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                                                                   EXHIBIT 10.38

                                     PERT
                   INTERNAL USE LICENSE AND OPTION AGREEMENT

THIS PERT INTERNAL USE LICENSE AND OPTION AGREEMENT is made as of July 7, 2000,
by and between 3-Dimensional Pharmaceuticals, Inc., a Delaware corporation
having a place of business at Eagleview Corporate Center, 665 Stockton Drive,
Suite 104, Exton, PA 19341 ("3DP"), and Bristol-Myers Squibb Company, a Delaware
corporation having a place of business at Route 206 & Province Line Road, P.O.
Box 4000, Princeton, New Jersey 08543 ("BMS").  Either 3DP or BMS may be
referred to herein as a "Party" or, collectively, they may be referred to as the
"Parties."

                                   ARTICLE 1

                                  DEFINITIONS

In addition to the capitalized terms defined throughout this Agreement, the
following terms when used herein shall have the respective meanings assigned to
them below:

     1.1  "Affiliate" means, with respect to either Party, any corporation or
          other business entity which controls, is controlled by, or is under
          common control with such Party. A corporation or other entity shall be
          regarded as in control of another corporation or other entity if it
          owns or directly or indirectly controls at least 50% of the voting
          stock or other ownership interest of the other corporation or entity
          (or alternatively, if it owns the maximum such ownership interest
          permitted by law), or if it possesses, directly or indirectly, the
          power to direct or cause the direction of the management and policies
          of the corporation or other entity, or the power to elect or appoint
          at least 50% of the members of the governing body of the corporation
          or other entity.

     1.2  "Agreement" means this PERT Internal Use License and Option Agreement,
          including its Exhibits, as may be amended from time to time.

     1.3  "BMS Site" means only (a) the BMS pharmaceutical research and
          development facilities located in Lawrenceville, New Jersey, U.S.A.;
          Hopewell, New Jersey, U.S.A.; Wallingford, Connecticut, U.S.A.;
          Candiac, Quebec, Canada; (b) [**] in the United States, Canada or a
          country in the European Union, [**], excepting [**] that has been [**]
          and [**] prior to BMS's installation of the 3DP PERT [**] and (c) [**]
          in the United States, Canada or a country in the European Union, [**]
          prior to the BMS's installation of the 3DP PERT at [**].

     1.4  "Confidential Information" means all commercial and/or technical
          information that has or could have commercial value or other utility
          in a Party's business, or the unauthorized disclosure of which could
          be detrimental to the Party's interests, including information,
          inventions, data and materials relating to the Licensed Patent Rights,
          and Know-how, and shall include, without limitation, research,
          technical, clinical development, manufacturing, marketing, financial,
          personnel and other business information and plans, whether in oral,
          written, graphic or electronic form, except to the extent that the
          Receiving Party can establish that such Confidential Information: (a)
          was already known to the Receiving Party, other than under an
          obligation of confidentiality to the Disclosing Party; (b) was

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

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          generally available to the public or otherwise part of the public
          domain at the time of its disclosure to the Receiving Party; (c)
          became generally available to the public or otherwise part of the
          public domain after its disclosure, and other than through any act or
          omission of the Receiving Party in breach of this Agreement; (d) was
          subsequently lawfully disclosed to the Receiving Party by a Third
          Party; (e) can be shown by written records to have been independently
          developed by or for the Receiving Party without reference to the
          Confidential Information received from the Disclosing Party, and
          without breach of any of the provisions of this Agreement; or (f) the
          Disclosing Party has specifically agreed in writing that the Receiving
          Party may disclose such Confidential Information.  For the purposes of
          this Agreement, the 3DP PERT shall be presumed to be 3DP's
          Confidential Information, unless 3DP specifically identifies in
          writing one or more components of the 3DP PERT that it does not
          consider to be its Confidential Information.

     1.5  "Effective Date" means the later of: (a) date of this Agreement as set
          forth above; or (b) the date on which all of the following documents
          between the Parties have been executed:  this Agreement, the GPCR
          License and User Agreement, the DiscoverWorks Nonexclusive License and
          Purchase Agreement, and the DiscoverWorks Drug Discovery Collaboration
          Agreement.

     1.6  "Field" means the expression of recombinant proteins from human and
          other species in mammalian and non-mammalian cell systems, and the
          refolding of such expressed proteins, solely for use in pharmaceutical
          and diagnostic research, and specifically excluding use in human
          clinical trials, veterinary medicine product development and all
          experiments conducted under GMP auspices, and excluding use for any
          commercial production or commercialization of a protein product.

     1.7  "Know-how" means unpatented technical and other information, belonging
          to or controlled by 3DP, which is not in the public domain, including
          aspects of 3DP PERT, Improvements and other information comprising or
          relating to concepts, discoveries, inventions, data, designs,
          formulae, ideas, methods, models, assays, research plans, procedures,
          designs for experiments and tests, results of experimentation and
          testing (including research or development results), processes
          (including manufacturing processes, specifications and techniques),
          and laboratory records.

     1.8  "Improvements" means any inventions, discoveries, improvements or
          enhancements made by either Party or their respective Affiliates,
          which relate to the 3DP PERT or to previous Improvements.

     1.9  "Licensed Patent Rights" means: (a) patent applications or issued
          patents identified in Exhibit A, including any patent applications,
                                ---------
          divisionals, continuations, reissues and reexaminations thereof, (b)
          any patents issuing from any of the patent applications described in
          clause (a) or any patents covering any Improvements made by 3DP to the
          inventions covered by the patents and patent applications described in
          clause (a); and (c) any extensions and supplementary

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

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          protection certificates based on, or the foreign equivalents of, any
          of the foregoing in clauses (a) and (b); filed by or granted to 3DP in
          the U.S., Canada, or one or more countries in the European Patent
          Community.

     1.10 "Third Party" means any person or entity other than a Party or any of
          its Affiliates.

     1.11 "3DP PERT" stands for "3DP Protein Expression and Refolding
          Technology" and means (a) the 3DP proprietary technology that
          facilitates high yield protein expression and high yield refolding of
          complex proteins expressed in mammalian and non-mammalian cell
          systems, that is covered at the time and place of the use by one or
          more patent claims within Licensed Patent Rights, and/or (b) the
          proprietary and nonproprietary methods, systems, instruments,
          programs, technology, trade secrets and software, together with all
          Know-how related thereto, necessary for the practice of the foregoing.

                                   ARTICLE 2

                                    LICENSE

     2.1  Grant. Subject to the terms and conditions of this Agreement, 3DP
          hereby grants BMS and its Affiliates a nontransferable,
          nonsublicensable, nonexclusive, nonroyalty-bearing license in the
          Field under: (a) the Licensed Patent Rights and Know-how, and (b) any
          Improvements to the 3DP PERT or Improvements thereto made by or for
          3DP during the [**] after the Effective Date, or for which 3DP
          otherwise acquires the right to grant such a license during such [**]
          period, and under all patent, copyright, trademark, trade secret and
          other intellectual property rights inherent therein and appurtenant
          thereto; to the extent necessary for BMS to use the 3DP PERT and
          Improvements solely for research purposes in the Field which shall be
          deemed to include any research and development activities being
          undertaken [**] over the term of the Agreement only at the BMS Sites.

     2.2  Access to Improvements. For a period of [**] from the Effective Date,
          3DP, at no additional cost, will promptly make full written disclosure
          to BMS of any and all Improvements that 3DP conceives or makes or has
          made to the 3DP PERT and to any Improvements thereto, and/or which 3DP
          has the right to provide hereunder, and 3DP will facilitate the
          transfer of such Improvements to BMS. Such transfer shall occur no
          later than six (6) months after such Improvements have been validated
          by 3DP. If BMS desires to acquire a license to any such Improvement
          from 3DP for commercial applications beyond the scope of the license
          granted in Section 2.1, the Parties will negotiate in good faith the
          terms under which 3DP may grant such license for such Improvement to
          BMS.

     2.3  Grantback Rights to Improvements. For a period of [**] from the
          Effective Date, BMS and its Affiliates agree that each will promptly
          make full written disclosure to 3DP of any and all Improvements that
          BMS and/or its Affiliates conceives or makes to the 3DP PERT and to
          any Improvements thereto. BMS

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

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          and its Affiliates hereby grant to 3DP, or its designee, a semi-
          exclusive (exclusive except as to BMS and its Affiliates), perpetual,
          nonroyalty-bearing license, including the right to transfer and
          sublicense such license, to all of BMS's and its Affiliates' worldwide
          right, title, and interest in and to any and all such Improvements
          solely for applications relating to 3DP PERT, under all patent,
          copyright, trademark, trade secret and other intellectual property
          rights inherent therein and appurtenant thereto, provided that such
          license shall be subject to a retained right by BMS and its Affiliates
          to use such Improvements solely for internal research purposes as
          permitted in Section 2.1.

     2.4  Limitations. Except as permitted under Section 2.1, this Agreement
          does not grant BMS a license to:

          2.4.1     transfer any part of the 3DP PERT to any Third Party; or

          2.4.2     develop or sell an instrument, product or a service based on
                    any part of the 3DP PERT; or

          2.4.3     provide services to any Third Party with respect to any part
                    of the 3DP PERT; or

          2.4.4     distribute, license or otherwise make available to any Third
                    Party any data or database that is obtained from the use of
                    any part of the 3DP PERT.

     2.5  Retained Rights. Any rights of either Party not expressly granted to
          the other Party under the provisions of this Agreement shall be
          retained by the former Party.

     2.6  Covenants. BMS covenants that it will not install, have installed or
          operate the 3DP PERT at any site that is not a BMS Site, and that it
          will limit disclosure and/or use of the 3DP PERT to/by only those of
          its employees or its Affiliates' employees necessary to accomplish the
          research activities involving the 3DP PERT at the BMS Sites.

                                   ARTICLE 3

                                    OPTION

     3.1  Grant. 3DP hereby grants BMS an option (the "Option") to negotiate, as
          provided for herein, a commercial license to the 3DP PERT. Such
          commercial license shall be nonexclusive, world-wide, and royalty-
          bearing, with a limited right to sublicense, and will grant BMS the
          right to develop, make, have made, use, have used, sell, have sold,
          import, and have imported products made using the 3DP PERT. The term
          of the Option shall begin on the Effective Date of this Agreement and
          shall continue for[**].

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

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     3.2  Exercise of Option. BMS shall provide written notice to 3DP of its
          election to exercise the Option no later than ninety (90) days prior
          to the expiration of the term of the Agreement. If BMS decides not to
          exercise such Option at any time before the expiration of the term of
          the Agreement, BMS shall promptly provide written notice to 3DP of
          such decision.

     3.3  Good Faith Negotiation. Upon receipt of written notice from BMS of its
          intent to exercise the Option, the Parties shall negotiate in good
          faith to achieve a definitive license agreement, including provisions,
          among others, for confidentiality, indemnification, and diligent
          marketing, as well as up-front license fees, royalties and milestone
          payments.

                                   ARTICLE 4

                                    PAYMENT

     4.1  3DP PERT License Fee.

          4.1.1     Within thirty (30) days after execution of this Agreement,
                    in consideration for the Option granted above, and for the
                    licenses granted hereunder for the BMS Sites described in
                    Sections 1.3(a) and 1.3(b), BMS will pay to 3DP[**].

          4.1.2     In consideration for the licenses granted hereunder for each
                    BMS Site described in Section 1.3(a), BMS will pay to 3DP a
                    fee of [**] within (30) days after BMS had identified such
                    BMS Site to 3DP as one at which it intends to install 3DP
                    PERT.

     4.2  Mode of Payment. Payment to 3DP hereunder shall be made by wire
          transfer of United States Dollars, in the requisite amount, to such
          bank account as 3DP may designate by timely notice to BMS. Payment
          shall be free and clear of any taxes, fees or charges, to the extent
          applicable.

                                   ARTICLE 5

                                   SERVICES

     5.1  Training and Support. 3DP shall use commercially reasonable efforts to
          provide up to [**] of training and support services to a limited
          number of qualified BMS personnel for the 3DP PERT during the [**]
          after the Effective Date, with such time to be divided equally on a
          quarterly basis ("Services"). Such Services will be provided at such
          times and in such places and in such form as may be mutually agreeable
          to the Parties. BMS will be subject to additional fees, which shall be
          reasonable and specified in advance, for any support or training
          required beyond the Services.

     5.2  Recording. In order to protect the patent rights, under applicable
          U.S., Canadian or European Union law in any inventions conceived or
          reduced to practice during the term of this Agreement as a result of
          the use of the 3DP PERT, BMS agrees to

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

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          maintain a policy which requires its employees to record and maintain
          all data and information developed using the 3DP PERT in such a manner
          as to enable the Parties to use such records to establish the earliest
          date of invention and/or diligence to reduction to practice. At a
          minimum, the policy shall require such individuals to record all
          inventions generated by them in standard laboratory notebooks which
          are dated and corroborated by non-inventors on a regular,
          contemporaneous basis.

                                   ARTICLE 6

                        PATENT RIGHTS AND INFRINGEMENT

     6.1  Licensed Patent Rights. 3DP agrees to use commercially reasonable
          efforts to prepare, file, prosecute and maintain the Licensed Patent
          Rights, at 3DP's expense, in a manner deemed appropriate in 3DP's sole
          judgment. 3DP agrees to keep BMS materially advised of the status of
          all Licensed Patent Rights, upon reasonable written request from BMS.

     6.2  BMS Patent Rights. BMS shall provide 3DP with copies of all material
          correspondence with any patent authority, such that 3DP is apprised of
          the status of all patent rights filed by or granted to BMS and/or its
          Affiliates which are related to Improvements or to 3DP PERT, and under
          which 3DP has rights, according to the provisions of Section 2.2.

     6.3  Cooperation. Each Party agrees to endeavor in good faith to coordinate
          its efforts with the other Party in order to minimize or avoid
          interference with the patent prosecution or rights of the other Party
          with respect to patent rights under which the other Party has a
          license.

     6.4  Infringement by Third Parties. In the event that BMS becomes aware of
          any infringement by one or more Third Parties of any of the patent
          rights within Licensed Patent Rights, BMS shall promptly notify 3DP.
          3DP shall respond to any such infringement in a manner deemed
          appropriate by 3DP, in its sole judgment.

     6.5  Third Party Patent Rights. If any warning letter or other notice of
          infringement is received by a Party, or action, suit or proceeding is
          brought against a Party alleging infringement of a patent of any Third
          Party, with respect to operations under the Licensed Patent Rights,
          the Parties shall promptly discuss and decide what response is in the
          best interests of the Parties.

                                   ARTICLE 7

                                CONFIDENTIALITY

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

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     7.1  Confidentiality Obligations. The Parties agree that, for the term of
          this Agreement and for ten (10) years thereafter, either Party that
          receives Confidential Information (a "Receiving Party") from the other
          Party (a "Disclosing Party") shall keep, and shall take steps, not
          fewer than it takes to protects its own valuable, proprietary
          information, and not less than reasonable measures, to attempt to
          ensure that its officers, directors and employees keep, confidential,
          and shall not publish or otherwise disclose, and shall not use for any
          purpose (except as expressly permitted hereunder) any Confidential
          Information (including without limitation, Know-how) furnished to it
          by its Disclosing Party pursuant to this Agreement.

     7.2  Written Assurances and Permitted Uses of Confidential Information.

          7.2.1     The Receiving Party may disclose the Disclosing Party's
                    Confidential Information to the extent the Receiving Party
                    is compelled to disclose such information by a judicial or
                    administrative authority of competent jurisdiction,
                    including but not limited to submitting information to tax
                    authorities or to comply with any discovery or similar
                    request for production of documents in litigation or similar
                    alternative dispute resolution proceedings, provided
                    however, that in such case, the Receiving Party shall timely
                    give notice to the Disclosing Party so that the Disclosing
                    Party may seek a protective order or other remedy from said
                    authority. In any event, the Receiving Party shall disclose
                    only that portion of the Confidential Information that, in
                    the opinion of its legal counsel, is legally required to be
                    disclosed, and will exercise reasonable efforts to ensure
                    that any such information so disclosed will be accorded
                    confidential treatment by said court or tribunal.

          7.2.2     To the extent reasonably necessary or appropriate to fulfill
                    its obligations or exercise its rights hereunder, a Party
                    may disclose Confidential Information received from the
                    other Party to one or more of its Affiliates, on a need-to-
                    know basis, on condition that each such Affiliate agrees to
                    keep such Confidential Information confidential under
                    equivalent conditions required of its parent Party.

          7.2.3     The existence and the terms and conditions of this Agreement
                    which the Parties have not specifically agreed to disclose
                    pursuant to this Section 7.2, shall be treated by each Party
                    as Confidential Information of the other Party.

          7.2.4     To the extent that it is reasonably necessary or appropriate
                    to fulfill its obligations to comply with the rules
                    controlling disclosure of material information during patent
                    examination, either Party may disclose Confidential
                    Information received from the other Party to the applicable
                    patent authority.

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

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     7.3  Publications. At least forty-five (45) days prior to submitting a
          manuscript that contains a reference to or details of the 3DP PERT or
          any Improvements for publication, BMS shall provide 3DP with such
          manuscript for 3DP's reasonable review. BMS shall also promptly
          provide 3DP with any updates or revisions to such manuscript. 3DP will
          review each manuscript in a timely manner and shall release such
          manuscript(s) to BMS, or may request BMS to make amendments or
          substitutions to the manuscript, in order to delete 3DP's Confidential
          Information. BMS will honor 3DP's reasonable request for such
          amendment or substitution.

     7.4  Permitted Disclosures for Business Development Purposes.
          Notwithstanding the foregoing, or any other provision in this
          Agreement to the contrary, 3DP may describe the financial terms of
          this Agreement in confidence, in connection with capital raising or
          financing activities; provided, however, any such recipient of such
          Confidential Information shall agree in writing to keep such terms
          confidential for the same time periods and to an equivalent extent as
          3DP is required to keep Confidential Information confidential under
          this Agreement. Furthermore, BMS acknowledges that 3DP may be
          obligated to disclose terms of this Agreement and make public a copy
          of this Agreement in the event it files a registration statement with
          respect to its shares or it becomes a public company as required by
          applicable U.S. law; provided however, the terms of this Agreement and
          the copy submitted to the applicable governmental agency shall be
          redacted such that the extent of any such disclosure shall be limited
          to that which in the reasonable opinion of 3DP's legal counsel is
          legally required to be disclosed.

                                   ARTICLE 8

                        REPRESENTATIONS AND WARRANTIES

     8.1  Authority. Each Party represents and warrants that it has the full
          right, power and authority to execute, deliver and perform its
          obligations pursuant to this Agreement, this Agreement has been duly
          executed by such Party, and it constitutes a legal, valid and binding
          obligation of such Party, enforceable in accordance with its terms.

     8.2  No Conflicts. Each Party represents and warrants that the execution,
          delivery and performance of this Agreement does not conflict with, or
          constitute a breach or default under any of its charter or
          organizational documents, any law, order, judgment or governmental
          rule or regulation applicable to it, or any material agreement,
          contract, commitment or instrument to which it is a party.

     8.3  Intellectual Property. 3DP represents and warrants that Exhibit A is
          accurate and complete, and identifies all patent rights owned by 3DP,
          as of the Effective Date, which are believed necessary for the use of
          the methods and technology claimed in the Licensed Patent Rights, in
          accordance with the license granted hereunder. 3DP further warrants
          that it has not received notice of any claim by a Third Party, which
          asserts that the practice of the 3DP PERT, as anticipated in

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

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          this Agreement, would infringe any claim of any valid, enforceable
          United States, Canadian or the applicable patent of a country in the
          European Union. 3DP has not conducted, and is not obliged to conduct,
          either a search for, or an analysis of, United States or Canadian
          patents, and/or patents to any countries in the European Patent
          Community that may be infringed by the use of the 3DP PERT.

     8.4  Disclaimer of Warranties. 3DP MAKES NO REPRESENTATIONS AND EXTENDS NO
          WARRANTIES OR CONDITIONS OF ANY KIND, EITHER EXPRESS OR IMPLIED, WITH
          RESPECT TO THE LICENSED PATENT RIGHTS OR OTHERWISE TO THE 3DP PERT,
          INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY OR
          FITNESS FOR A PARTICULAR PURPOSE.

                                   ARTICLE 9

                             TERM AND TERMINATION

     9.1  Term. This Agreement shall commence upon the Effective Date and shall
          expire upon the expiration of all of the last-to-expire of the patents
          within the Licensed Patent Rights.

     9.2  For Any Reason. BMS may terminate this Agreement for any reason by
          providing 3DP sixty (60)-days written notice.

     9.3  Termination for Material Breach. The failure by a Party to comply with
          any of the material obligations contained in this Agreement shall
          entitle the other Party to give notice to the allegedly breaching
          Party to have the default cured. If (i) such default is not cured
          within sixty (60) days after the receipt of such notice, or (ii) such
          default is not susceptible to cure within sixty (60) days after such
          notice (unless such default, by its nature, is incurable, in which
          case the Agreement may be terminated immediately by notice), or (iii)
          diligent and ongoing steps are not taken to cure, if by its nature
          such default could not be cured within sixty (60) days, the notifying
          Party shall be entitled, without prejudice to any of its other rights
          conferred on it by this Agreement, and in addition to any other
          remedies that may be available to it, to terminate this Agreement,
          provided, however, that such right to terminate shall be stayed in the
          event that, during such sixty (60) day period, the Party alleged to
          have been in default shall have: (a) initiated arbitration in
          accordance with the provisions of Section 11.1, below, with respect to
          the alleged default, and (b) diligently and in good faith cooperated
          in the prompt resolution of such arbitration proceedings. Such rights
          to terminate will be in addition to, and without prejudice to the
          exercise of, any other remedies available in law or equity.

     9.4  No Waiver. The right of a Party to terminate this Agreement, as
          provided in Article 9, shall not be affected in any way by its waiver
          or failure to take action with respect to any prior default.

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

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     9.5  Insolvency or Bankruptcy.

          9.5.1   Either Party may, in addition to any other remedies available
                  by law or in equity, terminate this Agreement by written
                  notice to the other Party in the event the latter Party shall
                  have become insolvent or bankrupt, or shall have an assignment
                  for the benefit of its creditors, or there shall have been
                  appointed a trustee or receiver of the other Party or for all
                  or a substantial part of its property, or any case or
                  proceeding shall have been commenced or other action taken by
                  or against the other Party in bankruptcy or seeking
                  reorganization, liquidation, dissolution, winding-up,
                  arrangement or readjustment of its debts or any other relief
                  under any bankruptcy, insolvency, reorganization or other
                  similar act or law of any jurisdiction now or hereafter in
                  effect, or there shall have been issued a warrant of
                  attachment, execution, restraint or similar process against
                  any substantial part of the property of the other Party, and
                  any such event shall have continued for ninety (90) days
                  undismissed, unbonded and undischarged.

          9.5.2   All rights and licenses granted under or pursuant to this
                  Agreement by BMS or 3DP are, and shall otherwise be deemed to
                  be, for purposes of Section 365(n) of the U.S. Bankruptcy
                  Code, licenses of right to "Intellectual Property," as defined
                  under Section 101 of the U.S. Bankruptcy Code. The Parties
                  agree that the Parties, as licensees of such rights under this
                  Agreement, shall retain and may fully exercise all of their
                  rights and elections under the U.S. Bankruptcy Code. The
                  Parties further agree that, in the event of the commencement
                  of a bankruptcy proceeding by or against either Party under
                  the U.S. Bankruptcy Code, the Party hereto which is not a
                  party to such proceeding shall be entitled to a complete
                  duplicate of (or complete access to, as appropriate) any such
                  intellectual property and all embodiments of such relevant
                  intellectual property, and same, if not already in their
                  possession, shall be promptly delivered to them (i) upon any
                  such commencement of a bankruptcy proceeding upon their
                  written request therefor, unless the Party subject to such
                  proceedings elects to continue to perform all of their
                  obligations under this Agreement, or (ii) if not delivered
                  under (i) above, upon the rejection of this Agreement by or on
                  behalf of the Party subject to such proceeding upon written
                  request therefor by a nonsubject Party.

     9.6  Survival of Obligations. The termination or expiration of this
          Agreement shall not relieve the Parties of any obligations accruing
          prior to such termination, and any such termination shall be without
          prejudice to the rights of either Party against the other. The
          provisions of Article 7, Section 8.4, Section 9.6, Section 9.7,
          Article 10, Article 11 and Article 12 (except Section 12.5) shall
          survive any termination of this Agreement.

     9.7  Return of Confidential Information. Upon termination or expiration of
          this Agreement, BMS will promptly return all 3DP Confidential
          Information

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

                                      10
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          transferred to it under this Agreement, whether in oral, written,
          graphic or electronic form, and will cease all use of 3DP PERT;
          provided, however, that BMS shall thereafter continue to have all
          rights to use any information or results obtained by BMS from its use
          of 3DP PERT during the term of this Agreement.

                                  ARTICLE 10

                                INDEMNIFICATION

     10.1 Indemnification of 3DP. BMS shall indemnify and defend 3DP and its
          Affiliates, and the directors, officers, employees, agents and counsel
          of 3DP and such Affiliates, and the successors and assigns of any of
          the foregoing (the "3DP Indemnitees"), and hold the 3DP Indemnitees
          harmless from and against any and all losses resulting from any claim,
          suit or proceeding brought by one or more Third Parties against a 3DP
          Indemnitee, arising from or occurring as a result of BMS's use of 3DP
          PERT and/or its operations under the Licensed Patent Rights, or the
          discovery, evaluation, manufacture, import, use, offer for sale or
          sale of products developed in whole or in part through the use by BMS
          of 3DP PERT, except to the extent any such claim, suit or proceeding
          results from the breach of any of the provisions of this Agreement,
          gross negligence or willful misconduct of 3DP. It is understood by
          both Parties that the technology licensed hereunder is experimental,
          that BMS is experienced in the handling of and appropriate precautions
          to be practiced with experimental technology, and it will take all
          appropriate precautions to prevent death, personal injury, illness,
          and property damages related to the use thereof.

     10.2 Procedure. Any of the 3DP Indemnitees that intends to claim
          indemnification under this Article 10 shall promptly notify BMS (the
          "Indemnitor") in writing of any loss in respect of which the 3DP
          Indemnitee intends to claim such indemnification, and shall permit the
          Indemnitor to assume direction and control of the defense of the claim
          (including the selection of counsel and the sole right to settle it at
          the sole discretion of the Indemnitor, provided that such settlement
          does not impose any material obligation or detriment on the 3DP
          Indemnitee), and shall cooperate as requested (at the expense of the
          Indemnitor) in the defense of the claim; provided, however, that a 3DP
          Indemnitee shall have the right to retain its own counsel, with the
          fees and expenses to be paid by such 3DP Indemnitee. The failure to
          deliver written notice to the Indemnitor within a reasonable time
          after the commencement of any such action, if prejudicial to its
          ability to defend such action, shall relieve the Indemnitor of any
          liability to the 3DP Indemnitee under this Article 10. At the
          Indemnitor's request, the 3DP Indemnitee under this Article 10, and
          its employees and agents, shall cooperate fully with the Indemnitor
          and its legal representatives in the investigation of any loss covered
          by this indemnification and provide true, correct and complete
          information with respect thereto.

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

                                      11
<PAGE>

                                  ARTICLE 11

                              DISPUTE RESOLUTION

     11.1 Dispute Resolution. Any dispute concerning or arising out of this
          Agreement or concerning the existence or validity hereof, shall be
          determined by the following procedure:

          11.11   Both Parties understand and appreciate that their long term
                  mutual interest will be best served by affecting a rapid and
                  fair resolution of any claims or disputes which may arise out
                  of services performed under this Agreement or from any dispute
                  concerning the terms of this Agreement. Therefore, both
                  Parties agree to use their reasonable best efforts to resolve
                  all such disputes as rapidly as practicable on a fair and
                  equitable basis. Toward this end, both Parties agree to
                  develop and follow a process for presenting, rapidly
                  assessing, and settling claims on a fair and equitable basis
                  that takes into account the precise subject and nature of the
                  dispute.

          11.12   If any dispute or claim arising under this Agreement cannot be
                  readily resolved by the Parties pursuant to the process
                  described above, then the Parties agree to refer the matter to
                  a panel consisting of the Chief Executive Officer ("CEO") of
                  3DP, and the Senior Vice President of Early Discovery and
                  Applied Technology for BMS, or a comparable position selected
                  by either Party from time to time, for review and a non-
                  binding resolution. A copy of the terms of this Agreement,
                  agreed upon facts (and areas of disagreement), and concise
                  summary of the basis for each side's contentions will be
                  provided to both such officers who shall review the same,
                  confer, and attempt to reach a mutual resolution of the issue.

          11.13   If the matter has not been resolved utilizing the foregoing
                  process, and the Parties are unwilling to accept the non-
                  binding decision of the indicated panel, either or both
                  Parties may elect to pursue definitive resolution through
                  binding arbitration, which the Parties agree to accept in lieu
                  of litigation or other legally-available remedies (with the
                  exception of injunctive relief where such relief is necessary
                  to protect a Party from irreparable harm pending the outcome
                  of any such arbitration proceeding). Binding arbitration shall
                  be settled in accordance with the Commercial Arbitration Rules
                  of the American Arbitration Association by a panel of three
                  arbitrators chosen in accordance with these Rules. This
                  Agreement shall be governed by and construed in accordance
                  with the substantive laws of the State of Delaware, without
                  regard to the conflicts of laws provisions of Delaware. The
                  arbitration will be held in Wilmington, Delaware. Judgment
                  upon the award rendered may be entered in any court having
                  jurisdiction and the Parties hereby consent to the said
                  jurisdiction and venue, and further irrevocably waive any
                  objection which either Party may have now or hereafter to the
                  laying of venue of any

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

                                      12
<PAGE>

                  proceedings in said courts and to any claim that such
                  proceedings have been brought in an inconvenient forum, and
                  further irrevocably agree that a judgment or order in any such
                  proceeding shall be conclusive and binding upon the Parties
                  and may be enforced in the courts of any other jurisdiction.

                                  ARTICLE 12

                                 MISCELLANEOUS

     12.1 Entire Agreement. This Agreement, and the DiscoverWorks(TM) Drug
          Discovery Collaboration Agreement, the DiscoverWorks(TM) Nonexclusive
          License and Purchase Agreement, and the GPCR License and User
          Agreement, all entered into simultaneously with this Agreement,
          constitute and contain the entire understanding and agreement of the
          Parties respecting the subject matters of these respective agreements,
          and cancel and supersede any and all prior negotiations,
          correspondence, understandings and agreements between the Parties,
          whether oral or written, regarding such subject matters.

     12.2 Further Actions. Each Party agrees to execute, acknowledge and deliver
          such further instruments and to do all such other acts as may be
          necessary or appropriate in order to carry out the purposes and intent
          of this Agreement.

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

     12.4 Assignment. Neither Party shall assign this Agreement without the
          prior written consent of the other Party; provided, however, that
          either Party may assign this Agreement without the prior written
          consent of the other Party in connection with the sale or transfer of
          substantially all of its assets that relate to this Agreement, or in
          the event of its merger or consolidation or change of control or
          similar transaction. Any permitted assignee shall assume all
          obligations of its assignor under this Agreement.

     12.5 Restrictions on Unsolicited Activities. In consideration of the
          licenses granted hereunder, BMS agrees that for the term of this
          Agreement, without the prior written consent of the board of directors
          of 3DP, neither BMS nor any of its respective Affiliates (including
          any person or entity directly or indirectly, through one or more
          intermediaries, controlling one of these entities, or controlled by
          one of these entities or under common control with one of these
          entities) will (i) purchase, offer or agree to purchase, or announce
          an intention to purchase, directly or indirectly, any securities or
          assets of 3DP; (ii) make, or in any way participate, directly or
          indirectly, in any "solicitation" of "proxies" to vote or "consents"
          (as such terms are used in the rules and regulations of the Securities
          and Exchange Commission), or seek to advise or influence any person
          with respect to the voting of any voting securities of 3DP or any
          Affiliate thereof; (iii)

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

                                      13
<PAGE>

            initiate or support, directly or indirectly, any stockholder
            proposal with respect to 3DP; (iv) directly or indirectly make any
            public announcement with respect to, or submit a proposal for, or
            offer of (with or without conditions) any extraordinary transaction
            involving 3DP or its securities or assets, or any Affiliate thereof,
            or of any successor to or person in control of 3DP or any of its
            businesses, or any assets of 3DP any Affiliate or division thereof,
            or of any such successor or controlling person; or (v) form, join or
            in any way participate in a "group" as defined in Section 13(d)(3)
            of the Exchange Act in connection with any of the foregoing. Nothing
            contained in this Section 12.5 shall prohibit the ownership by BMS
            of up to 1% of any class of securities of 3DP which are registered
            pursuant to the Exchange Act.

     12.6   No Implied Licenses. No rights to any other patents, Know-how or
            technical information, or other intellectual property rights, other
            than as explicitly identified herein, are granted or deemed granted
            by this Agreement. No right, expressed or implied, is granted by
            this Agreement to a Party to use in any manner the name or any other
            trade name or trademark of the other Party in connection with the
            performance of this Agreement.

     12.7   No Waiver. No waiver, modification or amendment of any provision of
            this Agreement shall be valid or effective unless made in writing
            and signed by a duly authorized officer of each Party. The failure
            of either Party to assert a right hereunder or to insist upon
            compliance with any term or condition of this Agreement shall not
            constitute a waiver of that right or excuse a similar subsequent
            failure to perform any such term or condition.

     12.8   Force Majeure. The failure of a Party to perform any obligation
            under this Agreement by reason of acts of God, acts of governments,
            riots, wars, strikes, accidents or deficiencies in materials or
            transportation or other causes of a similar magnitude beyond its
            control shall not be deemed to be a breach of this Agreement.

     12.9   Independent Contractors. Both Parties are independent contractors
            under this Agreement. Nothing contained in this Agreement is
            intended nor is to be construed so as to constitute 3DP or BMS as
            partners or joint venturers with respect to this Agreement. Neither
            Party shall have any express or implied right or authority to assume
            or create any obligations on behalf of or in the name of the other
            Party or to bind the other Party to any other contract, agreement,
            or undertaking with any Third Party.

     12.10  Notices and Deliveries. Any formal notices, request, delivery,
            approval or consent required or permitted to be given under this
            Agreement shall be in writing and shall be deemed to have been
            sufficiently given when it is received, whether delivered in person,
            transmitted by facsimile with contemporaneous confirmation,
            delivered by registered letter (or its equivalent) or delivered by
            overnight courier service (receipt required), to the Party to which
            it is directed at its address shown

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

                                      14
<PAGE>

            below or such other address as such Party shall have last given by
            notice to the other Parties.

            If to BMS:

            Bristol-Myers Squibb Company
            Route 206 & Province Line Road
            P.O. Box 4000
            Princeton, New Jersey 08543
            ATTN: Vice President and Senior Counsel
                  Pharmaceutical Research Institute


<TABLE>
<CAPTION>
            If to 3DP:                                 with a copy to:
            <S>                                        <C>
            3-Dimensional Pharmaceuticals, Inc.        Morgan, Lewis & Bockius LLP
            Eagleview Corporate Center                 502 Carnegie Center
            665 Stockton Drive, Suite 104              Princeton, New Jersey 08540
            Exton, PA  10341
            ATTN: Chief Executive Officer              ATTN: Randall B. Sunberg, Esq.
</TABLE>

     12.11  Public Announcements. The Parties shall consult with each other and
            reach mutual written agreement before making any public announcement
            concerning this Agreement or its subject matter. Notwithstanding the
            foregoing, the Parties may disclose the existence and general nature
            of this Agreement and may make disclosures for purposes of
            satisfying legal and regulatory requirements in accordance with
            Article 6; however, neither Party shall use the name of the other
            Party for promotional purposes.

     12.12  Headings. The captions to the sections in this Agreement are not a
            part of this Agreement, and are included merely for convenience of
            reference only and shall not affect its meaning or interpretation.

     12.13  Severability. If any provision of this Agreement becomes or is
            declared by a court of competent jurisdiction to be illegal,
            unenforceable or void, this Agreement shall continue in full force
            and effect without said provision, so long as the Agreement, taking
            into account said voided provision(s), continues to provide the
            Parties with the same practical economic benefits as the Agreement
            containing said voided provision(s) did on the Effective Date. If,
            after taking into account said voided provision(s), the Parties are
            unable to realize the practical economic benefit contemplated on the
            Effective Date, the Parties shall negotiate in good faith to amend
            this Agreement to reestablish the practical economic benefit
            provided the Parties on the Effective Date.

     12.14  No Consequential Damages. IN NO EVENT SHALL EITHER PARTY OR ANY OF
            ITS RESPECTIVE AFFILIATES BE LIABLE TO THE OTHER

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

                                      15
<PAGE>

            PARTY OR ANY OF ITS AFFILIATES FOR SPECIAL, INDIRECT, INCIDENTAL OR
            CONSEQUENTIAL DAMAGES, WHETHER IN CONTRACT, WARRANTY, TORT,
            NEGLIGENCE, STRICT LIABILITY OR OTHERWISE, INCLUDING, BUT NOT
            LIMITED TO, LOSS OF PROFITS OR REVENUE, OR CLAIMS OF CUSTOMERS OF
            ANY OF THEM OR OTHER THIRD PARTIES FOR SUCH OTHER DAMAGES.

     12.15  Applicable Law. This Agreement shall be governed by and interpreted
            in accordance with the laws of the State of Delaware, without
            reference to its conflicts of laws provisions.

     12.16  Advice of Counsel. BMS and 3DP have each consulted with counsel of
            their choice regarding this Agreement, and each acknowledges and
            agrees that this Agreement shall not be deemed to have been drafted
            by one party or another and will be construed accordingly.

     12.17  Counterparts. This Agreement may be executed in counterparts, or
            facsimile versions, each of which shall be deemed to be an original,
            and both of which together shall be deemed to be one and the same
            agreement.

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their respective duly authorized officers as of the Effective Date, each copy of
which shall for all purposes be deemed to be an original.


<TABLE>
<CAPTION>
3-DIMENSIONAL PHARMACEUTICALS, INC.               BRISTOL-MYERS SQUIBB COMPANY
<S>                                               <C>

By:  /s/ David C. U'Prichard                      By:   /s/ Marilyn Hartig

Name:  David C. U'Prichard, Ph.D.                 Name:  Marilyn Hartig, Ph.D.

Title: Chief Executive Officer                    Title:  VP, External Sciences
                                                           & Technology
</TABLE>

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

                                      16
<PAGE>

                                   EXHIBIT A
                                   ---------

                               Licensed Patents
                               ----------------

[**].

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

                                      17