QuickLinks
 -- Click here to rapidly navigate through this document

Exhibit 10.4  


 
 

PATENT AND SOFTWARE LICENSE AGREEMENT    
    


        This PATENT AND SOFTWARE LICENSE AGREEMENT (the "Agreement"), effective this 30th day of April, 2004 (the
"Effective Date"), is between Pharmacopeia Drug Discovery, Inc., a corporation organized and existing under the laws of the State of Delaware and having a principal place of business at 3000
Eastpark Boulevard, Cranbury New Jersey 08512 ("PDD"), and Pharmacopeia, Inc., a corporation organized and existing under the laws of the State of Delaware and having a place of business at
9685 Scranton Road, San Diego, California 92121-3752 ("Pharmacopeia"), for itself and on behalf of Accelrys Inc. and each of Pharmacopeia's subsidiaries other than PDD (Pharmacopeia
and such subsidiaries other than PDD being referred to herein collectively as the "Pharmacopeia Group"). 


        WHEREAS, the Pharmacopeia Group is the owner of certain software product(s), together with the related documentation and components
thereto, as well as all rights, title and interest in and to the inventions disclosed in certain patents and patent applications; 


        WHEREAS, PDD has incurred significant expenses in connection with the filing, prosecution and maintenance of such patents and patent
applications; and 


        WHEREAS, PDD desires to obtain, and the Pharmacopeia Group desires to grant, a license to PDD to the software and a license to practice
the inventions claimed by the Licensed Patents; 


        NOW THEREFORE, the parties agree as follows: 


        1.     Definitions. For all purposes of this Agreement, the following terms have the meanings set forth
below: 


        1.1.  "Affiliate"
of a party means any legal entity directly or indirectly controlling, controlled by or under common control with that party. For purposes of this Agreement,
"control" means the direct or indirect ownership of more than fifty percent (50%) of the outstanding voting securities of the legal entity, or the right to receive more than fifty percent (50%) of the
profits or earnings of the legal entity, or the right to direct the policy decisions of the legal entity. 


        1.2.  "Documentation"
means the then current on-line help, guides, and manuals published by the Pharmacopeia Group and made generally available by the
Pharmacopeia Group for the Software. Documentation shall include any updated Documentation that the Pharmacopeia Group provides with Updates. 



        1.3.  "Licensed
Patents" means the patents and patent applications listed on Exhibit A attached hereto, and any and all patents issuing from the patent applications
listed on such Exhibit A, or issuing from any divisions or continuations of such applications, as well as all re-issues, re-examinations, renewals or extensions of such
patents. 


        1.4.  "PDD's
Internal Business" means the design and manufacture of compounds for sale to and use by third parties, for its own use, and for use in performing drug discovery
and development services for third parties; the selection and evaluation of appropriate target molecules; the development of assays for screening against target molecules; the screening of compounds
against target molecules for its own internal research or for third parties and interpreting and advising on the results of such screening; and the performing of medicinal/pharmaceutical chemistry
services for its own internal research or for third parties. 


        1.5.  "Software"
means the software product(s), together with the Documentation and components (including new releases, enhancements, and modifications provided under
warranty or maintenance, if applicable) listed on attached Exhibit B. 


        1.6.  "Software
License Term" means the period commencing on the Effective Date and ending on April 30, 2007. 





 



        1.7.  "Update(s)"
means new releases, corrections, enhancements, improvements and modifications of the Software and/or Documentation that are (a) subsequent releases
of the Software that (i) add new features, functionality, and/or improved performance, (ii) operate on new or other databases, operating systems, or client or server platforms, or
(iii) add new foreign language capabilities; (b) bug or error fixes, patches, workarounds, and maintenance releases; (c) new point releases, including those denoted by a change to
the right of the first decimal point (e.g., version 3.0 to 3.1) and (d) new major version releases, regardless of the version name or number, but including those denoted by (i) a change
to the left of the first decimal point (e.g., version 5.0 to 6.0) and/or (ii) the addition of a date designation or a change in an existing date designation (e.g., version 1999 to 2000);
provided, however that Updates shall not include new or separate products which are offered only for an additional fee to its customers generally, inducing those customers purchasing maintenance
services. 


        1.8.  "User(s)"
means the named or specified (by password or other user identification) individuals authorized by PDD to use the Software, regardless of whether the
individual is actively using the Software at any given time. PDD may replace Users and authorize new Users as necessary to reflect personnel changes provided that the number of Users at any given time
does not exceed the maximum number of Users at any given time. Users may include the employees of PDD or third parties; provided that such third party is limited to use of the Software (i) only
as configured and deployed by PDD, and (ii) solely in connection with PDD's business operations as conducted by or through such third party, including but not limited to the installation,
administration or implementation of the Software for PDD. PDD agrees that it is responsible for ensuring that any usage by its employees and any such third parties is in accordance with the terms and
conditions of this Agreement. It is expressly understood and agreed that Users shall not include the employees or consultants of, or third parties working with, any individual or entity that acquires
a controlling interest in PDD or PDD's Internal Business, whether by merger, consolidation, reorganization or similar transaction or by sale, transfer or disposition of all or substantially all PDD's
assets, properties or business. 


        2.     Software License to PDD.


        2.1.  License Grant. Subject to the terms and conditions of this Agreement, the Pharmacopeia Group hereby grants, and PDD
accepts, a worldwide, paid-up, royalty-free, irrevocable, nontransferable (with no right to sublicense) and non-exclusive license to use the Software for the sole
purpose of processing the work of PDD's Internal Business. 



        a.     PDD
may only use the Software at the specific location(s) at which the Software currently is utilized or to which the Software is subsequently delivered. 


        b.     For
host-locked licenses, PDD may use the Software only on the central processing unit (the "Licensed CPU") originally designated for installation or as
agreed to by Pharmacopeia, and only at the specific location at which the Software is currently utilized or to which the Software is subsequently delivered. For floating licenses, the Software may be
accessed by any computer that is commercially supported by PDD and within PDD's authorized network at the specific location at which the Software is currently utilized or to which the Software is
subsequently delivered. 


        c.     The
Software may be used simultaneously by no more than the maximum number of Users set forth on Exhibit B, and may not be electronically or otherwise transferred
to a different physical location. 



            i.  If,
during the License Term, PDD desires to use the Software for additional simultaneous Users, at another site, or on a different Licensed CPU (for
host-locked licenses), PDD shall secure Pharmacopeia's prior approval, which will not be unreasonably withheld. 



           ii.  If,
after the expiration or termination of the License Term, PDD desires to use the Software for additional simultaneous users, at another site, or on a different
Licensed CPU 




2





 





(for
host-locked licenses), PDD shall secure Pharmacopeia's prior approval, which may be granted subject to additional charges. 





        2.2.  License Term. The license granted in Section 2.1 shall be in effect for the Software License Term, unless earlier
terminated by one of the parties as set forth in Section 7.2 or 7.3, or extended by mutual written agreement of the parties. 


        2.3.  Software Ownership. The Software, documentation, and supporting materials and all worldwide intellectual property rights
therein are the sole and exclusive property of the Pharmacopeia Group and its licensors or suppliers. Except to the limited extent required for PDD to use the Software pursuant to the license granted
in Section 2.1, nothing in this Agreement will be deemed to grant, by implication, estoppel or otherwise, a license in any existing or future patents of the Pharmacopeia Group. No title or
ownership rights to the Software are transferred to PDD by this Agreement, but shall remain with the Pharmacopeia Group and/or its licensors or suppliers. All rights not expressly granted by the
Pharmacopeia Group with respect to the Software under this Agreement are reserved by the Pharmacopeia Group. 


        2.4.  Software Maintenance. 



        a.     During
the Software License Term, the Pharmacopeia Group will provide maintenance services that include both Update Service and Hotline Support as described in this
Section 2.4.a.i and 2.4.a.ii at no additional cost or expense to PDD. 



            i.  Update
Service includes the provision to PDD of all Updates that are made by the Pharmacopeia Group during the Software License Term within thirty (30) days of
the date such Updates are available to the Pharmacopeia Group's other customers. 


           ii.  Hotline
Support includes commercially reasonable telephone and electronic mail assistance and consultation to assist PDD in resolving problems with the use of the
Software, including the verification, diagnosis, and correction of material errors and defects in the Software. Maintenance service does not include new products sold separately by the Pharmacopeia
Group, which products must be separately licensed by PDD. 




        b.     After
the Software License Term, upon payment of the applicable maintenance fee by PDD, maintenance services will be provided under the Pharmacopeia Group's standard
commercial terms for customers using the Software for twelve-month periods unless terminated by either party upon thirty (30) days written notice prior to the renewal date. Annual maintenance
fees are payable in advance on the anniversary date of the order. 




        2.5.  Non-Disclosure; Alterations; Copies. 



        a.     PDD
acknowledges and agrees that the Software, its structure, organization, source code and related documentation are valuable and proprietary trade secrets of the
Pharmacopeia Group. PDD shall (i) maintain the confidentiality of the Software, using, at a minimum, the same safeguards afforded its own confidential, proprietary trade secrets, but in no
event less than reasonable care; (ii) not disclose, provide, transfer, rent, sublicense, or otherwise make available any portion of the Software to any third party, without first obtaining
Pharmacopeia's written consent. PDD's non-disclosure obligation shall not apply to information now or hereafter in the public domain through no fault of PDD, information in the possession
of PDD prior to disclosure by the Pharmacopeia Group, information properly obtained without restriction from a third party who is not bound by an obligation of confidentiality to the Pharmacopeia
Group, or information independently developed by PDD without reference to the Software. 


        b.     PDD
acknowledges any actual or threatened breach of the obligations of confidentiality set forth in Section 2.5.a will constitute immediate, irreparable harm to
the Pharmacopeia Group for which monetary damages would be an inadequate remedy, and that the Pharmacopeia Group 



3





 




may,
in addition to any other remedy under this Agreement, seek injunctive or other appropriate equitable relief as remedy for such breach. 


        c.     PDD
shall not alter, modify, adapt, translate, reverse engineer, decompile, disassemble, or create derivative works from the Software, nor take any other steps intended
to produce a source language statement of the Software or any part thereof without Pharmacopeia's express prior written consent. 



        d.     PDD
is authorized to copy the Software solely for backup, archival, and disaster recovery purposes and only to the minimum extent necessary to accomplish such purposes.
PDD shall not remove any copyright or proprietary rights notices from the Software and shall reproduce all such notices on any copies that it makes. 




        2.6.  Publication Acknowledgement. If the Software is used by PDD to obtain results that are published in a scientific journal
or other publication, PDD will acknowledge its use of the Software with an appropriate citation, which shall include the Pharmacopeia Group's then current full corporate name and the name of the
Software product used. 


        2.7.  Applicable Laws. PDD agrees to comply with all applicable laws and regulations in its performance under this Agreement.
PDD acknowledges that the Software may be subject to U.S. Export controls, and agrees not to export the Software or any part or direct product thereof in violation of U.S. Bureau of Industry Security
regulations. In furtherance of these obligations, PDD hereby represents, warrants and covenants that it will not use, or authorize or permit any other person, firm, corporation or other entity to use,
the Software or make the Software available for use in connection with the design, development, production, stockpiling or use of any chemical or biological weapons. PDD agrees to defend, indemnify,
and hold harmless the Pharmacopeia Group from and against any violation of such laws or regulations by PDD or any of its respective agents, officers, directors or employees. This indemnity provision
shall survive any termination of this Agreement. 


        3.     Patent License.


        3.1.  License Grant. 



        a.     The
Pharmacopeia Group grants to PDD, and PDD accepts, a worldwide, paid-up, royalty-free, irrevocable, nontransferable and
non-exclusive license to the Licensed Patents. 


        b.     The
rights and licenses granted are personal and may not be sub-licensed, assigned or otherwise transferred except only as expressly set forth in this
Agreement. 


        c.     Notwithstanding
Section 3.1.b, PDD may grant a sublicense to the Licensed Patents to those of its customers who practice the Licensed Patents in a field that is
not competitive with the software products and services provided by the Pharmacopeia Group. 



        d.     PDD
and the Pharmacopeia Group each acknowledges and agrees that no right or license in or to any patent or proprietary right of the Pharmacopeia Group, other than to the
Licensed Patents as expressly set forth herein, is granted by this Agreement, either expressly or by implication. 


        e.     PDD
and the Pharmacopeia Group each acknowledges and agrees that no right or license in or to any patent or proprietary right of PDD is granted by this Agreement, other
than as expressly set forth herein 




        3.2.  Maintenance of Intellectual Property Rights. 



        a.     As
of the effective Date, the Pharmacopeia Group shall be responsible, at the Pharmacopeia Group's sole discretion and expense, for preparing, filing, prosecuting and
maintaining in such countries where the Pharmacopeia Group deems appropriate, those patents 



4





 

and
patent applications incorporated in the Licensed Patents and conducting any interference, re-examination, reissue and opposition proceedings relating to such Patent Rights. 



        b.     The
Pharmacopeia Group shall keep PDD fully informed as to the status of patent matters described in Section 3.2.a including, without limitation, by providing
copies of any substantive documents that the Pharmacopeia Group receives from any patent offices concerning the Licensed Patents promptly after receipt by the Pharmacopeia Group and by providing PDD
with the opportunity to fully review and comment on any substantive documents which will be filed in any patent office as far in advance of a filing date as reasonable. The documents shall include,
without limitation, and where applicable, office actions, notice of all fees due, notices of interference, reissue, re-examination, or opposition proceedings or requests for patent term
extensions. 


        c.     In
the event the Pharmacopeia Group decides to cease prosecuting or maintaining any patents and patent applications incorporated in the Licensed Patents, or decides not
to conduct any interference, re-examination, reissue or opposition proceedings with respect thereto, the Pharmacopeia Group will inform PDD of such decision at a time sufficient to allow
PDD to respond to any outstanding office action or other obligation, and PDD will have the right but not the obligation to maintain such patents and patent applications, and to conduct any
interference, re-examination, reissue or opposition proceedings with respect thereto, at PDD's sole
expense. The Pharmacopeia Group agrees to cooperate in any manner reasonably requested in connection with any such actions by PDD, at the expense of PDD. 




        3.3.  Patent Enforcement. 



        a.     In
the event the Pharmacopeia Group learns that any third party, including without limitation a customer of the Pharmacopeia Group, is or might be infringing, or
preparing to infringe, any Licensed Patent, then the Pharmacopeia Group will promptly notify PDD of such information. Upon such notice, PDD and the Pharmacopeia Group will consult one another in a
timely manner concerning any appropriate response to such infringement or noncompliance. Each party agrees to cooperate in all reasonable respects with the other in any action either may take against
infringement of any Licensed Patent. 


        b.     The
Pharmacopeia Group may, but is not obligated to, enforce the Licensed Patents, at the Pharmacopeia Group's own expense, against any third party infringing the same.
PDD may join any such lawsuit at its own expense. In the event the Pharmacopeia Group elects not to enforce the Licensed Patents against a third party infringer, PDD may assume the responsibility for
enforcing the Licensed Patents, at PDD's sole expense. However, absent the Pharmacopeia Group's permission, PDD may not enforce the Licensed Patents against any third party. 



        c.     The
Pharmacopeia Group will not enter into any settlement or compromise with an infringing third party that requires PDD to sublicense or relinquish any of the rights
granted to PDD hereunder without PDD's prior written consent. In the event PDD assumes the responsibility for enforcing the Licensed Patents against a third party, PDD will not enter into any
settlement or compromise with an infringing third party without the consent of the Pharmacopeia Group. 


        d.     In
any action to enforce any Licensed Patents, either party, at the reasonable request and sole expense of the other party, will cooperate to the fullest extent
reasonably possible with the other party, including being joined as a party to the action, if necessary. This provision does not require, and may not be construed to require, either party to undertake
any activities, including legal discovery, at the request of any third party except as may be required by lawful process of a court of competent jurisdiction. 


        e.     Any
consideration received or recovered by either party from any litigation or settlement of any claim or suit pursuant to Section 3.3.b will first be applied to
reimburse the Pharmacopeia 



5





 




Group
and PDD, as applicable, for such party's respective litigation expenditures related to enforcing the Licensed Patents licensed to PDD under this Agreement. Any additional recovery, beyond the
collective expenditures, will be divided between PDD and the Pharmacopeia Group in proportion to each party's respective share of the litigation expenditures related to the Licensed Patents licensed
to PDD under this Agreement. 




        4.     Use of Names. Other than as required by Section 2.6 above, nothing
in this Agreement confers to either party any right to use in publicity, advertising, promotion or marketing any name, trade name, trade mark or other designation of the other party, without the other
party's prior express permission. 


        5.     Warranties.


        5.1.  Each
of PDD and Pharmacopeia represents and warrants to the other that 



        a.     the
representing party is a company or corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized; 



        b.     such
party has the legal power and authority to execute, deliver and perform this Agreement; 


        c.     the
execution, delivery and performance by such party of this Agreement has been duly authorized by all necessary corporate action; 


        d.     this
Agreement constitutes the legal, valid and binding obligation of such party (and, in the case of Pharmacopeia, the Pharmacopeia Group), enforceable against such
party (and, in the case of Pharmacopeia, the Pharmacopeia Group) in accordance with its terms; 



        e.     the
execution, delivery and performance of this Agreement will not cause or result in a violation of any law, of such party's charter documents, or of any contract by
which such party (or, in the case of Pharmacopeia, the Pharmacopeia Group) is bound; and 


        f.      the
representing party (and, in the case of Pharmacopeia, the Pharmacopeia Group) has not, to the best of the representing party's knowledge, entered into, nor will the
representing party (or, in the case of Pharmacopeia, the Pharmacopeia Group) after the Effective Date knowingly enter into any written or oral agreement that is or would be inconsistent with the
representing party's (or, in the case of Pharmacopeia, the Pharmacopeia Group's) obligations under this Agreement or deprives or would deprive the other party of any rights granted under this
Agreement. 




        5.2.  Pharmacopeia
warrants, for itself and on behalf of the Pharmacopeia Group, that 



        a.     the
Pharmacopeia Group has the unencumbered right to grant to PDD the licenses conveyed herein according to the terms of this Agreement; 


        b.     for
the twelve (12) months following the Effective Date (the "Warranty Period"), the Software will perform substantially in accordance with any specifications set
forth in the Documentation when properly operated on the designated hardware and operating system; and 


        c.     the
Pharmacopeia Group is not aware of any claim or demand of any right in or to any of the Software; 


        d.     as
of the Effective Date, none of the Licensed Patents is the subject of any litigation; and 


        e.     the
Pharmacopeia Group is not aware of any claim or demand of any right in or to any of the Licensed Patents. 




        5.3.  The
Pharmacopeia Group's sole obligation and PDD's exclusive remedy for a breach of the warranty set forth in Section 5.2.b is for the Pharmacopeia Group to
replace defective Software media or materials and to use commercially reasonable efforts to correct any material error or defect in the 


6





 

Software
as expeditiously as reasonably possible. This warranty does not apply to problems arising from (i) PDD's modification or misuse of the Software; (ii) malfunction of PDD's
equipment, operating system, or software not supplied by the Pharmacopeia Group; or (iii) attempts to use the Software in a manner or purpose for which it was not intended. 


        5.4.  THE
PHARMACOPEIA GROUP MAKES NO WARRANTY OR REPRESENTATION THAT THE PRACTICE OF ANY OF THE INVENTIONS DISCLOSED IN THE LICENSED PATENTS WILL NOT INFRINGE ANY PATENT,
TRADE SECRET OR OTHER PROPRIETARY RIGHT, FOREIGN OR DOMESTIC, OF ANY THIRD PARTY. 


        5.5.  EXCEPT
AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE PHARMACOPEIA GROUP MAKES NO OTHER WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, REGARDING THE SOFTWARE. NEITHER THE
PHARMACOPEIA GROUP NOR ITS LICENSORS OR SUPPLIERS WARRANT THAT THE SOFTWARE OR ANY USE OF THE SOFTWARE OR EQUIPMENT WILL BE UN-INTERRUPTED OR ERROR-FREE. PDD ACKNOWLEDGES THAT
IT HAS RELIED ON NO WARRANTIES OTHER THAN THE EXPRESS WARRANTIES IN THIS AGREEMENT. 


        5.6.  EXCEPT
AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE PHARMACOPEIA GROUP MAKES NO OTHER WARRANTIES, EXPRESS OR IMPLIED, OR STATUTORY INCLUDING ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND NONE ARE CREATED, WHETHER UNDER THE UNIFORM COMMERCIAL CODE, CUSTOM OR USAGE IN THE INDUSTRY OR THE COURSE OF DEALINGS BETWEEN THE PARTIES. 


        6.     Indemnification.



        6.1.  The
Pharmacopeia Group shall at its expense defend PDD, its Affiliates after the Effective Date and their directors, officers, agents, employees, representatives and
assigns, against any claim, liabilities, damages, expenses and losses (including reasonable attorney fees and costs) and shall indemnify and hold PDD, such Affiliates and other indemnitees harmless
from any final judgment arising out of (i) the negligent actions of the Pharmacopeia Group, its employees or any third party acting on behalf or under authority of the Pharmacopeia Group in the
performance of this Agreement and (ii) the breach of any representation or warranty of the Pharmacopeia Group in this Agreement. 



        6.2.  The
Pharmacopeia Group shall at its expense defend PDD, its Affiliates after the Effective Date and their directors, officers, agents, employees, representatives and
assigns, against any claim, liabilities, damages, expenses and losses (including reasonable attorney fees and costs) and shall indemnify and hold PDD, such Affiliates and other indemnitees harmless
from any final judgment that a current, unmodified copy of the Software infringes a U.S. patent or copyright, provided that (i) the Pharmacopeia Group is given prompt written notice of any such
claim, (ii) the Pharmacopeia Group shall have sole control of the settlement or defense of any action against PDD to which this indemnity applies; and (iii) PDD cooperates with the
Pharmacopeia Group, at the Pharmacopeia Group's expense, in every reasonable way to facilitate such defense. 



        6.3.  Should
the use of the Software be enjoined, or should the Pharmacopeia Group desire to minimize its liabilities hereunder, the Pharmacopeia Group shall have the right,
at the Pharmacopeia Group's sole option and expense, to secure the right for PDD to continue use of the Software or to replace or modify the Software to make it noninfringing. 


        6.4.  Upon
seeking indemnification under this Agreement, PDD will give the Pharmacopeia Group prompt written notice of the commencement of any action (and any prior claims
relating to such action) for which PDD seeks indemnification. The Pharmacopeia Group will have no liability or responsibility of any kind to PDD if it is not promptly notified and does not have
adequate opportunity to defend. 


7





 



        6.5.  If
the Pharmacopeia Group is given prompt notice and has adequate opportunity to defend, but fails or declines to assume the defense of any such claim or action within
thirty (30) days after notice thereof, PDD may assume the defense of such claim or action for the account and at the risk of the Pharmacopeia Group, and any liabilities related thereto shall be
conclusively deemed a liability of the Pharmacopeia Group. 


        6.6.  Except
as provided in Section 6.5, the Pharmacopeia Group will have sole control of the defense of the action and of all negotiations for its settlement or
compromise. The Pharmacopeia Group, however, is not permitted to settle or compromise any claim or action that imposes any restrictions or obligations on PDD, without PDD's prior written consent. 


        6.7.  The
indemnification rights of PDD under this Agreement are in addition to all other rights which PDD may have at law or in equity or otherwise. 



        6.8.  IN
NO EVENT SHALL THE PHARMACOPEIA GROUP OR THE PHARMACOPEIA GROUP'S LICENSORS OR SUPPLIERS BE LIABLE FOR ANY SPECIAL, INCIDENTAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES,
INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF GOODWILL, DATA LOSS, BUSINESS DISRUPTION, OR COMPUTER FAILURE. EACH PARTY ACKNOWLEDGES THAT THE LICENSING RIGHTS REFLECT THE ALLOCATION OF RISK SET
FORTH IN THIS AGREEMENT AND THAT NEITHER PARTY WOULD ENTER INTO THIS AGREEMENT ON THE TERMS HEREOF WITHOUT THESE LIMITATIONS ON ITS LIABILITY. 


        7.     Term and Termination.



        7.1.  This
Agreement is effective as of the Effective Date and continues, unless earlier terminated pursuant to the provisions of Section 7.2, until the expiration of
the last to expire Licensed Patent. 


        7.2.  The
Pharmacopeia Group has the right to terminate a license granted under this Agreement if PDD breaches any material provision of this Agreement with respect to such
license and fails to remedy such breach within sixty (60) days after receiving written notice of such breach. This right of termination, however, cannot be exercised if at any time during said
time period, PDD advises the Pharmacopeia Group that it challenges the alleged breach. In such event, PDD and the Pharmacopeia Group will negotiate in good faith to resolve any disputed breach. 



        7.3.  In
the event of any proceeding is instituted by or against any member of the Pharmacopeia Group seeking to adjudicate it bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking an entry of an order for relief or the appointment of a receiver, trustee or other similar official for it or any substantial part of its property or taking any action to authorize any of the
foregoing or similar actions by or against any such Pharmacopeia Group member, all rights and licenses granted hereunder are and shall otherwise be deemed to be, for the purposes of
Section 365(n) of the Bankruptcy Code (11 U.S.C. 365(n)), licenses of rights to "intellectual property" as defined under Section 101(52) of the Bankruptcy Code. 


        7.4.  Termination
or expiration of this Agreement does not release PDD or the Pharmacopeia Group from any obligation theretofore accrued. 


        7.5.  Upon
any termination or expiration of any license right granted under Section 2.1, PDD shall make no further use of that portion of the Software subject to such
license right and shall either return to the Pharmacopeia Group or destroy originals and all copies of the Software and supporting materials subject to such license right. PDD shall supply a written
affidavit executed by an officer of PDD to the Pharmacopeia Group certifying that it no longer possesses any embodiments of the Software or supporting materials subject to such license right. No
refunds or credits will be due PDD. 


8





 



        8.     Miscellaneous.


        8.1.  Relationship of the Parties. The relationship of PDD and the Pharmacopeia Group under this Agreement is that of
independent contractors. The provisions of this Agreement will not be construed to create between PDD and the Pharmacopeia Group the relationship of principal and agent, joint venturers,
co-partners or any other similar relationship, the existence of which is hereby denied by PDD and the Pharmacopeia Group. Neither party nor any member of the Pharmacopeia Group will be
liable in any way for any engagement, obligation, liability, contract, representation or warranty of the other party to or with any third party. PDD is not an agent for the Pharmacopeia Group and the
Pharmacopeia Group is not an agent for PDD for any purpose and each party has no right or authority to assume or create any obligations, express or implied, on behalf or in the name of the other
party. 


        8.2.  Notices. Any notice or other communication required or permitted to be given by either party under this Agreement shall
be in writing and shall be effective when delivered, if delivered by hand or by electronic facsimile, or one (1) day after being sent by overnight express courier (e.g. Federal Express), or
five (5) days after mailing if mailed by registered or certified mail, postage prepaid and return receipt requested. Any such notice or communication shall be addressed to each party or the
Pharmacopeia Group at the following addresses or such other address as may be designated by notice pursuant to this Section 8.2: 



	If to PDD:	 	If to Pharmacopeia or any other member of the Pharmacopeia Group:
	

    Pharmacopeia Drug Discovery, Inc.	
 	

    Pharmacopeia, Inc./Accelrys, Inc.
	    3000 Eastpark Boulevard	 	    9685 Scranton Road
	    Cranbury New Jersey 08512	 	    San Diego, CA 92121-3752
	    Facsimile: (609) 452-3672	 	    Facsimile: (858) 799-            
	    Attn: General Counsel	 	    Attn: General Counsel






        8.3.  Waiver. No waiver of any breach of any provision of this Agreement will constitute a waiver of any prior, concurrent or
subsequent breach of the same or any other provision of this Agreement; and no waiver will be effective unless in writing. 


        8.4.  Survival. The following Sections shall survive any termination or expiration of this Agreement: Sections 2.5, 2.6, 2.7,
5.2.b, 5.3, 5.4, 5.4 and 5.5 and Article 6 survives any termination or expiration of this Agreement 



        8.5.  Force Majeur. In the event that the performance of this Agreement or of an obligation under this Agreement, is
prevented, restricted or interfered with by reason of any cause not within the control of the respective party, and which could not by reasonable diligence have been avoided by such party, the party
so affected, upon the giving of prompt notice to the other party, as to the nature and probable duration of such event, will be excused from such performance to the extent and for the duration of such
prevention, restriction or interference, provided that the party so affected uses its reasonable efforts to avoid or remove such cause of non-performance and will fulfill and continue
performance under this Agreement whenever and to the extent such cause or causes are removed. For the purpose of this Section, but without limiting the generality hereof, the following are not within
the control of a party: acts of God; acts or omissions of a governmental agency or body; compliance with requests, recommendations, rules, regulations, or orders of any governmental authority or any
officer, department, agency, or instrument thereof; flood; storm; earthquake; fire; war; insurrection; riot; terrorist incidents, accidents; acts of the public enemy; invasion; disease: quarantine
restrictions; strike; labor lockout; differences with workmen; embargoes; delays or failures in transportation; and acts of a similar nature. 


9





 



        8.6.  Choice of Law. This Agreement shall be construed and take effect in all respects in accordance with the laws of the
State of Delaware, without regard to its conflict of laws principals. The United Nations Convention on Contracts for the International Sale of Goods is expressly excluded from this Agreement. 


        8.7.  Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
unenforceable or void, such will be without effect on the validity, legality and enforceability of the remaining provisions or this Agreement as a whole. Such invalid, illegal, unenforceable or void
provision shall be changed and interpreted to accomplish the objectives of such provision to the greatest extent possible under applicable law, and such decision shall not affect the validity or
enforceability of any or all of the remaining provisions. 


        8.8.  Headings. The section and paragraph headings and numbering are for convenience only and cannot have any effect on the
interpretation or construction of this Agreement. 


        8.9.  Assignment. This Agreement is binding upon and inures to the benefit of the heirs, successors and assigns of the parties
hereto, provided that this Agreement, in whole or in part, is not assignable by either party, except that either party may assign this Agreement to any successor by merger or sale of substantially all
of its business or assets to which this Agreement pertains. Any effort to assign in violation hereof is considered void. In the event of any assignment, the assigning party must provide the other
party with appropriate documentation of the assignment. 


        8.10. Merger. Each party acknowledges that it has read this Agreement, understands it, and agrees to be bound by its terms
and further agrees that it constitutes the complete and exclusive understanding between the parties, which supersedes and merges all prior proposals, understandings, representations, and agreements,
oral and written, between the parties regarding the subject matter of this Agreement; and no party has relied on any representation not expressly set forth or referred to in this Agreement. 


        8.11. Amendment. No amendment, variation, waiver or modification of any of the terms or provisions of this Agreement will be
effective unless set forth in writing, specifically referencing this Agreement, and duly signed by an authorized officer of the party to be bound thereby. 


        8.12. Execution. This Agreement may be executed in two or more counterparts, all of which constitute one and the same legal
instrument. 


        8.13. Going Forward. The Pharmacopeia Group and PDD agree to execute, acknowledge and deliver such further instruments and do
all other such acts as may be necessary or appropriate to effect the purpose and intent of this Agreement. 


[Remainder
of page intentionally left blank] 


10





 

        IN
WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date. 



	Pharmacopeia, Inc.	 	Pharmacopeia Drug Discovery, Inc.
	

By:	

 	
 	

By:	

 
	 	
 Name:

Title:	 	 	
 Name:

Title:
	
Accelrys Inc.	
 	

 	

 
	

By:	

 	
 	

 	

 
	 	
 Name:

Title:	 	 	 




11









QuickLinks


PATENT AND SOFTWARE LICENSE AGREEMENT