<PAGE>

                                                                   EXHIBIT 10.47

                                  CONFIDENTIAL



NOTE: Certain portions of this Collaboration Agreement and its exhibits, which
are identified by the symbol "[* *]", have been omitted and filed separately
with the Securities and Exchange Commission pursuant to a confidential treatment
request.


                                DISCOVERWORKS(R)
                     DRUG DISCOVERY COLLABORATION AGREEMENT


THIS DISCOVERWORKS(R) DRUG DISCOVERY COLLABORATION AGREEMENT is made as of the
Effective Date by and between 3-Dimensional Pharmaceuticals, Inc., a Delaware
corporation having its principal place of business at Three Lower Makefield
Corporate Center, 1020 Stony Hill Road, Suite 300, Yardley, PA 19067, USA
("3DP"), and Janssen Pharmaceutica, N.V., having its place of business at
Turnhoutseweg 30, 2340 Beerse, Belgium and The R.W. Johnson Pharmaceutical
Research Institute, a division of Ortho-McNeil Pharmaceutical, Inc. having a
place of business at U.S. Route 202, Raritan, NJ 08869, USA (collectively, with
its Affiliates, referred to herein as "Janssen"). 3DP and Janssen may be
referred to herein as a "Party" or, collectively, as the "Parties." Reference to
a Party herein shall include its Affiliates (as hereinafter defined) unless
otherwise indicated.

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,  Janssen is engaged in research,  development and  commercialization of
biologically-active compounds for the treatment of human diseases; and

WHEREAS, 3DP and Janssen desire to enter into a research collaboration to allow
Janssen and 3DP to identify Prototype Compounds (as defined herein) active
against selected targets that may be developed and commercialized by Janssen.

NOW, THEREFORE, in consideration of the mutual promises and undertakings set
forth herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound
hereby, the Parties agree as follows:

                                    ARTICLE 1

                                   DEFINITIONS
<PAGE>

 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 compound(s) claimed by a Valid Claim
                  of a 3DP Patent, Joint Patent or Research Program Patent
                  Right.

         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, such lesser percentage which is the
                  maximum allowed to be owned by a foreign corporation in a
                  particular jurisdiction), 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 percent (50%) of
                  the members of the governing body of the corporation or other
                  entity.

         1.3      "Agreement" means this DiscoverWorks(R) Drug Discovery
                  Collaboration Agreement, including its Schedules, as may be
                  amended from time to time.

         1.4      "Back-up Compound" means a compound selected from the Focused
                  Library which has activity against a Target, that is reserved
                  as a back-up for an Active Compound or Licensed Product having
                  activity against the same Target, and is not intended to be
                  developed or commercialized unless development and/or
                  commercialization of such Active Compound or Licensed Product
                  is terminated and such compound becomes a Replacement
                  Compound.

         1.5      "Combination Product" means a Licensed Product that includes
                  one or more active ingredients in addition to an Active
                  Compound.

         1.6      "Confidential Information" means all confidential and
                  proprietary 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)



                                       2
<PAGE>

                  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.

         1.7      "Control" or "Controlled" means possession of the ability to
                  grant a license or sublicense of Patents, know-how or other
                  intangible rights as provided for herein without violating the
                  terms of any contract or other arrangements with any Third
                  Party.

         1.8      "DirectedDiversity(R)Technology" means the technology
                  described in: (a) the 3DP Patents identified in Schedule 1.8,
                                                                  ------------
                  and (b) associated proprietary 3DP know-how used to identify
                  Hits, Prototype Compounds, and Active Compounds.

         1.9      "DiscoverWorks(R) Technology" means 3DP's full panoply of drug
                  discovery and compound and library synthesis technologies,
                  including without limitation the technologies currently known
                  as DirectedDiversity(R) Technology, ThermoFluor(R) Technology,
                  3DP Synthetically Accessible Libraries and 3DP Probe
                  Libraries, notwithstanding that all such technologies and
                  resources may not be utilized under this Agreement.

         1.10     "Effective Date" means December 28, 2001.

         1.11     "Extended Research Term" means a period of time, mutually
                  agreed upon by the Parties, following conclusion of the Stage
                  A Term or Stage B Term or of an earlier Extended Research
                  Term, during which the Research Program is conducted. An
                  Extended Research Term may apply to either or both the Stage A
                  Term and the Stage B Term and is part of the Research Term.

         1.12     "Field" means the research, development and commercialization
                  of compounds for use in therapeutic, prophylactic and
                  diagnostic products in humans or animals. The Field shall
                  specifically exclude [*             *].

         1.13     "First Commercial Sale" means, with respect to a given
                  Licensed Product, the first shipment of Licensed Product 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.


                                       3
<PAGE>

         1.14     "Focused Library" means a library of compounds selected from
                  the 3DP Synthetically Accessible Library using
                  DirectedDiversity(R)Technology and synthesized by 3DP.

         1.15     "FTE" means a full time equivalent 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 with such time and effort to constitute
                  one employee working on the Research Program 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).

         1.16     "Generic Equivalent" means a pharmaceutical product that is
                  being sold in a country without infringing a claim of a Patent
                  Right covering a Licensed Product being sold hereunder by
                  Janssen, which would have infringed such claim of a Patent
                  Right, or which would have prevented a Third Party from
                  selling the same Active Compound that is part of the Licensed
                  Product, if such claim of a Patent Right were in force in that
                  country.

         1.17     "Hit" means a compound in the 3DP Probe Library having a
                  confirmed structure that (i) is identified from the screening
                  of a Target; (ii) modulates [*           *], as measured using
                  ThermoFluor(R) Technology, and (iii) passes the ThermoFluor(R)
                  validation tests set forth on Schedule 1.17.

         1.18     "IND" means an investigational new drug application filed with
                  the U.S. Food and Drug Administration or successor agency
                  ("FDA") as more fully defined in 21 C.F.R.ss.312.3, a CTX, or
                  their respective equivalents in any country.

         1.19     "Initiation of Prototype Compound Optimization" means the
                  receipt of written notice from Janssen to 3DP indicating that
                  Prototype Compound Optimization activities have been initiated
                  by Janssen for a Prototype Compound. Such notice shall, among
                  other things, specifically identify the Prototype Compound and
                  its Target, the project champion, and the site at which work
                  is being conducted.

         1.20     "Janssen Know-how" means any and all technical information,
                  inventions, developments, discoveries, software, know-how,
                  methods, techniques, formulae, data, processes and other
                  proprietary ideas, whether or not patentable or copyrightable,
                  that are first conceived, discovered, developed or reduced to
                  practice in the conduct of Prototype Compound Optimization or
                  the Janssen Research Program.

         1.21     "Janssen Patent" means those Patent Rights that claim
                  discoveries or inventions that (i) were conceived and/or
                  reduced to practice solely by Janssen employees or by a Third
                  Party acting under authority of Janssen prior to the Effective
                  Date; or (ii) were conceived and/or reduced to practice solely
                  by Janssen employees or by


                                       4
<PAGE>

                  a Third Party acting under authority of Janssen during the
                  Term but after the completion of the Research Program and the
                  [*              *] period following the Initiation of
                  Prototype Compound Optimization for each Prototype Compound,
                  on a compound-by-compound basis; and (iii) claiming a method,
                  apparatus, composition of matter, material, manufacture or
                  business method relating to Hits, Prototype Compounds, Active
                  Compound or Licensed Products.

         1.22     "Janssen Research Program" means activities of Janssen during
                  the Term that are intended to lead to the discovery of
                  compounds having activity against a Target, and the further
                  optimization, identification and/or discovery of such
                  compounds, excluding any activities of Janssen which occur
                  prior to the Effective Date or after the [* *] period
                  following the Initiation of Prototype Compound Optimization
                  for each Prototype Compound, on a compound-by-compound basis.

         1.23     "Joint Patent" means those Patent Rights that claim
                  discoveries or inventions that (i) were conceived and/or
                  reduced to practice jointly by Janssen and 3DP employees or by
                  a Third Party acting under authority of Janssen or 3DP during
                  the Term but after completion of the Research Program and the
                  [* *] period following the Initiation of Prototype Compound
                  Optimization for each Prototype Compound, on a
                  compound-by-compound basis; and (ii) claiming a method,
                  apparatus, composition of matter, material, manufacture or
                  business method relating to Hits, Prototype Compounds, Active
                  Compound or Licensed Products.

         1.24     "Joint Steering and Management Committee" or "JSMC" shall have
                  the meaning and roles ascribed to it in Article 4.

         1.25     "Know-how" means unpatented technical and other information,
                  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.

         1.26     "Licensed Product" means a pharmaceutical product containing
                  an Active Compound, a Prototype Compound, a Replacement
                  Compound or a Back-Up Compound as an active ingredient.


                                       5
<PAGE>

         1.27     "Major Country" means the United States, Japan, the United
                  Kingdom, France, Germany, or Italy.

         1.28     "NDA" means a new drug application filed pursuant to 21 U.S.C.
                  Section 505(b)(1) including all documents, data and other
                  information concerning a Licensed Product which are necessary
                  for or included in, FDA approval to market a Licensed Product
                  and all supplements and amendments, including supplemental new
                  drug applications, that may be filed with respect to the
                  foregoing as more fully defined in 21 C.F.R. ss.314.50 et.
                  seq.

         1.29     "Net Sales" means the gross amounts invoiced by Janssen, its
                  Affiliates or sublicensees for sales of Licensed Product in
                  finished package form (ready for use by the ultimate consumer)
                  in the Territory to a Third Party, including, but not limited
                  to, sales to wholesalers or other customers typical in each
                  country in bona fide, arm's length transactions. In the event
                  Janssen does not sell directly to such customers in one or
                  more countries, electing instead to utilize another party as a
                  distributor to those customers, it is understood that Net
                  Sales shall include sales by the distributor rather than
                  Janssen's sales to the distributor. In determining Net Sales,
                  certain deductions may be taken against the gross amount
                  invoiced. These allowable deductions are:

                  1.29.1   (i) discounts, including cash discounts, discounts to
                           managed care or similar organizations or government
                           organizations, administrative fees paid to pharmacy
                           benefits managers; (ii) rebates paid or credited,
                           including government rebates such as Medicaid
                           chargebacks or rebates; (iii) retroactive price
                           reductions or allowances actually allowed or granted
                           from the billed amount; and (iv) commercially
                           reasonably promotional allowances actually granted to
                           customers as reflected on the same invoice as for the
                           sale of Licensed Product;

                  1.29.2   credits or allowances actually granted upon claims,
                           rejections or returns of such sales of Licensed
                           Products, including government mandated recalls and
                           recalls that Janssen reasonably believes are in the
                           best interest of the consumer, it being understood
                           that if the recalled Licensed Product is resupplied,
                           Net Sales shall be calculated based on the resupplied
                           quantities at the price previously charged, provided
                           that the cause of the recall was not due to the
                           negligence of Janssen;

                  1.29.3   taxes, duties or other governmental charges levied on
                           or measured by the billing amount when included in
                           billing, as adjusted for rebates, charge-backs and
                           refunds; and

                  1.29.4   freight, postage, shipping and insurance charges to
                           the extent included on the same invoice by Janssen or
                           its Affiliates or sublicensee for delivery of such
                           Licensed Products.


                                       6
<PAGE>

                  In the case of discounts on packages of products or services
                  which include Licensed Product in those countries of the
                  Territory in which such is legally permissible ("Packages"),
                  the discount applied to Licensed Product within the Package
                  shall be no greater than the discount determined by
                  discounting the list price of the Licensed Product in the
                  Package by the average percentage discount of list prices of
                  all products of Janssen in the same Package, calculated as
                  follows:

                        Average percentage              (     A  )
                            Discount on a        =      ( 1- --- )  x  100
                         Particular Package             (     B  )

                  where A equals the total discounted value of a particular
                  Package of products, and B equals the sum of the undiscounted
                  value of the same Package of products. Janssen shall provide
                  3DP with reasonable documentation supporting the percentage
                  discounts with respect to each product within such Package.

                  A "sale" of a Licensed Product is deemed to occur upon the
                  invoicing, or if no invoice is issued, upon the earlier of
                  shipment or transfer of title in the Licensed Product to a
                  Third Party.

                  With respect to Combination Products, Net Sales for such
                  Combination Product sold by Janssen shall be determined by the
                  Parties to this Agreement in good faith based on the relative
                  value of the Active Compound and the additional active
                  ingredients that are included in the Combination Product.

         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     "Prototype Compound" means a compound discovered using
                  information obtained from a Hit in the course of Prototype
                  Compound Generation, as described in Section 2.2, having a
                  dissociation constant [* *] as determined in a dose response
                  experiment and which demonstrates a desired activity against a
                  Target in a molecular or cellular functional assay. Prototype
                  Compounds will have pharmaceutically acceptable properties as
                  determined by the JSMC prior to initiation of Prototype
                  Compound Generation and [* *]. Prototype Compounds will be
                  identified as Prototype Compounds by the JSMC within [* *] of
                  delivery of data [* *]. For purposes of clarity, the Janssen
                  may, at its discretion, select a compound as a Prototype
                  Compound even if such compound does not meet the criteria set
                  forth above.


                                       7
<PAGE>

         1.32     "Prototype Compound Generation" means a program for
                  discovering Prototype Compounds using information obtained
                  from Hits, and iterative rounds of chemistry and the 3DP
                  Synthetically Accessible Library to make Focused Libraries for
                  rescreening using ThermoFluor(R) Technology against such
                  Target as more fully described in Section 2.2.

         1.33     "Prototype Compound Optimization" means a program conducted by
                  Janssen for further optimizing, identifying and/or developing
                  a Prototype Compound or a compound discovered in the course of
                  the Janssen Research Program, to improve the
                  structure-activity relationships, potency, selectivity,
                  pharmacokinetics, pharmacodynamics and acute safety of such
                  Prototype Compound or such compound discovered in the course
                  of the Janssen Research Program, to identify an Active
                  Compound.

         1.34     "Replacement Compound" shall have the meaning attributed
                  thereto in Section 5.8.

         1.35     "Replacement Target" shall have the meaning attributed thereto
                  in Section 2.3.

         1.36     "Research Plan" means the description of the research
                  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
                  Schedule 1.36.
                  -------------

         1.37     "Research Program" means research activities of the Parties
                  during the Research Term, as described in Article 2, that are
                  intended to lead to the discovery of Hits and Prototype
                  Compounds, excluding Prototype Compound Optimization.

         1.38     "Research Program Know-how" means Know-how conceived or
                  developed during the conduct of the Research Program.

         1.39     "Research Program Patent Rights" means those Patent Rights
                  that claim discoveries or inventions that were conceived
                  and/or reduced to practice by Janssen or 3DP or jointly by
                  Janssen and 3DP or by a Third Party acting under authority of
                  Janssen or 3DP in the course of the Research Program or a
                  Janssen Research Program and during the [*    *]  period
                  following the Initiation of Prototype Compound Optimization
                  for each Prototype Compound on a compound-by-compound basis
                  and relating to the Research Program or Janssen Research
                  Program.

         1.40     "Research Term" shall have the meaning attributed thereto in
                  Section 10.1.

         1.41     "Stage A" means the research activities undertaken by the
                  Parties pursuant to Article 2 as part of the Research Program
                  with respect to the first and second Targets to be provided by
                  Janssen to 3DP.


                                       8
<PAGE>

         1.42     "Stage A Commencement Date" means the Effective Date.

         1.43     "Stage A Term" means the period beginning on the Stage A
                  Commencement Date through the first anniversary thereof,
                  during which Stage A of the Research Program is conducted.

         1.44     "Stage B" means the research activities undertaken by the
                  Parties pursuant to Article 2 as part of the Research Program
                  with respect to the third and fourth Targets to be provided by
                  Janssen to 3DP.

         1.45     "Stage B Commencement Date" means the date on which Janssen
                  provides written notice of the third and fourth Targets to
                  3DP.

         1.46     "Stage B Term" means the period beginning on the Stage B
                  Commencement Date through the first anniversary thereof,
                  during which Stage B of the Research Program is conducted.

         1.47     "Target" means a protein against which Hits are identified and
                  Prototype Compounds are to be optimized in the Research
                  Program. Targets, as defined herein, shall also include
                  Replacement Targets once such targets become Targets pursuant
                  to Section 2.3.

         1.48     "Term" shall have the meaning ascribed thereto in Section
                  10.2.

         1.49     "Territory" means the entire world.

         1.50     "ThermoFluor(R) Technology" means the technology described in:
                  (a) the 3DP Patents identified in Schedule 1.50, and (b)
                                                    -------------
                  associated proprietary 3DP Know-how used to evaluate ligand
                  binding parameters of Hits, Prototype Compounds, and Active
                  Compounds.

         1.51     "Third Party" means an individual, corporation or other entity
                  other than a Party or any of its Affiliates.

         1.52     "3DP Patent" means those Patent Rights that claim discoveries
                  or inventions that (i) were conceived and/or reduced to
                  practice solely by 3DP employees or by a Third Party acting
                  under authority of 3DP prior to the Effective Date; or (ii)
                  were conceived and/or reduced to practice solely by 3DP
                  employees or by a Third Party acting under authority of 3DP
                  during the Term, but after completion of the Research Program
                  and the [* *] period following the Initiation of Prototype
                  Compound Optimization for each Prototype Compound, on a
                  compound-by-compound basis; and (iii) claiming a method,
                  apparatus, composition of matter, material, manufacture or
                  business method relating to Hits, Prototype Compounds, Active
                  Compound or Licensed Products.


                                       9
<PAGE>

         1.53     "3DP Probe Library" means the sample compound library or any
                  subset thereof, comprised of proprietary and non-proprietary
                  compounds which are owned or Controlled by 3DP or to the
                  extent not encumbered by a bona fide third party interest,
                  that have been synthesized for the purposes of fulfilling
                  3DP's obligations under this Agreement, which is used for the
                  screening of Targets using ThermoFluor(R) Technology for the
                  purpose of identification of Hits, Prototype Compounds, or
                  Active Compounds. While the individual non-proprietary
                  compounds in the 3DP Probe Library are not proprietary, the
                  collection itself, and the list, as a whole, of
                  non-proprietary compounds included in the collection, are the
                  "Confidential Information" of 3DP.

         1.54     "3DP Synthetically Accessible Library" means 3DP's virtual
                  compound library as it exists from time to time from which 3DP
                  Probe Libraries have been selected, and from which Focused
                  Libraries will be selected.

         1.55     "Valid Claim" means (a) a claim of an issued and unexpired
                  patent included within the Patent Rights, which has not been
                  held permanently revoked, unenforceable or invalid by a
                  decision of a court or other governmental agency of competent
                  jurisdiction, unappealable or unappealed within the time
                  allowed for appeal, and which has not been admitted to be
                  invalid or unenforceable through reissue or disclaimer or
                  otherwise, or (b) a claim of a pending patent application
                  included within the Patent Rights, which claim was filed in
                  good faith and has not been abandoned or finally disallowed
                  without the possibility of appeal or refiling of such
                  application; provided, however, if a claim of a pending
                  application included within the Patent Rights has not issued
                  within six (6) years after the filing date from which such
                  claim takes priority, such claim of a pending application
                  shall no longer be a Valid Claim for purposes of this
                  definition until such patent application issues.

                                    ARTICLE 2

                                RESEARCH PROGRAM

         2.1      Supply of Targets. Janssen shall supply 3DP with four (4)
                  Targets, the first and second of which are identified in
                  Schedule 2.1 attached hereto, in quantities and of quality
                  ------------
                  sufficient to perform the Research Program pursuant to the
                  Research Plan. The third and fourth Targets shall be provided
                  to 3DP by Janssen no later than [* *], or as otherwise agreed
                  by the Parties. All such Targets shall be supplied to 3DP in
                  the form of proteins.

         2.2      Prototype Compound Generation. Depending on the nature and
                  source of each Target, 3DP will have the following
                  obligations. 3DP shall initially screen the Target against a
                  screening library, selected by 3DP from the 3DP Probe Library
                  and totaling approximately one hundred thousand (100,000)
                  compounds per Target. If such initial screening produces no
                  Hits, the JSMC may ask 3DP to


                                       10
<PAGE>

                  perform a secondary screen of a reasonable number of
                  additional compounds from the 3DP Probe Library and 3DP will
                  undertake such secondary screen. If the initial screening or
                  the secondary screening produces Hits, 3DP will undertake
                  rounds of iterative chemistry. Each round will include the
                  synthesis of Focused Libraries containing up to [* *] but not
                  less than [* *] compounds (unless such compounds are subject
                  to the limitations set forth in Schedule 2.2 or such other
                                                  ------------
                  maximum and minimum compound numbers as the Parties may agree
                  upon) per round. 3DP shall continue to perform iterative
                  rounds of chemistry until the first to occur of the following:

                  2.2.1    a Prototype Compound is identified in accordance with
                           Section 1.28; or

                  2.2.2    a maximum of [* *] total rounds of iterative
                           chemistry are performed to generate Focused Libraries
                           from the 3DP Synthetically Accessible Library; or

                  2.2.3    a maximum of [* *] compounds contained in Focused
                           Libraries are synthesized and screened using
                           DiscoverWorks(R) Technology from the 3DP
                           Synthetically Accessible Library.

         2.3      Replacement Targets.

                  2.3.1    If neither initial screening nor the secondary
                           screening of the compounds from the 3DP Probe Library
                           produces any Hits against that Target, then Janssen
                           may identify, subject to approval by 3DP and the
                           JSMC, a replacement Target ("Replacement Target")
                           against which 3DP will conduct Prototype Compound
                           Generation pursuant to Section 2.2 for the remainder
                           of the applicable Stage A Term or Stage B Term.

                  2.3.2    If Prototype Compound Generation of such Replacement
                           Target is incomplete at the end of the applicable
                           Stage A Term or Stage B Term, then at Janssen's
                           request, 3DP will continue and complete the Prototype
                           Compound Generation pursuant to Section 2.2 for such
                           Replacement Target at the same FTE rate of
                           compensation paid to 3DP as recited in Section 5.2.

                  2.3.3    Janssen may select a total of up to [* *] Replacement
                           Targets pursuant to the provisions of this Section
                           2.3.

                  2.3.4    Any Replacement Targets identified by Janssen may be
                           disapproved by 3DP only (i) in order to avoid
                           potential conflicts with respect to prior contractual
                           obligations and current internal 3DP programs, (ii)
                           for lack of suitability with ThermoFluor(R)
                           Technology, (iii) because 3DP reasonably believes
                           that use of such Replacement Target would infringe a
                           valid and enforceable third party patent, or (iv)
                           because the Target is for the primary


                                       11
<PAGE>

                           purpose of identifying drugs specifically intended
                           for [*     *].

         2.4      Prototype Compounds. Upon identification of a Prototype
                  Compound in accordance with Section 1.28, (a) the Prototype
                  Compound, along with all Back-Up Compounds shall be licensed
                  to Janssen for Prototype Compound Optimization and further
                  development and commercialization as provided in Section 6.4
                  herein and (b) 3DP shall provide Janssen with the structure
                  and protocol for synthesis of such Prototype Compound within
                  [* *] of the JSMC identifying it as a Prototype Compound.
                  Janssen shall promptly inform 3DP upon Initiation of Prototype
                  Compound Optimization.

         2.5      Back-up Compounds. On a Target-by-Target basis, upon
                  identification of a Prototype Compound, all the Compounds in
                  the Focused Libraries having activity against such Target
                  equivalent or better than the activity needed to be considered
                  a Hit against that Target shall constitute Back-Up Compounds.
                  On the first anniversary of initiation of Prototype Compound
                  Optimization for a Prototype Compound that has activity
                  against a Target, Janssen shall identify a total of up to
                  [* *] compounds from the Focused Libraries having activity
                  against the same Target to be designated as Back-up Compounds.
                  On the second anniversary of initiation of Prototype Compound
                  Optimization for such Prototype Compound, Janssen shall
                  identify a total of up to [* *] compounds from the [* *]
                  compounds previously identified and having activity against
                  the same Target to be designated Back-up Compounds. If a
                  Back-up Compound is selected for development as a Replacement
                  Compound, the [* *] period following the initiation of
                  Prototype Compound Optimization for each Prototype Compound on
                  a compound-by-compound basis during which Janssen Know-how
                  shall be disclosed by Janssen to 3DP for 3DP to prepare, file,
                  prosecute and maintain Research Program Patent Rights pursuant
                  to Article 8, will be deemed to have restarted on the date of
                  notification of such selection.

         2.6      No Grant of License to DiscoverWorks(R) Technology.
                  Notwithstanding any provision to the contrary in this
                  Agreement, no license to any portion of the DiscoverWorks(R)
                  Technology, including any related Know-how, is hereby granted
                  by 3DP to Janssen under this Agreement or otherwise.

                                   ARTICLE 3

                        RESEARCH AND DEVELOPMENT EFFORTS

         3.1      Research Efforts. Each Party shall use commercially reasonable
                  efforts to perform its responsibilities and fulfill its
                  obligations under this Agreement. As used herein, the term
                  "commercially reasonable efforts" will mean efforts


                                       12
<PAGE>

                  consistent with such Party's normal scientific and business
                  practice, as applied to other programs of similar scientific
                  and commercial potential.

         3.2      Allocation of FTEs. 3DP shall dedicate, and Janssen shall
                  fund, [* *] FTEs to Stage A of the Research Program for the
                  Stage A Term and [* *] FTEs to Stage B of the Research Program
                  for the Stage B Term, unless otherwise agreed by the Parties
                  in writing.

         3.3      Disclosure of Research Program Results. The JSMC will provide
                  quarterly written reports to the Parties presenting a
                  meaningful summary of the work performed on the Research
                  Program and Prototype Compound Optimization. In addition, on
                  reasonable request by Janssen or 3DP, 3DP or Janssen will make
                  presentations to the JSMC of its activities under this
                  Agreement to inform the JSMC of the details of the work done
                  under this Agreement during the Research Term and the [* *]
                  period following the Initiation of Prototype Compound
                  Optimization for each Prototype Compound, on a
                  compound-by-compound basis. Know-how and other information
                  regarding the Research Program or Prototype Compound
                  Optimization 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 chairperson and
                  secretary a written report summarizing in reasonable detail
                  the work performed by it under the Research Program or
                  Prototype Compound Optimization during the preceding calendar
                  quarter.

         3.4      Prototype Compound Optimization Continuing Report
                  Responsibility. For each compound identified as a Prototype
                  Compound or Active Compound, Janssen shall, until the issuance
                  of the last Research Program Patent Right, provide a report of
                  its activities, and/or those of its Affiliates and
                  sublicensees, toward the development, use and/or
                  commercialization of such Prototype Compound or Active
                  Compound. Such report relating to Prototype Compound
                  Optimization shall be submitted to 3DP semi-annually and shall
                  set forth in reasonable detail, with supporting data, the
                  results of work performed on such compound, including, without
                  limitation, all material information and data generated during
                  such period not previously provided to 3DP pursuant to Section
                  8.3, reasonably necessary to enable 3DP to prepare, file,
                  prosecute and maintain Research Program Patent Rights. If no
                  results of work performed on such compound have been obtained
                  by Janssen during the six-month period after the preceding
                  semi-annual report, Janssen will so inform 3DP. In no event
                  shall Janssen provide such a report relating to Prototype
                  Compound Optimization less frequently than semi-annually.
                  After achievement of the milestone in Section 5.7.2 for an
                  Active Compound, Janssen will thereafter provide to 3DP
                  reports relating to such Active Compound annually. Janssen
                  will provide timely notice, in good faith, of its decision to
                  discontinue its and/or its Affiliates' and


                                       13
<PAGE>

                  sublicensees' activities toward the development, use and/or
                  commercialization of a Prototype Compound, Active Compound
                  and/or Licensed Product.

         3.5      Material Transfer. In order to facilitate the Research
                  Program, either Party (a "Supplying Party") may provide to the
                  other Party (a "Receiving Party") certain information
                  (including chemical structures), biological materials or
                  chemical compounds, including without limitation any compounds
                  from the 3DP Synthetically Accessible Library, 3DP Probe
                  Library or Focused Library (collectively, the "Substances")
                  owned by or licensed to the Supplying Party (other than under
                  this Agreement) and available for use by either Party in
                  furtherance of the Research Program. Except as otherwise
                  provided under this Agreement, all information or 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 shall be 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 except
                  pursuant to an approved Janssen clinical trial. 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.

         3.6      Insurance. Each party shall maintain appropriate insurance
                  with respect to its activities hereunder, in amounts customary
                  in the pharmaceutical and biotechnology industries.

         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 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 Janssen 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 selected by Janssen. 3DP

                                       14
<PAGE>

                  shall select the secretary to the JSMC. 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. The JSMC shall review the Research Plan for the
                  Stage A Term 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.

         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    Overseeing the progress of research in the Research
                           Program;

                  4.2.3    Monitoring Prototype Compound Optimization and the
                           Janssen Research Program and providing a forum for
                           meetings and updates relating to Prototype Compound
                           Optimization and the Janssen Research Program until
                           the issuance of the last Research Program Patent
                           Right;

                  4.2.4    Allocation of funded FTEs across the Targets, and
                           within each Target;

                  4.2.5    Reviewing results from the screening of the 3DP Probe
                           Library and Focused Libraries in connection with
                           selecting the additional compounds from the 3DP Probe
                           Library to be screened by 3DP or synthesized by 3DP,
                           and the identification of Hits and Prototype
                           Compounds;

                  4.2.6    Defining quality criteria for identification of Hits
                           and Prototype Compounds pursuant to Sections 1.29 and
                           1.16; such criteria to be defined within sixty (60)
                           days after the Effective Date; and

                  4.2.7    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 one meeting 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. After the end of the Research Term, but
                  during the [* *] period following the initiation of Prototype
                  Compound Optimization for each Prototype Compound, on a
                  compound-by-compound basis, the JSMC shall meet in person or
                  by teleconference at least semi-annually. 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 telephone, electronic mail, facsimile, or other
                  method, as deemed necessary or appropriate.


                                       15
<PAGE>

         4.4      JSMC Decision-Making Process. Each Party shall have one vote
                  on all matters decided by the JSMC, and decisions by the JSMC
                  shall be made by unanimous vote of the parties. The Parties
                  shall attempt to resolve any disagreement between the Parties
                  within the JSMC using the objectives and principles of this
                  Agreement as the basis for settling such disputes. Any
                  disagreement that cannot be resolved by a vote of the JSMC
                  shall be subject to the procedures set forth in Article 13.

         4.5      Minutes of JSMC 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 JSMC 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 of the JSMC. Final minutes
                  shall be distributed to the members of the JSMC.

         4.6      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; Prototype Compound
                  Optimization; and development and commercialization decisions.
                  However, the Parties may, at their sole discretion,
                  communicate with each other on those matters which, while
                  outside the scope of the Research Program, influence the
                  conduct or term of the Research Program or the development or
                  commercialization of any Hit, Prototype Compound, or Active
                  Compound.

                                   ARTICLE 5

                                 FINANCIAL TERMS

         5.1      Technology Access Fee. Janssen 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    Janssen agrees to pay 3DP for [* *] Stage A FTEs at a
                           rate of [* *] per FTE per year. Such funding shall be
                           payable by Janssen to 3DP in a single nonrefundable
                           payment of [* *] by same day wire transfer and shall
                           be paid concurrently with the Technology Access Fee.


                                       16
<PAGE>

                  5.2.2    Janssen agrees to pay 3DP for [* *] Stage B FTEs [*
                           *] per FTE per year. Such funding shall be payable by
                           Janssen to 3DP in a single nonrefundable payment of
                           [* *] by same day wire transfer and shall be paid
                           concurrently with the Technology Access Fee.

         5.3      Costs. Except as otherwise provided in this Agreement, or as
                  may be agreed from time to time by the Parties in writing, 3DP
                  and Janssen will each bear all of its own expenses incurred in
                  connection with the Research Program including but not limited
                  to any capital expenses for equipment to carry out the
                  Research Program.

         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      Research Audit. 3DP shall maintain complete and accurate
                  records tracking the number of FTEs carrying out the Research
                  Program. During the Research Term and for one year thereafter,
                  upon Janssen's reasonable request, 3DP shall make such records
                  available no more than twice a year during normal business
                  hours for examination at Janssen 's expense for the sole
                  purpose of verifying for Janssen whether or not 3DP is using
                  the average required number of FTEs to carry out the Research
                  Program as specified in the Research Plan. Should it be
                  determined that 3DP has used fewer than the required FTEs
                  during any period of the Research Term, Janssen shall receive
                  a credit for the lost FTE time against any future payments
                  owed to 3DP (or if the Parties mutually agree, the lost FTE
                  time will be made up in subsequent quarters); or if no future
                  payments will be owed by Janssen to 3DP, a payment shall be
                  made by 3DP to Janssen for the lost FTE time.

         5.6      Fees for Early Termination of the Research Program. If Janssen
                  terminates the Research Program without cause, pursuant to the
                  provisions of Section 10.3, prior to the end of the Research
                  Term, Janssen agrees to pay to 3DP a termination fee equal to
                  [* *].

         5.7      Milestone Payments. The following milestones shall become due
                  and payable by Janssen to 3DP within sixty (60) days after
                  accomplishment of the following milestones:

                  5.7.1    Upon the identification by the JSMC of the first
                           Prototype Compound for each Target: [* *];

                  5.7.2    Upon submission of an IND and expiration of the
                           thirty (30) day waiting period without disapproval by
                           the FDA or its foreign counterpart for each Active
                           Compound: [* *]; and


                                       17
<PAGE>

                  5.7.3    Upon filing and acceptance by the FDA of an NDA for
                           each Active Compound: [* *].

         5.8      Milestone Payment Credit. In the event that any milestone
                  payment is made pursuant to Section 5.7 with respect to a
                  Prototype Compound or Active 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 Janssen shall be
                  entitled to a credit against milestone payments due with
                  respect to the Replacement Compound, in the amount equal to
                  all milestone payments actually paid with respect to the
                  Original Compound prior to termination of development of such
                  Original Compound.

         5.9      Milestone Press Release. Within ten (10) days of the
                  achievement of the milestone(s) set forth in Section 5.7, 3DP
                  shall, at its discretion and subject to Janssen's prior
                  written approval (such approval not to be unreasonably
                  withheld or delayed) issue a press release announcing, by way
                  of example, the achievement of a milestone, the identification
                  of a Prototype Compound (excluding any structural
                  information), and such other information as mutually agreed by
                  the Parties.

         5.10     Royalty Rate. Janssen shall pay 3DP a royalty of [* *] on
                  annual Net Sales.

         5.11     Royalty Rate Reduction.

                  5.11.1   Generic Equivalent. If, in any quarterly royalty
                           reporting period, (i) a third Party commences selling
                           a product which is a Generic Equivalent of the
                           Licensed Product in a country in the Territory and
                           (ii) such Unlicensed Unit Sales (as defined below)
                           amount to the following percentages of Janssen's Unit
                           Sales of the Licensed Product in such country in the
                           same royalty reporting period, the royalty rate on
                           Net Sales shall be reduced in such country in
                           accordance with the percentages below and such lower
                           royalty rate shall then apply on the Net Sales in
                           such country as long as the Unlicensed Unit Sales
                           amount to the particular percentage of Janssen's Unit
                           Sales of the Licensed Product in such country in the
                           same royalty reporting period.

                           Unlicensed Unit Sales         Royalty Rate Reduction*

                           (as a % of Janssen Unit Sales)   (% of Royalty Rate)
                           ------------------------------    -------------------

                           [*                   *]           [*               *]

                           [*                   *]           [*               *]


                                       18
<PAGE>

                           [*                   *]           [*               *]

                           * A royalty rate reduction will, however, only be
                           applicable if Janssen also experiences a decrease in
                           Net Sales of the applicable Licensed Product in that
                           country from the Net Sales of the applicable Licensed
                           Product in the same royalty reporting period in the
                           previous calendar year in the same country.

                           For purposes of this Section 5.11.1, (i) "Unlicensed
                           Unit Sales" and "Janssen Unit Sales" shall be deemed
                           to mean the total grams of the Active Compound
                           contained in the Third Party product (irrespective of
                           dosage form) and the Licensed Product (irrespective
                           of dosage form), respectively, as reflected on the
                           label of each such Licensed Product and Third Party
                           product; and (ii) Unlicensed Unit Sales shall be
                           determined by the sales reports of IMS America Ltd.
                           of Plymouth Meeting, Pennsylvania ("IMS") or any
                           successor to IMS or any other independent sales
                           auditing firm selected by Janssen and reasonably
                           acceptable to 3DP. Janssen shall bear all costs of
                           providing 3DP with such information. If Janssen is
                           entitled to a royalty reduction based on Unlicensed
                           Unit Sales pursuant to this Section 5.11.1 for any
                           royalty reporting period, Janssen shall submit the
                           sales report of IMS or such other independent firm,
                           as applicable, for the relevant royalty reporting
                           period to 3DP, together with Janssen 's or its
                           Affiliates' or sublicensees' sales report for the
                           relevant royalty reporting period. Such sales reports
                           for each royalty reporting period in which Janssen is
                           entitled to such royalty reduction shall be submitted
                           with the royalty report for such royalty reporting
                           period submitted pursuant to Section 5.15.

                  5.11.2   Third Party Patents. If Patent Rights of a Third
                           Party should exist in any country during the Term
                           which are required to manufacture, use sell the
                           Licensed Product, and if it should prove in Janssen's
                           reasonable judgment (as supported by an opinion from
                           outside patent counsel which counsel is acceptable to
                           both Parties) impractical or impossible for Janssen,
                           its Affiliates or its sublicensee to continue the
                           activity or activities licensed hereunder without
                           obtaining a royalty bearing license from such Third
                           Party under such Patent Rights in said country, then
                           Janssen shall be entitled to a credit against the
                           royalty payments due hereunder of an amount equal to
                           the royalty paid to such Third Party, not to exceed
                           [* *] of the royalty rate due under this Agreement,
                           arising from the manufacture, use or sale of the
                           Licensed Product in said country.

                  5.11.3   Compulsory License. If at any time and from time to
                           time a Third Party in any country shall, under the
                           right of a compulsory license granted or ordered to
                           be granted by a competent governmental authority,



                                       19
<PAGE>

                           manufacture, use or sell any Licensed Product, with
                           respect to which royalties would be payable pursuant
                           to Section 5.10 hereof, then Janssen may reduce the
                           royalty on sales in such country of such Licensed
                           Product according to the rates specified in Section
                           5.11.1.

         5.12     Royalty Period. The royalty payments set forth in Section 5.9
                  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) [* *] 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 (including
                  without limitation a Replacement Compound) which is an
                  ingredient of such Licensed Product in such country.

         5.13     Royalty Conditions. No royalties shall be due upon the sale or
                  other transfer among Janssen, its Affiliates, licensees or
                  sublicensees, but in such cases the royalty shall be due and
                  calculated upon Janssen's or its Affiliate's, licensee's or
                  sublicensee's Net Sales of Licensed Product to the first
                  independent Third Party.

         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 the account designated by 3DP which is attached
                  hereto as Schedule 5.14; provided, however, that any notice by
                            -------------
                  3DP of a change in such account shall not be effective until
                  thirty (30) days after receipt thereof by Janssen. Payments
                  shall be free and clear of any taxes due by Janssen (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 Janssen's global
                  accounting system which reflects the average exchange rate for
                  the applicable payment period.

         5.15     Quarterly Royalty Reports. During the Term and commencing with
                  the First Commercial Sale of each Licensed Product, Janssen
                  shall furnish or cause to be furnished to 3DP on a quarterly
                  basis, a written report or reports covering each quarter (each
                  such quarter being sometimes referred to herein as a
                  "reporting period") showing:

                  5.15.1   Gross invoiced sales and total deductions used to
                           calculate Net Sales of each Licensed Product sold by
                           Janssen and its sublicensees during the reporting
                           period on a country-by-country basis. For the United
                           States only, twice per calendar year, Janssen shall
                           provide to 3DP a report showing all itemized
                           deductions from gross sales to Net Sales. In any
                           Major Country or country which represents ten percent
                           (10%) or more of world wide gross invoiced sales
                           (other than the United States), to the extent that
                           there are significant variances in total deductions
                           from gross

                                       20
<PAGE>

                           invoiced sales to Net Sales from one quarter to
                           another, Janssen shall, at 3DP's reasonable request,
                           provide a reasonably detailed explanation as to such
                           increase.

                  5.15.2   The royalties, payable in U.S. Dollars, which shall
                           have accrued hereunder in respect of such Net Sales.

                  5.15.3   The exchange rates used, if any, in converting into
                           U.S. Dollars, from the currencies in which sales were
                           made.

                  5.15.4   Dispositions of such Licensed Product other than
                           pursuant to sale for cash, if such data is normally
                           reported in royalty reports of other licensed
                           products.

                  5.15.5   Any withholding taxes required to be paid from such
                           royalties.

         5.16     Royalty Payment Due Date; Accrual. Royalties which have
                  accrued during any month and are required to be shown on a
                  final quarterly sales report provided for hereunder shall be
                  due and payable on the date such final quarterly sales report
                  is due. In addition, at the end of each calendar year in which
                  royalties are paid hereunder, Janssen agrees to reconcile
                  estimated or accrued rebates and discounts taken during such
                  calendar year in accordance with its standard reconciliation
                  practices and make any necessary adjustment in the next
                  calendar quarter in which royalties are due and payable.

         5.17     Royalty Report Timing. Janssen shall provide flash sales
                  reports to 3DP [* *] after the close of each reporting period,
                  and final reports shall be due [* *] following the close of
                  each reporting period.

         5.18     Currency Exchange. In the case of sales of any Licensed
                  Product outside the United States, royalty payments by Janssen
                  to 3DP shall be converted to U.S. Dollars in accordance with
                  Janssen's current customary and usual procedures for
                  calculating same which are the following: the rate of currency
                  conversion shall be calculated using a simple monthly period
                  average of the end "spot rates" provided by Brown Brothers
                  Harriman, 59 Wall Street, NY, NY 10005, for each quarter, or
                  if such rate is not available, the spot rate as published by a
                  leading United States commercial bank for such accounting
                  period. This method of conversion is consistent with Janssen's
                  current accounting methods. Janssen shall give 3DP prompt
                  written notice of any changes to Janssen's customary and usual
                  procedures for currency conversion, which shall only apply
                  after such notice has been delivered and provided that such
                  changes continue to maintain a set methodology for currency
                  conversion.


                                       21
<PAGE>

         5.19     Records Retention. With respect to any products for which
                  royalties are due pursuant to this Agreement, Janssen and its
                  Affiliates and any licensees or sublicensees 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, Janssen shall permit an
                  independent certified accountant of nationally recognized
                  standing appointed by 3DP and reasonably acceptable to
                  Janssen, during normal business hours 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 Janssen's favor of more than [* *], in which event it shall
                  be at Janssen's expense.

         5.20     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. 3DP shall retain its ownership rights
                  to the compounds in the 3DP Probe Library and the 3DP
                  Synthetically Accessible Library and in any Focused Library
                  developed by 3DP pursuant to this Agreement.

         6.2      No Reverse Engineering. Janssen shall not, and shall not cause
                  or assist any Third Party to, use any data or information
                  derived from the Research Program or the 3DP Probe Library or
                  the 3DP Synthetically Accessible Library to design, create or
                  supplement a compound library.

         6.3      Ownership of Targets. Janssen shall retain any ownership
                  rights Janssen may have in any Targets Janssen provides to 3DP
                  pursuant to this Agreement, 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. During the Research Term [* *], 3DP
                  shall not use Targets in any work it conducts with Third
                  Parties. During the Research Term [* *], 3DP shall not enter
                  into a drug discovery or development agreement with any Third
                  Party on the same Target or Targets.

         6.4      Ownership of Hits and Prototype Compounds; Janssen Exclusive
                  License. 3DP shall retain any proprietary rights, title and
                  interest in and appurtenant to Hits, Prototype Compounds and
                  any other compounds in the Focused Library; provided, however,
                  that Janssen shall have an exclusive, worldwide license under


                                       22
<PAGE>

                  3DP Patents, Joint Patents and Research Program Patent Rights
                  (even as to 3DP), with the right to sublicense, to conduct
                  research, develop, make, have made, use, sell, have sold,
                  offer for sale or import Prototype Compounds, Replacement
                  Compounds, Active Compounds, Back-Up Compound or Licensed
                  Products in the Field. Notwithstanding the foregoing, 3DP
                  shall retain the right to use any Prototype Compounds, Back-up
                  Compounds, Replacement Compounds, Active Compounds, or any
                  other compounds in the Focused Library that are used in
                  Licensed Products to conduct research; provided, however, that
                  3DP shall not publish results of such research and shall not
                  provide Active Compounds, Prototype Compounds, Replacement
                  Compounds, or Back-Up Compounds to any Third Party during the
                  Term [* *].

                                   ARTICLE 7

                            CONFIDENTIAL INFORMATION

         7.1      Confidentiality Obligations. The Parties agree that, for the
                  Term and for five (5) 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 the 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 to Janssen with
                  respect to compounds that are assigned to Janssen or
                  exclusively licensed to Janssen 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 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
                           complying 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


                                       23
<PAGE>

                           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 exercise
                           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, and to any regulatory authorities to the
                           extent reasonably necessary to obtain regulatory
                           approvals.

                  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 or any 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 disclose statistics and
                  masked informational data for presentations to investors or to
                  scientific audiences, based on the research data produced
                  pursuant to the activities under this Agreement, including
                  without limitation, success rates; and excluding Confidential
                  Information identifying, for example, specific Prototype
                  Compounds, Active Compounds, Targets, Hits, Back-Up Compounds,
                  Replacement Compounds, Research Program Patent Rights,
                  chemical names, chemical structures and their activities.

         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, 3DP shall not make any publication relating to
                  any Prototype Compound, Replacement Compound, Active Compound
                  or Licensed Product without the prior written permission of
                  Janssen and any proposed publication by either Party relating
                  to the Research Program or Prototype Compound


                                       24
<PAGE>

                  Optimization 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
                  sixty (60) 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 ninety (90) days from
                  the JSMC's notification to the publishing Party 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 attempt 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.

                                   ARTICLE 8

                     PATENT RIGHTS AND INTELLECTUAL PROPERTY

         8.1      Ownership; Inventions. Inventorship for patentable inventions
                  conceived and reduced to practice during the course of the
                  performance of activities pursuant to this Agreement shall be
                  determined in accordance with U.S. patent laws for determining
                  inventorship. Janssen Patents shall be owned by Janssen, 3DP
                  Patents shall be owned by 3DP, and Joint Patents shall be
                  jointly owned by the Parties. Research Program Patent Rights
                  shall be owned by 3DP, regardless of inventorship, and Janssen
                  agrees to assign to 3DP its rights in any Research Program
                  Patent Rights having Janssen employees as sole or joint
                  inventors. In the event of a dispute regarding inventorship,
                  if the parties are unable to resolve such inventorship
                  dispute, the Parties shall establish a procedure to resolve
                  such dispute, which may include engaging a Third Party patent
                  attorney jointly selected by the Parties to resolve such
                  dispute. Each Party will cooperate with the other to

                                       25
<PAGE>

                  the extent reasonably necessary to execute assignments and
                  other documentation as may be required.

         8.2      Disclosure of Patentable Inventions. Each Party shall promptly
                  provide to the other any invention disclosure submitted in the
                  normal course of business and disclosing an invention arising
                  during the Research Program and [* *] period following the
                  Initiation of Prototype Compound Optimization for each
                  Prototype Compound, on a compound-by-compound basis, and
                  relating to Hits, Prototype Compounds, Active Compounds,
                  Back-Up Compounds or Replacement Compounds.

         8.3      Disclosure of Janssen Know-how. During the [* *] period
                  following the initiation of Prototype Compound Optimization
                  for each Prototype Compound on a compound-by-compound basis,
                  Janssen shall promptly provide 3DP with complete written
                  disclosures of any potentially patentable technology derived
                  from the Research Program, the Janssen Research Program and/or
                  Prototype Compound Optimization.

         8.4      3DP Patentable Inventions and Know-How.

                  8.4.1    3DP Patent Prosecution.

                           (a)      Selection of Outside Counsel. Before
                                    retaining any law firm and/or patent
                                    attorney for the preparation and prosecution
                                    of any patent applications which are
                                    Research Program Patent Rights, 3DP shall
                                    inform Janssen of the identity of such law
                                    firm and/or patent attorney it desires to
                                    employ and the Parties will discuss such
                                    firm and/or attorney. 3DP will consider any
                                    suggestions from Janssen regarding the
                                    selection of a law firm and/or patent
                                    attorney for handling preparation,
                                    prosecution and maintenance of Research
                                    Program Patent Rights and Janssen may
                                    disapprove any law firm and/or patent
                                    attorney proposed by 3DP, such approval not
                                    to be unreasonably withheld or delayed.

                           (b)      Prosecution and Maintenance. During the
                                    Term, 3DP shall prepare, file, prosecute and
                                    maintain 3DP Patents (at 3DP's sole expense)
                                    and Research Program Patent Rights (at
                                    Janssen's sole expense) and use reasonable
                                    efforts to initially file all such patent
                                    applications in the United States. For
                                    Research Program Patent Rights, Janssen
                                    shall provide a list of countries in which
                                    such patent applications shall be filed
                                    reasonably in advance of 3DP's estimated
                                    filing date. 3DP shall file such patent
                                    applications in each indicated country.


                                       26
<PAGE>

                           (c)      Discontinuance. If 3DP does not intend to
                                    file for patent protection or does not wish
                                    to continue preparation, prosecution or
                                    maintenance of Research Program Patent
                                    Rights, then it shall give at least
                                    forty-five (45) days advance notice to
                                    Janssen, and in no event less than a
                                    reasonable period of time for Janssen to act
                                    in its stead. In such case, Janssen may
                                    elect at its sole discretion to continue
                                    preparation, filing and prosecution or
                                    maintenance of the discontinued patent at
                                    its sole expense. 3DP shall execute such
                                    documents and perform such acts as may be
                                    reasonably necessary for Janssen to file or
                                    to continue prosecution or maintenance of
                                    such patent. Discontinuance may be elected
                                    on a country-by-country basis or for a
                                    patent application or patent series in
                                    total.

                  8.4.2    Cooperation. 3DP shall consult with Janssen and shall
                           keep Janssen continuously informed of all material
                           matters relating to the preparation, filing,
                           prosecution and maintenance of Research Program
                           Patent Rights covered by this Agreement, including,
                           but not limited to, disclosing to Janssen the
                           complete text of all such Research Program Patent
                           Rights. In addition, 3DP shall provide Janssen with
                           copies of all material correspondence with the
                           applicable patent office.

         8.5      Janssen Patentable Inventions and Know-How.

                  8.5.1    Janssen Patent Prosecution.

                           (a)      Prosecution and Maintenance. During the
                                    Term, Janssen shall, at its own expense,
                                    prepare, file, prosecute and maintain
                                    Janssen Patents and use reasonable efforts
                                    to file initially all such patent
                                    applications in countries in which Janssen
                                    would file patent applications in its normal
                                    business practice for comparable technology.

                           (b)      Discontinuance. If Janssen does not intend
                                    to file for Patent protection or does not
                                    wish to continue preparation, prosecution or
                                    maintenance of a Janssen Patent, then it
                                    shall give at least forty-five (45) days
                                    advance notice to 3DP, and in no event less
                                    than a reasonable period of time for 3DP to
                                    act in its stead. In such case, 3DP may
                                    elect at its sole discretion to continue
                                    preparation, filing and prosecution or
                                    maintenance of the discontinued patent at
                                    its sole expense. Janssen shall execute such
                                    documents and perform such acts as may be
                                    reasonably necessary for 3DP to file or to
                                    continue prosecution or maintenance of such
                                    patent. Discontinuance may be elected on a
                                    country-by-country basis or for a patent
                                    application or patent series in total.


                                       27
<PAGE>

                  8.5.2    Cooperation. Janssen shall consult with 3DP and shall
                           keep 3DP continuously informed of all material
                           matters relating to the preparation, filing,
                           prosecution and maintenance of Janssen Patents
                           covered by this Agreement, including, but not limited
                           to, disclosing to 3DP the complete text of all such
                           Janssen Patents.

         8.6      Joint Patents

                  8.6.1    The Parties shall jointly determine whether to
                           prepare, file, prosecute and maintain any Joint
                           Patents. Janssen shall act as the lead Party for the
                           prosecution and maintenance of such Joint Patents.

                  8.6.2    Janssen shall keep 3DP apprised of the status of each
                           Joint Patent and shall seek the advice of 3DP with
                           respect to patent strategy and drafting applications
                           and shall give reasonable consideration to any
                           suggestions or recommendations of 3DP concerning the
                           preparation, filing, prosecution, maintenance and
                           defense thereof. Each Party shall be responsible for
                           50% of the cost of such filings.

                  8.6.3    The Parties shall cooperate reasonably in the
                           prosecution of all Joint Patents and shall share all
                           material information relating thereto, including all
                           material communications from patent offices, promptly
                           after receipt of such information.

                  8.6.4    If, during the term of this Agreement, Janssen
                           intends to allow any Joint Patent to lapse or to
                           abandon any such Joint Patent, Janssen shall,
                           whenever practicable, notify 3DP of such intention at
                           least sixty (60) days prior to the date upon which
                           such Joint Patent shall lapse or become abandoned but
                           in no event less than a reasonably sufficient time to
                           prevent such lapse or abandonment, and 3DP shall
                           thereupon have the right, but not the obligation, to
                           assume responsibility for the prosecution,
                           maintenance and defense thereof and all expenses
                           related thereto.

         8.7      Assistance. Each Party hereby agrees:

                  8.7.1    to make its employees, agents and consultants
                           reasonably available to the other Party (or the other
                           Party's authorized attorneys, agents or
                           representatives), to the extent reasonably necessary
                           to enable the Prosecuting Party to undertake
                           preparation, filing, prosecution and maintenance of
                           its Patent Rights;

                  8.7.2    to cooperate, if necessary and appropriate, with the
                           other Party in gaining patent term extensions
                           wherever applicable to Patent Rights; and


                                       28
<PAGE>

                  8.7.3    to endeavor in good faith to coordinate its efforts
                           with the other Party to minimize or avoid
                           interference with the preparation, filing,
                           prosecution and maintenance of the other Party's
                           Patent Rights.

         8.8      Initial Filing if Made Outside of the United States. The
                  Parties agree to use reasonable efforts to ensure that any
                  Patent Rights filed outside of the United States prior to a
                  U.S. filing will be in a form sufficient to establish the date
                  of original filing as a priority date for the purposes of a
                  subsequent U.S. filing.

         8.9      Infringement Claims by Third Parties.

                  8.9.1    Notice. If the manufacture, use or sale of an Active
                           Compound or any Licensed Product results in a claim
                           or a threatened claim by a Third Party against a
                           Party hereto for patent infringement or for inducing
                           or contributing to patent infringement ("Infringement
                           Claim"), the Party first having notice of an
                           Infringement Claim shall promptly notify the other in
                           writing. The notice shall set forth the facts of the
                           Infringement Claim in reasonable detail.

                  8.9.2    Defense. Janssen shall have the right but not the
                           obligation to defend any suit resulting from an
                           Infringement Claim at its expense. 3DP shall
                           cooperate and assist Janssen in any such litigation
                           at Janssen's expense. In the event Janssen declines
                           to take steps with respect to such infringement
                           within [* *] following notice of such infringement,
                           3DP shall have the right to do so at its expense.

                  8.9.3    Settlement. In the event that the manufacture, use or
                           sale of the Active Compound or the Licensed Product
                           in a country would infringe Third Party Patent Rights
                           and a license to such Third Party Patent Rights is
                           available, and Janssen in its sole discretion seeks
                           such a license, the Parties agree:

                           (a)      Subject to Section 5.11.2, Janssen shall be
                                    responsible for all costs associated with
                                    acquiring such Third Party license; and

                           (b)      Janssen shall use reasonable efforts to
                                    obtain required licenses under the Third
                                    Party Patents, with a right to sublicense to
                                    3DP.

         8.10     Patent Assignment. Neither Party may assign its interest in
                  rights under Research Program Patent Rights or any Patent
                  Rights claiming an Active Compound or Licensed Product, except
                  with the prior written consent of the other Party, such
                  consent not to be unreasonably withheld or delayed; provided,
                  however, that either Party may assign such rights without
                  consent of the other Party to a permitted assignee under this
                  Agreement.

         8.11     Infringement Claims Against Third Parties.


                                       29
<PAGE>

                  8.11.1   Cooperation. 3DP and Janssen each agree to take
                           reasonable actions to protect 3DP Patents, Janssen
                           Patents, Joint Patents or Research Program Patent
                           Rights from infringement. If one Party brings any
                           such action or proceeding, the other Party may be
                           joined as a Party plaintiff if necessary for the
                           action or proceeding to proceed and, in case of
                           joining, the other Party agrees to give the first
                           Party reasonable assistance and authority to file and
                           to prosecute such suit. The other Party shall be
                           reimbursed for any costs associated with its
                           participation.

                  8.11.2   Notice. If any 3DP Patent, Janssen Patent, Joint
                           Patents and/or Research Program Patent Rights is
                           infringed by a Third Party in any country in
                           connection with the manufacture, use and/or sale of
                           an Active Compound or Licensed Product in such
                           country, the Party to this Agreement first having
                           knowledge of such infringement, or knowledge of a
                           reasonable probability of such infringement, shall
                           promptly notify the other in writing. The notice
                           shall set forth the known facts of such infringement
                           in reasonable detail.

                  8.11.3   Institution of Proceedings.

                           (a)      3DP shall have the primary right, but not
                                    the obligation, to institute, prosecute and
                                    control with its own counsel, any action or
                                    proceeding with respect to infringement of a
                                    3DP Patent or Research Program Patent
                                    Rights. Janssen shall have the right, at its
                                    own expense, to be represented in such
                                    action by its own counsel; provided,
                                    however, no settlement may be entered into
                                    by 3DP without the written consent of
                                    Janssen, which consent shall not be
                                    unreasonably withheld or delayed, if such
                                    settlement would have a material adverse
                                    effect on Janssen's interests.

                           (b)      With respect to Joint Patents, Janssen shall
                                    have the primary right, but not the
                                    obligation, to institute, prosecute and
                                    control any action or proceeding with
                                    respect to infringement of such Joint
                                    Patents, by counsel of its own choice and at
                                    its own expense; provided, however, 3DP may
                                    participate in such proceedings, represented
                                    by counsel of its own choice and at its own
                                    expense, no settlement may be entered into
                                    by Janssen without the written consent of
                                    3DP, which consent shall not be unreasonably
                                    withheld or delayed.

                           (c)      Janssen shall have the sole right to enforce
                                    any rights under the Janssen Patents at its
                                    own expense.

                  8.11.4   Failure to Institute Proceedings. If the Party having
                           the primary right to institute proceedings under
                           Section 8.11.3 (hereinafter referred to as the


                                       30
<PAGE>

                           "First Prosecuting Party") fails to institute,
                           prosecute or control such action or prosecution
                           within a period of one hundred eighty (180) days
                           after receiving notice of the infringement from the
                           other Party (hereinafter referred to as the "Second
                           Prosecuting Party"), then the Second Prosecuting
                           Party shall have the right to bring and control any
                           such action by counsel of its own choice, and the
                           First Prosecuting Party shall have the right, at its
                           own expense, to be represented in any such action by
                           counsel of its own choice. The First Prosecuting
                           Party shall cooperate with the Second Prosecuting
                           Party in such effort, including being joined as a
                           party to such action if necessary.

                  8.11.5   Costs. The Party bringing suit under this Article
                           shall bear all costs of the suit and shall retain any
                           damages or other monetary awards recovered.

                  8.11.6   Settlement. The parties shall keep each other
                           informed of the status of and of their respective
                           activities regarding any litigation or settlement
                           thereof concerning Licensed Products in the Field. A
                           settlement or consent judgment or other voluntary
                           final disposition of a suit brought by a Party under
                           this Section 8.11 may be entered without the consent
                           of the other Party; provided such settlement, consent
                           judgment or other disposition does not admit the
                           invalidity or unenforceability of any Patent Rights;
                           and provided further, that any rights to continue the
                           infringing activity in such settlement, consent
                           judgment or other disposition shall be limited to the
                           product or activity that was the subject of the suit.

         8.12     Notices Relating to the Act. 3DP shall notify Janssen of the
                  issuance of each U.S. patent included among the 3DP Patents,
                  Research Program Patent Rights and Joint Patents wherein 3DP
                  is the filing Party, giving the date of issue and patent
                  number for each such patent. 3DP and Janssen each shall
                  immediately give notice to the other of any certification
                  filed under the "U.S. Drug Price Competition and Patent Term
                  Restoration Act of 1984" (hereinafter the "Act"), including,
                  but not necessarily limited to, notices pursuant toss.ss.101
                  and 103 of the Act from persons who have filed an abbreviated
                  NDA ("ANDA") or a "paper" NDA claiming that 3DP Patents,
                  Janssen Patents, Joint Patents or Research Program Patent
                  Rights are invalid or that infringement will not arise from
                  the manufacture, use or sale of any Active Compound or
                  Licensed Product by a Third Party.

                  8.12.1   If Janssen decides not to bring infringement
                           proceedings against the entity making such a
                           certification, Janssen shall give notice to 3DP of
                           its decision not to bring suit within twenty-one (21)
                           days after receipt of notice of such certification.

                  8.12.2   3DP may then, but is not required to, bring suit
                           against the party that filed the certification.


                                       31
<PAGE>

                  8.12.3   Any suit by Janssen or 3DP shall either be in the
                           name of Janssen or in the name of 3DP, or jointly in
                           the name of Janssen and 3DP, as may be required by
                           law.

                  8.12.4   For purposes of this Section, the Party not bringing
                           suit shall execute such legal papers necessary for
                           the prosecution of such suit as may be reasonably
                           requested by the Party bringing suit.

         8.13     Patent Term Extensions. 3DP hereby authorizes Janssen to (a)
                  provide in any NDA a list of patents which includes 3DP
                  Patents, Joint Patents and Research Program Patent Rights
                  owned by 3DP that relate to such Licensed Product and such
                  other information as Janssen believes is appropriate; (b)
                  commence suit for infringement of 3DP Patents, Joint Patents
                  and Research Program Patent Rights underss.271(e) (2) of Title
                  35 of the United States Code; and (c) exercise any rights that
                  may be exercisable by 3DP as patent owner under the Act,
                  including without limitation, applying for an extension of the
                  term of any patent included in 3DP Patents, Joint Patents and
                  Research Program Patent Rights. In the event that applicable
                  law in any country provides for the extension of the term of
                  any patent included among Research Program Patent Rights owned
                  by 3DP, such as under the Act, the Supplementary Certificate
                  of Protection of the Member States of the European Union and
                  other similar measures in any other country, 3DP shall apply
                  for and use its reasonable efforts to obtain such an extension
                  or, should the law require Janssen to so apply, 3DP hereby
                  gives permission to Janssen to do so. Janssen and 3DP agree to
                  cooperate with one another in obtaining such extension. 3DP
                  agrees to cooperate with Janssen or its sublicensee, as
                  applicable, in the exercise of the authorization granted
                  herein and shall execute such documents and take such
                  additional action as Janssen may reasonably request in
                  connection therewith, including, if necessary, permitting
                  itself to be joined as a Party in any suit for infringement
                  brought by Janssen hereunder.

                                   ARTICLE 9

                                 INDEMNIFICATION

         9.1      Indemnification by Janssen. Janssen 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) Janssen's performance of its obligations under this
                  Agreement; or (b) patent infringement related to 3DP's use of
                  the Targets pursuant to this Agreement; or (c) patent
                  infringement or product liability for bodily injury and/or
                  property damage related to Janssen's development activities
                  with compounds identified under the Research Program and/or
                  with Licensed Products; or (d) the manufacture, use or sale of
                  Licensed Products by Janssen, sublicensees, distributors and
                  agents, except to the extent such claims or suits result from
                  the

                                       32
<PAGE>

                  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 Janssen thereof and shall permit Janssen
                  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 Janssen, provided that such
                  settlement does not impose any material obligation on the 3DP
                  Indemnitees), and shall cooperate as requested (at the expense
                  of Janssen) in the defense of the claim.

         9.2      Indemnification By 3DP. 3DP shall indemnify, defend and hold
                  Janssen and its agents, employees and directors (the "Janssen
                  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 Janssen Indemnitees.
                  Upon the assertion of any such claim or suit, the Janssen
                  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
                  Janssen Indemnitees), and shall cooperate as requested (at the
                  expense of 3DP) in the defense of the claim.

                                   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 last to expire of the
                  Stage A Term or the Stage B Term or any Extended Research Term
                  (the "Research Term").

         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,
                  if no compound, which was identified as a Prototype Compound,
                  is being optimized, developed, commercialized and/or sold by
                  Janssen or 3DP, or (b) upon the identification and
                  commercialization of one or more Licensed Products, upon
                  expiration of Janssen's obligation to pay royalties hereunder
                  (the "Term").

         10.3     Termination of the Research Program Without Cause. Subject to
                  the provisions of Section 5.6, Janssen may terminate the
                  Research Program upon ninety (90)-days advance written notice
                  during the Research Term provided, however, [* *].


                                       33
<PAGE>

         10.4     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 cannot be cured within
                  sixty (60) days, the notifying Party shall be entitled,
                  without prejudice to any of its other rights conferred to 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
                  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.

         10.5     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.

         10.6     Insolvency or Bankruptcy.

                  10.6.1   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.

                  10.6.2   All rights and licenses granted under or pursuant to
                           this Agreement by Janssen 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

                                       34
<PAGE>

                           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.

         10.7     Consequences of Termination of the Research Program.

                  10.7.1   In the event of termination of the Research Program
                           by Janssen pursuant to the provisions of Sections
                           10.4 or 10.6, 3DP shall (i) promptly transfer to
                           Janssen 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 Janssen all relevant records
                           and materials, whether in written or electronic form,
                           in 3DP's possession or control containing
                           Confidential Information of Janssen; and (iii)
                           furnish to Janssen all unused Substances provided to
                           3DP by Janssen in connection with the Research
                           Program. Thereafter, Janssen shall have no further
                           obligation to fund the Research Program, but the
                           remainder of the Agreement shall, including without
                           limitation, Janssen's rights to continue Prototype
                           Compound Optimization for those Prototype Compounds
                           identified as such pursuant to Section 1.29, remain
                           in force and effect until expiration of the term of
                           the Agreement, unless it is sooner terminated as
                           provided in this Agreement.

                  10.7.2   In the event of termination of the Research Program
                           by 3DP pursuant to the provisions of 10.4 or 10.6, or
                           if Janssen terminates the Research Program pursuant
                           to the provisions of Section 10.3, Janssen 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 Janssen'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 Janssen's possession or control
                           containing Confidential Information of 3DP; and (iii)
                           furnish to 3DP all unused Substances, if any,
                           provided to Janssen 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.


                                       35
<PAGE>

                  10.7.3   Either Party's termination of the Research Program
                           pursuant to Section 10.3, 10.4 and/or 10.6 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, Janssen'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.

         10.8     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, except that one (1) copy shall be retained by legal
                  counsel for the former Party.

         10.9     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 3.7, 5.15, 5.16,
                  6.1, 6.2, 6.3, 8.1, 10.8, 14.1, 14.14, 14.15 and Articles 1,
                  7, 9 and 13 shall survive any termination of this Agreement.


                                   ARTICLE 11

         DEVELOPMENT, REGULATORY AND COMMERCIALIZATION RESPONSIBILITIES

         11.1     Commercial Responsibilities. Janssen agrees to use
                  commercially reasonable efforts consistent with its normal
                  business practices, and in no event less than efforts standard
                  in the pharmaceutical industry, to develop and commercialize
                  Licensed Products. Such efforts shall be efforts consistent
                  with efforts used by Janssen (in each case comparable efforts
                  will be measured against such efforts used by Janssen for
                  marketing in the country where the commercialization takes
                  place for that Licensed Product) in commercializing its own
                  products that are similar with regard to, for example, market
                  potential, price per treatment, patient population, and
                  competitive position. Janssen shall use commercially
                  reasonable efforts consistent with its normal business
                  practices to effect the commercial launch of Licensed Products
                  in the Major Countries within [* *] of Regulatory Approval in
                  such Major Countries.

         11.2     Janssen's Marketing Obligations For Licensed Product. All
                  business decisions, including, without limitation, the design,
                  sale, price and promotion of Licensed Products under this
                  Agreement and the decisions whether to market any particular
                  Licensed Product shall be within the sole discretion of
                  Janssen.


                                       36
<PAGE>

         11.3     Janssen Responsibilities. Janssen shall be responsible for all
                  development, regulatory filings and related submissions that
                  are made in connection with the commercialization of Licensed
                  Products developed by Janssen and all commercialization
                  activities with respect to Licensed Products, and shall do so
                  at Janssen's sole discretion and expense. The JSMC will
                  provide annual written reports to the Parties presenting a
                  meaningful summary of the development and commercialization
                  activities undertaken for each Licensed Product for the Term.

                                   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     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.

         12.3     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.

         12.4     Permitted Use of Targets. Janssen 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.

         12.5     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.

         12.6     Disclaimer of Warranties. 3DP MAKES NO REPRESENTATIONS AND
                  EXTENDS NO WARRANTIES OR CONDITIONS OF ANY KIND, EITHER
                  EXPRESS OR IMPLIED, WITH RESPECT TO THE 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


                                       37
<PAGE>

                  AGREEMENT WILL RESULT IN THE DISCOVERY OR THE SUCCESSFUL
                  COMMERCIALIZATION OF A LICENSED PRODUCT FOR USE AGAINST THE
                  TARGET IN THE FIELD.

         12.7     No Infringement. To the best of its knowledge as of the
                  Effective Date, 3DP represents and warrants that the use of
                  the DirectedDiversity(R)Technology and
                  ThermoFluor(R)Technology does not infringe any Patent Rights
                  of a Third Party.

         12.8     Infectious Disease Targets. Janssen covenants that the Targets
                  and Replacement Targets that are provided by Janssen for
                  screening pursuant to this Agreement are not provided for the
                  primary purpose of identifying [* *].

                                   ARTICLE 13

                               DISPUTE RESOLUTION

         13.1     Any dispute concerning or arising out of this Agreement or
                  concerning the existence or validity hereof shall be
                  determined by the following procedure:

                  13.1.1   Dispute Resolution and Arbitration. In the case of
                           any disputes between the Parties arising from this
                           Agreement, and in case this Agreement does not
                           provide a solution for how to resolve such disputes,
                           the Parties shall discuss and negotiate in good faith
                           a solution acceptable to both Parties and in the
                           spirit of this Agreement. If after negotiating in
                           good faith pursuant to the foregoing sentence, the
                           Parties fail to reach agreement within sixty (60)
                           days, then the Chief Executive Officer of 3DP and the
                           Chairman Research & Development Pharmaceuticals shall
                           discuss in good faith an appropriate resolution to
                           the dispute. If these executives fail, after good
                           faith discussions, to reach an amicable agreement
                           within sixty (60) days, then either Party may upon
                           written notice to the other submit the dispute to
                           binding arbitration pursuant to Section 13.2.

         13.2     Arbitration. Any claim, dispute or controversy arising out of
                  or in connection with or relating to this Agreement,
                  (including, without limitation, disputes with respect to the
                  rights and obligations of the Parties following termination)
                  not settled by the procedures set forth in Section 13.1 above
                  or the breach or alleged breach of a material provision of
                  this Agreement shall be adjudicated by arbitration in
                  accordance with the Arbitration Proceedings as set forth in
                  Schedule 13.2 attached hereto.

                                   ARTICLE 14

                            MISCELLANEOUS PROVISIONS

         14.1     Entire Agreement. This Agreement and each of the Schedules
                  hereto constitute and contain the entire understanding and
                  agreement of the Parties respecting the


                                       38
<PAGE>

                  subject matter of this Agreement and cancels and supersedes
                  any and 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.

         14.3     Binding Effect. This Agreement and the rights granted herein
                  shall be binding upon and shall inure to the benefit of 3DP,
                  Janssen and their successors and permitted assigns.

         14.4     Assignment. Neither Party may 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, express
                  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     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.

         14.8     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 Janssen 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

                                       39
<PAGE>

                  other Party or to bind the other Party to any other contract,
                  agreement or undertaking with any Third Party.

         14.9     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, 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.
<TABLE>

                  <S>                                             <C>
                  If to Janssen:                                  with a copy to:

                  Johnson & Johnson Pharmaceutical                Johnson & Johnson
                  Research & Development, LLC                     One Johnson & Johnson Plaza
                  U.S. Route 202                                  New Brunswick, New Jersey 08933
                  Raritan, NJ  08869

                  ATTN: Chairman                                  ATTN: Chief Patent Counsel
                  FAX: 908-707-1895                               FAX:  732-524-2138

                  If to 3DP:                                      with a copy to:

                  3-Dimensional Pharmaceuticals, Inc.             Morgan, Lewis & Bockius LLP
                  Three Lower Makefield Corporate Center          1701 Market Street
                  1020 Stony Hill Road, Suite 300                 Philadelphia, PA 19103
                  Yardley, PA  19067
                  ATTN:  Chief Executive Officer                  ATTN:  Manya S. Deehr, Esq.
                  FAX:  267-757-7248                              FAX:  215-963-5299

</TABLE>

         14.10    Public Announcements. On or shortly after the Effective Date,
                  3DP shall issue a press release with respect to entering into
                  this Agreement in the form attached hereto as Schedule 14.10.
                                                                --------------

         14.11    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.

         14.12    Severability. In the event that any provision of this
                  Agreement shall, for any reason, be held to be invalid or
                  unenforceable in any respect, such invalidity or
                  unenforceability shall not affect any other provision hereof,
                  and this Agreement shall be construed as if such invalid or
                  unenforceable provision had not been included herein.


                                       40
<PAGE>

         14.13    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 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.

         14.14    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.

         14.15    Advice of Counsel. Janssen 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.

         14.16    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.




                                       41
<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.          JANSSEN PHARMACEUTICA, N.V.


By:      __________________________          By:      __________________________

Name:    David C. U'Prichard, Ph.D.          Name:    __________________________

Title:   Chief Executive Officer             Title:   __________________________


                                             THE R.W. JOHNSON
                                             PHARMACEUTICAL RESEARCH
                                             INSTITUTE, a division of
                                             Ortho-McNeil Pharmaceutical, Inc.


                                             By:      __________________________

                                             Name:    __________________________

                                             Title:   __________________________







                                       42
<PAGE>

                                  Schedule 1.8


                          DIRECTED DIVERSITY(R) PATENTS



--------------------------------------------------------------------------------

    TITLE      COUNTRY      SERIAL    FILING     PATENT       ISSUE DATE
                            NUMBER    DATE       NUMBER

--------------------------------------------------------------------------------

               [* The entire table, consisting of 1 page, has been
            omitted pursuant to a confidential treatment request *]




                                       43
<PAGE>

                                  Schedule 1.17

                         THERMOFLUOR(R) VALIDATION TESTS



[*               *]

[*               *]




[* 1 entire page has been omitted pursuant to a confidential treatment
request *]


                                       44
<PAGE>

                                  Schedule 1.36

                                  RESEARCH PLAN



                  [* 1 entire page has been omitted pursuant to
                      a confidential treatment request *]




                                       45
<PAGE>

                                  Schedule 1.50

                             THERMOFLUOR(R) PATENTS

--------------------------------------------------------------------------------

       TITLE         COUNTRY      SERIAL    FILING    PATENT     ISSUE DATE
                                  NUMBER     DATE     NUMBER
--------------------------------------------------------------------------------

               [* The entire table, consisting of 1 page, has been
            omitted pursuant to a confidential treatment request *]




                                       46
<PAGE>

                                  Schedule 2.1

                                     TARGETS

TARGET 1:         [*                *]

[*                                                            *]

TARGET 2:         [*                *]

[*                                                            *]

  [* 2 pages have been omitted pursuant to a confidential treatment request *]




                                       47
<PAGE>

                                  Schedule 2.2

                  [* 1 entire page has been omitted pursuant to
                      a confidential treatment request *]











                                       48
<PAGE>

                                  Schedule 5.14

                                WIRE INSTRUCTIONS

                  [* 1 entire page has been omitted pursuant to
                      a confidential treatment request *]




                                       49
<PAGE>

                                  Schedule 13.2

                             ARBITRATION PROCEEDINGS


         1.1  (a) Any dispute, controversy or claim arising out of or related to
                  this Agreement, or the interpretation, application, breach,
                  termination or validity thereof, including any claim of
                  inducement by fraud or otherwise, which claim would, but for
                  this provision, be submitted to arbitration shall, before
                  submission to arbitration, first be mediated through
                  non-binding mediation in accordance with the Model Procedures
                  for the Mediation of Business Disputes promulgated by the CPR
                  Institute for Dispute Resolution, or successor ("CPR") then in
                  effect, except where those rules conflict with these
                  provisions, in which case these provisions control. The
                  mediation shall be conducted in Wilmington, Delaware and shall
                  be attended by a senior executive with authority to resolve
                  the dispute from each of the operating companies that are
                  Parties.

              (b) The mediator shall be neutral, independent, disinterested and
                  shall be selected from a professional mediation firm such as
                  ADR Associates or JAMS/ENDISPUTE or CPR.

              (c) The parties shall promptly confer in an effort to select a
                  mediator by agreement. In the absence of such an agreement
                  within 10 days of initiation of the mediation, the mediator
                  shall be selected by CPR as follows: CPR shall provide the
                  parties with a list of at least 15 names. Each party shall
                  exercise challenges for cause, two peremptory challenges, and
                  rank the remaining candidates within 5 working days of
                  receiving the CPR list. The parties may together interview the
                  three top-ranked candidates for no more than one hour each
                  and, after the interviews, may each exercise one peremptory
                  challenge. The mediator shall be the remaining candidate with
                  the highest aggregate ranking.

              (d) The mediator shall confer with the parties to design
                  procedures to conclude the mediation within no more than 45
                  days after initiation. Under no circumstances may the
                  commencement of arbitration under Section 1.2 hereof be
                  delayed more than 45 days by the mediation process specified
                  herein absent contrary agreement of the parties.

              (e) Each party agrees not to use the period or pendency of the
                  mediation to disadvantage the other party procedurally or
                  otherwise. No statements made by either side during the
                  mediation may be used by the other or referred to during any
                  subsequent proceedings.

              (f) Each party has the right to pursue provisional relief from any
                  court, such as attachment, preliminary injunction, replevin,
                  etc., to avoid irreparable harm,

                                       50
<PAGE>

                  maintain the status quo, or preserve the subject matter of the
                               ------ ---
                  arbitration, even though mediation has not been commenced or
                  completed.

         1.2  (a) Following the mediation procedures set forth in Section 1.1,
                  any dispute, claim or controversy arising from or related in
                  any way to this Agreement or the interpretation, application,
                  breach, termination or validity thereof, including any claim
                  of inducement of this Agreement by fraud or otherwise, will be
                  submitted for resolution to arbitration pursuant to the rules
                  then pertaining of CPR, except where those rules conflict with
                  these provisions, in which case these provisions control. The
                  arbitration will be held in Wilmington, Delaware.

              (b) The panel shall consist of three arbitrators chosen from the
                  CPR Panels of Distinguished Neutrals (or, by agreement, from
                  another provider of arbitrators) each of whom is a lawyer with
                  at least 15 years experience with a law firm or corporate law
                  department of over 25 lawyers or was a judge of a court of
                  general jurisdiction. In the event the aggregate damages
                  sought by the claimant are stated to be less than $5 million,
                  and the aggregate damages sought by the counterclaimant are
                  stated to be less than $5 million, and neither side seeks
                  equitable relief, then a single arbitrator shall be chosen,
                  having the same qualifications and experience specified above.
                  Each arbitrator shall be neutral, independent, disinterested,
                  impartial and shall abide by The Code of Ethics for
                  Arbitrators in Commercial Disputes approved by the AAA. There
                  shall be no ex parte communications with an arbitrator either
                              -- -----
                  before or during the arbitration, relating to the dispute or
                  the issues involved in the dispute or the arbitrator's views
                  on any such issues.

              (c) The parties agree to cooperate (1) to attempt to select the
                  arbitrator(s) by agreement within 45 days of initiation of the
                  arbitration, including jointly interviewing the final
                  candidates, (2) to meet with the arbitrator(s) within 45 days
                  of selection and (3) to agree at that meeting or before upon
                  procedures for discovery and as to the conduct of the hearing
                  which will result in the hearing being concluded within no
                  more than 9 months after selection of the arbitrator(s) and in
                  the award being rendered within 60 days of the conclusion of
                  the hearings, or of any post-hearing briefing, which briefing
                  will be completed by both sides within 45 days after the
                  conclusion of the hearings.

              (d) In the event the parties cannot agree upon selection of the
                  arbitrator(s), CPR will select arbitrator(s) as follows: CPR
                  shall provide the parties with a list of no less than 25
                  proposed arbitrators (15 if a single arbitrator is to be
                  selected) having the credentials referenced above. Within 25
                  days of receiving such list, the parties shall rank at least
                  65% of the proposed arbitrators on the initial CPR list, after
                  exercising cause challenges. The parties may then interview
                  the five candidates (three if a single arbitrator is to be
                  selected) with the highest combined rankings for no more than
                  one hour each and, following the interviews, may exercise one
                  peremptory challenge each. The panel will consist of the
                  remaining three

                                       51
<PAGE>

                  candidates (or one, if one arbitrator is to be selected) with
                  the highest combined rankings.

                  In the event these procedures fail to result in selection of
                  the required number of arbitrators, CPR shall select the
                  appropriate number of arbitrators from among the members of
                  the various CPR Panels of Distinguished Neutrals, allowing
                  each side challenges for cause and three peremptory challenges
                  each.

              (e) In the event the parties cannot agree upon procedures for
                  discovery and conduct of the hearing meeting the schedule set
                  forth in Section 1.2(c) above, then the arbitrator(s) shall
                  set dates for the hearing, any post-hearing briefing, and the
                  issuance of the award in accord with the Section 1.2(c)
                  schedule. The arbitrator(s) shall provide for discovery
                  according to those time limits, giving recognition to the
                  understanding of the parties that they contemplate reasonable
                  discovery, including document demands and depositions, but
                  that such discovery be limited so that the Section 1.2(c)
                  schedule may be met without difficulty. In no event will the
                  arbitrator(s), absent agreement of the parties, allow more
                  than a total of ten days for the hearing or permit either side
                  to obtain more than a total of 40 hours of deposition
                  testimony from all witnesses, including both fact and expert
                  witnesses, or serve more than 20 individual requests for
                  documents, including subparts, or 20 individual requests for
                  admission or interrogatories, including subparts. Multiple
                  hearing days will be scheduled consecutively to the greatest
                  extent possible.

              (f) The arbitrator(s) must render their award by application of
                  the substantive law of the State of Delaware and are not free
                  to apply "amiable compositeur" or "natural justice and
                  equity." The arbitrator(s) shall render a written opinion
                  setting forth findings of fact and conclusions of law with the
                  reasons therefor stated. A transcript of the evidence adduced
                  at the hearing shall be made and shall, upon request, be made
                  available to either party. The arbitrator(s) shall have power
                  to exclude evidence on grounds of hearsay, prejudice beyond
                  its probative value, redundancy, or irrelevance and no award
                  shall be overturned by reason of such ruling on evidence. To
                  the extent possible, the arbitration hearings and award will
                  be maintained in confidence.

              (g) The United States District Court for the District in which the
                  arbitration is held may enter judgment upon any award. In the
                  event the panel's award exceeds $5 million in monetary damages
                  or includes or consists of equitable relief, or rejects a
                  claim in excess of that amount or for that relief, then the
                  court shall vacate, modify or correct any award (including
                  remanding to the arbitrators for further proceedings) where
                  the arbitrators' findings of fact are clearly erroneous,
                  and/or where the arbitrators' conclusions of law are
                  erroneous; in other words, the court will undertake the same
                  review as if it were a federal appellate court reviewing a
                  district court's findings of fact and conclusions of law
                  rendered after a bench trial. An award for less than $5
                  million in damages and not including equitable relief,


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<PAGE>

                  or which neither rejects a claim in excess of that amount or
                  for that relief, may be vacated, modified or corrected only
                  pursuant to the Federal Arbitration Act. The parties consent
                  to the jurisdiction of the above-specified Court for the
                  enforcement of these provisions, the review specified herein,
                  and the entry of judgment on any award. In the event such
                  Court lacks jurisdiction, then any court having jurisdiction
                  of this matter may enter judgment upon any award and provide
                  the same relief, and undertake the same review, as specified
                  herein.

              (h) In the event the expanded judicial review provided for under
                  Section 1.2(g) above is not available from the court as a
                  matter of law, the party unable to obtain such review may
                  instead obtain review of the arbitrators' award or decision by
                  a single appellate arbitrator (the "Appeal Arbitrator")
                  selected from the CPR list of distinguished neutrals and
                  pursuant to selection procedures specified in Section 1.2(d)
                  above. If CPR cannot provide such services, the parties will
                  together select another provider of arbitration services that
                  can. No Appeal Arbitrator shall be selected unless he or she
                  can commit to rendering a decision within forty-five days
                  following oral argument as provided in this paragraph. Any
                  such review must be initiated within thirty (30) days
                  following the date the court declines the expanded review
                  specified in Section 1.2(g) above. In the event timely review
                  is sought, the Appeal Arbitrator will make the same review of
                  the arbitration panel's ruling and its bases that the U.S.
                  Court of Appeals of the Circuit where the arbitration hearings
                  are held would make of findings of fact and conclusions of law
                  rendered by a district court after a bench trial and then
                  modify, vacate or affirm the arbitration panel's award or
                  decision accordingly, or remand to the panel for further
                  proceedings. The Appeal Arbitrator will consider only the
                  arbitration panel's findings of fact and conclusions of law,
                  pertinent portions of the hearing transcript and evidentiary
                  record as submitted by the parties, opening and reply briefs
                  of the party pursuing the review, and the answering brief of
                  the opposing party, plus a total of no more than four (4)
                  hours of oral argument evenly divided between the parties. The
                  party seeking review must submit its opening brief and any
                  reply brief within seventy-five (75) and one hundred thirty
                  (130) days, respectively, following the date the court
                  declines the expanded review specified in Section 1.2(g);
                  whereas, the opposing party must submit its responsive brief
                  within one hundred ten (110) days of that date. Oral argument
                  shall take place within five (5) months after the court
                  declines the expanded review specified in Section 1.2(g), and
                  the Appeal Arbitrator shall render a decision within
                  forty-five (45) days following oral argument. That decision
                  will be final and not subject to further review, except
                  pursuant to the Federal Arbitration Act.

              (i) Each party has the right before or, if the arbitrator(s)
                  cannot hear the matter within an acceptable period, during the
                  arbitration to seek and obtain from the appropriate court
                  provisional remedies such as attachment, preliminary
                  injunction, replevin, etc. to avoid irreparable harm, maintain
                  the status quo, or preserve the subject matter of the
                  arbitration.


                                       53
<PAGE>

              (j) EACH PARTY HERETO WAIVES ITS RIGHT TO TRIAL OF ANY ISSUE BY
                  JURY.

              (k) EACH PARTY HERETO WAIVES ANY CLAIM TO PUNITIVE, EXEMPLARY OR
                  MULTIPLIED DAMAGES FROM THE OTHER.

              (l) EACH PARTY HERETO WAIVES ANY CLAIM OF CONSEQUENTIAL DAMAGES
                  FROM THE OTHER.

              (m) EACH PARTY HERETO WAIVES ANY CLAIM FOR ATTORNEYS' FEES AND
                  COSTS AND PREJUDGMENT INTEREST FROM THE OTHER.




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<PAGE>

                                 SCHEDULE 14.10

                                  PRESS RELEASE

FOR IMMEDIATE RELEASE

<TABLE>
<CAPTION>

Corporate Contact                   Media Inquiries                 Investor Inquiries
-----------------                   ---------------                 ------------------
<S>                                 <C>                             <C>
3-Dimensional Pharmaceuticals       Noonan/Russo Communications     Rx Communications
Scott Horvitz                       Glenn Silver                    Melody Carey
VP, Finance and Administration      212-696-4455, ext. 271          917-322-2571
267-757-7208                        g.silver@noonanrusso.com        mcarey@rxir.com
horvitz@3dp.com                     ------------------------
---------------
</TABLE>


          3-DIMENSIONAL PHARMACEUTICALS ANNOUNCES DISCOVERWORKS(R)DRUG
            DISCOVERY ALLIANCE WITH JOHNSON & JOHNSON PHARMACEUTICAL
                             RESEARCH & DEVELOPMENT

Yardley, PA, January 7, 2002 - 3-Dimensional Pharmaceuticals, Inc. (Nasdaq:DDDP)
(3DP) today announced a drug discovery alliance that will apply 3DP's
proprietary technologies to discover and optimize small molecule drug leads
directed to genomics targets identified by Johnson & Johnson Pharmaceutical
Research & Development, L.L.C.

Under terms of the agreement, 3DP will receive an upfront technology access fee
and committed research funding during the research collaboration period. 3DP is
also eligible to receive milestone payments and royalties on any sales of
resulting products.

3DP (http://www.3dp.com) is an integrated bio-pharmaceuticals company dedicated
to revolutionizing small molecule drug discovery and development. 3DP's
proprietary platform, DiscoverWorks, can be applied to virtually any potential
drug target. It produces drug candidates suitable for faster development , with
fewer resources and a higher probability of success than using conventional drug
discovery methods. 3DP is developing its own drug pipeline and collaborates with
other pharmaceutical companies in discovery and development.

                                      ###

Statements in this press release that are not strictly historical are "forward
looking" statements which involve a high degree of risk and uncertainty. Such
statements are only predictions, and the actual events of results may differ
materially from those projected in such forward-looking statements. Factors that
could cause or contribute to differences include, but are not limited to, risks
associated with our new and uncertain technologies, clinical trials and product
development, the long and arduous process of obtaining regulatory approval, our
dependence on existing strategic alliances and new collaborations, our
dependence on patents and proprietary rights, our ability to protect and enforce
our patents and proprietary rights, the development and availability of
competitive products or technologies, our ability to attract and retain talented
employees and our ability to manage our expansion as a company increasingly
focused on internal product research and development.


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