Nonexclusive Patent License Agreement

EXHIBIT 10.21


NONEXCLUSIVE PATENT LICENSE AGREEMENT


This Nonexclusive Patent License Agreement is made and effective as of February 11, 2000 (the "Effective Date"), by and between 3-Dimensional Pharmaceuticals, Inc., a corporation having its principal place of business at Eagleview Corporate Center, 665 Stockton Drive, Suite 104, Exton, PA 19341 ("3DP"), and DuPont Pharmaceuticals Company (a wholly-owned subsidiary of E. I. DuPont de Nemours & Co. ("DuPont")) having its principal place of business at Centre Road, Chestnut Run Plaza, Building 721, Wilmington DE 19880 ("DPC"). 3DP and DPC may be referred to herein as a "Party" or, collectively, as the "Parties".


WHEREAS, 3DP has developed and patented certain DirectedDiversity(R) technology for generating chemical compounds having desired biological, chemical and other properties;


WHEREAS, DPC is engaged in research and development of biologically active compounds for the treatment of human disease;


WHEREAS, DPC wishes to license certain patent rights from 3DP on a nonexclusive basis;


WHEREAS, the parties desire to enter into this Agreement to set forth the licensing terms for such rights;


NOW, THEREFORE, in consideration of the various promises and undertakings set forth herein, and intending to be legally bound, the Parties agree as follows:


Article 1 DEFINITIONS


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


1.1 "Affiliate" means any corporation or other business entity which
controls, is controlled by, or is under common control with 3DP or
DPC. A corporation or other entity shall be regarded as in control of
another corporation or entity if it owns or directly or indirectly
controls at least 50% of the voting stock or other ownership interest
of the other corporation or entity (or alternatively, if it owns the
maximum such ownership interest permitted by law), or if it possesses,
directly or indirectly, the power to direct or cause the direction of
the management and policies of the corporation or other entity or the
power to elect or appoint at least 50% of the members of the governing
body of the corporation or other entity.


1.2 "Agreement" means the present agreement including its Appendices.


1.3 "Confidential Information" means all information that has or could
have commercial value or other utility in a Party's business, or the
unauthorized disclosure of which could be detrimental to the Party's
interests, including confidential information, inventions, know-how,
data and materials relating to the Licensed Patents, and shall include
without limitation research, technical, clinical development,
manufacturing, marketing, financial, personnel and other business
information and plans, whether in oral, written, graphic or electronic
form.


1.4 "DPC" means DuPont Pharmaceuticals Company as identified above.


1.5 "DPC Site" means a Site which is a DPC Site or a Site of a DPC
Affiliate which is involved in pharmaceutical (including diagnostic
imaging) research and development.


1.6 "DuPont" means E. I. DuPont de Nemours & Co. as identified above.


1.7 "Effective Date" means the effective date of this Agreement as set
forth above.


1.8 "Field" means the research and development of chemical materials for
use in pharmaceutical and diagnostic products. With respect to the
Other DuPont Site described in Section 3.3, the Parties shall agree to
the applicable definition of Field.


1.9 "Improvements" means any inventions, discoveries, improvements or
enhancements, whether or not patented or patentable, relating to the
subject matter claimed in the Licensed Patents.


1.10 "Licensed Patents" means all U.S. and foreign patent applications or
issued patents identified in Appendix A, and any U.S. and foreign
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patent applications or issued patents claiming Improvements made by
3DP in respect thereof, including any provisionals, divisionals,
continuations, continuations-in-part, reissues and extensions derived
therefrom, such as patent term restorations, supplementary protection
certificates, etc., to the foregoing that may be filed by or granted
to 3DP during the term of this Agreement.


1.11 "Other DuPont Site" means a Site which is a DuPont Site or a Site of a
DuPont Affiliate which is not a DPC Site and is not involved in
pharmaceutical (including diagnostic imaging) research and
development.


1.12 "Site" means a discrete research facility, for example, a building or
building complex at which DPC or an Affiliate of DPC conducts internal
research and development activities, in a geographic location distinct
from other research facilities of DPC or an Affiliate of DPC.


1.13 "Site License Fee" shall have the meaning set forth in Section 3.2
below.


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1.14 "Third Party" means an individual, corporation or other entity other
than the Parties and their Affiliates.


1.15 "3DP" means 3-Dimensional Pharmaceuticals, Inc. as identified above.


Article 2 GRANT OF LICENSE


2.1 Nonexclusive Patent License. 3DP hereby grants DPC (and its
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Affiliates, but only to the extent specifically permitted herein) a
nonexclusive license, without any right to sublicense, under the
Licensed Patents in the Field but only in Direct Support of DPC's (or
its Affiliate's as permitted herein) internal and collaborative
research and development activities. As used herein, "Direct Support"
means that DPC (or its Affiliates as permitted herein) may operate
under the Licensed Patents to identify compounds with activity against
targets that have been selected through DPC's (or its Affiliate's as
permitted herein) internal research and development programs or to
identify compounds for which DPC (or its Affiliates as permitted
herein) will pay for a share of the development costs or receives at
least a 10% royalty (or equivalent revenue share) or has any rights of
commercialization. In accordance with the foregoing, it is
acknowledged and understood that DPC and its Affiliates are not
permitted under the license granted herein to compete with 3DP by
providing combinatorial chemistry services to third parties on a fee-
for-service basis.


The rights granted hereunder may be extended by DPC to one (1) Other
DuPont Site, provided that in such event DuPont or its Affiliate shall
be bound in the same way as DPC with respect to all the terms and
conditions of this Agreement. In such event DuPont (or its Affiliate
as permitted herein) shall have a nonexclusive license, without any
right to sublicense, under the Licensed Patents in the Field but only
in Direct Support of DuPont's (or its Affiliate's as permitted herein)
internal and collaborative research and development activities. As
used in this paragraph, "Direct Support" means that DuPont (or its
Affiliate as permitted herein) may operate under the Licensed Patents
to identify compounds with activity against targets that have been
selected through DuPont's (or its Affiliate's as permitted herein)
internal research and development programs or to identify compounds
for which DuPont (or its Affiliate as permitted herein) will pay for a
share of the development costs or receives at least a 10% royalty (or
equivalent revenue share) or has any rights of commercialization.


2.2 Limitations on License Grant. Except as permitted under Section 2.1,
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DPC (and any of its Affiliates, to the extent permitted below) may not
operate under the Licensed Patents on behalf of any Third Parties such
as, for example, in connection with providing research or development
services to any Third Party on a contractual basis. The foregoing
license


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grant is further limited to on-site activities at one or more actual
DPC Sites, and does not include or permit off-site or remote access
through the internet or otherwise. In addition, the foregoing license
does not permit activities by DPC or DuPont or their Affiliates under
this Agreement that are covered by that certain Collaborative Research
and License Agreement, effective on October 12, 1998, between 3DP and
E. I. DuPont de Nemours & Co.


2.3 Term and Renewal. The initial term of this Agreement shall expire on
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April 1, 2000. However, this Agreement may be renewed by DPC on an
annual basis by payment of the Site License Fees as set forth in
Section 3.2.


2.4 Non-Assertion. During the term of this Agreement and so long as DPC
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has not committed any material breach with respect to any obligation
hereunder, 3DP will not assert any patent or patent application
against DPC to prevent DPC from practicing the rights granted to DPC
under Article 2 hereof.


Article 3 FINANCIAL TERMS


3.1 License Fee. In consideration of the grant of rights under Article 2
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of this Agreement, DPC agrees to pay an initial nonrefundable license
fee of [**] within thirty (30) days of the Effective Date of this
Agreement. This initial license fee shall be creditable against the
first annual Site License Fee payable in accordance with Section 3.2.


3.2 Individual Site License Fees. [**]


3.3 Location of DPC Sites. The location(s) of the DPC Site(s) may include
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the Wilmington Experimental Station, to the extent that DPC conducts
research and development activities there, and other DPC Sites to be
determined at DPC's sole discretion. Notwithstanding the foregoing,
DPC may permit one (1) Other DuPont Site to operate under the Licensed
Patents subject to the approval of 3DP, such approval not to be
unreasonably withheld. Once approved, DPC may not transfer the license
to another Other DuPont Site without the approval of 3DP, such
approval not to be unreasonably withheld. Any such Other DuPont Site
shall be considered to be a DPC Site for the purpose of determining
License Fees, and operations under the Licensed Patents at any such
Site shall be subject to all of the other terms and conditions of this
Agreement.


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


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


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3.5 Most Favored Licensee Provision. [**]


Upon the written request of DPC and not more than once in each
calendar year, 3DP shall permit an independent certified public
accounting firm of nationally recognized standing selected by DPC and
acceptable to 3DP (which acceptance by 3DP shall not be unreasonably
withheld), at DPC's expense, to have access during normal business
hours to such records of 3DP as may be reasonably necessary to verify
3DP's compliance with the provisions of this Section 3.5. The
accounting firm shall enter into an acceptable and customary
confidentiality agreement with 3DP obligating the accounting firm to
retain in confidence all information of 3DP which it obtains in
performing such audits hereunder, and such audit shall be subject to
3DP's third party confidentiality obligations. Such accounting firm
shall report to DPC and 3DP whether or not 3DP is in compliance with
this Section 3.5. If 3DP is not in compliance with this Section 3.5,
such accounting firm shall disclose the financial terms of the Third
Party license which contains more favorable financial terms than those
applicable to DPC hereunder. In no event shall such accounting firm
disclose the identity of the Third Party with whom 3DP has entered
into a license.


3.6 [**]


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


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[**]


Article 4 OBLIGATIONS OF DPC


4.1 Annual Reports. DPC shall provide 3DP with written annual reports
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within sixty (60) days after the end of each calendar year during the
term of this Agreement to identify the DPC (or Affiliate's) Sites that
are operating under the Licensed Patents.


Article 5 CONFIDENTIALITY


5.1 Confidentiality Obligations. The Parties agree that, for the term of
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this Agreement and for ten (10) years thereafter, either Party that
receives Confidential Information (a "Receiving Party") from the other
Party (a "Disclosing Party") shall keep completely confidential and
shall not publish or otherwise disclose and shall not use for any
purpose (except as expressly permitted hereunder) any Confidential
Information furnished to it by the "Disclosing Party" pursuant to this
Agreement (including without limitation, know-how), except to the
extent that it can be established by the Receiving Party that such
Confidential Information:


(a) was already known to the Receiving Party, other than under an
obligation of confidentiality from the Disclosing Party;


(b) was generally available to the public or otherwise part of the
public domain at the time of its disclosure to the Receiving
Party;


(c) became generally available to the public or otherwise part of the
public domain after its disclosure and other than through any act
or omission of the Receiving Party in breach of this Agreement;


(d) was subsequently lawfully disclosed to the Receiving Party by a
Third Party;


(e) can be shown by written records to have been independently
developed by the Receiving Party without reference to the
Confidential Information received from the Disclosing Party and
without breach of any of the provisions of this Agreement; or


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


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(f) the disclosing party has specifically agreed in writing that the
receiving party may disclose.


The obligations of confidentiality and non-use set forth in this
Section 6.1 shall also apply to biological material and chemical
compounds and associated information (including without limitation
know-how) disclosed by one Party to the other prior to or during the
term of this Agreement; provided however, that such obligation of
confidentiality and non-use shall not apply with respect to compounds
which are assigned to DPC or exclusively licensed to DPC by 3DP.


5.2 Written Assurances and Permitted Uses of Confidential Information.


(a) The Receiving Party may disclose Confidential Information to the
extent the Receiving Party is compelled to disclose such
information by a court or other tribunal of competent
jurisdiction, provided however, that in such case the Receiving
Party shall immediately give notice to the Disclosing Party so
that the Disclosing Party may seek a protective order or other
remedy from said court or tribunal. In any event, the Receiving
Party shall disclose only that portion of the Confidential
Information that, in the opinion of its legal counsel, is legally
required to be disclosed and will exercise reasonable efforts to
ensure that any such information so disclosed will be accorded
confidential treatment by said court or tribunal.


(b) To the extent it is reasonably necessary or appropriate to
fulfill its obligations and exercising its rights under this
Agreement, the Parties may disclose Confidential Information to
their Affiliates on a need-to-know basis on condition that such
Affiliates agree to keep the Confidential Information
confidential for the same time periods and to the same "extent as
the Party is required to keep the Confidential Information
confidential under this Agreement.


(c) The existence and the terms and conditions of this Agreement
which the Parties have not specifically agreed to disclose
pursuant to this Section 5.2 shall be treated by each Party as
Confidential Information of the other Party.


(d) If a Party is required to make any disclosure of the other
Party's Confidential Information, it will give at least thirty
(30) days written, advance notice to the latter Party of such
disclosure requirement. If a Party is required to disclose
Confidential Information to comply with applicable laws or
governmental regulations, including but not limited to submitting
information to tax authorities or to comply with any discovery or
similar request for production of documents in litigation or
similar alternative


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dispute resolution proceedings, such party may make such
disclosure provided it gives prompt notice to the other Party,
and provided it makes all reasonable efforts to comply with all
administrative or other procedures or to establish a reasonable
protective or similar order under which the confidential nature
of the information will be maintained.


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


Article 6 PATENTS AND INFRINGEMENT


6.1 Licensed Patents. 3DP shall prepare, file, prosecute and maintain the
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Licensed Patents at 3DP's expense and in a manner deemed appropriate
in 3DP's sole judgment. 3DP agrees to keep DPC fully advised of the
status of all Licensed Patents, upon reasonable written request from
DPC.


6.2 Infringement of the Licensed Patents by Third Parties. In the event
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that DPC becomes aware of any infringement by Third Parties of any of
the Licensed Patents, subject to any confidentiality obligations DPC
may have, DPC shall promptly notify 3DP. 3DP shall respond to any such
infringement by Third Parties in a manner deemed appropriate by 3DP in
its sole judgment.


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


Article 7 REPRESENTATIONS AND WARRANTIES


7.1 Authority. Each Party represents and warrants that it has the full
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right, power and authority to execute, deliver and perform its
obligations pursuant to this Agreement.


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7.2 No Conflicts. Each Party represents and warrants that the execution,
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delivery and performance ...