UNDER THIS AGREEMENT SHALL AUTOMATICALLY BE REDUCED BY THE AMOUNT
OF ALL OUT-OF-POCKET COSTS AND EXPENSES INCURRED BY SCHERING IN EXERCISING SUCH
RIGHTS.
THE PARTIES ACKNOWLEDGE AND AGREE THAT ALL INFORMATION, DATA AND OTHER
INTELLECTUAL PROPERTY REFERRED TO IN THIS SECTION 10.3 (INCLUDING, WITHOUT
LIMITATION, PHARMACOPEIA TECHNOLOGY) AND ALL AGREEMENT COMPOUNDS, AGREEMENT
PRODUCTS, COLLABORATION TECHNOLOGY AND ANY OTHER INTELLECTUAL PROPERTY THAT IS
LICENSED, OR IS THE SUBJECT OF ANY OTHER RIGHT, BENEFIT, PROTECTION OR PRIVILEGE
THAT IS GRANTED, TRANSFERRED OR OTHERWISE AFFORDED, TO SCHERING HEREUNDER IS
"INTELLECTUAL PROPERTY" WITHIN THE MEANING OF 11 U.S.C. §365.
10.4
TERMINATION FOR PHARMACOPEIA CHANGE IN CONTROL.
10.4.1
TERMINATION OF ENTIRE AGREEMENT.
IN THE EVENT OF ANY
PHARMACOPEIA CHANGE IN CONTROL DURING THE TERM OF THIS AGREEMENT, SCHERING SHALL
HAVE THE RIGHT TO TERMINATE THIS AGREEMENT UPON NINETY (90) DAYS WRITTEN NOTICE
AFTER SUCH PHARMACOPEIA CHANGE IN CONTROL.
IN SUCH EVENT, THE PROVISIONS OF
SECTIONS 10.6.1, 10.6.2, 10.6.3 AND 10.6.4(D) SHALL APPLY, BUT NONE OF THE
PROVISIONS OF SECTION 10.6.5 SHALL BE APPLICABLE.
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10.4.2
TERMINATION OF THE COLLABORATION.
IN THE EVENT THAT
SUCH PHARMACOPEIA CHANGE IN CONTROL OCCURS DURING THE TERM OF THE COLLABORATION,
SCHERING MAY, IN ITS DISCRETION, ELECT TO TERMINATE THE COLLABORATION (BUT NOT
THE AGREEMENT) ON NINETY (90) DAYS WRITTEN NOTICE AS SET FORTH IN
SECTION 2.2.3.
UPON RECEIPT OF WRITTEN NOTICE FROM SCHERING OF ITS DECISION TO
TERMINATE THE COLLABORATION (BUT NOT THE AGREEMENT) PURSUANT TO THIS
SECTION 10.4.2 AND SECTION 2.2.3, PHARMACOPEIA (OR ITS SUCCESSOR IN INTEREST AS
A RESULT OF THE PHARMACOPEIA CHANGE IN CONTROL) SHALL HAVE THE OPTION
(EXERCISABLE IN ITS SOLE DISCRETION) TO PROVIDE TO SCHERING WITHIN THIRTY (30)
DAYS AFTER RECEIPT OF SUCH NOTICE A WRITTEN CERTIFICATION SIGNED BY A SENIOR
CORPORATE OFFICER OF PHARMACOPEIA (OR SUCH SUCCESSOR) SETTING FORTH WRITTEN
REPRESENTATIONS AND WARRANTIES BY PHARMACOPEIA (OR SUCH SUCCESSOR):
(I)
THAT IT IS COMMITTED TO CONTINUING IN
GOOD FAITH TO PERFORM THE COLLABORATION UNDER THE TERMS OF THIS AGREEMENT;
(II)
THAT IT WILL CONTINUE TO PROVIDE AT LEAST
THE SAME LEVEL AND QUALITY OF PERSONNEL, FACILITIES AND RESOURCES FOR THE
PERFORMANCE OF THE COLLABORATION AS EXISTED PRIOR TO THE PHARMACOPEIA CHANGE IN
CONTROL;
(III)
THAT IT WILL IMPLEMENT SUCH ADDITIONAL
SAFEGUARDS AS MAY BE REQUIRED (AND WHICH ARE REASONABLY ACCEPTABLE TO SCHERING)
TO ENSURE THAT ALL OF SCHERING'S CONFIDENTIAL INFORMATION WILL BE PROTECTED FROM
UNAUTHORIZED DISCLOSURE OR USE BY PHARMACOPEIA (OR SUCH SUCCESSOR) AND ITS
AFFILIATES; AND
(IV)
THAT IT WILL TAKE SUCH OTHER ACTIONS AS ARE
REASONABLY NECESSARY TO PROVIDE REASONABLE ASSURANCES TO SCHERING THAT THE
RESULTS OF THE COLLABORATION, INCLUDING WITHOUT LIMITATION, ANY AGREEMENT
COMPOUNDS AND COLLABORATION TECHNOLOGY, WILL ONLY BE USED BY PHARMACOPEIA (OR
SUCH SUCCESSOR) AND ITS AFFILIATES IN FURTHERANCE OF THE COLLABORATION OR AS
OTHERWISE EXPRESSLY PERMITTED UNDER THE TERMS AND CONDITIONS OF THIS AGREEMENT.
IF PHARMACOPEIA (OR SUCH SUCCESSOR) DOES NOT PROVIDE A CERTIFICATION UNDER THIS
SECTION 10.4.2 WITHIN SUCH THIRTY (30) DAY PERIOD, THEN THE COLLABORATION SHALL
TERMINATE UPON EXPIRATION OF THE NINETY (90) PERIOD FOLLOWING SCHERING'S