PARTIES TO OVERSEE
THE PATENT PROSECUTION AND/OR ENFORCEMENT ACTIVITIES DESCRIBED IN ARTICLE VI,
AND TO FACILITATE COMMUNICATION AND AGREEMENT BETWEEN THE PARTIES REGARDING
INVENTORSHIP OF INVENTIONS MADE IN THE COLLABORATION AND THE CLASSIFICATION OF
SUCH INVENTIONS (E.G., AS SCHERING IMPROVEMENTS, PHARMACOPEIA IMPROVEMENTS,
COLLABORATION TECHNOLOGY, ETC.).
ADDITIONAL NON-VOTING REPRESENTATIVES OR
CONSULTANTS FROM EITHER PARTY MAY FROM TIME TO TIME BE INVITED BY SPL OR
PHARMACOPEIA TO ATTEND AND PARTICIPATE IN COLLABORATION COMMITTEE MEETINGS
(E.G., TO EVALUATE AND ADVISE ON BUSINESS OR SCIENTIFIC ISSUES) SUBJECT TO
COMPLIANCE WITH THE CONFIDENTIALITY PROVISIONS OF SECTION 7.1.
EACH PARTY SHALL
BE RESPONSIBLE FOR ITS OWN EXPENSES IN CONNECTION WITH THE COLLABORATION
COMMITTEE.
3.3
COLLABORATION COMMITTEE DECISIONS.
DECISIONS OF THE COLLABORATION COMMITTEE SHALL BE BASED UPON THE CONSENSUS OF
ALL THE MEMBERS.
IN THE EVENT THAT THE COLLABORATION COMMITTEE CANNOT OR DOES
NOT, AFTER GOOD FAITH EFFORTS, REACH AGREEMENT ON AN ISSUE, SUCH ISSUE SHALL BE
REFERRED TO THE PRESIDENT OF SPL'S AFFILIATE, THE SCHERING-PLOUGH RESEARCH
INSTITUTE ("SPRI"), AND THE PRESIDENT AND CHIEF OPERATING OFFICER OF
PHARMACOPEIA DRUG DISCOVERY FOR RESOLUTION.
IN THE EVENT THAT THESE OFFICERS
ARE UNABLE TO RESOLVE THE ISSUE WITHIN FIFTEEN (15) BUSINESS DAYS AFTER
SUBMISSION OF THE ISSUE TO THEM, THEN THE UNRESOLVED ISSUE MAY BE SUBMITTED BY
EITHER PARTY TO BINDING ARBITRATION PURSUANT TO SECTION 11.3 OF THIS AGREEMENT,
EXCEPT THAT THE DECISION SHALL BE MADE BY ONE (1) ARBITRATOR WITH EXPERTISE IN
PHARMACEUTICAL PRODUCT DEVELOPMENT, AND THE DECISION OF THE ARBITRATOR SHALL BE
RENDERED WITHIN SIX (6) MONTHS OF INITIATION OF THE ARBITRATION.
DURING THE
PENDENCY OF ANY SUCH ARBITRATION PROCEEDINGS, THE PARTIES SHALL PROCEED WITH
PERFORMANCE OF THE COLLABORATION FOLLOWING THE COURSE OF CONDUCT DETERMINED BY
SPL; PROVIDED, HOWEVER, THAT NOTWITHSTANDING THE FOREGOING, PHARMACOPEIA SHALL
NOT BE OBLIGATED TO (I) PERFORM ANY ACTION THAT WOULD VIOLATE ITS OBLIGATIONS TO
ANY THIRD PARTY OR CONTRAVENE SECTION 2.12, (II) SPEND OR FOREGO RECEIVING ANY
AMOUNTS OF MONEY (EXCEPT AS NECESSARY IN CONNECTION WITH THE FULFILLMENT OF
PHARMACOPEIA'S RESPONSIBILITIES UNDER SECTION 2.3), OR (III) KNOWINGLY PREPARE
OR DELIVER TO SPL ANY COMPOUNDS PREVIOUSLY LICENSED TO ANY THIRD PARTY.
NOTWITHSTANDING THE FOREGOING, SPL, IN ITS SOLE DISCRETION, SHALL HAVE COMPLETE
AND FINAL CONTROL OVER SPL'S RESEARCH, DEVELOPMENT AND COMMERCIALIZATION OF
SCHERING COMPOUNDS, AGREEMENT COMPOUNDS AND/OR AGREEMENT PRODUCT(S) IN
ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS AGREEMENT.
3.4
DEVELOPMENT STATUS; NOTICE OF SALE OF
AGREEMENT PRODUCTS.
DURING THE TERM OF THIS AGREEMENT, SPL SHALL PROVIDE
PHARMACOPEIA WRITTEN ANNUAL REPORTS WITHIN THIRTY (30) DAYS AFTER THE FIRST AND
EACH SUBSEQUENT ANNIVERSARY OF THE EFFECTIVE DATE, WHICH REPORTS SHALL PROVIDE:
(I) A BRIEF REPORT SUMMARIZING THE DEVELOPMENT STATUS OF EACH LEAD COMPOUND
AND/OR DEVELOPMENT CANDIDATE UNDER DEVELOPMENT AT SPL; (II) THE STATUS OF ALL
PATENT APPLICATIONS CLAIMING ANY LIBRARY COMPOUNDS OR DERIVATIVE COMPOUNDS, AND
(III) COPIES OF ALL SUCH PATENT APPLICATIONS WHICH HAVE PUBLISHED DURING THE
RELEVANT TWELVE (12) MONTH PERIOD AND WERE NOT PREVIOUSLY PROVIDED TO
PHARMACOPEIA.
SUCH REPORTS SHALL CONTAIN INFORMATION SUFFICIENT TO ALLOW
PHARMACOPEIA TO MONITOR THE STATUS OF SPL'S EFFORTS