EXHIBIT
10.46


 


Portions of this Exhibit were
omitted and filed separately with the Secretary of the Commission pursuant to
an application for confidential treatment filed with the Commission pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934.  Such omissions are designated as ***.


 




 





 


 


DISCOVERY COLLABORATION AGREEMENT


 


between


 


PHARMACOPEIA, INC.


 


and


 


BRISTOL-MYERS SQUIBB COMPANY


 




 





 

















 


DISCOVERY COLLABORATION AGREEMENT


 


THIS
DISCOVERY COLLABORATION AGREEMENT (the “Agreement”) is made and entered
into effective as of October 11, 2007 (the “Effective
Date”), by and between Bristol-Myers Squibb
Company, a Delaware Corporation (“BMS”)
and Pharmacopeia, Inc., a Delaware
Corporation (“Pharmacopeia”).  BMS and Pharmacopeia each may be referred to
herein individually as a “Party,” or
collectively as the “Parties.”


 


WHEREAS,
Pharmacopeia and BMS
are parties to that certain License Agreement, under which Pharmacopeia has
agreed to perform under this Agreement as partial consideration for BMS
providing the licenses granted in the License Agreement;


 


WHEREAS, Pharmacopeia and BMS each desire to
collaborate in the performance of a Research Program for the purpose of
discovery of Research Compounds suitable for development for human therapeutic
uses, with the objective of identifying one or more Research Compounds for BMS
to advance into human clinical trials; and


 


WHEREAS, BMS will have exclusive rights and will be
solely responsible for the clinical development and commercialization of
products incorporating Research Compounds worldwide, in each case on the terms
set forth in this Agreement.


 


NOW,
THEREFORE, in
consideration of the foregoing and the mutual covenants herein contained, the
Parties do hereby agree as follows.


 


ARTICLE 1 - DEFINITIONS


 


The terms used in this Agreement with initial letters capitalized,
whether used in the singular or the plural, shall have the meaning set forth
below, or if not listed below, the meaning designated in places throughout the
Agreement.


 


“Affiliate”
of an entity means any
other entity that, directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with such first
entity.  For purposes of this definition
only, “control” (and, with correlative meanings, the terms “controlled by” and “under
common control with”) means the possession, directly or indirectly, of the
power to direct the management or policies of an entity, whether through the
ownership of voting securities or by contract relating to voting rights or corporate
governance.


 


“Alliance
Manager” has the
meaning set forth in Section 3.5.


 


“Applicable
Law” or “Law” means all applicable laws, statutes, rules,
regulations and other pronouncements having the effect of law of any federal,
national, multinational, state, provincial, county, city or other political
subdivision, agency or other body, domestic or foreign, including but not
limited to any applicable rules, regulations, guidelines, or other requirements
of the Regulatory Authorities that may be in effect from time to time, but
excluding patent laws.


 


“BMS Compound(s)” means any chemical compound, a physical sample or the structure of
which is *** or otherwise ***.  BMS
Compounds shall not include any ***.


 


“BMS Materials” has the meaning set forth in Section 3.9.


 

















 


“Business Day” means any day, other than Saturday, Sunday
or any statutory holiday in the United States.


 


“Calendar Quarter” means the respective periods of three
consecutive calendar months ending on March 31, June 30, September 30
and December 31.


 


“Calendar Year” means each successive period of 12 months
commencing on January 1 and ending on December 31.


 


“Commercially Reasonable Efforts” means the carrying out of the research
activities in accordance with the Research Plan and under the direction of the
JRC using ***.


 


“Confidential
Information” means
all information and Know-How and any tangible embodiments thereof provided by
or on behalf of the Disclosing Party to the Receiving Party either in
connection with the discussions and negotiations pertaining to this Agreement
or in the course of performing this Agreement, including without limitation
data; knowledge; practices; processes; ideas; research plans; engineering
designs and drawings; research data; manufacturing processes and techniques;
scientific, manufacturing, marketing and business plans; and financial and
personnel matters relating to the Disclosing Party or to its present or future
products, sales, suppliers, customers, employees, investors or business;
regardless of whether any of the foregoing are marked “confidential” or “proprietary”
or communicated to the other by the Disclosing Party in oral, written, graphic
or electronic form.  For all purposes of
this Agreement, the structure of the BMS Compounds and Research Compounds and
the Research Results shall be treated as being Confidential Information of BMS.


 


Notwithstanding the foregoing, information or
Know-How of a Party will not be deemed Confidential Information for purposes of
this Agreement to the extent that the Receiving Party can show by competent
proof that such information or Know-How:


 


(a)                                  was already known to the Receiving Party or
any of its Affiliates, without any obligation to the Disclosing Party to keep
it confidential or restricting its use, prior to the time of disclosure to such
Receiving Party;


 


(b)                                 was generally available or known to parties
reasonably skilled in the field to which such information or Know-How pertains,
or was otherwise part of the public domain, at the time of its disclosure to
the Receiving Party;


 


(c)                                  became generally available or known to
parties reasonably skilled in the field to which such information or Know-How
pertains, or otherwise became part of the public domain, after its disclosure
to such Receiving Party through no fault of the Receiving Party;


 


(d)                                 was disclosed to such Receiving Party or any
of its Affiliates by a Third Party lawfully in possession thereof, and was not
obtained indirectly or directly from the Disclosing Party or in connection with
the Research Program; or


 


(e)                                  was independently discovered or developed
outside of the Research Program by employees or (sub)contractors of the
Receiving Party or any of its Affiliates, without the aid, application or use
of Confidential Information of the Disclosing Party.


 


“Derived” means, with respect to a particular Research Compound, the
identification of a follow-up compound that (i) ***
or (ii) ***, in each case whether or not such follow-up compound is ***.


 


2

















 


“Disclosing
Party” has the
meaning set forth in Section 7.1.


 


“Discovery
Collaboration” means
the collaborative discovery research activities to be conducted by the Parties
pursuant to this Agreement.


 


“Dollars” or “$” means the
lawful currency of the United States.


 


“ECN” means a compound that has been designated as
an Early Candidate Nomination (or other equivalent designation as may be in
effect at the applicable time) by BMS, such that such compound has been shown
to meet the internal standards and criteria established by BMS to qualify such
compound for ***.


 


“ECN
Milestone” has the
meaning set forth in Section 5.1.


 


“Effective
Date” means the date
specified in the initial paragraph of this Agreement.


 


“Extended
Research Term” has
the meaning set forth in Section 3.2.


 


 “FTE” means the equivalent of the work of one (1) employee working on a
dedicated full time basis for one (1) year (consisting of at least a total
of *** (***) hours per year of dedicated effort, excluding vacations and
holidays) of work on or directly related to the Research Plan.  No one person will be permitted to account
for more than *** (***) hours of FTE contribution per year.   Any person who devotes less than *** hours per
year shall be treated as an FTE on a pro-rata basis, based upon the actual number
of hours worked directly related to the Research Program divided by ***.  Scientific work performed in the performance
of the Research Program by an FTE may include, but is not limited to, ***.


 


“FTE
Rate” means the rate
at which BMS would fund Pharmacopeia FTEs during any Extended Research
Term.  The FTE Rate will be negotiated
between the parties no later than thirty (30) days prior to the start of the
Extended Research term and will be a fully burdened rate (including any
overhead, laboratory supply costs, etc.) based on the average full-time
equivalent rate charged to all Third Parties for whom Pharmacopeia is
conducting research services and for which the basis of any research funding to
be provided to Pharmacopeia by such Third Party is an FTE rate applicable to a
defined number of Pharmacopeia full-time equivalents committed to such research
services.  If any Subcontractor FTEs are
to be utilized during the Extended Research Term, the FTE Rate will include any
costs incurred by Pharmacopeia related to such Subcontractor FTEs.


 


“Initiation
Date” has the meaning
set forth in Section 3.2.


 


“Joint Invention” has the meaning set forth in Section 8.1.


 


“Joint Patent”
has the meaning set forth in Section 8.1.


 


“Joint Research Committee” or “JRC” has the meaning set forth in
Section 3.3.


 


“Know-How” means technical information, results and
materials, including without limitation, technology, software, instrumentation,
devices, data, biological materials, assays, constructs, compounds, unpatented
inventions, practices, methods, knowledge, know-how, trade secrets, skill and
experience.


 


“License Agreement” means that certain license agreement between BMS and Pharmacopeia
related to selective androgen receptor modulator compounds of even date
herewith.


 


3

















 


“Losses” has the meaning set forth in Section 10.1.


 


“Objective” has the meaning set forth in Section 3.1.1.


 


“Patents” means (a) patents and patent
applications in any country or jurisdiction, (b) all priority
applications, divisionals, continuations, and continuations-in-part of any of
the foregoing, and (c) all patents issuing on any of the foregoing patent
applications, together with all registrations, reissues, renewals,
re-examinations, confirmations, supplementary protection certificates, and
extensions of any of (a), (b) or (c). 
Patents shall not include any Know-How.


 


“Person” means any individual, firm, corporation,
partnership, limited liability company, trust, business trust, joint venture
company, governmental authority, association or other entity.


 


“Pharmacopeia
Compound”  means any chemical compound that, as of the
time BMS ***.


 


“Pharmacopeia Inventions” has the meaning set forth in Section 8.1.


 


“Pharmacopeia Know-How” means any Know-How and works of authorship created, used or generated
by Pharmacopeia’s employees or Subcontractors in the course of the Research
Program(s).


 


“Pharmacopeia Program Patent(s)” has the meaning set forth in Section 8.1.


 


“Pharmacopeia Research Personnel” has the meaning set forth in Section 3.7.1.


 


“Product” shall mean a pharmaceutical product incorporating a BMS Compound or
Research Compound, or a compound Derived by BMS from a Research Compound.


 


“Program Inventions” has the meaning set forth in Section 8.1.


 


“Receiving
Party” has the
meaning set forth in Section 7.1.


 


“Regulatory Authority” or “Regulatory
Authorities” shall mean the
Food and Drug Administration (the “FDA”) in the U.S., and any health regulatory
authority(ies) in any foreign country that is a counterpart to the FDA and
holds responsibility for granting regulatory marketing approval for a Product
in such country, and any successor(s) thereto.


 


“Research
Compound” means any
chemical compound created or identified by ***. 
For avoidance of doubt, Research Compounds shall include ***.  Such alternate forms may include any
***.  Research Compounds shall not
include any ***.


 


“Research
Plan” has the meaning set forth in Section 3.6.


 


“Research
Program” has the meaning set forth in Section 3.1.1.


 


“Research
Results” means all data, information, trade secrets, inventions and Know-How which
are discovered, made, reduced to practice, identified or developed in whole or
in part by Pharmacopeia (including any Subcontractor) or BMS in the
course of the performance of the Research Program.


 


“Research Target” means any drug target which is the focus of
a Research Program pursuant to this Agreement.


 


4

















 


“Research
Term” will have the meaning set forth in Section 3.2.


 


“Research
Year” means each 12 month period during the Research Term, with the first
Research Year beginning on the Initiation Date.


 


“Senior
Representatives” has the meaning set forth in Section 12.4.


 


“Subcontractor” has the meaning set forth in Section 3.7.2.


 


“Substitute
Research Program” has the meaning set forth in Section 3.1.3.


 


“Term” has the meaning set
forth in Section 9.1.


 


“Third
Party(ies)” means any
Person other than Pharmacopeia or BMS or their respective Affiliates.


 


“Working
Group” has the meaning
set forth in Section 3.4.


 


ARTICLE 2 - 

GRANT OF RIGHTS; EXCLUSIVITY


 


Section 2.1                                   Assignment to BMS. 
Pharmacopeia agrees to assign, and hereby does assign, to BMS all right,
title and interest in and to all Research Compounds, including any Pharmacopeia
Program Patents and Pharmacopeia’s interest in any Joint Patents which claim
the composition-of-matter or a method-of-use of any Research Compound.


 


Section 2.2                                   Exclusive License Grant to BMS. 
Pharmacopeia agrees to grant, and hereby does grant, to BMS and its
Affiliates an exclusive (even as to Pharmacopeia), worldwide, perpetual,
royalty-free license (including the right to sublicense) under such Research
Results (including the Pharmacopeia Know-How), and any Pharmacopeia Program
Patents or Joint Patents, other than those assigned pursuant to Section 2.1,
that are necessary for BMS to make, have made, and use BMS Compounds or
Research Compounds in order to make, have made, use, import, export, offer for
sale and sell Products.


 


Section 2.3                                   Non-Exclusive License Grant to
BMS.  Pharmacopeia agrees to grant, and hereby does
grant, to BMS and its Affiliates a non-exclusive, worldwide, perpetual,
royalty-free license (including the right to sublicense) under such Research
Results (including the Pharmacopeia Know-How), and any Pharmacopeia Program
Patents or Joint Patents, other than those assigned pursuant to Section 2.1
or licensed pursuant to Section 2.2, that are useful, but not necessary,
for BMS to make, have made, and use BMS Compounds or Research Compounds in
order to make, have made, use, import, export, offer for sale and sell
Products.


 


Section 2.4                                   Research Exclusivity. 
During the Term and continuing thereafter for a period of *** (***) ***,
Pharmacopeia agrees that it will not ***.


 


Section 2.5                                   Exception for JAK-3 Kinase
Inhibitors.  BMS acknowledges that, pursuant to a
Research and License Agreement dated December 22, 2006 between
Pharmacopeia and Wyeth, Pharmacopeia is not permitted to grant any license or
right, to any party other than Wyeth, under any Patents or Know-How controlled
by Pharmacopeia, to any compound having as its primary mechanism of action
JAK-3 kinase inhibitory activity or to any method of making or using such a 


 


5

















 


compound.  Therefore, it is understood and agreed that
the assignment and license provisions of Sections 2.1 through 2.3 shall not
apply to (i) any compound determined to have, as its primary mechanism of
action, JAK-3 kinase inhibitory activity or (ii) any method of making or
using such a compound.


 


Section 2.6                                   Third Party Rights.


 


2.6.1                                       Overlapping
Rights.  It is understood that
Pharmacopeia is in the business of discovering pharmaceutically active
compounds for Third Parties, and that Pharmacopeia may grant Third Parties
rights to such compounds comparable to those rights granted to BMS herein.  Notwithstanding the assignments in favor of,
and licenses granted to, BMS pursuant to Sections 2.1 through 2.3 above, it is
possible that a Third Party may acquire rights from Pharmacopeia with respect
to one or more compounds of which Pharmacopeia is a sole or joint owner, which
compounds were identified independently of Pharmacopeia’s activities and
knowledge gained under the Discovery Collaboration. Accordingly, Pharmacopeia’s
grant of rights under Sections 2.1 through 2.3 shall be limited, and shall be
subject to any grant of rights to a Third Party, to the extent that (i) such
Third Party (either alone or jointly with Pharmacopeia) has filed a patent
application with respect to such a compound prior to the filing by BMS (either
alone or jointly with Pharmacopeia) of a patent application with respect to
such a compound, or (ii) Pharmacopeia has previously granted such Third
Party a license or other rights with respect to such a compound.


 


2.6.2                     No Liability.  It is understood and agreed that, even if
Pharmacopeia complies with its obligations under this Agreement, including its
obligations under Section 2.4, compounds provided to Third Parties in the
course of Pharmacopeia’s other business activities may result in patent
applications and patents owned by such Third Parties, or owned jointly by
Pharmacopeia and such Third Parties, which could conflict with patent
applications and patents owned by BMS, or jointly owned by BMS and Pharmacopeia
hereunder.  Pharmacopeia shall use its
reasonable efforts to avoid such conflict; provided, that
unless BMS is damaged as a proximate result of a material breach by
Pharmacopeia of Section 2.4, Section 3.9, Section 9.4.2, Article 7
or of any of the representations and warranties in Article 11, then
Pharmacopeia shall have no liability under this Agreement with respect to any
such conflict.


 


Section 2.7                                   No Implied Licenses.  Only the licenses granted pursuant to the
express terms of this Agreement shall be of any legal force or effect.  No other license rights shall be created by
implication, estoppel or otherwise.


 


ARTICLE 3 - 

RESEARCH PROGRAM


 


Section 3.1                                   Research Program.


 


3.1.1                     During the Research Term, the Parties will
collaborate in carrying out a research program to discover and preclinically
develop Research Compounds against a Research Target as described in the
Research Plan (the “Research
Program”).  The objective of the Research Program will be
to *** (the “Objective”).  The Research Program will be carried out in
accordance with the Research Plan, as may be amended by the JRC.  BMS will provide BMS Compounds which it has
identified as having activity against the Research Target, and the design and
prioritization of Research Compounds will be done by the Working Group.  Pharmacopeia’s role in the Research Program
will focus on the synthesis of Research Compounds with respect to the Research
Target.


 


6

















 


3.1.2                     Within thirty (30) days after BMS’ disclosure
to Pharmacopeia of the applicable BMS Compounds, Pharmacopeia will provide to
BMS a listing of any Pharmacopeia Compounds that Pharmacopeia believes could be
encompassed by a reasonable medicinal chemistry program of the type to be
performed in the Research Program.  The
listing of Pharmacopeia Compounds shall be deemed to be Confidential
Information of Pharmacopeia. 
Pharmacopeia will retain ownership of all Pharmacopeia Compounds. No
Pharmacopeia Compound shall be deemed to be a BMS Compound or a Research
Compound, and Pharmacopeia Compounds shall not be included in any of the
assignment of rights or licenses to BMS pursuant to Sections 2.1 through
2.3.  No Pharmacopeia Compounds will be
evaluated in the course of the Research Program without express written
permission of BMS.


 


3.1.3                     In the event that the JRC determines that the
Research Program with respect to the original Research Target has failed to
meet the Objective or cannot or should not, based on good faith reasonable
commercial or development considerations, be further progressed by or on behalf
of BMS, BMS will have sixty (60) days from such decision in which to substitute
another research project into the Research Program subject to approval of the
new Research Program by Pharmacopeia (the “Substitute Research
Program”).  BMS may use its discretion in the
selection of the Substitute Research Program, provided that, (i) such
Substitute Research Program is not directed to the same drug target that is the
subject of an active (at the time of such selection) internal or Third Party
collaborative research, development or commercialization program of
Pharmacopeia; (ii) such Substitute Research Program is not directed
towards a drug target for which Pharmacopeia has an obligation to any Third
Party not to conduct any research, development or commercialization; and (iii) such
Substitute Research Program does not (in the opinion of counsel selected by
Pharmacopeia) infringe valid claims of any Third Party intellectual property,
unless BMS first obtains a license reasonably satisfactory to Pharmacopeia at
BMS’s sole cost and expense or BMS agrees to indemnify Pharmacopeia against any
claims arising from the alleged infringement of such Third Party intellectual
property.  For any proposed Substitute
Research Programs, Pharmacopeia will provide notice to BMS if the proposed
Substitute Research Program must be excluded due to one of clauses (i) — (iii) above
within fifteen (15) Business Days of the Substitute Research Program being
proposed, and such Substitute Research Program thereafter shall be subject to Section 3.1.2
above.  In the event that (a) a
Substitute Research Program has been included in the Discovery Collaboration,
and (b) at any time during Pharmacopeia’s performance of such Substitute Research
Program, BMS conducts (or has conducted on its behalf) activities to further
progress the Research Program with respect to the original Research Target, BMS
shall promptly report to Pharmacopeia such activities with respect to the
original Research Target.


 


3.1.4                     The Research Program will be conducted by
each Party in good scientific manner, and in compliance with all applicable
safety rules and practices, and in accordance with Applicable Law, to
attempt to achieve efficiently and expeditiously the objectives of the Research
Program.  Each Party will comply with all
Applicable Laws, in the performance of work under this Agreement.


 


3.1.5                     Each Party will maintain laboratories,
offices and all other facilities at its own expense and risk necessary to carry
out its responsibilities under the Research Program pursuant to the Research
Plan.  Each Party agrees to make its
employees reasonably available at their respective places of employment to
consult with the other Party on issues arising during the performance of the
Research Program.  BMS and Pharmacopeia will cooperate with each
other in carrying out the Research Program, and each Party will contribute its
relevant Know-How and experience necessary to carry out the Research Program.


 


7

















 


Section 3.2                                   Research Term.


 


3.2.1                     Subject to Section 3.2.2 below, the term
of the Research Program will extend until the earlier of (i) the
expiration of the three (3) year period following an initiation date (the “Initiation Date”) to be agreed upon
by the Parties (such Initiation Date not to be later than January 1,
2008), or (ii) the JRC’s determination that the Research Program has
successfully met the Objective (the “Research
Term”).


 


3.2.2                     In the event that  the JRC determines that (x) the Research
Program has failed to meet the Objective or (y) that the Research Program
cannot or should not be further progressed, and BMS has substituted a new
Research Program into the Discovery Collaboration pursuant to Section 3.1.3,
such new Research Program shall continue for the unexpired remainder of the
original three (3) years from the Initiation Date.  BMS will not be required to pay any
additional consideration to Pharmacopeia for any such remainder of the Research
Term.


 


3.2.3                     BMS shall have the right to extend the
Research Term for up to one year beyond the expiration of the original three (3) year
term (the “Extended Research Term”)
by (i) providing written notice to Pharmacopeia of BMS’s desire to so
extend at least one hundred twenty (120) days before the expiration of the
original three (3) year term and (ii) paying Pharmacopeia’s FTE Rate
for all Pharmacopeia Research Personnel during the Extended Research Term for
activities conducted under the Research Program, pursuant to Sections 3.7.1(b) and
3.7.3(b)(ii).


 


Section 3.3                                   Joint Research Committee.


 


3.3.1                     Formation and Purpose.  The
Parties will establish and maintain a joint research committee (the “Joint Research Committee” or “JRC”), which shall oversee
the activities of the Parties under the Research Program and progress towards
meeting the Objective.  The JRC shall
have the membership and shall operate by the procedures set forth in this Section 3.3.    The JRC shall be dissolved at the end of
the Research Term unless otherwise agreed to by the Parties.


 


3.3.2                     Specific Responsibilities of the
JRC.  In addition to its overall responsibility for
the Research Program, the JRC shall, in particular, during the Research Term
(including any Extended Research Term):


 


(i)   oversee the activities of the Working Group;


 


(ii)   resolve any disputes or disagreements relating to the Research Program
that are submitted to it by the Working Group or a Party;


 


(iii)   modify the Research Plan as necessary, but in no event shall such modification
increase the *** or be contrary to the intent and purpose of this Agreement;


 


(iv)   determine the status of the Research Program to meet the Objective,
including determination of success, failure and whether the Research Program
cannot, or should not, be further progressed; in determining whether the
Research Program can, or should, be further progressed, the JRC may consider
factors such as commercial factors and risks related to the Research Target and
safety concerns among others;  and


 


(v)   review of Program Inventions and the filing of Program Patents.


 


Other than the obligations under (i), (ii) and
(iv) above, the JRC may delegate its obligations under this Agreement to
the Working Group or any other subcommittee.


 


8

















 


3.3.3                     Decisions of the JRC.  The
JRC shall make its decision on matters within its purview only after the JRC
discusses such matters and only after reasonably considering each Party’s
comments (through its JRC members) on such matters.  All decisions by the JRC must be consistent
with the terms of this Agreement, and may not modify the terms and conditions
of this Agreement or the rights and obligations of a Party under this
Agreement.


 


3.3.4                     JRC Membership and Procedures.


 


a.               Membership. 
Pharmacopeia and BMS shall *** with appropriate expertise to serve as
members of the JRC.  Each Party may
replace any of its JRC representatives at any time upon written notice to the
other Party.  BMS shall select ***.  The chairperson of the JRC (or his/her
designees) shall be responsible for calling meetings, preparing and circulating
an agenda in advance of each meeting of the JRC, and preparing and issuing
minutes of each meeting within thirty (30) days thereafter; provided that the
JRC chairperson shall call a meeting of the JRC promptly upon the written
request of a Pharmacopeia JRC representative to convene such a meeting.  Such minutes will not be finalized until both
chairpersons review and confirm the accuracy of such minutes in writing.


 


b.               Meetings.  The
JRC shall hold meetings at such times as it elects to do so, but in no event
shall such meetings be held less frequently than once every ***.  The JRC shall meet alternately at
Pharmacopeia’s facilities in New Jersey and BMS’ facilities in New Jersey or at
such locations as the Parties may otherwise agree.  Other employees of each Party involved in the
development of Research Compounds may attend meetings of the JRC as nonvoting
participants.  Each Party shall be
responsible for all of its own expenses of participating in the JRC.  Meetings of the JRC may be held by audio or
video teleconference with the consent of each Party; provided
that at least one (1) meeting of the JRC per Calendar Year
shall be held in person.  A quorum for a
meeting of the JRC requires the presence of at least one representative of each
Party.


 


c.               Decision-Making.  Each
Party’s representatives on the JRC shall, *** present at the meeting.  Except as otherwise expressly provided in
this Agreement, the JRC shall operate as to matters within its jurisdiction by
***; provided, that the JRC shall not have
the authority to amend or modify, or waive compliance with, this Agreement
other than to modify the Research Plan, but only as permitted by this
Agreement.  Further, no decision of the
JRC shall violate or breach any provision of this Agreement.  In the event of a failure of the JRC to reach
agreement on any issue, such dispute shall be subject to the dispute
resolution provisions set forth in Section 12.4., including any disputes concerning the validity, interpretation
or construction of, or the compliance with or breach of, this Agreement.


 


d.               Meeting Agendas.  Each
Party will disclose to the other proposed agenda items along with appropriate
information at least five (5) Business Days in advance of each meeting of
the JRC; provided that under exigent
circumstances requiring JRC input, a Party may provide its agenda items to the
other Party within a lesser period of time in advance of the meeting, or may
propose that there not be a specific agenda for a particular meeting, so long
as such other Party consents to such later addition of such agenda items or the
absence of a specific agenda for such JRC meeting.


 


Section 3.4                                   Research Program Working Group.


 


3.4.1                     Membership.  A
working group will be established immediately after the formation of the JRC
(the “Working Group”).  The Working Group will have ***.  The key responsibility of the Working Group
will be the day-to-day execution of the Research Plan.  The Working Group will report directly to the
JRC and will present its progress against the Research Plan to the JRC ***
during the term of the Research Program. 
The chairpersons of the Working Group will designate 


 


9

















 


employees from BMS and Pharmacopeia to be members of the Working Group
as needed to get proper representation on the Working Group for all expertise
needed to execute the Research Plan.   
In addition, from time to time, the Working Group may establish and delegate
duties to sub-committees on an “as-needed” basis to oversee particular projects
or activities.  Each such sub-committee
shall be constituted and shall operate as the Working Group determines.  Sub-committees may be established on an ad
hoc basis for purposes of a specific project or on such other basis as the
Working Group may determine.  The Working
Group and each sub-committee and their activities shall be subject to the
oversight, review and approval of, and shall report to, the JRC.  Decisions of the Working Group and each
sub-committee shall be reached by consensus between the Parties’
representatives.  In the case of a
non-concurrence in the Working Group, or in a sub-committee, the issue shall be
referred for a decision to the JRC.  In
no event shall the authority of the Working Group exceed that specified for the
JRC in this Article 3.  The Working
Group shall hold meetings at such times as it elects to do so approximately on
a monthly basis as needed.  Meetings of
the Working Group may be held by audio or video teleconference or in person at
a location agreed to by the chairpersons; provided that
at least one (1) meeting of the Working Group per year shall be held in
person.  Each Party shall be responsible
for all of its own expenses of participating in the Working Group.  A quorum for a meeting of the Working Group
requires the presence of at least one representative of each Party.


 


3.4.2                     Interactions Between the JRC and
the Working Group, and Internal Teams.  The Parties recognize that
while they will establish the JRC,  the
Working Group, and sub-committees of the Working Group for the purpose of the
Research Program, each Party possesses an internal structure (including without
limitation various committees, teams and review boards) that will be involved
in administering such Party’s activities under this Agreement.  The JRC and the chairpersons of the Working
Group shall establish procedures to facilitate communications between the JRC
and the Working Group and any relevant internal committee, team or board in
order to maximize the efficiency of the Research Program, including without
limitation by requiring appropriate members of the JRC, the Working Group, or
any sub-committee of the JRC to be available at reasonable times and places and
upon reasonable prior notice for making appropriate oral reports to, and
responding to reasonable inquiries from, the relevant internal committee, team
or board.  Furthermore, the JRC and the
Working Group will establish the necessary working level contacts between the
two Parties to ensure that necessary day-to-day interactions will occur in
implementing the Research Plan.


 


Section 3.5                                   Alliance Managers.  Each
Party shall have the right, but not the obligation, to appoint one
representative who possesses a general understanding of the scientific and
business issues relevant to this Agreement to act as its respective alliance
manager (each, an “Alliance Manager”) for the
relationship of the Parties under this Agreement.  Each Party may change its designated Alliance
Manager, who may not be a member of the JRC, from time to time upon notice to
the other Party.  Any Alliance Manager
may designate a substitute to temporarily perform the functions of that
Alliance Manager.  Each Alliance Manager
will take responsibility for ensuring that governance activities occur as set
forth in this Agreement, in particular ensuring that the JRC meetings occur,
and that any conflict is given prompt attention as set forth in Section 3.3.4.  The Alliance Managers shall be entitled to
attend meetings of the JRC, but shall not have, or be deemed to have, any
rights or responsibilities of a member of the JRC.  Similarly, the Alliance Managers may attend
meetings of the Working Group or any subcommittees of the JRC.  Each Alliance Manager may bring any matter to
the attention the JRC where such Alliance Manager reasonably believes that such
matter requires such attention.  For
purposes of clarification, in no event will the Alliance Managers have the
power or authority to amend any provision of this Agreement.


 


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Section 3.6                                   Research Plan.


 


3.6.1                     The Research Program will be carried out in
accordance with a written research plan (the “Research
Plan”).  The initial
Research Plan agreed to by the Parties
as of the Effective Date is attached hereto as Appendix 1 and is hereby
incorporated into this Agreement by reference and is made a part of this
Agreement.  The purpose of the
Research Plan is to detail the responsibilities and activities of Pharmacopeia
and BMS with respect to carrying out the Research Program.  The Research Plan will include a description
of the specific activities to be performed by the Parties in support of the
Research Program, the allocation of Pharmacopeia Research Personnel to perform
such activities, and projected timelines for completion of such activities and
the desired specifications for the Research Compounds.  At least once each Research Year (starting in
Calendar Year 2008), the JRC will review and, if necessary, update the Research
Plan.  The Research Plan may only be ***
and is subject to Section 3.7.1 below. 
The Working Group may ***.


 


3.6.2                     In addition, at least six (6) months
prior to the beginning of any Extended Research Term, the JRC will begin the
process of updating the Research Plan for such Extended Research Term (if
applicable).  At least three (3) months
prior to the beginning of any Extended Research Term, the JRC will have agreed
on an updated Research Plan for such Extended Research Term (as applicable).


 


Section 3.7                                   Research Staffing; Funding.


 


3.7.1                     Staffing.


 


a.                   During the Research Term.  Pharmacopeia will provide *** (***) ***, of which *** (collectively, “Pharmacopeia Research Personnel”)
per Research Year during the Research Term to perform activities in support of
the Research Program, in accordance with the then-current Research Plan.    The Pharmacopeia Research Personnel
dedicated to the Research Program cannot be reduced during the Research Term
without express written consent of BMS. 
Throughout the Research Term, Pharmacopeia shall assign, as Pharmacopeia
Research Personnel, no fewer than the number of FTE qualified scientists
specified in this Section 3.7.1 to perform the work set forth in the
then-applicable Research Plan.  The
mixture of skills and levels of the Pharmacopeia Research Personnel shall be
appropriate to the scientific objectives of the Research Program.  No later than sixty (60) days following the
end of each Calendar Quarter, during the Research Term Pharmacopeia shall
report to the JRC a listing of the FTEs comprising the Pharmacopeia Research
Personnel and their percentage of time devoted to working on the Research
Program.  If BMS has concern regarding
any specific Pharmacopeia Research Personnel assigned to the Research Program,
such concerns shall be communicated to the JRC for its consideration.


 


b.                   During the Extended Research Term.  At
least three (3) months prior to the beginning of an Extended Research
Term, if applicable, the JRC shall determine the number of Pharmacopeia
Research Personnel to be provided by Pharmacopeia in accordance with Section 3.6.2
above, such number ***, and to be funded by BMS in accordance with Section 3.7.3(b)(ii) below.


 


3.7.2                     Subcontracting. 
Except as provided in the Research Plan or as may be specifically
permitted by the JRC, Pharmacopeia shall be entitled to subcontract to a Third
Party (a “Subcontractor”)
up to *** (***) *** to conduct any of the work for which it is responsible in
the performance of the Research Program (such Subcontractor FTEs to be
considered Pharmacopeia Research Personnel for the purposes of this
Agreement).  In the case of any
subcontracting of Research Program activities by a Party to a Third Party, such
Third Party must have entered into a written agreement with 


 


11

















 


such Party consistent with the terms and conditions of this Agreement,
including provisions (i) protecting and limiting use and disclosure of
Confidential Information and Know-How at least to the same extent as under this
Agreement, (ii) providing for assignment of all Program Inventions and
Program Patents to effect the rights of the Parties under this Agreement, and (iii) obligations
regarding the use and transfer of materials consistent with those contained in
this Agreement.  Each Party is
responsible for compliance by such Third Party with the applicable terms and
conditions of this Agreement in the same way and to the same extent as such
Party.


 


3.7.3                     Funding; Expenses.


 


a.               Responsibility for Expenses for
Conduct of Research Program.  Except as set forth in this Section 3.7.3
and as may be otherwise specifically agreed to in writing by Pharmacopeia and
BMS, each Party shall bear its own costs incurred in conducting work under the
Research Program.


 


b.               Pharmacopeia Research Personnel


 


(i)   During the Research Term. 
Pharmacopeia will bear its own costs, including costs related to the
Pharmacopeia Research Personnel (which may include Subcontractor FTEs under Section 3.7.2
above), standard research supplies, consumables and applicable overhead costs,
in performing its obligations under the Research Program.


 


(ii)   During the Extended Research Term. BMS will pay Pharmacopeia in advance for
the Pharmacopeia Research Personnel assigned to the Research Program in
accordance with Section 3.7.1(b) for each Calendar Quarter (a
prorated amount shall be payable for any portion of a Calendar Quarter) of the
Extended Research Term at the agreed upon FTE Rate.  Such FTE payment obligation of BMS will be
subject to Pharmacopeia providing such qualified Pharmacopeia Research Personnel.  No later than sixty (60) days following the
end of each Calendar Quarter, Pharmacopeia will provide BMS with a report of
the number of FTEs assigned to the Research Program with a summary of their
activities.  Any overpayment by BMS may
be applied by BMS to the funding of Pharmacopeia FTEs in a subsequent Calendar
Quarter.  If the Parties agree that the
activities contemplated by the Research Plan at any time do not justify the
number of Pharmacopeia FTEs allocated to the Research Program, the Parties will
modify the scope of the Research Plan or adjust the number of Pharmacopeia
Research Personnel.


 


c.               Additional Studies. 
During the course of the Research Program, the JRC may request that
Pharmacopeia conduct studies which Pharmacopeia does not have the necessary
internal resources or expertise to conduct (as an example, NovaScreen
studies).  In the event that Pharmacopeia
needs to engage a Third Party to perform such studies, Pharmacopeia will notify
the JRC:   (i) that it does not have the internal
resources or expertise to conduct such studies, (ii) the identity of the
Third Party that Pharmacopeia proposes to engage in such work, and (iii) the
proposed budget for such studies.  If the
JRC approves Pharmacopeia’s engagement of the Third Party to conduct such
studies and the proposed budget, then BMS will reimburse Pharmacopeia for any
external out-of-pocket expenses incurred by Pharmacopeia in undertaking such
additional studies which are not carried out by the Pharmacopeia Research
Personnel.  Absent such approval by the
JRC, Pharmacopeia need not outsource, nor conduct itself, any such additional
study.  Further, notwithstanding the
preceding sentences, nothing in this Agreement shall be deemed to obligate Pharmacopeia
to undertake any study, or to expend its own funds 


 


12

















 


to engage a Third Party to conduct any study, that normally would not
be performed by Pharmacopeia employees in connection with one of Pharmacopeia’s
internal research programs.


 


d.                   Synthesis of Research Compounds. 
Pharmacopeia will synthesize Research Compounds for testing by BMS in
quantities of at least ***.  Upon
direction of the Working Group, Pharmacopeia will scale up synthesis of
Research Compounds selected by the Working Group to quantities of ***.  If the Working Group directs Pharmacopeia to
synthesize quantities of any single Research Compound in excess of 5g,
Pharmacopeia will present the JRC with a proposed budget for such synthesis
(covering Pharmacopeia’s external out-of-pocket costs to be incurred for such
synthesis).  If the JRC approves the
budget for such synthesis, then BMS will reimburse Pharmacopeia for its
external out-of-pocket expenses incurred by Pharmacopeia in undertaking such
synthesis. Absent such approval by the JRC, Pharmacopeia need not outsource,
nor conduct itself, any such synthesis.


 


Section 3.8                                   Research Efforts. 
Subject to Section 3.7, each Party shall use good faith
Commercially Reasonable Efforts to perform its activities under the Research Program,
including its responsibilities under the Research Plan.


 


Section 3.9                                   Materials Transfer.  In
order to facilitate the Research Program, either Party may provide to the other
Party certain materials for use by the other Party in furtherance of the Research
Program.  All such materials shall be
used by the receiving Party in accordance with the terms and conditions of this
Agreement solely for purposes of performing its rights and obligations under
this Agreement, and the receiving Party shall not transfer such materials to
any Third Party unless expressly contemplated by this Agreement or upon the
written consent of the supplying Party.


 


a.               Any
materials provided by BMS to Pharmacopeia in support of the Research Program,
including but not limited to BMS Compounds (such materials being individually
and collectively referred to as the “BMS
Materials”) shall be used
by Pharmacopeia solely for purposes of performing the Research Program and for
no other purpose, and any remaining BMS Materials will be returned to BMS (or
destroyed as may be requested by BMS in writing) promptly following the end of
the Research Term or earlier upon request by BMS.  All information related to such BMS Materials
shall be deemed to be BMS Confidential Information.  All such materials must be used
with prudence and appropriate caution in any experimental work, since all of
their characteristics may not be known.


 


b.               All physical samples of the BMS Compounds and
Research Compounds are and will be the property of BMS. In general, physical
samples of BMS Compounds and Research Compounds in Pharmacopeia’s possession
during the Research Term will be shipped from Pharmacopeia to BMS as the JRC
directs.  Any remaining physical samples
of Research Compounds or BMS Compounds will be sent to BMS at the end of the
Research Term.


 


Section 3.10                            Research Program Records.  Pharmacopeia will maintain complete and accurate records of all work
conducted in the performance of the Research Program and all results, data,
inventions and developments made in the performance of the Research
Program.  Such records will be in
sufficient detail and in good scientific manner appropriate for patent and
regulatory purposes.  Pharmacopeia shall
maintain appropriate records sufficient to document the work performed by each
of the individuals comprising the FTEs working in support of the Research
Program and the time such individuals spent working in support of the Research
Program.  Pharmacopeia shall provide BMS
the right to inspect such records, and shall provide copies of all requested
records, to the extent reasonably required for the performance of BMS’ rights
and obligations under this Agreement; provided however,
that BMS shall maintain such records and the information of Pharmacopeia in
confidence in accordance 


 


13

















 


with Article 7 hereof and shall not use such records or
information except to the extent otherwise permitted by this Agreement.


 


Each Party agrees to maintain a policy that requires
its employees to record and maintain all data and information developed during
the Research Program 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 or other suitable means that are dated
and corroborated by non-inventors on a regular, contemporaneous basis.


 


Section 3.11                            Disclosure of Results of Research
Program.  The results of all work performed by the
Parties as part of the Research Program shall be promptly disclosed to the
other Party in a reasonable manner as such results are obtained.  Pharmacopeia shall provide BMS monthly with
reports of the work performed under the Research Program and the Research
Results in a format acceptable to the Working Group and JRC.  Pharmacopeia and BMS will provide reports and
analyses at each JRC meeting, and more frequently on reasonable request by the
JRC, detailing the current status of the Research Program, including but not
limited to the utilization of the Pharmacopeia Research Personnel.  Within thirty (30) days following the end of
each Calendar Quarter, Pharmacopeia and BMS Alliance Managers and/or JRC
members, as applicable, shall exchange and provide to the JRC a report in a
mutually acceptable format summarizing in reasonable detail the work performed
under the Research Program and results achieved during the preceding Calendar
Quarter.  The results, reports, analyses
and other information regarding the Research Program disclosed by one Party to
the other Party pursuant hereto may be used only in accordance with the rights
granted and other terms and conditions under this Agreement.  Upon reasonable request by BMS, Pharmacopeia
shall provide BMS with additional data, results and other information with
respect to the work performed by Pharmacopeia in the performance of the
Research Program.  Any reports required
under this Section 3.11 may take the form of and be recorded in minutes of
the JRC that will contain copies of any slides relating to the results and
presented to the JRC.  Upon direction of
the JRC, the Parties will setup and maintain a secure electronic data storage
system where the Research Results will be uploaded and stored by each Party,
the electronic data storage system will accessible only by the Parties (and any
Subcontractors as appropriate).


 


ARTICLE 4 - 

DEVELOPMENT, COMMERCIALIZATION & MANUFACTURING


 


Section 4.1                                   Development, Commercialization
and Regulatory Responsibilities.  Other than Pharmacopeia’s
responsibilities under the Research Program, BMS shall have sole responsibility
(including without limitation sole responsibility for all funding, resourcing
and decision-making) for all further development and commercialization with
respect to the BMS Compounds, Research Compounds and Products incorporating a
BMS Compound or Research Compound.  BMS
will be solely responsible for, and will solely own, all regulatory filings
related to BMS Compounds, Research Compounds and Products incorporating a BMS
Compound or Research Compound.


 


ARTICLE 5 - 

FINANCIAL PROVISIONS


 


Section 5.1                                   Milestone Payments by BMS.  Provided that (i) *** and (ii) ***, in the event that
***.  Furthermore, if the ***.  It is understood and agreed that BMS shall
not be required to pay more than one set of milestone payments as described in
this Section.


 


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ARTICLE 6 - 

PRESS RELEASES & PUBLICATIONS


 


Section 6.1                                   Press Releases; Public
Disclosure.


 


6.1.1                     Any press releases or other public statements
regarding this Agreement will be made solely pursuant to Section 15.9 of
the License Agreement and,  except as set
forth in Section 15.9 of the License Agreement, each Party agrees not to
issue any press release or other public statement disclosing other information
relating to this Agreement or the transactions contemplated hereby without the
prior written consent of the other Party.


 


Section 6.2                                   Publication of Research Results.


 


6.2.1                     Publication by Pharmacopeia. 
Pharmacopeia shall not publish, present or otherwise disclose to the
public the Research Results or any information related to the Research Program,
including, but not limited to any information related to the BMS Compounds,
Research Compounds, strategy, screening tier, and novel assays.


 


6.2.2                     Publication by BMS.  BMS
will have the sole and exclusive right to publish the Research Results, and all
information related to the BMS Compounds and Research Compounds.  Notwithstanding the foregoing, BMS will not
publish any Confidential Information of Pharmacopeia, and will not use the name
of Pharmacopeia (or any of its directors, employees, or Affiliates) in any such
publication without the express written consent of Pharmacopeia.


 


6.2.3                     For clarification, this Section 6.2
shall not apply with respect to the use and disclosure of Confidential
Information as specifically provided for in Section 6.1 or Article 7
(i.e., a disclosure expressly permitted and made in accordance with Section 6.1
or Article 7).


 


ARTICLE 7 - 

CONFIDENTIALITY


 


Section 7.1                                   Disclosure and Use Restriction.  Each
Party agrees that, for so long as this Agreement is in effect and for a period
of *** (***) years thereafter, a Party (the “Receiving Party”) receiving Confidential
Information of the other Party (the “Disclosing Party”)
shall (i) maintain in confidence such Confidential Information using not
less than the efforts such Receiving Party uses to maintain in confidence other
proprietary industrial information of similar kind and value, (ii) not
disclose such Confidential Information except to the Receiving Party’s
employees having a need-to-know such Confidential Information solely for
purposes of performing Receiving Party’s obligations under this Agreement, (iii) not
disclose such Confidential Information to any Third Party without the prior
written consent of the Disclosing Party, except for disclosures expressly
permitted by this Agreement, and (iv) not use such Confidential
Information for any purpose except those expressly permitted by this
Agreement.  For avoidance of doubt,
Pharmacopeia shall be permitted to use the BMS Confidential Information solely
for purposes of performing the Research Program in accordance with the Research
Plan and for no other purpose.  Upon
completion of the Research Program or earlier upon written request by BMS,
Pharmacopeia shall return to BMS or destroy any BMS Confidential Information,
with the understanding that Pharmacopeia will be entitled to retain one (1) copy
of BMS Confidential Information in the files of its legal counsel solely for
archival purposes.


 


15

















 


Section 7.2                                   Authorized Disclosure.  To
the extent (and only to the extent) that it is reasonably necessary or appropriate
to fulfill its obligations or exercise its rights under this Agreement, a Party
may disclose Confidential Information belonging to the other Party in the
following instances:


 


(a)                                        filing or prosecuting patent applications in
accordance with this Agreement;


 


(b)                                       made to the Regulatory Authorities as
necessary for the development or commercialization of a Product in a country,
as required in connection with any filing, application or request for
regulatory approval; provided, however,
that reasonable measures will be taken to assure confidential treatment of such
information;


 


(c)                                        prosecuting or defending litigation;


 


(d)                                       complying with applicable governmental laws
and regulations (including, without limitation, the rules and regulations
of the Securities and Exchange Commission or any national securities exchange,
and compliance with tax laws and regulations) and with judicial process, if (i) in
the reasonable opinion of the Receiving Party’s counsel, such disclosure is
necessary for such compliance and (ii) such disclosure is made in
accordance with Section 7.3 or 7.4 as applicable; and


 


(e)                                        disclosure, in connection with the
performance of this Agreement and solely on a need-to-know basis, to
Affiliates, potential or actual collaborators (including potential licensees),
potential or actual investment bankers, investors, lenders, or acquirers,  or  employees, independent contractors
(including without limitation consultants and clinical investigators) or
agents, each of whom prior to disclosure must be bound by written obligations
of confidentiality and non-use no less restrictive than the obligations set
forth in this Article 7; provided, however,
that the Receiving Party shall remain responsible for any failure by any Person
who receives Confidential Information pursuant to this Article 7 to treat
such Confidential Information as required under this Article 7.


 


If and whenever any Confidential Information
is disclosed in accordance with this Section 7.2, such disclosure shall
not cause any such information to cease to be Confidential Information except
to the extent that such permitted disclosure results in a public disclosure of
such information (other than by breach of this Agreement).  Where reasonably possible and subject to
Sections 7.3 and 7.4, the Receiving Party shall notify the Disclosing Party of
the Receiving Party’s intent to make such disclosure pursuant to clauses (a) through
(d) of this Section 7.2 sufficiently prior to making such disclosure
so as to allow the Disclosing Party adequate time to take whatever action it
may deem appropriate to protect the confidentiality of the information.


 


For purposes of this Agreement, the Research Results shall be treated
as Confidential Information of BMS. 
Accordingly, Pharmacopeia shall be considered the Receiving Party with
respect to the Research Results and shall be subject to all of the restrictions
and obligations of this Article 7 with respect to the disclosure and use
of such Research Results to the same extent as applicable to Confidential Information
disclosed to Pharmacopeia by BMS.


 


Section 7.3                                   Required Disclosure.  A
Receiving Party may disclose Confidential Information pursuant to
interrogatories, requests for information or documents, subpoena, civil
investigative demand issued by a court or governmental agency or as otherwise
required by Law; provided however, that the
Receiving Party shall notify the Disclosing Party promptly upon receipt
thereof, giving (where practicable) the Disclosing Party sufficient advance
notice to permit it to oppose, limit or seek confidential treatment for such
disclosure, and to file for patent protection if relevant; and provided, further, that the Receiving Party shall furnish
only that portion of the Confidential Information which it is advised by
counsel is legally required whether or not a protective order or other similar
order is obtained by the Disclosing Party.


 


16














 


Section 7.4                                   Securities Filings.  In
the event either Party proposes to file with the Securities and Exchange
Commission or the securities regulators of any state or other jurisdiction a
registration statement, periodic report, or any other disclosure document which
describes or refers to this Agreement under the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended, or any other
applicable securities Law, the Party shall notify the other Party of such
intention and shall provide such other Party with a copy of relevant portions
of the proposed filing not less than three (3) Business Days prior to such
filing (provided that, whenever practicable,
such portions shall be provided not less than five (5) Business Days prior
to such filing) (and any revisions to such portions of the proposed filing a
reasonable time prior to the filing thereof), including any exhibits thereto
relating to the Agreement, and shall use reasonable efforts to obtain
confidential treatment of any information concerning the Agreement that such
other Party requests be kept confidential (except to the
extent advised by counsel that confidential treatment is not available for such
information), and shall only disclose Confidential Information which it is
advised by counsel or, if applicable, by a Regulatory Authority, is legally
required to be disclosed.  No such notice
shall be required under this Section 7.4 if the substance of the
description of or reference to this Agreement contained in the proposed filing
has been included in any previous filing made by either Party hereunder or
otherwise approved by the other Party.


 


Section 7.5                                   Terms of Agreement.  The
existence and the terms and conditions of the Agreement that the Parties have
not specifically agreed to disclose pursuant to Article 6 or Section 7.4
shall be considered Confidential Information of both Parties.  Either Party may disclose such terms to a bona fide potential licensee, investor, investment banker,
acquirer, merger partner or other potential financial partner, and their
attorneys and agents, provided that
each such Person to whom such information is to be disclosed is informed of the
confidential nature of such information and has entered into a written
agreement with the Party requiring such Person to keep such information
confidential.


 


Section 7.6                                   Injunctive Relief.  The
Parties hereto understand and agree that remedies at Law may be inadequate to
protect against any breach of any of the provisions of this Article 7 by
either Party or their employees, agents, officers or directors or any other
person acting in concert with it or on its behalf.  Accordingly, each Party shall be entitled to
seek injunctive relief by a court of competent jurisdiction against any action
that constitutes any such breach of this Article 7.


 


ARTICLE 8 - 

PATENTS


 


Section 8.1                                   Ownership of Inventions and
Patents.


 


(a)                                  Except as set forth in Section 2.1
above, title to inventions, discoveries, improvements and other technology,
whether or not patentable, conceived, made or reduced to practice in the
performance of the Research Program under this Agreement (collectively, the “Program Inventions”) and any
Patents claiming such Program Inventions (“Program
Patents”), are retained by the Party that is the employer
of the inventor (or, in the case of consultants and (sub)contractors, the Party
for which the consultant or (sub)contractor is providing its services).  The Parties agree that the United States
federal patent law on inventorship shall determine the inventorship of any
invention and the names of the inventors on any patent filings, whether sole or
joint inventions, which arise in connection with activities conducted pursuant
to this Agreement.  BMS shall own Program
Inventions invented solely by employees, consultants and/or (sub)contractors of
BMS (the “BMS Inventions”)
and any Patents claiming such Program Inventions (the “BMS Program Patents”).  Subject to Section 2.1, Pharmacopeia
shall own Program Inventions invented solely by employees, consultants and/or
(sub)contractors of Pharmacopeia, including the Pharmacopeia Research Personnel
(the “Pharmacopeia Inventions”)
and any Patents claiming such Program Inventions (the “Pharmacopeia Program Patents”).  Subject to 


 


17

















 


Section 2.1,
Pharmacopeia and BMS shall own jointly such Program Inventions invented jointly
by employees, consultants and/or (sub)contractors of Pharmacopeia and BMS (the “Joint Inventions”) and any
Patents claiming such jointly invented Program Inventions (the “Joint Patents”).  Pharmacopeia shall promptly disclose to BMS
any such Pharmacopeia Invention or Joint Invention arising from or made in the
performance of the Research Program and any patent or patent application
claiming such Program Invention.


 


(b)                                 This Agreement shall be understood to be a
joint research agreement to discover Research Compounds and associated uses in
accordance with 35 U.S.C. § 103(c)(3).


 


(c)                                  Each Party has entered or will enter into
binding agreements obligating all employees, consultants and/or
(sub)contractors performing activities in the performance of the Research
Program to assign (or, in the case of (sub)contractors, assign or license) the
employee’s, consultant’s and/or (sub)contractor’s interest in any invention and
related intellectual property conceived or reduced to practice in the course of
such activities to the Party for which such employee, consultant and/or
(sub)contractor is providing its services.


 


Section 8.2                                   Filing, Prosecution and
Maintenance of Patent Rights.


 


8.2.1                     Solely Owned Patents. 
Subject to the other sections of this Article 8, including the
other subsections of this Section 8.2 below, each Party will have the sole
right, at its cost and expense and at its sole discretion, to prepare, file,
prosecute (including, without limitation, to control any interferences, reissue
proceedings, oppositions and reexaminations), maintain, enforce and defend
throughout the world any Patents solely owned or controlled by such Party.  For purposes of the preceding sentence, all
Pharmacopeia Program Patents assigned to BMS pursuant to Section 2.1 shall
be understood to be solely owned or controlled by BMS.


 


8.2.2                     Filing, Prosecution and
Maintenance of Pharmacopeia Program Patents.    As between Pharmacopeia and
BMS, Pharmacopeia shall be responsible for the preparation, filing, prosecution
(including, without limitation, any interferences, reissue proceedings,
oppositions and reexaminations) and maintenance of Pharmacopeia Program Patents
(other than those assigned to BMS pursuant to Section 2.1), provided that
for those Pharmacopeia Program Patents exclusively licensed to BMS pursuant to Section 2.2
BMS and Pharmacopeia will agree upon an outside counsel for the filing,
prosecution and maintenance of such Patents. 
Pharmacopeia shall be responsible for all costs incurred by Pharmacopeia
with respect to such preparation, filing, prosecution and maintenance of such
Pharmacopeia Program Patents, except in the case of those Pharmacopeia Program
Patents exclusively licensed to BMS pursuant to Section 2.2, for which BMS
shall be responsible for all costs incurred by Pharmacopeia.  At BMS’ reasonable request, Pharmacopeia, or
its outside counsel, shall promptly provide BMS with an update of the filing,
prosecution and maintenance status for each of the Pharmacopeia Program
Patents.  In addition, for any
Pharmacopeia Program Patents that are licensed to BMS pursuant to Article 2,
Pharmacopeia will coordinate the preparation, filing and prosecution of such
Patents with BMS and incorporate reasonable comments, suggestions and requests
from BMS in the preparation, filing and prosecution of such Patents.  If BMS specifically directs that a patent
application within the Pharmacopeia Program Patents that are licensed to BMS
pursuant to Article 2 be filed in a country where Pharmacopeia was not
intending to file such patent application, then Pharmacopeia will prepare, file
and prosecute such patent application and will consult with BMS at all times to
assure that such patent application(s) cover all items of commercial
interest and importance.  With respect to
all reasonable documented attorneys’ fees and other out-of-pocket costs paid by
Pharmacopeia in connection with the preparation, filing, prosecution, and
maintenance by Pharmacopeia of  said
Pharmacopeia Program Patent for those countries as to which BMS has
specifically directed that a patent application be filed (the “Costs”),
until such time as BMS notifies Pharmacopeia that it is no longer willing to
cover such Costs as 


 


18

















 


to any country(ies) and/or patent application(s), BMS shall reimburse
Pharmacopeia for *** of such Costs (it being understood that, as of such time
as BMS notifies Pharmacopeia that BMS is no longer willing to cover such Costs
as to any country(ies) and/or patent application(s), Pharmacopeia shall be free
to discontinue prosecution of, or otherwise abandon, such country(ies) and/or
patent application(s) without further notice or obligation to BMS).  In the event that Pharmacopeia does not want
to file a particular patent application covering a Program Invention which is a
Pharmacopeia Invention, or to continue the prosecution, maintenance or defense
of a particular Pharmacopeia Program Patent which is licensed to BMS pursuant
to Article 2, Pharmacopeia shall so notify BMS, and if BMS wants to file
such patent application or continue the prosecution or maintenance of such
Patent, Pharmacopeia shall assign such Patent to BMS and BMS may prosecute and
maintain such Patent at its sole discretion and expense.


 


8.2.3                     Filing, Prosecution and
Maintenance of Joint Patents.    For Joint Patents (other than those
assigned to BMS pursuant to Section 2.1), Pharmacopeia and BMS agree to
meet and confer in order to discuss whether, and in what countries, Joint
Patents should be filed.  Unless the
Parties agree otherwise, BMS shall handle the preparation, filing, prosecution
and maintenance of such Joint Patents, and BMS may elect to use either its
in-house patent counsel or external counsel reasonably acceptable to
Pharmacopeia for the filing and prosecution of such Joint Patents, at BMS’ sole
cost and expense.  In the event that BMS
does not want to continue to be responsible for the costs and expenses with
respect to the filing, prosecution and/or maintenance of a particular Joint
Patent, BMS shall so notify Pharmacopeia, and if Pharmacopeia wants to continue
the filing, prosecution and/or maintenance of such Joint Patent it may do so,
subject to Section 8.2.4 below, at its sole expense.


 


8.2.4                     Cooperation.  In accordance with the foregoing, each Party will cooperate reasonably
in the preparation, filing, prosecution, and maintenance of the Program Patent
Rights.  Such cooperation includes (a) promptly
executing all papers and instruments and requiring employees (and other persons
under obligation to assign Patents to such Party) to execute such papers and
instruments as reasonable and appropriate so as to enable such other Party, to
prepare, file, prosecute, and maintain such Patents in any country; and (b) promptly
informing such other Party of matters that may affect the preparation, filing,
prosecution, or maintenance of the Program Patents and Joint Patents.


 


Section 8.3                                   Patent Term Extension. 
Pharmacopeia and BMS shall each cooperate with one another and shall use
commercially reasonable efforts in obtaining patent term extensions (including
without limitation, any pediatric exclusivity extensions as may be available)
or supplemental protection certificates or their equivalents in any country
with respect to Patents covering Products. 
If elections with respect to obtaining such patent term extensions or
supplemental protection are to be made, BMS shall have the right to make such
election, provided that such election will be made
in accordance with applicable Law so as to maximize the period of marketing
exclusivity for such Product.


 


Section 8.4                                   Enforcement of Patents


 


8.4.1                     Enforcement of Solely Owned
Patents.  Except as set forth in Section 8.4.2
below for those Pharmacopeia Program Patents exclusively licensed to BMS
pursuant to Section 2.2 and Joint Patents, each Party will have the sole
right and responsibility to enforce, at its discretion, any Patents solely
owned by such Party.  For purposes of the
preceding sentence, all Pharmacopeia Program Patents assigned to BMS pursuant
to Section 2.1 shall be understood to be solely owned by BMS.


 


8.4.2                     Enforcement of Pharmacopeia
Program Patents and Joint Patents Licensed to BMS.


 


a.               Enforcement by BMS.  In
the event that Pharmacopeia or BMS becomes aware of a suspected infringement of
any Pharmacopeia Program Patent exclusively licensed to BMS 


 


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pursuant to Section 2.2 or Joint Patent, or any such Pharmacopeia
Program Patent or Joint Patent is challenged in any action or proceeding (other
than any interferences, reissue proceedings, oppositions or reexaminations,
which are addressed above), such Party shall notify the other Party promptly,
and following such notification, the Parties shall confer.  BMS shall have the right, but shall not be
obligated, to defend any such action or proceeding or bring an infringement
action with respect to such infringement to the extent relevant to BMS’s
exclusive rights hereunder at its own expense, in its own name and entirely
under its own direction and control, or settle any such action, proceeding or
dispute by license (to the extent such sublicense is permitted under this
Agreement), subject to the following. 
Pharmacopeia shall reasonably assist BMS in any action or proceeding
being defended or prosecuted if so requested, and shall lend its name to such
actions or proceedings if reasonably requested by BMS or required by Applicable
Law.  BMS shall reimburse Pharmacopeia
for the documented out-of-pocket costs Pharmacopeia reasonably incurs in
providing such assistance requested by BMS. 
In the event Pharmacopeia is a required party to the proceeding or
action, Pharmacopeia shall have the right to be represented by its own counsel
(such selection to be subject to BMS’s approval, such approval not to be
unreasonably withheld), and BMS shall reimburse Pharmacopeia for the documented
out-of-pocket costs Pharmacopeia reasonably incurs that are reasonably related
to the proceeding or action, including attorneys’ fees; provided
that BMS shall retain overall responsibility for the prosecution of such action
or proceeding in such event.  In the
event that Pharmacopeia is not a necessary party to the proceeding or action,
Pharmacopeia shall have the right to participate and be represented in any such
suit by its own counsel at its own expense, provided that
BMS shall retain overall responsibility for the prosecution of such action or
proceedings in such event.  No settlement
of any such action or proceeding (a) that restricts the validity or scope,
or adversely affects the enforceability, of a (i) Joint Patent or (ii) Pharmacopeia
Program Patent which, in each case (i) and (ii), is not exclusively
licensed to BMS under Section 2.2, or (b) which could be reasonably
expected to have a material adverse financial impact on Pharmacopeia, may be
entered into by BMS without the prior written consent of Pharmacopeia.


 


b.               Enforcement by Pharmacopeia.  If
BMS elects not to settle, defend or bring any action for infringement of a
Pharmacopeia Program Patent or Joint Patent described in Section 8.4.2 and
so notifies Pharmacopeia, including following any request by Pharmacopeia to do
so, then Pharmacopeia may defend or bring such action at its own expense, in
its own name; provided however that,
Pharmacopeia agrees not to so settle, defend or bring any action for
infringement of a Pharmacopeia Program Patent or Joint Patent upon BMS’s
request based on BMS’s good faith reasonable determination, the basis for which
shall be provided to Pharmacopeia, that it is not in the best interest of the
Parties to so settle, defend or bring such action for infringement.  In the case where Pharmacopeia proceeds to
settle, defend or bring an action for such infringement, the following shall apply.  BMS shall reasonably assist Pharmacopeia in
any action or proceeding being defended or prosecuted if so requested, and
shall lend its name to such actions or proceedings if requested by Pharmacopeia
or required by Applicable Law. 
Pharmacopeia shall reimburse BMS for the documented external costs BMS
reasonably incurs in providing such assistance as specifically requested in
writing by Pharmacopeia.  BMS shall have
the right to participate and be represented in any such suit by its own counsel
at its own expense, provided that
Pharmacopeia shall retain overall responsibility for the prosecution of such
suit or proceedings in such event.  No
settlement of any action or proceeding defended or brought by Pharmacopeia with
respect to a Pharmacopeia Program Patent exclusively licensed to BMS under Article 2
or any Joint Patent, (a) that restricts the validity or scope, or
adversely affects the enforceability, of such Patent, or (b) which could
be reasonably expected to have a material adverse financial impact on BMS, may
be entered into by Pharmacopeia without the prior written consent of BMS.


 


c.               Withdrawal.  If
either Party brings an action or proceeding under this Section 8.4 with regard to any Pharmacopeia Program Patents
which are exclusively licensed to BMS under Section 2.2 or Joint Patents,
and subsequently ceases to pursue or withdraws from such action or 


 


20

















 


proceeding, it shall promptly notify the other Party and the other
Party may substitute itself for the withdrawing Party and pursue such action or
proceeding in accordance with the terms of this Section 8.4.


 


d.               Cooperation.  The
Party not enforcing the applicable Patent will provide reasonable assistance to
the other Party (at such other Party’s expense), including providing access to
relevant documents and other evidence, making its employees available at
reasonable business hours, and joining the action to the extent necessary to
allow the enforcing Party to maintain the action.


 


e.               Damages.  In the
event that either Party exercises the rights conferred in this Section 8.4 and recovers any
damages or other sums in such action, suit or proceeding or in settlement
thereof, such damages or other sums recovered shall first be applied to all
out-of-pocket costs and expenses incurred by the Parties in connection
therewith, including, without limitation, attorneys’ fees.  Except as otherwise provided in this Section 8.4,
each Party will bear its own expenses with respect to any suit or other
proceeding against an infringer.  If such
recovery is insufficient to cover all such costs and expenses of both Parties,
it shall be shared pro rata in proportion to the total of such costs and
expenses incurred by each Party.  If
after such reimbursement any funds shall remain from such damages or other sums
recovered, such funds shall remain with the Party that brought the enforcement
action at its expense.


 


Section 8.5                                   Notification of Patent
Certification.  Pharmacopeia shall notify and provide BMS
with copies of any allegations of alleged patent invalidity, unenforceability
or non-infringement of any Pharmacopeia Program Patent covering a Research
Compound or BMS Compound, or a Product (including methods of use thereof)
pursuant to a Paragraph IV Patent Certification by a Third Party filing an
Abbreviated New Drug Application, an application under §505(b)(2) or other
similar patent certification by a Third Party, and any foreign equivalent
thereof for a Generic Product.  Such
notification and copies shall be provided to BMS by Pharmacopeia as soon as
practicable and at least within five (5) Business Days after Pharmacopeia
receives such certification, and shall be sent by facsimile and overnight
courier to the address set forth below:


 


Bristol-Myers Squibb Company


P.O. Box 4000


Route 206 & Province Line Road


Princeton, New Jersey 08543-4000


Attention: 
Vice President and Chief Intellectual Property Counsel


Telephone: 
***


Facsimile: 
***


 


Section 8.6                                   Further Actions.  Each
Party shall, upon the reasonable request of the other Party, provide such
assistance and execute such documents as are reasonably necessary for such
Party to exercise its rights and/or perform its obligations pursuant to this Article 8;
provided however, that neither Party
shall be required to take any action pursuant to Article 8 that such Party
reasonably determines in its sole judgment and discretion conflicts with or
violates any applicable court or government order or decree.


 


Section 8.7                                   Infringement Claims; Oppositions.  BMS
and Pharmacopeia shall promptly inform the other in writing of any written
notice to it of alleged infringement or misappropriation, based on the
research, development, making, using, importing, exporting or selling of a
Research Compound or Product incorporating a Research Compound, of a Third
Party’s intellectual property rights of which it shall become aware.  The Parties shall confer on the handling of
such matter.  Pharmacopeia shall not ***,
and BMS shall not ***.  BMS and
Pharmacopeia shall each keep the other advised of all material developments in
the conduct of any proceedings in defending any claim of such 


 


21

















 


alleged infringement or misappropriation and shall cooperate with the
other in the conduct of such defense.  In
no event may either Party settle any such infringement or misappropriation
claim in a manner that would limit the rights of the other Party or impose any
obligation on the other Party, without such other Party’s prior written
consent, such consent not to be unreasonably withheld or delayed.


 


BMS and Pharmacopeia shall promptly inform the other in writing of any
challenge to  Pharmacopeia Program Patents and
Joint Patents (an interference proceeding or opposition related to a
Pharmacopeia Program Patent or Joint Patent will be deemed a challenge for
purposes of this paragraph).  The Parties
shall confer on the handling of such matter, and such matter will be handled in
accordance with Section 8.2.3 and 8.2.4 above.


 


Section 8.8                                   Records Regarding Pharmacopeia
Program Patents and Joint Patents.  Each Party shall assign patent
counsel representatives who, under the direction of the JRC, shall be
responsible for coordinating activities between the Parties in accordance with
this Article 8.  Such
representatives will use good faith diligent efforts to maintain a report
listing the Pharmacopeia Program Patents and Joint Patents that are subject to
the license granted to BMS under Section 2.2 or 2.3.  Such report shall be used to facilitate the
identification and tracking of the Pharmacopeia Program Patents and Joint
Patents licensed under this Agreement, but shall not, unless specifically
agreed to in a separate written agreement signed by authorized representatives
of both Parties, be considered to be a then-current complete and binding list
of the Pharmacopeia Program Patents and Joint Patents licensed under this
Agreement.


 


ARTICLE 9 - 

TERM AND TERMINATION


 


Section 9.1                                   Term.  The
term of this Agreement (the “Term”)
commences upon the Effective Date and, unless earlier terminated in accordance
with the provisions of this Article 9, will continue until the expiration
of the Research Term or any Extended Research Term, provided
that the obligation to pay milestones as described in Section 5.1 will
survive expiration of the Term.


 


Section 9.2                                   BMS Right to Terminate Without
Cause.


 


(a)                                  BMS may terminate this Agreement in full (but
not in part), effective upon ninety (90) calendar days prior written notice to
Pharmacopeia.


 


(b)                                 If BMS elects not to substitute a new Research
Program into the Discovery Collaboration within the sixty (60) day time period
set forth in Section 3.1.3, Pharmacopeia’s obligations to continue to
perform the Discovery Collaboration shall automatically terminate.


 


Section 9.3                                   Material Breach.


 


(a)                                  If either Party believes that the other is in
material breach of this Agreement, then the non-breaching Party may deliver
notice of such breach to the other Party. 
In such notice the non-breaching Party shall identify the actions or
conduct that it wishes such Party to take for an acceptable and prompt cure of
such breach; provided that such identified
actions or conduct shall not be binding upon the other Party with respect to
the actions that it may need to take to cure such breach.  The allegedly breaching Party shall have
ninety (90) days to either cure such breach or, if cure cannot be reasonably
effected within such ninety (90) day period, to deliver to the other Party a
plan for curing such breach which the breaching Party believes is reasonably
sufficient to effect a cure within a reasonable period; provided
that the breaching Party must notify the non-breaching Party as soon
as practicable after the 


 


22

















 


breaching Party becomes aware that it will not be able to cure the
breach within the ninety (90) day period. 
Following agreement to such plan by the other Party, such agreement not
to be unreasonably withheld, the breaching Party shall use commercially
reasonable efforts to carry out the plan and cure the breach.  If the Party receiving notice of breach fails
to cure such breach within the ninety (90) day period or the cure period
identified in the proposed corrective plan, as applicable, or the Party
providing the notice reasonably determines that the proposed corrective plan or
the actions being taken to carry it out is not commercially practicable, the
Party originally delivering the notice may declare a breach hereunder upon
thirty (30) days advance written notice. 
Subject to Section 9.3(b), such notice shall effectively terminate
this Agreement upon expiration of such thirty (30) day period.


 


(b)                                 Notwithstanding the foregoing, if the
allegedly breaching Party disputes in good faith the existence or materiality
of any such breach, and provides notice to the other Party (the “Other Party”) of such dispute
within such ninety (90) day period, the Other Party shall not have the right to
terminate this Agreement in accordance with this Section 9.3 unless and
until it has been determined in accordance with Section 12.4 that this
Agreement was materially breached by the allegedly breaching Party and that
Party fails to cure such breach within ninety (90) days following such
determination.  It is understood and
acknowledged that during the pendency of such a dispute, all of the terms and
conditions of this Agreement shall remain in effect and the Parties shall
continue to perform all of their respective obligations hereunder.


 


(c)                                  This Section 9.3 shall be subject to and
shall not limit the provisions of Section 9.4 and Section 9.5.


 


Section 9.4                                   Consequences of Termination.


 


9.4.1                     Licenses and Assignment
Obligations.  BMS’ rights and Pharmacopeia’s obligations
under Article 2 shall survive termination and expiration of this
Agreement.


 


9.4.2                     Return of Information and
Materials.  Upon early termination of this Agreement in
its entirety by either Party pursuant to this Article 9, each Party will
return to the other (or destroy, as directed by such other Party) all data,
files, records and other materials containing or comprising the other Party’s
Confidential Information. 
Notwithstanding the foregoing, (i) BMS will be permitted to retain
all Research Results (which are deemed to be Confidential Information of BMS
pursuant to Section 7.1), (ii) subject to clause (iii) below,
Pharmacopeia will destroy all Research Results in its possession as of the date
of termination or expiration, and (iii) each Party will be entitled to
retain one (1) copy of the other Party’s Confidential Information in the
files of its legal counsel solely for archival purposes.


 


9.4.3                     Termination Pursuant to Section 9.2.   For
the avoidance of doubt, in the event BMS terminates this Agreement pursuant to Section 9.2(a) or
elects not to substitute a new Research Program into the Discovery Collaboration
pursuant to Section 9.2(b), then Pharmacopeia’s rights and BMS’
obligations under the License Agreement shall survive without any additional
obligation by either Party.


 


Section 9.5                                   Accrued Rights; Surviving
Obligations.


 


9.5.1                     Accrued Rights.  Termination
or expiration of this Agreement for any reason will be without prejudice to any
rights or financial compensation that will have accrued to the benefit of a
Party prior to such termination or expiration. 
Such termination or expiration will not relieve a Party from obligations
that are expressly indicated to survive the termination or expiration of this
Agreement 


 


23

















 


(including the Milestone Payments by BMS to Pharmacopeia pursuant to Article 5,
and the obligations to license or assign compounds and inventions pursuant to Article 2).


 


9.5.2                     Survival.  The
definitions contained in Article 1, the license and obligations to assign
under Article 2, as well as Articles 6, 7, 8, 10, and 12, and Sections
9.5, 9.6 and 11.2 of this Agreement will survive expiration or termination of
this Agreement for any reason.


 


Section 9.6                                   Rights in Bankruptcy.  All
rights and licenses granted under or pursuant to this Agreement by Pharmacopeia
or BMS are, and shall otherwise be deemed to be, for purposes of Section 365(n) of
the U.S. Bankruptcy Code (i.e., Title 11 of the U.S. Code) or analogous
provisions of Applicable Law outside the United States, licenses of rights to “intellectual
property” as defined under Section 101 of the U.S. Bankruptcy Code or
analogous provisions of Applicable Law outside the United States.  The Parties agree that each Party, as
licensee of such rights under this Agreement, shall retain and may fully
exercise all of its rights and elections under the U.S. Bankruptcy Code or any
other provisions of Applicable Law outside the United States that provide
similar protection for ‘intellectual property.’ 
The Parties further agree that, in the event of the commencement of a
bankruptcy proceeding by or against a Party under the U.S. Bankruptcy Code or
analogous provisions of Applicable Law outside the United States, the Party
that is not subject to such proceeding will be entitled to a complete duplicate
of (or complete access to, as appropriate) such intellectual property and all
embodiments of such intellectual property, which, if not already in the non
subject Party’s possession, shall be promptly delivered to it upon the non
subject Party’s written request therefor. 
Any agreements supplemental hereto shall be deemed to be “agreements
supplementary to” this Agreement for purposes of Section 365(n) of
the U.S. Bankruptcy Code.


 


ARTICLE 10 - 

INDEMNIFICATION, INSURANCE AND LIMITATION OF LIABILITY


 


Section 10.1                            Indemnification of Pharmacopeia.  BMS
agrees to defend Pharmacopeia,
its Affiliates and their respective directors, officers, employees and agents,
and their respective successors, heirs and assigns (collectively, the “Pharmacopeia Indemnitees”), and
shall indemnify and hold harmless the Pharmacopeia
Indemnitees, from and against any liabilities, losses, costs, damages,
fees or expenses payable to a Third Party, and reasonable attorney’s fees and
other legal expenses with respect thereto (collectively, “Losses”)
arising out of any claim, action, lawsuit or other proceeding by a Third Party
(collectively, “Third Party Claims”) brought
against any Pharmacopeia Indemnitee
and resulting from or occurring as a result of: (a) whether or not
negligence is found, the development, manufacture, use, handling, storage, sale
or other commercialization or disposition of any Product (or any product
incorporating a compound derived from a BMS Compound) by BMS or its Affiliates
or licensees, (b) any breach by BMS
of any of its representations or warranties pursuant to this Agreement, (c) the
gross negligence or willful misconduct of BMS or any BMS Affiliate or licensee
in connection with this Agreement, (d) any breach of Applicable Law in
connection with this Agreement by BMS or any BMS Affiliate or licensee, or (e) claims
arising from the infringement of Third Party intellectual property related to a
Research Program selected by BMS pursuant to Section 3.1.3, including
but not limited to patent infringement claims in connection with the use of any
Research Target or of any materials relating to any Research Target but excluding any intellectual property that
Pharmacopeia routinely uses in its business that is not specifically related to
the Research Program.


 


Section 10.2                            Indemnification of BMS.  Pharmacopeia agrees to defend BMS, its
Affiliates, Licensees and their respective directors, officers, employees and
agents, and their respective successors, heirs and assigns (collectively, the “BMS
Indemnitees”), and shall indemnify and hold harmless the BMS
Indemnitees, from and against any Losses and Third Party Claims brought against
any 


 


24

















 


BMS Indemnitee and resulting from or
occurring as a result of: (a) any breach by Pharmacopeia of its representations or warranties pursuant to this
Agreement, (b) the gross negligence or willful misconduct of Pharmacopeia or any Subcontractor in
connection with this Agreement, (c) any breach of Applicable Law in
connection with this Agreement by Pharmacopeia or any Subcontractor, or (d) any
breach by Pharmacopeia or any Subcontractor under any agreement with a Third
Party related to this Agreement (including any breach of an agreement between
Pharmacopeia and a Subcontractor) .


 


Section 10.3                            Notice of Claim. All indemnification claims provided for in
Sections 10.1 and 10.2 shall be made solely by such Party to this Agreement
(the “Indemnified Party”).  The Indemnified Party shall give the
indemnifying Party prompt written notice (an “Indemnification
Claim Notice”) of any Losses or the discovery of any fact upon
which the Indemnified Party intends to base a request for indemnification under
Section 10.1 or 10.2, but in no event shall the indemnifying Party be
liable for any Losses to the extent such Losses result from any delay in
providing such notice.  Each
Indemnification Claim Notice must contain a description of the claim and the
nature and amount of such Loss (to the extent that the nature and amount of
such Loss is known at such time).  The
Indemnified Party shall furnish promptly to the indemnifying Party copies of
all papers and official documents received in respect of any Losses and Third
Party Claims.


 


Section 10.4                            Defense, Settlement, Cooperation
and Expenses.


 


(a)                                  Control of Defense.  At
its option, the indemnifying Party may assume the defense of any Third Party
Claim by giving written notice to the Indemnified Party within thirty (30)
calendar days after the indemnifying Party’s receipt of an Indemnification
Claim Notice.  The assumption of the
defense of a Third Party Claim by the indemnifying Party shall not be construed
as an acknowledgment that the indemnifying Party is liable to indemnify the
Indemnified Party in respect of the Third Party Claim, nor shall it constitute
a waiver by the indemnifying Party of any defenses it may assert against the
Indemnified Party’s claim for indemnification. 
Upon assuming the defense of a Third Party Claim, the indemnifying Party
may appoint as lead counsel in the defense of the Third Party Claim any legal
counsel selected by the indemnifying Party. 
In the event the indemnifying Party assumes the defense of a Third Party
Claim, the Indemnified Party shall as soon as is reasonably possible deliver to
the indemnifying Party all original notices and documents (including court
papers) received by the Indemnified Party in connection with the Third Party
Claim.  Should the indemnifying Party
assume the defense of a Third Party Claim, except as provided in Section 10.4(b),
the Indemnified Party shall be responsible for the legal costs or expenses
subsequently incurred by such Indemnified Party in connection with the
analysis, defense or settlement of the Third Party Claim.  In the event that it is ultimately determined
that the indemnifying Party is not obligated to indemnify, defend or hold
harmless the Indemnified Party from and against the Third Party Claim, the
Indemnified Party shall reimburse the indemnifying Party for any and all costs
and expenses (including attorneys’ fees and costs of suit) and any Third Party
Claims incurred by the Indemnifying Party solely attributed to the defense of
the Third Party Claim on behalf of the Indemnified Party (but not those costs
and expenses otherwise attributable to the defense of the Indemnifying Party).


 


(b)                                 Right to Participate in Defense. 
Without limiting Section 10.4(a), any Indemnified Party shall be
entitled to participate in, but not control, the defense of such Third Party
Claim and to employ counsel of its choice for such purpose; provided, however, that such employment shall be at the
Indemnified Party’s own cost and expense unless (i) the employment thereof
has been specifically authorized by the indemnifying Party in writing, (ii) the
indemnifying Party has failed to assume the defense and employ counsel in
accordance with Section 10.4(a) (in which case the Indemnified Party
shall control the defense) or (iii) the interests of the Indemnified Party
and the indemnifying Party with respect to such Third Party Claim are
sufficiently adverse to prohibit the representation by the same counsel of both
Parties under Applicable Law, ethical rules or equitable principles in
which case the 


 


25

















 


indemnifying Party shall be responsible for any such costs and expenses
of counsel for the Indemnified Party.


 


(c)                                  Settlement.  With
respect to any Third Party Claims relating solely to the payment of money
damages in connection with a Third Party Claim and that shall not admit
liability or violation of Law on the part of the Indemnified Party or result in
the Indemnified Party’s becoming subject to injunctive or other relief or
otherwise adversely affecting the business of the Indemnified Party in any
manner (such as granting a license or admitting the invalidity of a Patent
controlled by an Indemnified Party), and as to which the indemnifying Party
shall have acknowledged in writing the obligation to indemnify the Indemnified
Party hereunder, the indemnifying Party shall have the sole right to consent to
the entry of any judgment, enter into any settlement or otherwise dispose of
such Loss, on such terms as the indemnifying Party, in its sole discretion,
shall deem appropriate.  With respect to
all other Losses in connection with Third Party Claims, where the indemnifying
Party has assumed the defense of the Third Party Claim in accordance with Section 10.4(a),
the indemnifying Party shall have authority to consent to the entry of any
judgment, enter into any settlement or otherwise dispose of such Loss provided
it obtains the prior written consent of the Indemnified Party (which consent
shall not be unreasonably withheld).  The
indemnifying Party shall not be liable for any settlement or other disposition
of a Loss by an Indemnified Party that is reached without the written consent
of the indemnifying Party.  Regardless of
whether the indemnifying Party chooses to defend or prosecute any Third Party
Claim, no Indemnified Party shall admit any liability with respect to or
settle, compromise or discharge, any Third Party Claim without the prior
written consent of the indemnifying Party, such consent not to be unreasonably
withheld.


 


(d)                                 Cooperation. 
Regardless of whether the indemnifying Party chooses to defend or
prosecute any Third Party Claim, the Indemnified Party shall, and shall cause
each other Indemnified Party to, cooperate in the defense or prosecution
thereof and shall furnish such records, information and testimony, provide such
witnesses and attend such conferences, discovery proceedings, hearings, trials
and appeals as may be reasonably requested in connection therewith.  Such cooperation shall include access during
normal business hours afforded to indemnifying Party to, and reasonable
retention by the Indemnified Party of, records and information that are
reasonably relevant to such Third Party Claim, and making Indemnified Parties
and other employees and agents available on a mutually convenient basis to
provide additional information and explanation of any material provided
hereunder, and the indemnifying Party shall reimburse the Indemnified Party for
all its reasonable out-of-pocket costs and expenses in connection therewith.


 


(e)                                  Costs and Expenses. 
Except as provided above in this Section 10.4, the costs and
expenses, including attorneys’ fees and expenses, incurred by the Indemnified
Party in connection with any claim shall be reimbursed on a Calendar Quarter
basis by the indemnifying Party, without prejudice to the indemnifying Party’s
right to contest the Indemnified Party’s right to indemnification and subject
to refund in the event the indemnifying Party is ultimately held not to be
obligated to indemnify the Indemnified Party.


 


Section 10.5                            Insurance.  Each Party shall maintain at its sole cost and expense, an adequate
liability insurance or self-insurance program (including, in the case of BMS,
clinical trials and product liability insurance) to protect against potential
liabilities and risk arising out of activities to be performed under this
Agreement and any agreement related hereto and upon such terms (including
coverages, deductible limits and self-insured retentions) as are customary in
the U.S. pharmaceutical industry for the activities to be conducted by such
Party under this Agreement.


 


Section 10.6                            Limitation of Liability.  Neither Party hereto will be liable for the other Party’s indirect,
incidental, consequential, special, exemplary, punitive or multiple damages
arising in 


 


26

















 


connection with this Agreement or the exercise of its rights hereunder,
or for lost profits arising from or relating to any breach of this Agreement,
regardless of any notice of such damages; provided however,
that this Section 10.6 shall not limit or restrict (i) damages
available for breaches of confidentiality obligations set forth in Article 7
and (ii) damages available for willful breaches of Article 11.


 


ARTICLE 11 - 

REPRESENTATIONS AND WARRANTIES


 


Section 11.1                            Representations, Warranties and
Covenants.  Each Party hereby represents and warrants as
of the Effective Date and covenants to the other Party that:


 


(a)  it has the power
and authority and the legal right to enter into this Agreement and perform its
obligations hereunder, and that it has taken all necessary action on its part
required to authorize the execution and delivery of this Agreement and the
performance of its obligations hereunder;


 


(b)  this Agreement has
been duly executed and delivered on behalf of such Party and constitutes a
legal, valid and binding obligation of such Party and is enforceable against it
in accordance with its terms subject to the effects of bankruptcy, insolvency
or other laws of general application affecting the enforcement of creditor
rights and judicial principles affecting the availability of specific
performance and general principles of equity, whether enforceability is considered
a proceeding at law or equity;


 


(c)  all necessary
consents, approvals and authorizations of all Regulatory Authorities and other
parties required to be obtained by such Party in connection with the execution
and delivery of this Agreement and the performance of its obligations hereunder
have been obtained;


 


(d)  the execution and
delivery of this Agreement and the performance of such Party’s obligations
hereunder (i) do not conflict with or violate any requirement of
Applicable Law or any provision of the articles of incorporation, bylaws or any
similar instrument of such Party, as applicable, in any material way, and (ii) do
not conflict with, violate, or breach or constitute a default or require any
consent not already obtained under, any contractual obligation or court or
administrative order by which such Party is bound;


 


(e)  it has and will
have enforceable written agreements with all of its employees who receive
Confidential Information under this Agreement assigning to such Party ownership
of all intellectual property rights created in the course of their employment;
and


 


(f) it
has the requisite personnel, facilities, equipment, expertise, experience and
skill to perform its obligations under this Agreement.


 


Section 11.2                            DISCLAIMER OF WARRANTY.  EXCEPT
FOR THE EXPRESS WARRANTIES SET FORTH IN THIS ARTICLE 11, BMS AND PHARMACOPEIA
MAKE NO REPRESENTATIONS AND GRANT NO WARRANTIES, EXPRESS OR IMPLIED, EITHER IN
FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND BMS AND PHARMACOPEIA
EACH SPECIFICALLY DISCLAIM ANY OTHER WARRANTIES, WHETHER WRITTEN OR ORAL, OR
EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY OR
FITNESS FOR A PARTICULAR USE OR PURPOSE OR ANY WARRANTY AS TO THE VALIDITY OF
ANY PATENTS OR THE NON-INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS OF
THIRD PARTIES.


 


27














 


ARTICLE 12 - 

MISCELLANEOUS


 


Section 12.1         Assignment.  Except as expressly set forth in this Agreement, without the prior
written consent of the other Party hereto, neither Party will sell, transfer,
assign, delegate, pledge or otherwise dispose of, whether voluntarily,
involuntarily, by operation of law or otherwise, this Agreement or any of its
rights or duties hereunder; provided, however,
that either Party hereto may assign or transfer this Agreement or any of its
rights or obligations hereunder without the consent of the other Party to any
Third Party with which it has merged or consolidated, or to which it has
transferred all or substantially all of its assets or stock to which this
Agreement relates if in any such event the Third Party assignee or surviving
entity assumes in writing all of the assigning Party’s obligations under this
Agreement.  Any purported assignment or
transfer in violation of this Section 12.1 will be void ab initio and of no force or effect.


 


Section 12.2         Severability.  If
any provision of this Agreement is held to be illegal, invalid or unenforceable
by a court of competent jurisdiction, such adjudication will not affect or
impair, in whole or in part, the validity, enforceability, or legality of any
remaining portions of this Agreement. 
All remaining portions will remain in full force and effect as if the
original Agreement had been executed without the invalidated, unenforceable or
illegal part.


 


Section 12.3         Governing Law; Jurisdiction.  This
Agreement will be governed by and construed and enforced in accordance with the
laws of the State of Delaware, USA without reference to any rules of
conflicts of laws.  Each of the Parties
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any federal court of the United States of
America sitting in the State of Delaware and any appellate court from any
jurisdiction thereof, in any action or proceeding arising out of or relating to
this Agreement, or for recognition or enforcement of any judgment, and each of
the Parties hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in any
such federal court in Delaware.  For
clarification, any dispute relating to the scope, validity, enforceability or
infringement of any Patents shall be governed by and construed and enforced in
accordance with the patent laws of the applicable jurisdiction.


 


Section 12.4         Dispute Resolution.


 


12.4.1     Resolution by Senior Representatives.  The
Parties shall seek to settle amicably any and all disputes, controversies or
claims arising out of or in connection with this Agreement.  Any dispute between the Parties, including
any failure by the JRC to agree, shall be promptly presented to the *** for
resolution.  If either Party has failed
to appoint ***, or if the *** are unable to resolve such dispute, such dispute
shall then be presented to the *** of BMS and the *** of Pharmacopeia (the “Senior Representatives”) for
resolution.  Such Senior Representatives
will meet in-person or by teleconference as soon as reasonably possible
thereafter, and use their good faith efforts to mutually agree upon the
resolution of the dispute, controversy or claim.  If the Senior Representatives are not able to
resolve such dispute, and if the dispute relates to (i) *** or (ii) ***.  If any other dispute between the Parties
(i.e., a dispute other than those described in (i) and (ii) of the
preceding sentence such as, but not limited to, ***, either Party may refer
such dispute to binding arbitration to be conducted as set forth below in Section 12.4.2.


 


12.4.2     Arbitration.


 


(a)           With respect to any
dispute amenable to arbitration under this Agreement as set forth in Section 12.4.1,
a Party may submit such dispute to arbitration by notifying the other Party, in
writing, of 


 


28

















 


such dispute.  Within thirty (30)
days after receipt of such notice, the Parties shall designate in writing a
single arbitrator to resolve the dispute; provided, however,
that if the Parties cannot agree on an arbitrator within such thirty (30) day
period, the arbitrator shall be selected by the New Jersey office of the
American Arbitration Association (the “AAA”) or, if such office does not
exist or is unable to make a selection, by the office of the AAA nearest to
Princeton, New Jersey.  The arbitrator
shall be a lawyer knowledgeable and experienced in the Applicable Laws
concerning the subject matter of the dispute. 
In any case the arbitrator shall not be an Affiliate, employee,
consultant, officer, director or stockholder of either Party, or otherwise have
any current or previous relationship with either Party or their respective
Affiliates.  The governing law in Section 12.3
shall govern any such proceedings.  The
language of the arbitration shall be English. 
No individual will be appointed to arbitrate a dispute pursuant to this
Agreement unless he or she agrees in writing to be bound by the provisions of
this 12.4.2.  The place of arbitration
will be Princeton, New Jersey.  Either
Party may apply to the arbitrator for interim injunctive relief until the
arbitration award is rendered or the controversy is otherwise resolved.


 


(b)           Within
sixty (60) days after the designation of the arbitrator, the arbitrator and the
Parties shall meet, and each Party shall provide to the arbitrator a written
summary of all disputed issues, such Party’s position on such disputed issues
and such Party’s proposed ruling on the merits of each such issue.


 


(c)           The
arbitrator shall set a date for a hearing, which shall be no later than thirty
(30) days after the submission of written proposals pursuant to Section 12.4.2(b), for the presentation of evidence and
legal argument concerning each of the issues identified by the Parties.  The Parties shall have the right to be
represented by counsel.  Except as
provided herein, the arbitration shall be governed by the Commercial Arbitration
Rules of the AAA applicable at the time of the notice of arbitration pursuant
to Section 12.4.2(a); provided, however, that the
arbitrator shall determine what discovery will be permitted, consistent with
the goal of limiting the cost and time that the Parties must expend for
discovery; provided the arbitrators shall permit such discovery as is deemed
necessary to permit an equitable resolution of the dispute.  In
any such arbitration proceeding, the Parties shall be entitled to all remedies
to which they would be entitled in a United States District Court, including
monetary damages and injunctive relief, provided that
the arbitrator may not order the termination of licenses or assignment rights
to a Research Compound to either of the Parties.


 


(d)           The
arbitrator shall use his or her best efforts to rule on each disputed
issue within thirty (30) days after completion of the hearing described in Section 12.4.2(c). 
The determination of the arbitrator as to the resolution of any dispute
shall be binding and conclusive upon all Parties.  All rulings of the arbitrator shall be in writing
and shall be delivered to the Parties as soon as is reasonably possible.  Nothing contained herein shall be construed
to permit the arbitrator to award punitive, exemplary or any similar damages.  The
arbitrator shall render a “reasoned decision” within the meaning of the
Commercial Arbitration Rules which shall include findings of fact and
conclusions of law.  The Parties
undertake to satisfy any award without delay.


 


(e)           The
arbitrator shall determine the proportion in which the Parties shall bear (i) attorneys’
fees of the Parties in any arbitration, (ii) fees of the arbitrator and (iii) costs
and expenses of the arbitration.


 


(f)            Any
arbitration pursuant to this Section 12.4 shall be conducted in Princeton,
New Jersey, unless the Parties otherwise agree to a different location.  Any arbitration award may be entered in and
enforced by a court in accordance with Section 12.3.


 


(g)           Notwithstanding anything in this Section 12.4,
each Party shall have the right to seek injunctive or other equitable relief
from a court of competent jurisdiction pursuant to Section 12.3 that 


 


29

















 


may
be necessary to avoid irreparable harm, maintain the status quo or preserve the
subject matter of the arbitration.


 


(h)           The Parties agree
that any payments that are made by one Party to the other Party pursuant to
this Agreement pending resolution of any dispute shall be promptly refunded if
an arbitrator or court determines pursuant to this Section 12.4.2 that
such payments are to be refunded by one Party to the other Party.


 


(i)            The Parties intend,
and will take all reasonable action as is necessary or desirable to ensure,
that there be a speedy resolution to any dispute which becomes the subject of
arbitration, and the arbitrator will conduct the arbitration so as to resolve
the dispute as expeditiously as possible.


 


(j)            Except to the
extent necessary to confirm an award or as may be required by Applicable Law,
neither a Party nor an arbitrator may disclose the existence, content, or
results of an arbitration without the prior written consent of both
Parties.  In no event will an arbitration
be initiated after the date when commencement of a legal or equitable
proceeding based on the dispute, controversy or claim would be barred by the
applicable Delaware statute of limitations.


 


(k)           Disputes
Regarding Material Breach.  If
the Parties are in dispute as to whether one Party is in material breach of
this Agreement, then the arbitrator will first determine if material breach has
in fact occurred, and if so, will grant the defaulting Party the cure period
provided pursuant to Section 9.3. 
If the material breach is not cured within the time period provided
pursuant to Section 9.3, the arbitration will continue and the arbitrator
will, as part of the same arbitration, award actual direct damages to the
non-defaulting Party.


 


Section 12.5         Notices.  Except as otherwise provided for in this Agreement, all notices or
other communications that are required or permitted hereunder will be in writing
and delivered personally with acknowledgement of receipt, sent by facsimile
(and promptly confirmed by personal delivery, registered or certified mail or
overnight courier as provided herein), sent by nationally-recognized overnight
courier or sent by registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:


 


If to BMS, to:


 


Bristol-Myers
Squibb Company

P.O. Box 4000


Route
206 & Province Line Road


Princeton,
NJ  08543-4000

Attention:  Vice President, and Head of
Business Development


Telephone:  ***


Facsimile:  ***


 


With
copy to:


Bristol-Myers
Squibb Company


P.O. Box
4000


Route
206 and Province Line Road


Princeton,
NJ  08543-4000


Attention: 
Vice President and Senior Counsel, Corporate &

Business Development


Phone:  ***


Facsimile:  ***


 


30

















 


If
to Pharmacopeia, to:


Pharmacopeia, Inc.


3000
Eastpark Boulevard


Cranbury,
New Jersey 08512


Attention:  Chief Executive Officer


Telephone:  ***


Facsimile:  ***


 


With
a copy to:


Pharmacopeia, Inc.


3000
Eastpark Boulevard


Cranbury,
New Jersey 08512


Attention:  Executive Vice President and General Counsel


Telephone:  ***


Facsimile:  ***


 


or
to such other address as the Party to whom notice is to be given may have
furnished to the other Party in writing in accordance herewith.  Any such communication will be deemed to have
been given (i) when delivered, if personally delivered or sent by
facsimile on a Business Day, (ii) on the Business Day after dispatch, if
sent by nationally-recognized overnight courier, and (iii) on the third
Business Day following the date of mailing, if sent by mail.  It is understood and agreed that this Section 12.5
is not intended to govern the day-to-day business communications necessary
between the Parties in performing their duties, in due course, under the terms
of this Agreement.


 


Section 12.6         Entire Agreement; Modifications.  This
Agreement (including the attached Research Plan) sets forth and constitutes the
entire agreement and understanding between the Parties with respect to the
subject matter hereof and all prior agreements, understandings, promises and
representations, whether written or oral, with respect thereto are superseded
hereby.  Each Party confirms that it is
not relying on any representations or warranties of the other Party except as
specifically set forth herein.  No
amendment, modification, release or discharge will be binding upon the Parties
unless in writing and duly executed by authorized representatives of both
Parties.


 


Section 12.7         Headings.  The
headings of Articles and Sections of this Agreement are for ease of reference
only and shall not affect the meaning or interpretation of this Agreement in
any way.


 


Section 12.8         Relationship of the Parties.  It is
expressly agreed that the Parties will be independent contractors of one
another and that the relationship between the Parties will not constitute a
partnership, joint venture or agency.


 


Section 12.9         Waiver.  Any
term or condition of this Agreement may be waived at any time by the Party that
is entitled to the benefit thereof, but no such waiver will be effective unless
set forth in a written instrument duly executed by or on behalf of the Party
waiving such term or condition.  Any such
waiver will not be deemed a waiver of any other right or breach hereunder.


 


Section 12.10       Counterparts.  This
Agreement may be executed in two or more counterparts, each of which will be
deemed an original, but all of which together will constitute one and the same
instrument.


 


Section 12.11       No Benefit to Third Parties.  The representations, warranties, covenants and agreements set forth in
this Agreement are for the sole benefit of the Parties hereto and their 


 


31

















 


successors and permitted assigns, and they will not be construed as
conferring any rights on any other parties.


 


Section 12.12       Further Assurances.  Each
Party will duly execute and deliver, or cause to be duly executed and
delivered, such further instruments and do and cause to be done such further
acts and things, including the filing of such assignments, agreements,
documents and instruments, as may be necessary to carry out the provisions and
purposes of this Agreement.


 


Section 12.13       Force Majeure. 
Neither Party will be charged with any liability for delay in
performance of an obligation under this Agreement to the extent such delay is
due to a cause beyond the reasonable control of the affected Party, such as
war, riots, labor disturbances, fire, explosion, and compliance in good faith
with any governmental Law, regulation or order. 
The Party affected will give prompt written notice to the other Party of
any material delay due to such causes.


 


Section 12.14       Interpretation.


 


(a)           Each of the Parties
acknowledges and agrees that this Agreement has been diligently reviewed by and
negotiated by and between them, that in such negotiations each of them has been
represented by competent counsel and that the final agreement contained herein,
including the language whereby it has been expressed, represents the joint
efforts of the Parties hereto and their counsel.  Accordingly, in the event an ambiguity or a
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof
shall arise favoring or disfavoring any Party by virtue of the authorship of
any provisions of this Agreement.


 


(b)           The definitions of
the terms herein shall apply equally to the singular and plural forms of the
terms defined.  Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms.  The words “include”, “includes”
and “including” shall be deemed to be followed by the phrase “without
limitation”.  The word “will” shall be
construed to have the same meaning and effect as the word “shall”.  The word “any” shall mean “any and all”
unless otherwise clearly indicated by context.


 


(c)           Unless the context
requires otherwise, (i) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or therein), (ii) any
reference to any Applicable Laws herein shall be construed as referring to such
Applicable Laws as from time to time enacted, repealed or amended, (iii) any
reference herein to any person shall be construed to include the person’s
successors and assigns, (iv) the words “herein”, “hereof” and “hereunder”,
and words of similar import, shall be construed to refer to this Agreement in
its entirety and not to any particular provision hereof, and (v) all
references herein to Articles, Sections or Appendices, unless otherwise
specifically provided, shall be construed to refer to Articles, Sections and
Appendices of this Agreement.


 


(d)           References to
sections of the Code of Federal Regulations and to the United States Code shall
mean the cited sections, as these may be amended from time to time.


 


[SIGNATURE PAGE FOLLOWS]


 


32

















 


IN WITNESS WHEREOF, the Parties hereto have caused this Discovery Collaboration Agreement
to be executed by their duly authorized representatives as of the date first
above written.


 


 


	
  PHARMACOPEIA, INC.

  
	
   

  
	
   

  	
   

  
	
  By:

  	
          /s/
  Leslie J. Browne

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  Leslie J. Browne, Ph.D.

  	
   

  
	
   

  	
   

  
	
  Title:

  	
  President and Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  BRISTOL-MYERS SQUIBB COMPANY

  
	
   

  
	
   

  	
   

  
	
  By:

  	
         /s/ Graham
  R. Brazier

  	
   

  
	
   

  	
   

  
	
  Name:

  	
    Graham R. Brazier

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
    Vice President & Head of
  Business Development

  	
   

  
							



 


33

















 


APPENDIX 1


 


RESEARCH PLAN


 


***


 


34

















 


***.


 


35

















 


***


 


36

















 


***


 


37

















 


***.


 


38

















 


APPENDIX 2


 


***


 


39