.1     Within thirty (30) days of the Effective Date: $1,500,000
                    (U.S.)

          6.1.2     Upon the commencement of Contract Year Two:

                    (a)  [**] (U.S.) if the Proteomica(TM) Database contains at
                         least one GPCR Suite, or [**] or one additional GPCR
                         Structure[**].

                    (b)  [**] (U.S.) if the Proteomica(TM) Database does not
                         contain at least one GPCR Suite, or [**] or one
                         additional GPCR Structure [**].

          6.1.3     Upon the commencement of Contract Year Three:

                    (a)  [**] (U.S.), if the Proteomica(TM) Database contains
                         [**] GPCR Suites, such that each GPCR Suite relates to
                         a different GPCR Sequence, and contains [**], with the
                         [**] structures being [**] or

                    (b)  [**], if the Proteomica(TM) Database contains at least
                         [**] GPCR Suites containing [**] including at least
                         [**]; or

                    (c)  [**] (U.S.), if the Proteomica(TM) Database contains at
                         least [**] GPCR Suites (containing any GPCR
                         Structures), [**] or

                    (d)  If the Proteomica(TM) Database does not contain GPCR
                         Suites or GPCR Structures which meet any of the
                         foregoing, then [**].

                    (e)  In the event that the criteria set forth in clauses (a)
                         through (c) have not been met at the commencement of
                         Contract Year Three, but are thereafter met during
                         Contract Year Three, BMS shall pay the difference
                         between the amount paid at the time of the commencement
                         of Contract Year Three and the amount that would have
                         been due to 3DP if the criteria that is met during
                         Contract Year Three had been met at the commencement of
                         Contract Year Three.

          6.1.4     Any payment to be made pursuant to Section 6.1.2 or 6.1.3
                    shall be due within thirty (30) days after the commencement
                    of Contract Year Two or Contract Year Three, as the case may
                    be.

     6.2  Additional Site Fees. BMS will pay to 3DP an "Annual User Fee" for
          access to the Proteomica(TM) Database at any BMS Site described in
          Section 1.5(c) of [**] if BMS identifies such BMS Site during the
          First Contract Year, and [**] of the then-current fee, according to
          the provisions of Section 6.1.2 or Section 6.1.3, respectively, if BMS
          identifies such BMS Site during Contract Year Two or Contract Year
          Three. BMS shall make such payment to 3DP within 30 days of
          identifying such BMS Site to 3DP, according to the provisions of
          Section 1.5.

     6.3  Additional Fees.

          6.3.1     Maintenance and Support Fees. BMS will be responsible for
                    the expenses of 3DP personnel engaged in any training and
                    support or 3DP Consulting Services provided under this
                    Agreement.

**   Certain portions of this Exhibit have been omitted based upon a request for
     confidential treatment that has been filed with the Commission. The omitted
     portions have been filed separately with the Commission.


                                       10
<PAGE>

          6.3.2     Installation/Integration Fees. BMS will be responsible for
                    the expenses associated with additional installations
                    required for BMS for the Proteomica(TM) Database after the
                    initial installation at each BMS
                               Site.
     6.4  Mode of Payment.  All payments to 3DP hereunder shall be made by wire
          transfer of United States Dollars in the requisite amount to such bank
          account as 3DP may designate by notice to BMS.  Payments shall be free
          and clear of any taxes, fees or charges, to the extent applicable.

     6.5  Late Payments. All amounts payable by BMS hereunder, shall be paid by
          BMS to 3DP in full, without any right of set-off or deduction. BMS
          shall pay interest on all amounts past due at the rate of one percent
          (1%) over the prime rate of interest reported in The Wall Street
          Journal for the date such amount was due.

     6.6  Taxes. Each Party shall pay all sales, use, personal property, and
          other similar taxes associated with the license rights granted and/or
          services provided to such Party hereunder, except taxes based on the
          other Party's gross or net income, net worth or assets, which shall be
          the sole responsibility of such other Party. If either Party claims an
          exemption from any applicable sales or use taxes, the Parties shall
          cooperate with each other, including, without limitation, in the
          filing of appropriate certificates of tax exemption, (i) to ensure
          that any withholding payments required to be made by the other Party
          are reduced to the fullest extent permitted by law, and (ii) to seek
          credit for withholding payments previously made by such other Party.

     6.7  Most Favored Provision. Upon the commencement of Contract Year One and
          until the expiration or termination of this Agreement, if 3DP enters
          into an agreement with a Third Party and such agreement provides for
          [**] on more favorable financial terms than are applicable to BMS
          hereunder, then 3DP agrees to apply those more favorable financial
          terms to BMS for the remainder of the term of the Agreement. 3DP shall
          promptly notify BMS in writing if it has executed such an agreement,
          [**].

                                   ARTICLE 7

                         PUBLICATION; CONFIDENTIALITY

     7.1  Notification.  Each Party recognizes that the other Party may wish to
          publish the results of its work relating to GPCR Structures.  However,
          each Party also recognizes the importance of preserving the
          proprietary nature of these GPCR Structures.  Consequently, any
          proposed publication relating to GPCR Structures by either Party shall
          comply with this Section 7.  At least 90 days before a manuscript is
          to be submitted to a publisher, the publishing Party will provide to
          the nonpublishing Party with a copy of the manuscript and any GPCR
          Structures disclosed therein.  If the publishing Party wishes to make
          an oral presentation, it will provide the other Party with a copy of
          the abstract (if one is submitted) at least 60 days before it is to be
          submitted.  The publishing Party will also provide to the other Party
          a copy of the text of the presentation, including all slides, posters,
          and any other visual aids, at least 60 days before the presentation is
          made.

**   Certain portions of this Exhibit have been omitted based upon a request for
     confidential treatment that has been filed with the Commission. The omitted
     portions have been filed separately with the Commission.

                                       11

<PAGE>

     7.2  Review of Proposed Publications.  The other Party will review the
          manuscript, abstract, text or any other material provided under
          Section 7.1 to determine if any confidential or proprietary
          information is being disclosed, then the Parties will consult to
          arrive at an agreement on mutually acceptable modifications to the
          proposed publication to avoid such disclosure.

     7.3  GPCR Structure Disclosure. If either Party is required to submit the
          GPCR Structure coordinates to a public database as a condition of
          publication, then such party shall subject such submission to a [**]
          BMS shall not otherwise distribute such GPCR Structure coordinates
          publicly or privately. 3DP shall not otherwise distribute such GPCR
          Structure coordinates publicly, but may make them available as part of
          the Proteomica(TM) Database to other parties [**].

     7.4  Confidentiality Obligations. The Parties agree that, for the term of
          this Agreement and for 10 years thereafter, either Party that receives
          Confidential Information (a "Receiving Party") from the other Party (a
          "Disclosing Party") shall keep, and shall ensure that its officers,
          directors and employees keep, completely confidential and shall not
          publish or otherwise disclose and shall not use for any purpose
          (except as expressly permitted hereunder) any Confidential Information
          furnished to it by the Disclosing Party pursuant to this Agreement
          (including, without limitation, know-how).

     7.5  Written Assurances and Permitted Uses of Confidential Information.

          7.5.1     The Receiving Party may disclose Confidential Information to
                    the extent the Receiving Party is compelled to disclose such
                    information by a court or other tribunal of competent
                    jurisdiction; provided however, that in such case the
                    Receiving Party shall immediately give notice to the
                    Disclosing Party so that the Disclosing Party may seek a
                    protective order or other remedy from said court or
                    tribunal. In any event, the Receiving Party shall disclose
                    only that portion of the Confidential Information that, in
                    the opinion of its legal counsel, is legally required to be
                    disclosed and will exercise reasonable efforts to ensure
                    that any such information so disclosed will be accorded
                    confidential treatment by said court or tribunal.

          7.5.2     The existence and the terms and conditions of this Agreement
                    which the Parties have not specifically agreed to disclose
                    pursuant to this Section 7.5 shall be treated by each Party
                    as Confidential Information of the other Party.

          7.5.3     If a Party is required to make any disclosure of the other
                    Party's Confidential Information, it will give at least
                    thirty (30) days written, advance notice to the latter Party
                    of such disclosure requirement. If a Party is required to
                    disclose Confidential Information to comply with applicable
                    laws or governmental regulations, including but not limited
                    to submitting information to tax authorities or to comply
                    with any discovery or similar request for production of
                    documents in litigation or similar alternative dispute
                    resolution proceedings, such Party may make such disclosure
                    provided it gives prompt notice to the other Party, and
                    provided it makes all reasonable efforts to comply with all
                    administrative or other

**   Certain portions of this Exhibit have been omitted based upon a request for
     confidential treatment that has been filed with the Commission. The omitted
     portions have been filed separately with the Commission.

                                       12
<PAGE>

                    procedures or to establish a reasonable protective or
                    similar order under which the confidential nature of the
                    information will be maintained.

     7.6  Permitted Disclosures for Business Development Purposes.
          Notwithstanding the foregoing, or any other provision in this
          Agreement to the contrary, 3DP may describe the financial terms of
          this Agreement in confidence, in connection with capital raising or
          financing activities; provided, however, any such recipient of such
          Confidential Information shall agree in writing to keep such terms
          confidential for the same time periods and to the same extent as 3DP
          is required to keep Confidential Information confidential under this
          Agreement. Furthermore, BMS acknowledges that 3DP may be obligated to
          disclose terms of this Agreement and make public a copy of this
          Agreement in the event it files a registration statement with respect
          to its shares or it becomes a public company as required by applicable
          U.S. law; provided however, the terms of this Agreement and the copy
          submitted to the applicable governmental agency shall be redacted such
          that the extent of any such disclosure shall be limited to that which
          in the opinion of 3DP's and BMS's legal counsel is legally required to
          be disclosed.

                                   ARTICLE 8

                        REPRESENTATIONS AND WARRANTIES

     8.1  Authority. Each Party represents and warrants that as of the Effective
          Date it has full right, power and authority to enter into this
          Agreement, this Agreement has been duly executed by such Party and
          constitutes a legal, valid and binding obligation of such Party,
          enforceable in accordance with its terms.

     8.2  No Conflicts.  Each Party represents and warrants that the execution,
          delivery and performance of this Agreement does not conflict with, or
          constitute a breach or default under any of its charter or
          organizational documents, any law, order, judgment or governmental
          rule or regulation applicable to it, or any material agreement,
          contract, commitment or instrument to which it is a Party.

     8.3  Disclaimer of Warranties.  3DP MAKES NO REPRESENTATIONS AND EXTENDS NO
          WARRANTIES OR CONDITIONS OF ANY KIND, EITHER EXPRESS OR IMPLIED, WITH
          RESPECT TO THE PROTEOMICA(TM) DATABASE OR THE DATABASE INFORMATION
          INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY OR
          FITNESS FOR A PARTICULAR PURPOSE.

     8.4  Warranties Repeated at Installation. The representations and
          warranties set forth in this Article 8 shall be true and correct on
          the Effective Date, as well as on the date of installation of the
          Proteomica(TM) Database.

**   Certain portions of this Exhibit have been omitted based upon a request for
     confidential treatment that has been filed with the Commission. The omitted
     portions have been filed separately with the Commission.

                                       13

<PAGE>

                                   ARTICLE 9

                              DISPUTE RESOLUTION

     9.1  Dispute Resolution.  Any dispute concerning or arising out of this
          Agreement or concerning the existence or validity hereof, shall be
          determined by the following procedure:

          9.1.1  Both Parties understand and appreciate that their long term
                 mutual interest will be best served by affecting a rapid and
                 fair resolution of any claims or disputes which may arise out
                 of services performed under this Agreement or from any dispute
                 concerning the terms of this Agreement. Therefore, both Parties
                 agree to use their best efforts to resolve all such disputes as
                 rapidly as possible on a fair and equitable basis. Toward this
                 end, both Parties agree to develop and follow a process for
                 presenting, rapidly assessing, and settling claims on a fair
                 and equitable basis that takes into account the precise subject
                 and nature of the dispute.

          9.1.2  If any dispute or claim arising under this Agreement cannot be
                 readily resolved by the Parties pursuant to the process
                 described above, then the Parties agree to refer the matter to
                 a panel consisting of the Chief Executive Officer ("CEO") of
                 3DP and the Senior Vice President of Early Discovery and
                 Applied Technology for BMS, or a comparable position selected
                 by either Party from time to time, for review and a non-binding
                 resolution. A copy of the terms of this Agreement, agreed upon
                 facts (and areas of disagreement), and concise summary of the
                 basis for each side's contentions will be provided to both such
                 officers who shall review the same, confer, and attempt to
                 reach a mutual resolution of the issue.

          9.1.3  If the matter has not been resolved utilizing the foregoing
                 process, and the Parties are unwilling to accept the non-
                 binding decision of the indicated panel, either or both Parties
                 may elect to pursue definitive resolution through binding
                 arbitration, which the Parties agree to accept in lieu of
                 litigation or other legally available remedies (with the
                 exception of injunctive relief where such relief is necessary
                 to protect a Party from irreparable harm pending the outcome of
                 any such arbitration proceeding). Binding arbitration shall be
                 settled in accordance with the Commercial Arbitration Rules of
                 the American Arbitration Association by a panel of three
                 arbitrators chosen in accordance with these Rules. This
                 Agreement shall be governed by and construed in accordance with
                 the substantive laws of the State of Delaware without regard to
                 the conflicts of laws provisions of Delaware. The arbitration
                 will be held in Wilmington, Delaware. Judgment upon the award
                 rendered may be entered in any court having jurisdiction and
                 the Parties hereby consent to the said

** Certain portions of this Exhibit have been omitted based upon a request for
   confidential treatment that has been filed with the Commission. The omitted
   portions have been filed separately with the Commission.

                                      14
<PAGE>

                 jurisdiction and venue, and further irrevocably waive any
                 objection which either Party may have now or hereafter to the
                 laying of venue of any proceedings in said courts and to any
                 claim that such proceedings have been brought in an
                 inconvenient forum, and further irrevocably agree that a
                 judgment or order in any such proceeding shall be conclusive
                 and binding upon the Parties and may be enforced in the courts
                 of any other jurisdiction.

                                  ARTICLE 10

                        TERM AND TERMINATION; SURVIVAL

     10.1 Term. The term of the Agreement shall be from the Effective Date until
          the expiration of Contract Year Three. Within six (6) months prior to
          the expiration date, the Parties will negotiate in good faith to
          provide BMS continued access to the Proteomica(TM) Database; such
          negotiations will be based on the then prevailing pricing structure
          for customer access to the Proteomica(TM) Database.

     10.2 For Any Reason.  Subject to the provisions of Section 10.3, BMS may
          terminate this Agreement for any reason by providing sixty (60) days
          written notice after the beginning of Contract Year Two.

     10.3 Return of Confidential Information. Upon termination prior to
          expiration of the term of this Agreement:

          10.3.1 If the termination occurs before the receipt of payment under
                 Section 6.1.2, then BMS must return or destroy any Confidential
                 Information received from 3DP over the course of the term of
                 the Agreement and return the Proteomica(TM) Database and any
                 related Confidential Information.

          10.3.2 If the termination occurs after the receipt of payment under
                 Section 6.1.2, then BMS may either:


                  10.3.2.1 return or destroy any Confidential Information
                           received from 3DP over the course of the term of the
                           Agreement and return the Proteomica(TM) Database and
                           any related Confidential Information, or

                  10.3.2.2 return any Confidential Information received from 3DP
                           over the course of the term of the Agreement which is
                           not part of the Proteomica(TM) Database [**] but keep
                           the then current copy of the Proteomica(TM) Database,
                           and [**].

                  10.3.3   In either event, upon termination or expiration of
                           this Agreement, BMS shall thereafter continue to have
                           all rights to [**] obtained by BMS under this
                           Agreement during the Access term.

     10.4 Termination for Material Breach. The failure by a Party to comply with
          any of the material obligations contained in this Agreement shall
          entitle the other Party to give written notice to have the default
          cured. If such default (i) is not cured within 60 days after the
          receipt of such notice or (ii) is not susceptible to cure within 60
          days after receipt of such notice (unless such default, by its nature,
          is incurable, in which case the Agreement may be terminated
          immediately upon

** Certain portions of this Exhibit have been omitted based upon a request for
   confidential treatment that has been filed with the Commission. The omitted
   portions have been filed separately with the Commission.

                                      15

<PAGE>

          written notice) or (iii) diligent steps are not taken to cure if by
          its nature such default could not be cured within 60 days, the
          notifying Party shall be entitled, without prejudice to any of its
          other rights conferred on it by this Agreement, and in addition to any
          other remedies that may be available to it, to terminate this
          Agreement. Such rights to terminate will be in addition to, and
          without prejudice to the exercise of, any other remedies available in
          law or equity.

     10.5 Insolvency or Bankruptcy.

          10.4.1  Either Party may, in addition to any other remedies available
                  by law or in equity, terminate this Agreement by written
                  notice to the other Party in the event the latter Party shall
                  have become insolvent or bankrupt, or shall have an assignment
                  for the benefit of its creditors, or there shall have been
                  appointed a trustee or receiver of the other Party or for all
                  or a substantial part of its property or any case or
                  proceeding shall have been commenced or other action taken by
                  or against the other Party in bankruptcy or seeking
                  reorganization, liquidation, dissolution, winding-up,
                  arrangement or readjustment of its debts or any other relief
                  under any bankruptcy, insolvency, reorganization or other
                  similar act or law of any jurisdiction now or hereafter in
                  effect, or there shall have been issued a warrant of Exhibit,
                  execution, restraint or similar process against any
                  substantial part of the property of the other Party, and any
                  such event shall have continued for 90 days undismissed,
                  unbonded and undischarged.

          10.4.2  All rights and licenses granted under or pursuant to this
                  Agreement by BMS or 3DP are, and shall otherwise be deemed to
                  be, for purposes of Section 365(n) of the U.S. Bankruptcy
                  Code, licenses of right to "Intellectual Property" as defined
                  under Section 101 of the U.S. Bankruptcy Code. The Parties
                  agree that the Parties as licensees of such rights under this
                  Agreement, shall retain and may fully exercise all of their
                  rights and elections under the U.S. Bankruptcy Code. The
                  Parties further agree that, in the event of the commencement
                  of a bankruptcy proceeding by or against either Parties under
                  the U.S. Bankruptcy Code, the Parties hereto which is not a
                  Party to such proceeding shall be entitled to a complete
                  duplicate of (or complete access to, as appropriate) any such
                  intellectual property and all embodiments of such intellectual
                  property, and same, if not already in their possession, shall
                  be promptly delivered to them (i) upon any such commencement
                  of a bankruptcy proceeding upon their written request
                  therefor, unless the Party subject to such proceedings elects
                  to continue to perform all of their obligations under this
                  Agreement or (ii) if not delivered under (i) above, upon the
                  rejection of this Agreement by or on behalf of the Party
                  subject to such proceeding upon written request therefor by a
                  nonsubject Party.

** Certain portions of this Exhibit have been omitted based upon a request for
   confidential treatment that has been filed with the Commission. The omitted
   portions have been filed separately with the Commission.

                                      16
<PAGE>

     10.6 No Waiver. The right of a Party to terminate this Agreement shall not
          be affected in any way by its waiver or failure to take action with
          respect to any prior default.

     10.7 Survival of Obligations. The termination or expiration of this
          Agreement shall not relieve the Parties of any obligations accruing
          prior to such termination, and any such termination shall be without
          prejudice to the rights of either Party against the other. The
          provisions of Article 7, Section 8.3, Article 9, Section 10.6, Section
          10.7, Article 11 and Article 12 (except Section 12.5) shall survive
          any expiration or termination of this Agreement.

                                  ARTICLE 11

                                INDEMNIFICATION

     11.1 Direct Indemnity. Each Party (the "indemnifying Party") shall
          indemnify and hold the other Party, its trustees, officers, agents,
          and employees (the "indemnified Parties"), harmless from and against
          all losses, liabilities, damages and expenses (including attorney's
          fees and costs) arising out of a breach of the indemnifying Party's
          warranties or out of the negligence or willful misconduct of the
          indemnifying Party in connection with activities under this Agreement
          except to the extent such losses, liabilities, damages and expenses
          (including attorney's fees and costs) resulted from the negligent or
          willful misconduct of the indemnified Party. BMS acknowledges and
          agrees that, with respect to the nature of the Proteomica(TM)
          Database, there may be no adequate remedy at law for any breach of
          BMS's obligations under the security provisions of this Agreement,
          that any such breach may result in irreparable harm to 3DP, and
          therefore, that upon any such breach, 3DP may be entitled to seek
          appropriate equitable relief in addition to whatever remedies it might
          have at law, including injunctive relief, specific performance or such
          other relief as 3DP may request to enjoin or otherwise restrain any
          act prohibited hereby, as well as the recovery of all costs and
          expenses, including attorneys' fees incurred. 3DP shall be entitled to
          indemnification by BMS from any losses, liabilities, damages and
          expenses (including attorneys' fees and costs), in connection with
          such unauthorized use or release of Confidential Information of 3DP.
          3DP shall be entitled to indemnification by BMS from any losses,
          liabilities, damages and expenses (including attorneys' fees and
          costs) in connection with any Third Party infringement action arising
          with respect to the Database Information as it may pertain to BMS's
          use of such Database Information. BMS shall be entitled to
          indemnification by 3DP from any losses, liabilities, damages and
          expenses (including attorneys' fees and costs) in connection with any
          Third Party infringement action arising with respect to BMS's use of
          the Proteomica(TM) Database as it may pertain to claims that the
          Proteomica(TM) Database infringes such Third Party's proprietary
          rights.

** Certain portions of this Exhibit have been omitted based upon a request for
   confidential treatment that has been filed with the Commission. The omitted
   portions have been filed separately with the Commission.

                                      17
<PAGE>

     11.2 Procedure. Upon the assertion of any such claim or suit, the
          indemnified Party shall promptly notify the indemnifying Party thereof
          and shall permit the indemnifying Party to assume direction and
          control of the defense of the claim (including the selection of
          counsel and the sole right to settle it at the sole discretion of the
          indemnifying Party, provided that such settlement does not impose any
          material obligation on the indemnified Parties), and shall cooperate
          as requested (at the expense of the indemnifying Party) in the defense
          of the claim.

                                  ARTICLE 12

                                 MISCELLANEOUS

     12.1 Entire Agreement. This Agreement, and the DiscoverWorks(TM) Drug
          Discovery Collaboration Agreement, the DiscoverWorks(TM) Non-exclusive
          License and Purchase Agreement and the PERT Internal Use License and
          Option Agreement all entered into simultaneously with this Agreement,
          and each of the Exhibits thereto constitute and contain the entire
          understanding and agreement of the Parties respecting the subject
          matters of these respective Agreement and cancels and supersedes any
          and all prior negotiations, correspondence, understandings and
          agreements between the Parties, whether oral or written, regarding
          such subject matters.

     12.2 Further Actions. Each Party agrees to execute, acknowledge and deliver
          such further instruments and to do all such other acts as may be
          necessary or appropriate in order to carry out the purposes and intent
          of this Agreement.

     12.3 Binding Effect. This Agreement and the rights granted herein shall be
          binding upon and shall inure to the benefit of 3DP, BMS and their
          permitted assigns.

     12.4 Assignment. Neither Party shall assign this Agreement without the
          prior written consent of the other Party; provided, however, that
          either Party may assign this Agreement without the prior written
          consent of the other Party in connection with the sale or transfer of
          substantially all of its assets that relate to this Agreement, or in
          the event of its merger or consolidation or change of control or
          similar transaction. Any permitted assignee shall assume all
          obligations of its assignor under this Agreement.

     12.5 Restrictions on Unsolicited Activities. In consideration of the
          licenses granted hereunder, BMS agrees that for the term of this
          Agreement, without the prior written consent of the board of directors
          of 3DP, neither BMS nor any of its respective Affiliates (including
          any person or entity directly or indirectly, through one or more
          intermediaries, controlling one of these entities, or controlled by
          one of these entities or under common control with one of these
          entities) will (i) purchase, offer or agree to purchase, or announce
          an intention to purchase, directly or indirectly, any securities or
          assets of 3DP; (ii) make, or in any way

** Certain portions of this Exhibit have been omitted based upon a request for
   confidential treatment that has been filed with the Commission. The omitted
   portions have been filed separately with the Commission.

                                      18
<PAGE>

          participate, directly or indirectly, in any "solicitation" of
          "proxies" to vote or "consents" (as such terms are used in the rules
          and regulations of the Securities and Exchange Commission), or seek to
          advise or influence any person with respect to the voting of any
          voting securities of 3DP or any Affiliate thereof; (iii) initiate or
          support, directly or indirectly, any stockholder proposal with respect
          to 3DP; (iv) directly or indirectly make any public announcement with
          respect to, or submit a proposal for, or offer of (with or without
          conditions) any extraordinary transaction involving 3DP or its
          securities or assets, or any Affiliate thereof, or of any successor to
          or person in control of 3DP or any of its businesses, or any assets of
          3DP any Affiliate or division thereof, or of any such successor or
          controlling person; or (v) form, join or in any way participate in a
          "group" as defined in Section 13(d)(3) of the Exchange Act in
          connection with any of the foregoing. Nothing contained in this
          Section 12.5 shall prohibit the ownership by BMS of up to 1% of any
          class of securities of 3DP which are registered pursuant to the
          Exchange Act.

     12.6 No Implied Licenses. No rights to any other patents, know-how or
          technical information, or other intellectual property rights, other
          than as explicitly identified herein, are granted or deemed granted by
          this Agreement. No right, expressed or implied, is granted by this
          Agreement to a Party to use in any manner the name or any other trade
          name or trademark of the other Party in connection with the
          performance of this Agreement.

     12.7 No Waiver. No waiver, modification or amendment of any provision of
          this Agreement shall be valid or effective unless made in writing and
          signed by a duly authorized officer of each Party. The failure of
          either Party to assert a right hereunder or to insist upon compliance
          with any term or condition of this Agreement shall not constitute a
          waiver of that right or excuse a similar subsequent failure to perform
          any such term or condition.

     12.8 Force Majeure. The failure of a Party to perform any obligation under
          this Agreement by reason of acts of God, acts of governments, riots,
          wars, strikes, accidents or deficiencies in materials or
          transportation or other causes of a similar magnitude beyond its
          control shall not be deemed to be a breach of this Agreement.

     12.9 Independent Contractors. Both Parties are independent contractors
          under this Agreement. Nothing contained in this Agreement is intended
          nor is to be construed so as to constitute 3DP or BMS as partners or
          joint venturers with respect to this Agreement. Neither Party shall
          have any express or implied right or authority to assume or create any
          obligations on behalf of or in the name of the other Party or to bind
          the other Party to any other contract, agreement, or undertaking with
          any Third Party.

** Certain portions of this Exhibit have been omitted based upon a request for
   confidential treatment that has been filed with the Commission. The omitted
   portions have been filed separately with the Commission.

                                      19
<PAGE>

     12.10  Notices and Deliveries. Any formal notices, request, delivery,
            approval or consent required or permitted to be given under this
            Agreement shall be in writing and shall be deemed to have been
            sufficiently given when it is received, whether delivered in person,
            transmitted by facsimile with contemporaneous confirmation,
            delivered by registered letter (or its equivalent) or delivered by
            certified overnight courier service (receipt required), to the Party
            to which it is directed at its address shown below or such other
            address as such Party shall have last given by notice to the other
            Parties.

     If to BMS:

     Bristol-Myers Squibb Company
     Route 206 & Province Line Road
     P.O. Box 4000
     Princeton, New Jersey 08543
     ATTN: Vice President and Senior Counsel,
           Pharmaceutical Research Institute

     If to 3DP:                             with a copy to:

     3-Dimensional Pharmaceuticals, Inc.    Morgan, Lewis & Bockius LLP
     Eagleview Corporate Center             502 Carnegie Center
     665 Stockton Drive, Suite 104          Princeton, New Jersey 08540
     Exton, PA  10341
     ATTN:  Chief Executive Officer         ATTN: Randall B. Sunberg, Esq.

     12.11  Public Announcements. The Parties shall consult with each other and
            reach mutual written agreement before making any public announcement
            concerning this Agreement or its subject matter. Notwithstanding the
            foregoing, the Parties may disclose the existence and general nature
            of this Agreement and may make disclosures for purposes of
            satisfying legal and regulatory requirements in accordance with
            Article 7; however, neither Party shall use the name of the other
            Party for promotional purposes.

     12.12  Headings. The captions to the sections in this Agreement are not a
            part of this Agreement, and are included merely for convenience of
            reference only and shall not affect its meaning or interpretation.

     12.13  Severability. If any provision of this Agreement becomes or is
            declared by a court of competent jurisdiction to be illegal,
            unenforceable or void, this Agreement shall continue in full force
            and effect without said provision, so long as the Agreement, taking
            into account said voided provision(s), continues to provide the
            Parties with the same practical economic benefits as the Agreement
            containing said voided provision(s) did on the Effective Date. If,
            after taking into

** Certain portions of this Exhibit have been omitted based upon a request for
   confidential treatment that has been filed with the Commission. The omitted
   portions have been filed separately with the Commission.

                                      20
<PAGE>

            account said voided provision(s), the Parties are unable to realize
            the practical economic benefit contemplated on the Effective Date,
            the Parties shall negotiate in good faith to amend this Agreement to
            reestablish the practical economic benefit provided the Parties on
            the Effective Date.

     12.14  Applicable Law. This Agreement shall be governed by and interpreted
            in accordance with the laws of the State of Delaware without
            reference to its conflicts of laws provisions.

     12.15  Advice of Counsel. BMS and 3DP have each consulted with counsel of
            their choice regarding this Agreement, and each acknowledges and
            agrees that this Agreement shall not be deemed to have been drafted
            by one Party or another and will be construed accordingly.

     12.16  No Consequential Damages. IN NO EVENT SHALL EITHER PARTY OR ANY OF
            ITS RESPECTIVE AFFILIATES BE LIABLE TO THE OTHER PARTY OR ANY OF ITS
            AFFILIATES FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL
            DAMAGES, WHETHER IN CONTRACT, WARRANTY, TORT, NEGLIGENCE, STRICT
            LIABILITY OR OTHERWISE, INCLUDING, BUT NOT LIMITED TO, LOSS OF
            PROFITS OR REVENUE, OR CLAIMS OF CUSTOMERS OF ANY OF THEM OR OTHER
            THIRD PARTIES FOR SUCH OTHER DAMAGES.

     12.17  Counterparts. This Agreement may be executed in counterparts, or
            facsimile versions, each of which shall be deemed to be an original,
            and both of which together shall be deemed to be one and the same
            agreement.

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their respective duly authorized officers as of the Effective Date, each copy of
which shall for all purposes be deemed to be an original.

3-DIMENSIONAL PHARMACEUTICALS, INC.             BRISTOL-MYERS SQUIBB COMPANY

By:  /s/ David C. U'Prichard                    By:   /s/ Marilyn Hartig

Name:  David C. U'Prichard, Ph.D.               Name:  Marilyn Hartig, Ph.D.

Title: Chief Executive Officer                  Title:  VP, External Sciences
                                                         & Technology

** Certain portions of this Exhibit have been omitted based upon a request for
   confidential treatment that has been filed with the Commission. The omitted
   portions have been filed separately with the Commission.

                                      21
<PAGE>

                                   EXHIBIT A
                                   ---------

                            GPCR Sequence Subtypes
                            ----------------------

[**]


** This page and the next three pages of this Exhibit have been omitted based
   upon a request for confidential treatment that has been filed with the
   Commission. The omitted pages have been filed separately with the Commission.

                                      22
<PAGE>

                                   EXHIBIT B
                                   ---------

                          BMS Preferred GPCR Targets
                          --------------------------

[**]


** Certain portions of this Exhibit have been omitted based upon a request for
   confidential treatment that has been filed with the Commission. The omitted
   portions have been filed separately with the Commission.

                                      23
<PAGE>

                                   EXHIBIT C
                                   ---------

                             Database Access Terms
                             ---------------------

     Only authorized personnel from BMS shall be entitled to download GPCR
     Structure or GPCR Homology Model coordinates from the Proteomica Database
     solely for the purpose of modeling such GPCRs using software tools external
     to the Proteomica Database.  BMS shall maintain a list of such authorized
     personnel, which may be inspected  by 3DP upon reasonable cause, BMS
     considering access to names of staff and their expertise to be proprietary
     to BMS.

     BMS shall not transfer the Proteomica Database or the Database Information,
     or any portion thereof, from the BMS Sites.

     Other terms to be added by mutual agreement of the parties.

** Certain portions of this Exhibit have been omitted based upon a request for
   confidential treatment that has been filed with the Commission. The omitted
   portions have been filed separately with the Commission.

                                      24
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.38
<SEQUENCE>19
<FILENAME>0019.txt
<DESCRIPTION>OPTION AGREEMENT BTWN THE COMPANY & BRISTOL MEYERS
<TEXT>

<PAGE>

                                                                   EXHIBIT 10.38

                                     PERT
                   INTERNAL USE LICENSE AND OPTION AGREEMENT

THIS PERT INTERNAL USE LICENSE AND OPTION AGREEMENT is made as of July 7, 2000,
by and between 3-Dimensional Pharmaceuticals, Inc., a Delaware corporation
having a place of business at Eagleview Corporate Center, 665 Stockton Drive,
Suite 104, Exton, PA 19341 ("3DP"), and Bristol-Myers Squibb Company, a Delaware
corporation having a place of business at Route 206 & Province Line Road, P.O.
Box 4000, Princeton, New Jersey 08543 ("BMS").  Either 3DP or BMS may be
referred to herein as a "Party" or, collectively, they may be referred to as the
"Parties."

                                   ARTICLE 1

                                  DEFINITIONS

In addition to the capitalized terms defined throughout this Agreement, the
following terms when used herein shall have the respective meanings assigned to
them below:

     1.1  "Affiliate" means, with respect to either Party, any corporation or
          other business entity which controls, is controlled by, or is under
          common control with such Party. A corporation or other entity shall be
          regarded as in control of another corporation or other entity if it
          owns or directly or indirectly controls at least 50% of the voting
          stock or other ownership interest of the other corporation or entity
          (or alternatively, if it owns the maximum such ownership interest
          permitted by law), or if it possesses, directly or indirectly, the
          power to direct or cause the direction of the management and policies
          of the corporation or other entity, or the power to elect or appoint
          at least 50% of the members of the governing body of the corporation
          or other entity.

     1.2  "Agreement" means this PERT Internal Use License and Option Agreement,
          including its Exhibits, as may be amended from time to time.

     1.3  "BMS Site" means only (a) the BMS pharmaceutical research and
          development facilities located in Lawrenceville, New Jersey, U.S.A.;
          Hopewell, New Jersey, U.S.A.; Wallingford, Connecticut, U.S.A.;
          Candiac, Quebec, Canada; (b) [**] in the United States, Canada or a
          country in the European Union, [**], excepting [**] that has been [**]
          and [**] prior to BMS's installation of the 3DP PERT [**] and (c) [**]
          in the United States, Canada or a country in the European Union, [**]
          prior to the BMS's installation of the 3DP PERT at [**].

     1.4  "Confidential Information" means all commercial and/or technical
          information that has or could have commercial value or other utility
          in a Party's business, or the unauthorized disclosure of which could
          be detrimental to the Party's interests, including information,
          inventions, data and materials relating to the Licensed Patent Rights,
          and Know-how, and shall include, without limitation, research,
          technical, clinical development, manufacturing, marketing, financial,
          personnel and other business information and plans, whether in oral,
          written, graphic or electronic form, except to the extent that the
          Receiving Party can establish that such Confidential Information: (a)
          was already known to the Receiving Party, other than under an
          obligation of confidentiality to the Disclosing Party; (b) was

**   Certain portions of this Exhibit have been omitted based upon a request for
     confidential treatment that has been filed with the Commission. The omitted
     portions have been filed separately with the Commission

                                       1
<PAGE>

          generally available to the public or otherwise part of the public
          domain at the time of its disclosure to the Receiving Party; (c)
          became generally available to the public or otherwise part of the
          public domain after its disclosure, and other than through any act or
          omission of the Receiving Party in breach of this Agreement; (d) was
          subsequently lawfully disclosed to the Receiving Party by a Third
          Party; (e) can be shown by written records to have been independently
          developed by or for the Receiving Party without reference to the
          Confidential Information received from the Disclosing Party, and
          without breach of any of the provisions of this Agreement; or (f) the
          Disclosing Party has specifically agreed in writing that the Receiving
          Party may disclose such Confidential Information.  For the purposes of
          this Agreement, the 3DP PERT shall be presumed to be 3DP's
          Confidential Information, unless 3DP specifically identifies in
          writing one or more components of the 3DP PERT that it does not
          consider to be its Confidential Information.

     1.5  "Effective Date" means the later of: (a) date of this Agreement as set
          forth above; or (b) the date on which all of the following documents
          between the Parties have been executed:  this Agreement, the GPCR
          License and User Agreement, the DiscoverWorks Nonexclusive License and
          Purchase Agreement, and the DiscoverWorks Drug Discovery Collaboration
          Agreement.

     1.6  "Field" means the expression of recombinant proteins from human and
          other species in mammalian and non-mammalian cell systems, and the
          refolding of such expressed proteins, solely for use in pharmaceutical
          and diagnostic research, and specifically excluding use in human
          clinical trials, veterinary medicine product development and all
          experiments conducted under GMP auspices, and excluding use for any
          commercial production or commercialization of a protein product.

     1.7  "Know-how" means unpatented technical and other information, belonging
          to or controlled by 3DP, which is not in the public domain, including
          aspects of 3DP PERT, Improvements and other information comprising or
          relating to concepts, discoveries, inventions, data, designs,
          formulae, ideas, methods, models, assays, research plans, procedures,
          designs for experiments and tests, results of experimentation and
          testing (including research or development results), processes
          (including manufacturing processes, specifications and techniques),
          and laboratory records.

     1.8  "Improvements" means any inventions, discoveries, improvements or
          enhancements made by either Party or their respective Affiliates,
          which relate to the 3DP PERT or to previous Improvements.

     1.9  "Licensed Patent Rights" means: (a) patent applications or issued
          patents identified in Exhibit A, including any patent applications,
                                ---------
          divisionals, continuations, reissues and reexaminations thereof, (b)
          any patents issuing from any of the patent applications described in
          clause (a) or any patents covering any Improvements made by 3DP to the
          inventions covered by the patents and patent applications described in
          clause (a); and (c) any extensions and supplementary

**   Certain portions of this Exhibit have been omitted based upon a request for
     confidential treatment that has been filed with the Commission. The omitted
     portions have been filed separately with the Commission

                                       2
<PAGE>

          protection certificates based on, or the foreign equivalents of, any
          of the foregoing in clauses (a) and (b); filed by or granted to 3DP in
          the U.S., Canada, or one or more countries in the European Patent
          Community.

     1.10 "Third Party" means any person or entity other than a Party or any of
          its Affiliates.

     1.11 "3DP PERT" stands for "3DP Protein Expression and Refolding
          Technology" and means (a) the 3DP proprietary technology that
          facilitates high yield protein expression and high yield refolding of
          complex proteins expressed in mammalian and non-mammalian cell
          systems, that is covered at the time and place of the use by one or
          more patent claims within Licensed Patent Rights, and/or (b) the
          proprietary and nonproprietary methods, systems, instruments,
          programs, technology, trade secrets and software, together with all
          Know-how related thereto, necessary for the practice of the foregoing.

                                   ARTICLE 2

                                    LICENSE

     2.1  Grant. Subject to the terms and conditions of this Agreement, 3DP
          hereby grants BMS and its Affiliates a nontransferable,
          nonsublicensable, nonexclusive, nonroyalty-bearing license in the
          Field under: (a) the Licensed Patent Rights and Know-how, and (b) any
          Improvements to the 3DP PERT or Improvements thereto made by or for
          3DP during the [**] after the Effective Date, or for which 3DP
          otherwise acquires the right to grant such a license during such [**]
          period, and under all patent, copyright, trademark, trade secret and
          other intellectual property rights inherent therein and appurtenant
          thereto; to the extent necessary for BMS to use the 3DP PERT and
          Improvements solely for research purposes in the Field which shall be
          deemed to include any research and development activities being
          undertaken [**] over the term of the Agreement only at the BMS Sites.

     2.2  Access to Improvements. For a period of [**] from the Effective Date,
          3DP, at no additional cost, will promptly make full written disclosure
          to BMS of any and all Improvements that 3DP conceives or makes or has
          made to the 3DP PERT and to any Improvements thereto, and/or which 3DP
          has the right to provide hereunder, and 3DP will facilitate the
          transfer of such Improvements to BMS. Such transfer shall occur no
          later than six (6) months after such Improvements have been validated
          by 3DP. If BMS desires to acquire a license to any such Improvement
          from 3DP for commercial applications beyond the scope of the license
          granted in Section 2.1, the Parties will negotiate in good faith the
          terms under which 3DP may grant such license for such Improvement to
          BMS.

     2.3  Grantback Rights to Improvements. For a period of [**] from the
          Effective Date, BMS and its Affiliates agree that each will promptly
          make full written disclosure to 3DP of any and all Improvements that
          BMS and/or its Affiliates conceives or makes to the 3DP PERT and to
          any Improvements thereto. BMS

**   Certain portions of this Exhibit have been omitted based upon a request for
     confidential treatment that has been filed with the Commission. The omitted
     portions have been filed separately with the Commission

                                       3
<PAGE>

          and its Affiliates hereby grant to 3DP, or its designee, a semi-
          exclusive (exclusive except as to BMS and its Affiliates), perpetual,
          nonroyalty-bearing license, including the right to transfer and
          sublicense such license, to all of BMS's and its Affiliates' worldwide
          right, title, and interest in and to any and all such Improvements
          solely for applications relating to 3DP PERT, under all patent,
          copyright, trademark, trade secret and other intellectual property
          rights inherent therein and appurtenant thereto, provided that such
          license shall be subject to a retained right by BMS and its Affiliates
          to use such Improvements solely for internal research purposes as
          permitted in Section 2.1.

     2.4  Limitations. Except as permitted under Section 2.1, this Agreement
          does not grant BMS a license to:

          2.4.1     transfer any part of the 3DP PERT to any Third Party; or

          2.4.2     develop or sell an instrument, product or a service based on
                    any part of the 3DP PERT; or

          2.4.3     provide services to any Third Party with respect to any part
                    of the 3DP PERT; or

          2.4.4     distribute, license or otherwise make available to any Third
                    Party any data or database that is obtained from the use of
                    any part of the 3DP PERT.

     2.5  Retained Rights. Any rights of either Party not expressly granted to
          the other Party under the provisions of this Agreement shall be
          retained by the former Party.

     2.6  Covenants. BMS covenants that it will not install, have installed or
          operate the 3DP PERT at any site that is not a BMS Site, and that it
          will limit disclosure and/or use of the 3DP PERT to/by only those of
          its employees or its Affiliates' employees necessary to accomplish the
          research activities involving the 3DP PERT at the BMS Sites.

                                   ARTICLE 3

                                    OPTION

     3.1  Grant. 3DP hereby grants BMS an option (the "Option") to negotiate, as
          provided for herein, a commercial license to the 3DP PERT. Such
          commercial license shall be nonexclusive, world-wide, and royalty-
          bearing, with a limited right to sublicense, and will grant BMS the
          right to develop, make, have made, use, have used, sell, have sold,
          import, and have imported products made using the 3DP PERT. The term
          of the Option shall begin on the Effective Date of this Agreement and
          shall continue for[**].

**   Certain portions of this Exhibit have been omitted based upon a request for
     confidential treatment that has been filed with the Commission. The omitted
     portions have been filed separately with the Commission

                                       4
<PAGE>

     3.2  Exercise of Option. BMS shall provide written notice to 3DP of its
          election to exercise the Option no later than ninety (90) days prior
          to the expiration of the term of the Agreement. If BMS decides not to
          exercise such Option at any time before the expiration of the term of
          the Agreement, BMS shall promptly provide written notice to 3DP of
          such decision.

     3.3  Good Faith Negotiation. Upon receipt of written notice from BMS of its
          intent to exercise the Option, the Parties shall negotiate in good
          faith to achieve a definitive license agreement, including provisions,
          among others, for confidentiality, indemnification, and diligent
          marketing, as well as up-front license fees, royalties and milestone
          payments.

                                   ARTICLE 4

                                    PAYMENT

     4.1  3DP PERT License Fee.

          4.1.1     Within thirty (30) days after execution of this Agreement,
                    in consideration for the Option granted above, and for the
                    licenses granted hereunder for the BMS Sites described in
                    Sections 1.3(a) and 1.3(b), BMS will pay to 3DP[**].

          4.1.2     In consideration for the licenses granted hereunder for each
                    BMS Site described in Section 1.3(a), BMS will pay to 3DP a
                    fee of [**] within (30) days after BMS had identified such
                    BMS Site to 3DP as one at which it intends to install 3DP
                    PERT.

     4.2  Mode of Payment. Payment to 3DP hereunder shall be made by wire
          transfer of United States Dollars, in the requisite amount, to such
          bank account as 3DP may designate by timely notice to BMS. Payment
          shall be free and clear of any taxes, fees or charges, to the extent
          applicable.

                                   ARTICLE 5

                                   SERVICES

     5.1  Training and Support. 3DP shall use commercially reasonable efforts to
          provide up to [**] of training and support services to a limited
          number of qualified BMS personnel for the 3DP PERT during the [**]
          after the Effective Date, with such time to be divided equally on a
          quarterly basis ("Services"). Such Services will be provided at such
          times and in such places and in such form as may be mutually agreeable
          to the Parties. BMS will be subject to additional fees, which shall be
          reasonable and specified in advance, for any support or training
          required beyond the Services.

     5.2  Recording. In order to protect the patent rights, under applicable
          U.S., Canadian or European Union law in any inventions conceived or
          reduced to practice during the term of this Agreement as a result of
          the use of the 3DP PERT, BMS agrees to

**   Certain portions of this Exhibit have been omitted based upon a request for
     confidential treatment that has been filed with the Commission. The omitted
     portions have been filed separately with the Commission

                                       5
<PAGE>

          maintain a policy which requires its employees to record and maintain
          all data and information developed using the 3DP PERT in such a manner
          as to enable the Parties to use such records to establish the earliest
          date of invention and/or diligence to reduction to practice. At a
          minimum, the policy shall require such individuals to record all
          inventions generated by them in standard laboratory notebooks which
          are dated and corroborated by non-inventors on a regular,
          contemporaneous basis.

                                   ARTICLE 6

                        PATENT RIGHTS AND INFRINGEMENT

     6.1  Licensed Patent Rights. 3DP agrees to use commercially reasonable
          efforts to prepare, file, prosecute and maintain the Licensed Patent
          Rights, at 3DP's expense, in a manner deemed appropriate in 3DP's sole
          judgment. 3DP agrees to keep BMS materially advised of the status of
          all Licensed Patent Rights, upon reasonable written request from BMS.

     6.2  BMS Patent Rights. BMS shall provide 3DP with copies of all material
          correspondence with any patent authority, such that 3DP is apprised of
          the status of all patent rights filed by or granted to BMS and/or its
          Affiliates which are related to Improvements or to 3DP PERT, and under
          which 3DP has rights, according to the provisions of Section 2.2.

     6.3  Cooperation. Each Party agrees to endeavor in good faith to coordinate
          its efforts with the other Party in order to minimize or avoid
          interference with the patent prosecution or rights of the other Party
          with respect to patent rights under which the other Party has a
          license.

     6.4  Infringement by Third Parties. In the event that BMS becomes aware of
          any infringement by one or more Third Parties of any of the patent
          rights within Licensed Patent Rights, BMS shall promptly notify 3DP.
          3DP shall respond to any such infringement in a manner deemed
          appropriate by 3DP, in its sole judgment.

     6.5  Third Party Patent Rights. If any warning letter or other notice of
          infringement is received by a Party, or action, suit or proceeding is
          brought against a Party alleging infringement of a patent of any Third
          Party, with respect to operations under the Licensed Patent Rights,
          the Parties shall promptly discuss and decide what response is in the
          best interests of the Parties.

                                   ARTICLE 7

                                CONFIDENTIALITY

**   Certain portions of this Exhibit have been omitted based upon a request for
     confidential treatment that has been filed with the Commission. The omitted
     portions have been filed separately with the Commission

                                       6
<PAGE>

     7.1  Confidentiality Obligations. The Parties agree that, for the term of
          this Agreement and for ten (10) years thereafter, either Party that
          receives Confidential Information (a "Receiving Party") from the other
          Party (a "Disclosing Party") shall keep, and shall take steps, not
          fewer than it takes to protects its own valuable, proprietary
          information, and not less than reasonable measures, to attempt to
          ensure that its officers, directors and employees keep, confidential,
          and shall not publish or otherwise disclose, and shall not use for any
          purpose (except as expressly permitted hereunder) any Confidential
          Information (including without limitation, Know-how) furnished to it
          by its Disclosing Party pursuant to this Agreement.

     7.2  Written Assurances and Permitted Uses of Confidential Information.

          7.2.1     The Receiving Party may disclose the Disclosing Party's
                    Confidential Information to the extent the Receiving Party
                    is compelled to disclose such information by a judicial or
                    administrative authority of competent jurisdiction,
                    including but not limited to submitting information to tax
                    authorities or to comply with any discovery or similar
                    request for production of documents in litigation or similar
                    alternative dispute resolution proceedings, provided
                    however, that in such case, the Receiving Party shall timely
                    give notice to the Disclosing Party so that the Disclosing
                    Party may seek a protective order or other remedy from said
                    authority. In any event, the Receiving Party shall disclose
                    only that portion of the Confidential Information that, in
                    the opinion of its legal counsel, is legally required to be
                    disclosed, and will exercise reasonable efforts to ensure
                    that any such information so disclosed will be accorded
                    confidential treatment by said court or tribunal.

          7.2.2     To the extent reasonably necessary or appropriate to fulfill
                    its obligations or exercise its rights hereunder, a Party
                    may disclose Confidential Information received from the
                    other Party to one or more of its Affiliates, on a need-to-
                    know basis, on condition that each such Affiliate agrees to
                    keep such Confidential Information confidential under
                    equivalent conditions required of its parent Party.

          7.2.3     The existence and the terms and conditions of this Agreement
                    which the Parties have not specifically agreed to disclose
                    pursuant to this Section 7.2, shall be treated by each Party
                    as Confidential Information of the other Party.

          7.2.4     To the extent that it is reasonably necessary or appropriate
                    to fulfill its obligations to comply with the rules
                    controlling disclosure of material information during patent
                    examination, either Party may disclose Confidential
                    Information received from the other Party to the applicable
                    patent authority.

**   Certain portions of this Exhibit have been omitted based upon a request for
     confidential treatment that has been filed with the Commission. The omitted
     portions have been filed separately with the Commission

                                       7
<PAGE>

     7.3  Publications. At least forty-five (45) days prior to submitting a
          manuscript that contains a reference to or details of the 3DP PERT or
          any Improvements for publication, BMS shall provide 3DP with such
          manuscript for 3DP's reasonable review. BMS shall also promptly
          provide 3DP with any updates or revisions to such manuscript. 3DP will
          review each manuscript in a timely manner and shall release such
          manuscript(s) to BMS, or may request BMS to make amendments or
          substitutions to the manuscript, in order to delete 3DP's Confidential
          Information. BMS will honor 3DP's reasonable request for such
          amendment or substitution.

     7.4  Permitted Disclosures for Business Development Purposes.
          Notwithstanding the foregoing, or any other provision in this
          Agreement to the contrary, 3DP may describe the financial terms of
          this Agreement in confidence, in connection with capital raising or
          financing activities; provided, however, any such recipient of such
          Confidential Information shall agree in writing to keep such terms
          confidential for the same time periods and to an equivalent extent as
          3DP is required to keep Confidential Information confidential under
          this Agreement. Furthermore, BMS acknowledges that 3DP may be
          obligated to disclose terms of this Agreement and make public a copy
          of this Agreement in the event it files a registration statement with
          respect to its shares or it becomes a public company as required by
          applicable U.S. law; provided however, the terms of this Agreement and
          the copy submitted to the applicable governmental agency shall be
          redacted such that the extent of any such disclosure shall be limited
          to that which in the reasonable opinion of 3DP's legal counsel is
          legally required to be disclosed.

                                   ARTICLE 8

                        REPRESENTATIONS AND WARRANTIES

     8.1  Authority. Each Party represents and warrants that it has the full
          right, power and authority to execute, deliver and perform its
          obligations pursuant to this Agreement, this Agreement has been duly
          executed by such Party, and it constitutes a legal, valid and binding
          obligation of such Party, enforceable in accordance with its terms.

     8.2  No Conflicts. Each Party represents and warrants that the execution,
          delivery and performance of this Agreement does not conflict with, or
          constitute a breach or default under any of its charter or
          organizational documents, any law, order, judgment or governmental
          rule or regulation applicable to it, or any material agreement,
          contract, commitment or instrument to which it is a party.

     8.3  Intellectual Property. 3DP represents and warrants that Exhibit A is
          accurate and complete, and identifies all patent rights owned by 3DP,
          as of the Effective Date, which are believed necessary for the use of
          the methods and technology claimed in the Licensed Patent Rights, in
          accordance with the license granted hereunder. 3DP further warrants
          that it has not received notice of any claim by a Third Party, which
          asserts that the practice of the 3DP PERT, as anticipated in

**   Certain portions of this Exhibit have been omitted based upon a request for
     confidential treatment that has been filed with the Commission. The omitted
     portions have been filed separately with the Commission

                                       8
<PAGE>

          this Agreement, would infringe any claim of any valid, enforceable
          United States, Canadian or the applicable patent of a country in the
          European Union. 3DP has not conducted, and is not obliged to conduct,
          either a search for, or an analysis of, United States or Canadian
          patents, and/or patents to any countries in the European Patent
          Community that may be infringed by the use of the 3DP PERT.

     8.4  Disclaimer of Warranties. 3DP MAKES NO REPRESENTATIONS AND EXTENDS NO
          WARRANTIES OR CONDITIONS OF ANY KIND, EITHER EXPRESS OR IMPLIED, WITH
          RESPECT TO THE LICENSED PATENT RIGHTS OR OTHERWISE TO THE 3DP PERT,
          INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY OR
          FITNESS FOR A PARTICULAR PURPOSE.

                                   ARTICLE 9

                             TERM AND TERMINATION

     9.1  Term. This Agreement shall commence upon the Effective Date and shall
          expire upon the expiration of all of the last-to-expire of the patents
          within the Licensed Patent Rights.

     9.2  For Any Reason. BMS may terminate this Agreement for any reason by
          providing 3DP sixty (60)-days written notice.

     9.3  Termination for Material Breach. The failure by a Party to comply with
          any of the material obligations contained in this Agreement shall
          entitle the other Party to give notice to the allegedly breaching
          Party to have the default cured. If (i) such default is not cured
          within sixty (60) days after the receipt of such notice, or (ii) such
          default is not susceptible to cure within sixty (60) days after such
          notice (unless such default, by its nature, is incurable, in which
          case the Agreement may be terminated immediately by notice), or (iii)
          diligent and ongoing steps are not taken to cure, if by its nature
          such default could not be cured within sixty (60) days, the notifying
          Party shall be entitled, without prejudice to any of its other rights
          conferred on it by this Agreement, and in addition to any other
          remedies that may be available to it, to terminate this Agreement,
          provided, however, that such right to terminate shall be stayed in the
          event that, during such sixty (60) day period, the Party alleged to
          have been in default shall have: (a) initiated arbitration in
          accordance with the provisions of Section 11.1, below, with respect to
          the alleged default, and (b) diligently and in good faith cooperated
          in the prompt resolution of such arbitration proceedings. Such rights
          to terminate will be in addition to, and without prejudice to the
          exercise of, any other remedies available in law or equity.

     9.4  No Waiver. The right of a Party to terminate this Agreement, as
          provided in Article 9, shall not be affected in any way by its waiver
          or failure to take action with respect to any prior default.

**   Certain portions of this Exhibit have been omitted based upon a request for
     confidential treatment that has been filed with the Commission. The omitted
     portions have been filed separately with the Commission

                                       9
<PAGE>

     9.5  Insolvency or Bankruptcy.

          9.5.1   Either Party may, in addition to any other remedies available
                  by law or in equity, terminate this Agreement by written
                  notice to the other Party in the event the latter Party shall
                  have become insolvent or bankrupt, or shall have an assignment
                  for the benefit of its creditors, or there shall have been
                  appointed a trustee or receiver of the other Party or for all
                  or a substantial part of its property, or any case or
                  proceeding shall have been commenced or other action taken by
                  or against the other Party in bankruptcy or seeking
                  reorganization, liquidation, dissolution, winding-up,
                  arrangement or readjustment of its debts or any other relief
                  under any bankruptcy, insolvency, reorganization or other
                  similar act or law of any jurisdiction now or hereafter in
                  effect, or there shall have been issued a warrant of
                  attachment, execution, restraint or similar process against
                  any substantial part of the property of the other Party, and
                  any such event shall have continued for ninety (90) days
                  undismissed, unbonded and undischarged.

          9.5.2   All rights and licenses granted under or pursuant to this
                  Agreement by BMS or 3DP are, and shall otherwise be deemed to
                  be, for purposes of Section 365(n) of the U.S. Bankruptcy
                  Code, licenses of right to "Intellectual Property," as defined
                  under Section 101 of the U.S. Bankruptcy Code. The Parties
                  agree that the Parties, as licensees of such rights under this
                  Agreement, shall retain and may fully exercise all of their
                  rights and elections under the U.S. Bankruptcy Code. The
                  Parties further agree that, in the event of the commencement
                  of a bankruptcy proceeding by or against either Party under
                  the U.S. Bankruptcy Code, the Party hereto which is not a
                  party to such proceeding shall be entitled to a complete
                  duplicate of (or complete access to, as appropriate) any such
                  intellectual property and all embodiments of such relevant
                  intellectual property, and same, if not already in their
                  possession, shall be promptly delivered to them (i) upon any
                  such commencement of a bankruptcy proceeding upon their
                  written request therefor, unless the Party subject to such
                  proceedings elects to continue to perform all of their
                  obligations under this Agreement, or (ii) if not delivered
                  under (i) above, upon the rejection of this Agreement by or on
                  behalf of the Party subject to such proceeding upon written
                  request therefor by a nonsubject Party.

     9.6  Survival of Obligations. The termination or expiration of this
          Agreement shall not relieve the Parties of any obligations accruing
          prior to such termination, and any such termination shall be without
          prejudice to the rights of either Party against the other. The
          provisions of Article 7, Section 8.4, Section 9.6, Section 9.7,
          Article 10, Article 11 and Article 12 (except Section 12.5) shall
          survive any termination of this Agreement.

     9.7  Return of Confidential Information. Upon termination or expiration of
          this Agreement, BMS will promptly return all 3DP Confidential
          Information

**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission. The omitted
    portions have been filed separately with the Commission

                                      10
<PAGE>

          transferred to it under this Agreement, whether in oral, written,
          graphic or electronic form, and will cease all use of 3DP PERT;
          provided, however, that BMS shall thereafter continue to have all
          rights to use any information or results obtained by BMS from its use
          of 3DP PERT during the term of this Agreement.

                                  ARTICLE 10

                                INDEMNIFICATION

     10.1 Indemnification of 3DP. BMS shall indemnify and defend 3DP and its
          Affiliates, and the directors, officers, employees, agents and counsel
          of 3DP and such Affiliates, and the successors and assigns of any of
          the foregoing (the "3DP Indemnitees"), and hold the 3DP Indemnitees
          harmless from and against any and all losses resulting from any claim,
          suit or proceeding brought by one or more Third Parties against a 3DP
          Indemnitee, arising from or occurring as a result of BMS's use of 3DP
          PERT and/or its operations under the Licensed Patent Rights, or the
          discovery, evaluation, manufacture, import, use, offer for sale or
          sale of products developed in whole or in part through the use by BMS
          of 3DP PERT, except to the extent any such claim, suit or proceeding
          results from the breach of any of the provisions of this Agreement,
          gross negligence or willful misconduct of 3DP. It is understood by
          both Parties that the technology licensed hereunder is experimental,
          that BMS is experienced in the handling of and appropriate precautions
          to be practiced with experimental technology, and it will take all
          appropriate precautions to prevent death, personal injury, illness,
          and property damages related to the use thereof.

     10.2 Procedure. Any of the 3DP Indemnitees that intends to claim
          indemnification under this Article 10 shall promptly notify BMS (the
          "Indemnitor") in writing of any loss in respect of which the 3DP
          Indemnitee intends to claim such indemnification, and shall permit the
          Indemnitor to assume direction and control of the defense of the claim
          (including the selection of counsel and the sole right to settle it at
          the sole discretion of the Indemnitor, provided that such settlement
          does not impose any material obligation or detriment on the 3DP
          Indemnitee), and shall cooperate as requested (at the expense of the
          Indemnitor) in the defense of the claim; provided, however, that a 3DP
          Indemnitee shall have the right to retain its own counsel, with the
          fees and expenses to be paid by such 3DP Indemnitee. The failure to
          deliver written notice to the Indemnitor within a reasonable time
          after the commencement of any such action, if prejudicial to its
          ability to defend such action, shall relieve the Indemnitor of any
          liability to the 3DP Indemnitee under this Article 10. At the
          Indemnitor's request, the 3DP Indemnitee under this Article 10, and
          its employees and agents, shall cooperate fully with the Indemnitor
          and its legal representatives in the investigation of any loss covered
          by this indemnification and provide true, correct and complete
          information with respect thereto.

**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission. The omitted
    portions have been filed separately with the Commission

                                      11
<PAGE>

                                  ARTICLE 11

                              DISPUTE RESOLUTION

     11.1 Dispute Resolution. Any dispute concerning or arising out of this
          Agreement or concerning the existence or validity hereof, shall be
          determined by the following procedure:

          11.11   Both Parties understand and appreciate that their long term
                  mutual interest will be best served by affecting a rapid and
                  fair resolution of any claims or disputes which may arise out
                  of services performed under this Agreement or from any dispute
                  concerning the terms of this Agreement. Therefore, both
                  Parties agree to use their reasonable best efforts to resolve
                  all such disputes as rapidly as practicable on a fair and
                  equitable basis. Toward this end, both Parties agree to
                  develop and follow a process for presenting, rapidly
                  assessing, and settling claims on a fair and equitable basis
                  that takes into account the precise subject and nature of the
                  dispute.

          11.12   If any dispute or claim arising under this Agreement cannot be
                  readily resolved by the Parties pursuant to the process
                  described above, then the Parties agree to refer the matter to
                  a panel consisting of the Chief Executive Officer ("CEO") of
                  3DP, and the Senior Vice President of Early Discovery and
                  Applied Technology for BMS, or a comparable position selected
                  by either Party from time to time, for review and a non-
                  binding resolution. A copy of the terms of this Agreement,
                  agreed upon facts (and areas of disagreement), and concise
                  summary of the basis for each side's contentions will be
                  provided to both such officers who shall review the same,
                  confer, and attempt to reach a mutual resolution of the issue.

          11.13   If the matter has not been resolved utilizing the foregoing
                  process, and the Parties are unwilling to accept the non-
                  binding decision of the indicated panel, either or both
                  Parties may elect to pursue definitive resolution through
                  binding arbitration, which the Parties agree to accept in lieu
                  of litigation or other legally-available remedies (with the
                  exception of injunctive relief where such relief is necessary
                  to protect a Party from irreparable harm pending the outcome
                  of any such arbitration proceeding). Binding arbitration shall
                  be settled in accordance with the Commercial Arbitration Rules
                  of the American Arbitration Association by a panel of three
                  arbitrators chosen in accordance with these Rules. This
                  Agreement shall be governed by and construed in accordance
                  with the substantive laws of the State of Delaware, without
                  regard to the conflicts of laws provisions of Delaware. The
                  arbitration will be held in Wilmington, Delaware. Judgment
                  upon the award rendered may be entered in any court having
                  jurisdiction and the Parties hereby consent to the said
                  jurisdiction and venue, and further irrevocably waive any
                  objection which either Party may have now or hereafter to the
                  laying of venue of any

**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission. The omitted
    portions have been filed separately with the Commission

                                      12
<PAGE>

                  proceedings in said courts and to any claim that such
                  proceedings have been brought in an inconvenient forum, and
                  further irrevocably agree that a judgment or order in any such
                  proceeding shall be conclusive and binding upon the Parties
                  and may be enforced in the courts of any other jurisdiction.

                                  ARTICLE 12

                                 MISCELLANEOUS

     12.1 Entire Agreement. This Agreement, and the DiscoverWorks(TM) Drug
          Discovery Collaboration Agreement, the DiscoverWorks(TM) Nonexclusive
          License and Purchase Agreement, and the GPCR License and User
          Agreement, all entered into simultaneously with this Agreement,
          constitute and contain the entire understanding and agreement of the
          Parties respecting the subject matters of these respective agreements,
          and cancel and supersede any and all prior negotiations,
          correspondence, understandings and agreements between the Parties,
          whether oral or written, regarding such subject matters.

     12.2 Further Actions. Each Party agrees to execute, acknowledge and deliver
          such further instruments and to do all such other acts as may be
          necessary or appropriate in order to carry out the purposes and intent
          of this Agreement.

     12.3 Binding Effect. This Agreement and the rights granted herein shall be
          binding upon and shall inure to the benefit of 3DP, BMS, and their
          permitted assigns.

     12.4 Assignment. Neither Party shall assign this Agreement without the
          prior written consent of the other Party; provided, however, that
          either Party may assign this Agreement without the prior written
          consent of the other Party in connection with the sale or transfer of
          substantially all of its assets that relate to this Agreement, or in
          the event of its merger or consolidation or change of control or
          similar transaction. Any permitted assignee shall assume all
          obligations of its assignor under this Agreement.

     12.5 Restrictions on Unsolicited Activities. In consideration of the
          licenses granted hereunder, BMS agrees that for the term of this
          Agreement, without the prior written consent of the board of directors
          of 3DP, neither BMS nor any of its respective Affiliates (including
          any person or entity directly or indirectly, through one or more
          intermediaries, controlling one of these entities, or controlled by
          one of these entities or under common control with one of these
          entities) will (i) purchase, offer or agree to purchase, or announce
          an intention to purchase, directly or indirectly, any securities or
          assets of 3DP; (ii) make, or in any way participate, directly or
          indirectly, in any "solicitation" of "proxies" to vote or "consents"
          (as such terms are used in the rules and regulations of the Securities
          and Exchange Commission), or seek to advise or influence any person
          with respect to the voting of any voting securities of 3DP or any
          Affiliate thereof; (iii)

**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission. The omitted
    portions have been filed separately with the Commission

                                      13
<PAGE>

            initiate or support, directly or indirectly, any stockholder
            proposal with respect to 3DP; (iv) directly or indirectly make any
            public announcement with respect to, or submit a proposal for, or
            offer of (with or without conditions) any extraordinary transaction
            involving 3DP or its securities or assets, or any Affiliate thereof,
            or of any successor to or person in control of 3DP or any of its
            businesses, or any assets of 3DP any Affiliate or division thereof,
            or of any such successor or controlling person; or (v) form, join or
            in any way participate in a "group" as defined in Section 13(d)(3)
            of the Exchange Act in connection with any of the foregoing. Nothing
            contained in this Section 12.5 shall prohibit the ownership by BMS
            of up to 1% of any class of securities of 3DP which are registered
            pursuant to the Exchange Act.

     12.6   No Implied Licenses. No rights to any other patents, Know-how or
            technical information, or other intellectual property rights, other
            than as explicitly identified herein, are granted or deemed granted
            by this Agreement. No right, expressed or implied, is granted by
            this Agreement to a Party to use in any manner the name or any other
            trade name or trademark of the other Party in connection with the
            performance of this Agreement.

     12.7   No Waiver. No waiver, modification or amendment of any provision of
            this Agreement shall be valid or effective unless made in writing
            and signed by a duly authorized officer of each Party. The failure
            of either Party to assert a right hereunder or to insist upon
            compliance with any term or condition of this Agreement shall not
            constitute a waiver of that right or excuse a similar subsequent
            failure to perform any such term or condition.

     12.8   Force Majeure. The failure of a Party to perform any obligation
            under this Agreement by reason of acts of God, acts of governments,
            riots, wars, strikes, accidents or deficiencies in materials or
            transportation or other causes of a similar magnitude beyond its
            control shall not be deemed to be a breach of this Agreement.

     12.9   Independent Contractors. Both Parties are independent contractors
            under this Agreement. Nothing contained in this Agreement is
            intended nor is to be construed so as to constitute 3DP or BMS as
            partners or joint venturers with respect to this Agreement. Neither
            Party shall have any express or implied right or authority to assume
            or create any obligations on behalf of or in the name of the other
            Party or to bind the other Party to any other contract, agreement,
            or undertaking with any Third Party.

     12.10  Notices and Deliveries. Any formal notices, request, delivery,
            approval or consent required or permitted to be given under this
            Agreement shall be in writing and shall be deemed to have been
            sufficiently given when it is received, whether delivered in person,
            transmitted by facsimile with contemporaneous confirmation,
            delivered by registered letter (or its equivalent) or delivered by
            overnight courier service (receipt required), to the Party to which
            it is directed at its address shown

**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission. The omitted
    portions have been filed separately with the Commission

                                      14
<PAGE>

            below or such other address as such Party shall have last given by
            notice to the other Parties.

            If to BMS:

            Bristol-Myers Squibb Company
            Route 206 & Province Line Road
            P.O. Box 4000
            Princeton, New Jersey 08543
            ATTN: Vice President and Senior Counsel
                  Pharmaceutical Research Institute


<TABLE>
<CAPTION>
            If to 3DP:                                 with a copy to:
            <S>                                        <C>
            3-Dimensional Pharmaceuticals, Inc.        Morgan, Lewis & Bockius LLP
            Eagleview Corporate Center                 502 Carnegie Center
            665 Stockton Drive, Suite 104              Princeton, New Jersey 08540
            Exton, PA  10341
            ATTN: Chief Executive Officer              ATTN: Randall B. Sunberg, Esq.
</TABLE>

     12.11  Public Announcements. The Parties shall consult with each other and
            reach mutual written agreement before making any public announcement
            concerning this Agreement or its subject matter. Notwithstanding the
            foregoing, the Parties may disclose the existence and general nature
            of this Agreement and may make disclosures for purposes of
            satisfying legal and regulatory requirements in accordance with
            Article 6; however, neither Party shall use the name of the other
            Party for promotional purposes.

     12.12  Headings. The captions to the sections in this Agreement are not a
            part of this Agreement, and are included merely for convenience of
            reference only and shall not affect its meaning or interpretation.

     12.13  Severability. If any provision of this Agreement becomes or is
            declared by a court of competent jurisdiction to be illegal,
            unenforceable or void, this Agreement shall continue in full force
            and effect without said provision, so long as the Agreement, taking
            into account said voided provision(s), continues to provide the
            Parties with the same practical economic benefits as the Agreement
            containing said voided provision(s) did on the Effective Date. If,
            after taking into account said voided provision(s), the Parties are
            unable to realize the practical economic benefit contemplated on the
            Effective Date, the Parties shall negotiate in good faith to amend
            this Agreement to reestablish the practical economic benefit
            provided the Parties on the Effective Date.

     12.14  No Consequential Damages. IN NO EVENT SHALL EITHER PARTY OR ANY OF
            ITS RESPECTIVE AFFILIATES BE LIABLE TO THE OTHER

**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission. The omitted
    portions have been filed separately with the Commission

                                      15
<PAGE>

            PARTY OR ANY OF ITS AFFILIATES FOR SPECIAL, INDIRECT, INCIDENTAL OR
            CONSEQUENTIAL DAMAGES, WHETHER IN CONTRACT, WARRANTY, TORT,
            NEGLIGENCE, STRICT LIABILITY OR OTHERWISE, INCLUDING, BUT NOT
            LIMITED TO, LOSS OF PROFITS OR REVENUE, OR CLAIMS OF CUSTOMERS OF
            ANY OF THEM OR OTHER THIRD PARTIES FOR SUCH OTHER DAMAGES.

     12.15  Applicable Law. This Agreement shall be governed by and interpreted
            in accordance with the laws of the State of Delaware, without
            reference to its conflicts of laws provisions.

     12.16  Advice of Counsel. BMS and 3DP have each consulted with counsel of
            their choice regarding this Agreement, and each acknowledges and
            agrees that this Agreement shall not be deemed to have been drafted
            by one party or another and will be construed accordingly.

     12.17  Counterparts. This Agreement may be executed in counterparts, or
            facsimile versions, each of which shall be deemed to be an original,
            and both of which together shall be deemed to be one and the same
            agreement.

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their respective duly authorized officers as of the Effective Date, each copy of
which shall for all purposes be deemed to be an original.


<TABLE>
<CAPTION>
3-DIMENSIONAL PHARMACEUTICALS, INC.               BRISTOL-MYERS SQUIBB COMPANY
<S>                                               <C>

By:  /s/ David C. U'Prichard                      By:   /s/ Marilyn Hartig

Name:  David C. U'Prichard, Ph.D.                 Name:  Marilyn Hartig, Ph.D.

Title: Chief Executive Officer                    Title:  VP, External Sciences
                                                           & Technology
</TABLE>

**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission. The omitted
    portions have been filed separately with the Commission

                                      16
<PAGE>

                                   EXHIBIT A
                                   ---------

                               Licensed Patents
                               ----------------

[**].

**  Certain portions of this Exhibit have been omitted based upon a request for
    confidential treatment that has been filed with the Commission. The omitted
    portions have been filed separately with the Commission

                                      17
</TEXT>
</DOCUMENT>
</SUBMISSION>
