NOTICE OF TERMINATION
TO SCHERING UPON THE FILING OF BANKRUPTCY OR INSOLVENCY OF SCHERING OR THE
APPOINTMENT OF A RECEIVER FOR THE ASSETS OF SCHERING, OR THE MAKING BY SCHERING
OF AN ASSIGNMENT FOR THE BENEFIT OF CREDITORS, OR THE INSTITUTION OF ANY
PROCEEDINGS AGAINST SCHERING UNDER ANY BANKRUPTCY LAW.
TERMINATION SHALL BE
EFFECTIVE UPON THE DATE SPECIFIED IN SUCH NOTICE.
THE RIGHTS OF SCHERING UNDER
THIS AGREEMENT SHALL NOT TERMINATE IN THE EVENT OF A BANKRUPTCY OF PHARMACOPEIA,
UNLESS SCHERING ELECTS TO TERMINATE THIS AGREEMENT IN ACCORDANCE WITH THE
FOLLOWING PROVISIONS OF THIS SECTION 10.3.
IN THE EVENT THAT (I) PHARMACOPEIA
SHALL MAKE AN ASSIGNMENT FOR THE BENEFIT OF CREDITORS, FILE A PETITION IN
BANKRUPTCY, PETITION OR APPLY TO ANY TRIBUNAL FOR THE APPOINTMENT OF CUSTODIAN,
RECEIVER OR ANY TRUSTEE FOR IT OR A SUBSTANTIAL PART OF ITS ASSETS, OR SHALL
COMMENCE ANY CASE OR PROCEEDING UNDER ANY BANKRUPTCY, REORGANIZATION,
ARRANGEMENT, READJUSTMENT OF DEBT, DISSOLUTION OR LIQUIDATION LAW OR STATUTE OF
ANY JURISDICTION, WHETHER NOW OR HEREAFTER IN EFFECT; OR (II) IF THERE SHALL
HAVE BEEN FILED ANY SUCH BONA FIDE PETITION OR APPLICATION, OR ANY SUCH
PROCEEDING SHALL HAVE BEEN COMMENCED AGAINST IT, IN WHICH AN ORDER FOR RELIEF IS
ENTERED OR WHICH REMAINS UNDISMISSED FOR A PERIOD OF SIXTY (60) DAYS OR MORE; OR
(III) IF PHARMACOPEIA BY ANY ACT OR OMISSION OF ACT SHALL INDICATE ITS CONSENT
TO, APPROVAL OF OR ACQUIESCENCE IN ANY SUCH BONA FIDE PETITION, APPLICATION, OR
PROCEEDING OR ORDER FOR RELIEF OR THE APPOINTMENT OF A CUSTODIAN, RECEIVER OR
TRUSTEE FOR IT OR ANY SUBSTANTIAL PART OF ITS PROPERTY, OR SHALL SUFFER ANY SUCH
CUSTODIANSHIP, RECEIVERSHIP OR TRUSTEESHIP TO CONTINUE UNDISCHARGED FOR A PERIOD
OF SIXTY (60) DAYS OR MORE (EACH SUCH EVENT A "PHARMACOPEIA BANKRUPTCY EVENT"),
THEN SCHERING SHALL HAVE THE FOLLOWING RIGHTS.
SCHERING SHALL HAVE THE RIGHT,
IN ITS SOLE DISCRETION, TO ELECT TO TERMINATE THIS AGREEMENT BY GIVING WRITTEN
NOTICE OF SUCH TERMINATION TO PHARMACOPEIA.
IN THE EVENT THAT SCHERING DOES NOT
ELECT TO TERMINATE THIS AGREEMENT, THEN NOTWITHSTANDING ANY REJECTION OF THIS
AGREEMENT BY PHARMACOPEIA (WHICH, FOR PURPOSES OF THIS SECTION 10.3, INCLUDES
ANY DEBTOR IN POSSESSION, TRUSTEE OR OTHER ENTITY THAT MAY SUCCEED PHARMACOPEIA)
PURSUANT TO 11 U.S.C. §365, SCHERING SHALL RETAIN ALL OF ITS RIGHTS, BENEFITS,
LICENSES, PROTECTIONS AND PRIVILEGES UNDER THIS AGREEMENT AND SHALL BE ENTITLED
TO ALL OF THE RIGHTS, BENEFITS AND PROTECTIONS OF A LICENSEE UNDER 11 U.S.C.
365(N).
SCHERING WILL HAVE THE RIGHT (INCLUDING, WITHOUT LIMITATION, THE RIGHT
AND ABILITY TO CURE ANY AND ALL DEFAULTS BY PHARMACOPEIA UNDER THIS AGREEMENT,
ANY AGREEMENT SUPPLEMENTARY HERETO, AND ANY AGREEMENT WITH A THIRD PARTY
AFFECTING OR COMPRISING ALL OR A PART OF THE PHARMACOPEIA TECHNOLOGY, AND TO
TAKE ANY OTHER ACTIONS, TO OPPOSE A REJECTION PURSUANT TO 11 U.S.C. §365 OF THIS
AGREEMENT, AND TO CONTRACT DIRECTLY WITH THIRD PARTIES, IF ANY, INVOLVED IN
CONTRACTED ARRANGEMENTS WITH PHARMACOPEIA WITH RESPECT TO PERFORMANCE OF THE
COLLABORATION), PROVIDED THAT SCHERING'S OBLIGATIONS TO MAKE PAYMENTS TO
PHARMACOPEIA