Exhibit 10.3

 

Execution Copy

 

***Text Omitted and Filed Separately

with the Securities and Exchange Commission.

Confidential Treatment Requested

Under 17 C.F.R. Sections 200.80(b)(4)

and 240.24b-2.

 

 

COLLABORATIVE RESEARCH,

DEVELOPMENT, COMMERCIALIZATION

AND LICENSE AGREEMENT

 

 

BETWEEN

 

SENOMYX, INC.

 

AND

 

AJINOMOTO CO., INC.

 

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COLLABORATIVE RESEARCH, DEVELOPMENT,
COMMERCIALIZATION AND LICENSE AGREEMENT

 

THIS AGREEMENT is entered into as of March 23, 2006 (the “Effective Date”) by
and between SENOMYX, INC., a Delaware Corporation having offices at 11099 North
Torrey Pines Road, La Jolla, CA 92037, U.S.A. (“Senomyx”) and AJINOMOTO
CO., INC., a Japanese Corporation, having its principal place of business at
15-1, Kyobashi 1-chome, Chuo-ku, Tokyo 104-8315, Japan (“Ajinomoto”).

 

BACKGROUND

 

Ajinomoto and Senomyx desire to enter into this Agreement whereunder Senomyx
will grant Ajinomoto certain license rights to Senomyx [***] Compounds and
Senomyx [***] Compounds for use in the field and in the territory as provided
herein below. In addition, this Agreement will cover two collaborative research
and/or development programs to (i) develop Senomyx [***] Compounds during the
Collaborative Period under the applicable Research Plan for use in the
applicable product categories and Territory set forth in Section 8.1 (the “[***]
Program I”); and (ii) discover and develop Senomyx [***] Compounds during the
Collaborative Period under the applicable Research Plan for use in the
applicable product categories and Territory set forth in Section 8.2 (the “[***]
Program II”).

 

NOW, THEREFORE, in consideration of the foregoing promises and of the covenants,
representations and agreements set forth below, the parties hereby agree as
follows:

 

THE AGREEMENT

 

1.     Definitions. Certain terms set forth in this Agreement with initial
capitals are defined in Appendix A, which is incorporated herein by reference.

 

2.     Steering Committee. Within [***] of the Effective Date, the parties will
establish a joint steering committee, which will be made up of representatives
from the parties (the “Steering Committee”). The Steering Committee will direct
the efforts of the Collaborative Program. The Steering Committee will consist of
two (2) representatives designated by Senomyx and two (2) representatives
designated by Ajinomoto. Steering Committee members may delegate their voting
powers to delegates from their respective companies. Each member of the Steering
Committee will have one (1) vote. The Steering Committee will meet at least four
(4) times per year during the Collaborative Period, and thereafter from time to
time, using mutually agreed upon meeting locations and formats including
teleconferencing and videoconferencing. Each party shall bear its own expenses
relating to the meetings and activities of the Steering Committee. Senomyx will
prepare and deliver to the members of the Steering Committee minutes of such
meetings for review and

 

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approval by both parties. Decisions of the Steering Committee will be made by
unanimous vote, at a meeting where all four voting representatives are present,
or by unanimous written consent.

 

3.     Collaborative Program.

 

3.1          Research Plans; Staffing.  

 

(A)   Research Plans. The parties will prepare the Research Plans within [***]
from the Effective Date and will conduct the [***] Program I and [***] Program
II pursuant thereto. The Research Plan will be reviewed at the first meeting of
the Steering Committee. The Research Plans for the respective programs will be
prepared and reviewed as follows:

 

•      [***] Program I:  [***], the Steering Committee will authorize the same;
and

 

•      [***] Program II: [***], the Steering Committee will authorize the same.

 

(B)   Staffing. Senomyx represents and warrants that the personnel it will
provide to participate in the Collaborative Program are qualified to perform the
work in the respective Research Plan. Senomyx shall identify to Ajinomoto the
Senomyx personnel, including their academic and work experience, who shall
participate in the Collaborative Program. Senomyx may change such personnel to
other qualified personnel from time to time, in its reasonable discretion,
provided that, to the extent reasonably possible, Senomyx shall notify Ajinomoto
in advance of any such change and identify to Ajinomoto such new personnel,
including their academic and work experience.

 

3.2      [***] Program I.  During the Collaborative Period, Senomyx will
collaborate with Ajinomoto in [***] Program I on (i) an Exclusive basis with
respect to [***] Product Category I in the Territory; (ii) a Co-Exclusive basis
with respect to [***] Product Category II in the Territory; and (iii) an
Exclusive basis with respect to [***] Product Category III in the Territory.

 

(A)  Research Plan. The Research Plan for [***] Program I shall include
(i) evaluation by Ajinomoto of the Senomyx [***] Compound(s); and (ii) product
development by Ajinomoto of the same.

 

(B)   Responsibilities of the Parties. During the Collaborative Period,
Ajinomoto will use its reasonable commercial efforts to perform the activities
outlined in the Research Plan. During the Collaborative Period,

 

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Senomyx will use its reasonable commercial efforts using the Research Fee
provided under Section 7.3 to support Ajinomoto’s performance of the activities
in accordance with the Research Plan, including, without limitation, [***]
(i) making available any and all relevant information regarding the Senomyx
[***] Compounds with respect to [***]; and (ii) providing to Ajinomoto
reasonable quantities of [***] Senomyx [***] Compounds selected by Ajinomoto,
for evaluation and/or product development. During the Collaborative Period,
Ajinomoto may include in [***] Program I the evaluation of the [***] Compounds
needed under [***] Program I, or subject to Section 13, may have a third party
manufacture the same. [***] Upon expiration of the Collaborative Period, the
parties’ research and development obligations pursuant to this Section 3.2 will
expire.

 

(C)   Co-Exclusivity/Exclusivity. For so long as Ajinomoto maintains its
Exclusive and Co-Exclusive licenses pursuant to Sections 8.1 and 8.2, Senomyx
[***]. For the avoidance of doubt, this Section 3.2(C) will not be construed as
[***].

 

3.3      [***] Program II.  During the Collaborative Period, Senomyx will
collaborate with Ajinomoto in [***] Program II on (i) an Exclusive basis [***]
in [***] Product Category I in the Territory; (ii) a Co-Exclusive basis [***] in
[***] Product Category II in the Territory; (iii) an Exclusive basis [***] in
[***] Product Category II in the Territory; (iv) an Exclusive basis [***] in
[***] Product Category III in the Territory; and (v) an Exclusive basis [***] in
[***] Product Category IV in the Territory.    

 

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(A)  Research Plan. The Research Plan for [***] Program II shall include
(i) research by Senomyx to determine whether there are any Senomyx [***]
Compounds among the compounds Controlled by Senomyx and [***]; (ii) evaluation
of Senomyx [***] Compounds by Ajinomoto; and (iii) development by Ajinomoto of
Selected Senomyx [***] Compounds. Ajinomoto will decide whether or not to
conduct the work provided in Section 3.3 (A) (ii) and (iii) based on the results
of the work provided for in Section 3.3 (A) (i). In the event that Ajinomoto
wishes Senomyx to [***] Controlled by Senomyx in an attempt to [***] Compound,
Ajinomoto shall so notify Senomyx and Senomyx shall prepare a draft Research
Plan for Ajinomoto’s review. Following approval by the Steering Committee of
such Research Plan, such Research Plan shall be included in [***] Program II. In
the event such [***] is included in [***] Program II, the Steering Committee
shall [***]; provided, however, that (i) in no event shall the amount of such
[***]; and (ii) such [***].

 

(B)   Responsibilities of the Parties. During the Collaborative Period, Senomyx
will use its reasonable commercial efforts using the applicable Research Fee
provided under Section 7.3 to perform the activities outlined in the Research
Plan. [***] Senomyx will prepare a data package for Senomyx [***] Compounds, and
reasonable quantities of [***] Senomyx [***] Compounds, which results from the
works described in Section 3.3 (A) (i) and (ii), subject to agreement of the
parties on the contents of such data package. During the Collaborative Period,
Ajinomoto will use its reasonable commercial efforts to perform the activities
in accordance with the Research Plan, and the evaluation of the data package and
the [***] Senomyx [***] Compounds. With respect to each Senomyx [***] Compound
[***] in the course of [***] Program II, by no later than [***] immediately
following the Collaborative Period (the “Selection Date”), Ajinomoto may, upon
written notice to Senomyx, select [***] Senomyx [***] Compound(s), or such
larger reasonable number as the parties shall reasonably agree, for development;
provided, however, that if a Regulatory Approval has been obtained with respect
to a Senomyx [***] Compound at least

 

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[***] prior to the Selection Date, Ajinomoto may decide by a date which is [***]
after the date of [***] whether Ajinomoto selects such compound or not; provided
further, that Ajinomoto shall [***]. Until the Selection Date, Ajinomoto
may include in [***] Program II the evaluation of the manufacturability of the
relevant Senomyx [***] Compound, and if Ajinomoto so desires, it may manufacture
any necessary additional quantities of such Senomyx [***] Compounds needed under
[***] Program II, or subject to Section 13, may have a third party manufacture
the same. [***]  During the Collaborative Period, Senomyx and Ajinomoto will
cooperate in good faith to support the other party’s performance of the
activities set forth in the Research Plan. Upon expiration of the Collaborative
Period, the parties’ research and development obligations pursuant to this
Section 3.3 will expire. If no compounds are selected as Selected Senomyx [***]
Compound(s) pursuant to this Section 3.3(B) by the Selection Date, [***].

 

(C)   Extension of the Collaborative Period. Ajinomoto may extend the
Collaborative Period for [***] Program II beyond the original three (3) year
Collaborative Period. If Ajinomoto chooses to extend the Collaborative Period
for [***] Program II, Ajinomoto must notify Senomyx at least [***] prior to
expiration of the Collaborative Period. In such event, the Collaborative Period
of [***] Program II shall be extended in [***] increments; provided, however,
that in no event shall the Research Fee in the Collaborative Period so extended
[***].

 

(D)  Co-Exclusivity/Exclusivity. During the Collaborative Period, Senomyx shall
[***]; provided, however, that Senomyx may [***]. Notwithstanding the foregoing,
this Section 3.3(D) will not be construed as [***]

 

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[***]. For the avoidance of doubt, provided that Ajinomoto has [***], Ajinomoto
shall [***].

 

3.4      Acceptance of Ajinomoto’s Scientists. For the purpose of [***] Program
II, Senomyx will accept [***] Ajinomoto’s scientists at Senomyx’s laboratory
(“Ajinomoto Scientists”), the detailed terms and conditions of such acceptance
of the Ajinomoto Scientists will be discussed and agreed between Senomyx and
Ajinomoto separately. Such terms and conditions will include [***].

 

3.5      Product Development and Commercialization.

 

(A)  Product Development. Within a commercially reasonable time, but no later
than [***] of the selection of a Selected Senomyx [***] Compound, Ajinomoto will
prepare a plan for product development (the “Product Development Plan”) for
[***] Products containing such compound for approval by the Steering Committee,
which will be incorporated into the minutes of the Steering Committee. Within a
commercially reasonable time, but no later than [***] of the Effective Date,
Ajinomoto will prepare a Product Development Plan for [***] Products containing
Senomyx [***] Compounds for approval by the Steering Committee. The Product
Development Plan(s) will set forth the following:  (i) specific products with
potential inclusion of any of the Selected Senomyx [***] Compound(s) and/or
Senomyx [***] Compounds; (ii) specific countries of potential interest for
commercialization of [***] Products; (iii) prioritization of [***] Products and
countries for development and commercialization; and (iv) a development plan
timeline including plans for [***] Product [***]. Ajinomoto will use its
commercially reasonable efforts to perform the activities set forth in the
Product Development Plan(s). For the avoidance of doubt, Ajinomoto will be
responsible for [***] of [***] Product [***] in accordance with the activities
outlined in the Product Development Plan(s).

 

(B)   Product Commercialization. Ajinomoto will use commercially reasonable
efforts to commercialize [***] Product containing one or more

 

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Senomyx [***] Compounds within [***] from [***]. Ajinomoto will use commercially
reasonable efforts to commercialize [***] Product containing one or more of the
Selected Senomyx [***] Compound(s) within [***] from [***]. Notwithstanding any
failure of Ajinomoto to commercialize [***] Product in [***] within such period,
Ajinomoto shall not lose any rights under Section 8 in [***]. Ajinomoto may, at
any time, elect to discontinue all rights to one or more Senomyx [***] Compounds
or one or more Selected Senomyx [***] Compounds on a country-by country basis
upon written notice to Senomyx, and Ajinomoto will, after such written notice,
lose all rights provided for in Section 8 to such compound(s) in such
discontinued country(ies) and also will be released from any obligations with
respect to such compound(s) in such country(ies). Notwithstanding the foregoing,
(i) any accrued payment obligations of Ajinomoto (including minimum annual
royalties) will continue to be payable; and (ii) such minimum annual royalty
obligations with respect to (x) [***] and/or (y) [***] will continue unless
Ajinomoto has discontinued all rights to all Senomyx [***] Compounds and all
Selected Senomyx [***] Compounds in either (i) [***] and/or (ii) [***].

 

3.6      Regulatory. Through the Steering Committee process, both parties will
have input into the regulatory approval process to be followed with respect to
Senomyx [***] Compound(s) and Senomyx [***] Compound(s), including, without
limitation, safety studies, regulatory strategy, and timing.

 

(A)  Regulatory Filings. Subject to the provision of Section 3.6(C), all
regulatory filings for any Senomyx [***] Compounds and Senomyx [***] Compounds
and all Regulatory Approvals received or issued in connection therewith shall be
[***]. Subject to Section 3.6(C), any data that is required to submit or
complete a regulatory filing or obtain Regulatory Approval (“Regulatory Filing
Data”) shall be [***]. Any regulatory filings made by Ajinomoto under
Section 3.6(C) and all Regulatory Approvals issued in connection therewith will
[***]

 

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[***].

 

Notwithstanding the foregoing, at the request of [***], and subject to [***]
consent (not to be unreasonably withheld), [***] will, with the commercially
reasonable assistance of [***], represent [***].

 

(B)  Reimbursement of the Cost of Filings to [***]. [***] will reimburse [***]
for the costs associated with the regulatory filings and the Regulatory Filing
Data for the Senomyx [***] Compounds and Selected Senomyx [***] Compounds made
pursuant to Section 3.6(A); provided, however, that if any Third Party licensee
of [***] has the right to [***]. For the avoidance of doubt, with respect to
Senomyx [***] Compounds [***].

 

(C)  [***] to Make Filings. If at any time Ajinomoto determines, in its
reasonable discretion, that a regulatory filing with respect to a Senomyx [***]
Compound or a Selected Senomyx [***] Compound in any country within the
Territory is necessary, then Ajinomoto may request that Senomyx make such
filing. [***] in the event that Senomyx fails to agree to make the regulatory
filing requested by Ajinomoto or to take reasonable steps to make such filing
(including, without limitation, taking steps to commence safety studies) within
[***] of the date of such Ajinomoto request. In the event [***] the Steering
Committee for the Steering Committee’s review and approval, which shall not be
unreasonably withheld. To the extent [***]

 

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[***]. Ajinomoto hereby [***]; provided, however, that whenever Senomyx [***],
then Senomyx will [***]. In addition, Senomyx will have a [***]; provided,
however, that the parties will agree on [***]. Notwithstanding the foregoing,
Senomyx shall [***].

 

4.     Right of First Negotiation and [***].

 

4.1      Right of First Negotiation. Until [***], Ajinomoto shall have the
exclusive right of first negotiation to be granted additional licenses to expand
the [***] Field or the Territory. Except to the extent that Senomyx is [***],
Senomyx will, to the extent it will not breach any existing agreement with any
Third Parties, negotiate in good faith with Ajinomoto the terms and conditions
for a license to the expanded territory and/or [***] Field. After [***], if at
any time during the Term Senomyx wishes to develop any new opportunity with a
Third Party in [***] or [***], then Senomyx will notify Ajinomoto in writing of
such opportunity and Ajinomoto will then have [***] to communicate to Senomyx in
writing its interest in such opportunity and specific financial terms. In the
event Senomyx does not receive such written notification within such [***]
period or if such terms offered by Ajinomoto are [***], then Senomyx shall
[***]. If the terms offered by Ajinomoto are [***], the parties shall [***] for
a period not to exceed [***], which period can be extended by mutual agreement
of the parties.

 

4.2      [***]. In the event that, [***], Senomyx grants Co-Exclusive rights to
a Third Party to a Senomyx [***] Compound or

 

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a Selected Senomyx [***] Compound in the Territory and the [***] Field [***],
Senomyx will notify Ajinomoto and Ajinomoto [***].

 

5.     Law and Regulation. The [***] Compounds, Senomyx [***] Compounds, Senomyx
[***] Compounds, Selected Senomyx [***] Compounds, and Substances provided by
Senomyx under this Agreement must be used in compliance with all applicable laws
and regulations, including, without limitation, all import and export laws and
regulations.

 

6.     Reporting. During the Collaborative Period, each party will report to the
other a written summary, the contents of which shall be determined by the
parties following the Effective Date, of results of research and development
work it carries out, if any, under this Agreement within [***] after each
quarterly Steering Committee meeting. The exchange of such report may be
reasonably supplemented, at the request of the party receiving a report, by
correspondence and/or, upon reasonable prior notice, visits to the other party’s
facilities. In addition, each party agrees to prepare and exchange written and
electronic reports concerning any results and data that must be used by either
party as supporting information for any regulatory filings. Anything in this
Agreement to the contrary notwithstanding, Ajinomoto shall be under no
obligation to report to Senomyx [***]. Each party shall promptly bring to the
other party’s attention any [***] with respect to any Senomyx [***] Compound or
Senomyx [***] Compound.

 

7.     Financial Terms.

 

7.1          License Fee for Licenses to Senomyx [***] Compounds. In
consideration for the license grants for [***] Program I under Section 8,
Ajinomoto shall pay to Senomyx a license fee of [***] within [***] of the
Effective Date. Such license fee shall be non-refundable and non-creditable.

 

7.2          Fee for Technology Access for [***] Program II and License to
Senomyx [***] Compounds. In consideration for [***] Program II, including
without limitation, for the license grants under Section 8 for Senomyx [***]
Compounds, Ajinomoto shall pay to Senomyx a fee of [***] within [***] of the
Effective Date. Such fee shall be non-refundable and non-creditable.

 

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7.3          Research Fees. During the Collaborative Period of [***] Program I
and [***] Program II, Ajinomoto will pay Senomyx research fees for the work of
Senomyx under [***] Program I and [***] Program II (“Research Fees”). The
Research Fees for the first year of the Collaborative Program shall be [***]
(which shall be equivalent to the cost of [***] FTEs on the basis of [***] per
FTE, for [***] Program I and/or [***] Program II hereunder, including, without
limitation, the cost of overhead, salaries and necessary materials and supplies
for such FTEs). The Research Fees for the second year of the Collaborative
Program shall be a minimum of [***]. The Research Fees for the third year of the
Collaborative Program shall be a minimum of [***], and thereafter, the same will
be decided through a good faith negotiation between Senomyx and Ajinomoto. The
Research Fees will be paid in equal quarterly installments payable in advance.
The first payment will be made within [***] following the Effective Date. The
Research Fees [***].   

 

7.4          Milestone Payments. Ajinomoto will pay Senomyx the following
non-creditable, non-refundable milestone payments within [***] of the
occurrence, and written backup information to Ajinomoto from Senomyx, of the
following milestone events for [***] Program I and [***] Program II:

 

•      Milestone 1: [***];

 

•      Milestone 2: [***].   

 

With respect to Milestone 2 above, within [***] of the [***], Ajinomoto will
notify

 

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Senomyx whether Ajinomoto wishes to commercialize such compound. In the event
Ajinomoto does not wish to commercialize such compound, then [***]; and

 

•      Milestone 3: [***].

 

7.5          Royalty for [***] Products. Pursuant to the provisions of
Section 7.7, Ajinomoto will pay to Senomyx a royalty of [***] on [***] during
the Royalty Term; provided, however, that the royalty rate of the sales of [***]
Products in [***] Product Category III and [***] Product Category IV shall be
[***] on [***]. For the avoidance of doubt, there shall be no double or triple
royalty in the event that [***] Product contains more than any one of the
following (i) Senomyx [***] Compound(s); and/or (ii) Senomyx [***] Compound(s).
In the event that Ajinomoto sells [***] Products to Affiliates of Ajinomoto,
royalties will be based on [***]. In all such cases above, the sales price in
such transactions shall be determined on an arms-length basis. For the avoidance
of doubt, [***] Products in [***] Product Category III and [***] Product
Category IV shall always be sold as a [***] and shall, in no event, be sold as
[***].

 

7.6          Minimum Annual Royalties.

 

7.6.1        Minimum Annual Royalty Amount. During the Royalty Term, Ajinomoto
shall pay to Senomyx a minimum annual royalty based on the following
schedule for each of the following two territories (“Minimum Annual Royalty”):
(i) [***]; and (ii) [***].

 

FOLLOWING [***] FOR [***]

 

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Anniversary of “Commercialization Date”

 

Minimum Annual Royalty Payment Due

 

 

 

The Commercialization Date with respect to [***] means the earlier of the
following:  [***].

 

 

1st Anniversary of Commercialization Date in [***]

 

[***]

2nd Anniversary of Commercialization Date in [***]

 

[***]

3rd Anniversary of Commercialization Date in [***], and successive anniversaries

 

[***]

 

Following [***] for [***]

 

Anniversary of “Commercialization Date”

 

Minimum Annual Royalty Payment Due

 

 

 

The Commercialization Date with respect to [***] means the earlier of the
following:  [***].

 

 

1st Anniversary of Commercialization Date in [***]

 

[***]

2nd Anniversary of Commercialization Date in [***]

 

[***]

3rd Anniversary of Commercialization Date in [***] and successive anniversaries

 

[***]

 

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For purposes of this Section 7.6, if [***] for a Senomyx [***] Compound prior to
[***], the [***] shall be deemed to be the [***]. There will be no duplication
of Minimum Annual Royalties in either territory; only one Minimum Annual Royalty
will be paid in the applicable territory even if [***] for both a Senomyx [***]
Compound and a Senomyx [***] Compound [***]. For each of (i) [***]; and
(ii) [***], the Minimum Annual Royalties shall be paid according to a
schedule based on when the first Minimum Annual Royalty payment for [***]
Compound becomes due. Thus, for example, if (i) [***] for a Senomyx [***]
Compound [***] in [***] on June 15, 2006 and (ii) then (x) [***] for a Senomyx
[***] Compound [***] in [***] on July 15, 2006, or (y) if [***] prior thereto,
Ajinomoto [***] on such date and year, Minimum Annual Royalties will first
become due on [***] and each subsequent Minimum Annual Royalty payment for [***]
will be due on an anniversary thereof, but no additional Minimum Annual
Royalties will become due on [***] notwithstanding that such date would be [***]
with respect to such Senomyx [***] Compound.

 

7.6.2        Calculation of the Minimum Annual Royalty. The amount by which the
earned royalties provided for in Section 7.5 paid for a Minimum Annual Royalty
Year (as defined below) is less than the amount of the relevant Minimum Annual
Royalty shall be paid by Ajinomoto to Senomyx within [***] from the end of that
Minimum Annual Royalty Year; provided, however, that a “Minimum Annual Royalty
Year” shall mean each twelve-(12)-month period commencing on the
Commercialization Date and each anniversary thereof. Anything in this Agreement
to the contrary notwithstanding, with respect to the Minimum Annual Royalty for
[***], the [***] shall be used to determine whether a Minimum Annual Royalty is
due with respect to such [***].

 

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7.6.3        Pro Ration of Minimal Annual Royalty. In the event of the
expiration or termination of this Agreement [***], the Minimum Annual Royalty
for the final Minimum Annual Royalty Year shall be calculated by subtracting
(i) the amount of the applicable earned royalty for such Minimum Annual Royalty
Year from (ii) the product of (a) the amount of the applicable Minimum Annual
Royalty multiplied by (b) the quotient of the number of days from the beginning
of such Minimum Annual Royalty Year through the date of such expiration or
termination divided by the number of days in such Minimum Annual Royalty Year.

 

7.6.4        Reset of Minimum Annual Royalty. Once the Minimum Annual Royalties
are triggered as provided above, such Minimum Annual Royalties will remain in
place during the entire Royalty Term unless this Agreement is earlier terminated
pursuant to the provisions of Section 14; provided, however, that the
Commercialization Date may be re-set if both of the following occur:  [***]. In
the event the Commercialization Date is re-set, Ajinomoto will be responsible
for the Minimum Annual Royalty [***] with respect to the returned compounds. By
way of example, if (i) Ajinomoto commercializes in [***] Product containing a
Senomyx [***] Compound, (ii) the Commercialization Date for such [***] Product
is October 1, 2007, (iii) the [***] is March 31, 2010, and (iv) the aggregate
earned royalties for the last Minimum Annual Royalty Year were [***], then the
Minimum Royalty Payment for the last Minimum Annual Royalty Year shall be [***].
In addition, if Ajinomoto commercializes in [***] Product containing a Selected
[***] Compound (“[***] Product”) more than [***], the Minimum Annual Royalties
for the [***] Product for the first Minimum Annual Royalty Year will be [***].

 

7.7          Payment Terms. The royalties due under Section 7.5 will be paid
within [***] after the end of each calendar quarter period in which such
royalties are earned during the Royalty Term for [***]. With each such quarterly
payment, Ajinomoto (or its respective Affiliate) will furnish to Senomyx a
royalty statement in sufficient detail to permit confirmation of the accuracy of
the royalty payment made, which sets forth on a country-by-country basis the
[***]

 

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[***], the royalties payable in United States dollars, the method used to
calculate the royalty, the exchange rate used and [***].

 

7.8          Currency of Payment. All payments to be made under this Agreement,
including the royalties payable to Senomyx by Ajinomoto, will be paid in United
States dollars by wire transfer or other mutually acceptable means to a bank
account designated by Senomyx. With respect to each quarter, for countries other
than the United States, whenever conversion of payments from any foreign
currency are required, such conversion will be made at [***].

 

7.9          Taxes Withheld. Any income or other tax that Ajinomoto, or any of
its Affiliates is required by a government agency to withhold and pay on behalf
of Senomyx with respect to the royalties payable under this Agreement will be
deducted from and offset against such royalties prior to remittance to Senomyx;
provided, however, that in regard to any tax so deducted, Ajinomoto will give or
cause to be given to Senomyx such assistance as may reasonably be necessary to
enable Senomyx to claim exemption from or credit for the tax so deducted, and in
each case will without delay furnish to Senomyx proper evidence of the taxes
paid on Senomyx’s behalf.

 

7.10        Late Payment. In the event that any payment, including royalty
payments, due hereunder is not made when due, the payment will accrue interest
from that date due at the rate of [***] per annum; provided, however, that in no
event will such rate exceed the maximum legal annual interest rate. The payment
of such interest will not limit the receiving party from exercising any other
rights it may have as a consequence of the lateness of any payment.

 

7.11        Records of [***] and Royalty Calculations. During the Royalty Term
and for a period of [***] thereafter, Ajinomoto will keep complete and accurate
records of [***] in sufficient detail to allow the accrued royalties to be
determined accurately in accordance with the generally accepted accounting
principles of the relevant country and to verify the royalty payments pursuant
to Section 7.5. Senomyx, following reasonable prior written notice to Ajinomoto,
will have the right [***] in order to verify the accuracy of the reports of
[***] and royalty payments. [***]

 

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[***]. Senomyx will bear [***] unless [***], in which event, Ajinomoto will bear
[***]. In all events, Ajinomoto will pay any underpayment with interest in
accordance with Section 7.10 and Senomyx shall refund any overpayment with
interest in accordance with Section 7.10. Senomyx acknowledges that the
information concerning royalty payments reports, and all other information
learned [***] constitutes the Confidential Information of Ajinomoto, but Senomyx
may disclose the same to the extent necessary for Senomyx to enforce its rights
under this Agreement or if disclosure is required by law or falls under an
exception under Section 10.4; provided, however, that in the event of such
disclosure, Senomyx shall observe the provisions of the second paragraph of
Section 10.4.

 

8.     Grants. Commencing on the Effective Date and throughout the Royalty Term,
Senomyx hereby grants to Ajinomoto the following rights, which shall be subject
to the terms and conditions of this Agreement: 

 

8.1          Grant of Rights regarding Senomyx [***] Compounds:

 

(A)  [***] Product Category I. An Exclusive, nontransferable (except as
permitted under Sections 8.3 and 17.12) license under the Senomyx Technology to
(i) use Senomyx [***] Compounds for evaluation and development of [***] Products
in [***] Product Category I in the Territory; (ii) make, have made, use, sell,
offer for sale, have sold, import and export [***] Products containing Senomyx
[***] Compounds in [***] Product Category I in the Territory; and (iii) make and
have made Senomyx [***] Compounds to be used by Ajinomoto and/or its Affiliates
(only if pursuant to a permitted sublicense as provided for in Section 8.3) in
[***] Products in [***] Product Category I in the Territory, subject to
Section 13.

 

(B)   [***] Product Category II.  A Co-exclusive, nontransferable (except as
permitted under Sections 8.3 and 17.12) license under the Senomyx Technology to
(i) use Senomyx [***] Compounds for evaluation and development of [***] Products
in [***] Product Category II in the Territory; (ii) make, have made, use, sell,
offer for sale, have sold, import and export [***] Products containing Senomyx
[***] Compounds in [***] Product Category II in the Territory; and (iii) make
and have made Senomyx [***] Compounds to be used by Ajinomoto and/or its
Affiliates (only if pursuant

 

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to a permitted sublicense as provided for in Section 8.3) in [***] Products in
[***] Product Category II in the Territory, subject to Section 13.

 

(C)   [***] Product Category III. An Exclusive, nontransferable (except as
permitted under Sections 8.3 and 17.12) license under the Senomyx Technology to
(i) use Senomyx [***] Compounds for evaluation and development of [***] Products
in [***] Product Category III in the Territory; (ii) make, have made, use, sell,
offer for sale, have sold, import and export [***] Products containing Senomyx
[***] Compounds in [***] Product Category III in the Territory; and (iii) make
and have made Senomyx [***] Compounds to be used by Ajinomoto and/or its
Affiliates (only if pursuant to a permitted sublicense as provided for in
Section 8.3) in [***] Products in [***] Product Category III in the Territory,
subject to Section 13.

 

8.2          Grant of Rights regarding Senomyx [***] Compounds. A non-exclusive,
nontransferable (except as permitted under Sections 8.3 and 17.12), license
under the Senomyx Technology to [***] Senomyx [***] Compound(s) [***] in [***]
Product Category I, [***] Product Category II, [***] Program III and [***]
Product Category IV [***] in the Territory. In addition, Senomyx hereby grants
to Ajinomoto the following rights below:

 

(A)  [***] Product Category I. An Exclusive, nontransferable (except as
permitted under Sections 8.3 and 17.12) license under the Senomyx Technology to
(i) [***] Senomyx [***] Compounds [***] for [***] of [***] Products in [***]
Product Category I in the Territory; (ii) make, have made, use, sell, offer for
sale, have sold, import and export [***] Products containing Selected Senomyx
[***] Compounds in [***] Product Category I in the Territory; and (iii) make and
have made Selected Senomyx [***] Compounds to be used by Ajinomoto and/or its
Affiliates (only if pursuant to a permitted sublicense as provided for in
Section 8.3) in [***] Products in [***] Product Category I in the Territory,
subject to Section 13.

 

(B)   [***] Product Category II. With respect to [***], a Co-Exclusive, and with
respect to [***] an Exclusive, nontransferable (except as permitted under
Sections 8.3 and 17.12) license under the Senomyx Technology to (i) [***]
Senomyx [***] Compounds [***] for [***] of [***] Products in [***] Product
Category II in the Territory; (ii)

 

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make, have made, use, sell, offer for sale, have sold, import and export [***]
Products containing Selected Senomyx [***] Compounds in [***] Product Category
II in the Territory; and (iii) make and have made Selected Senomyx [***]
Compounds to be used by Ajinomoto and/or its Affiliates (only if pursuant to a
permitted sublicense as provided for in Section 8.3) in [***] Products in [***]
Product Category II in the Territory, subject to Section 13.

 

(C)   [***] Product Category III. An Exclusive, nontransferable (except as
permitted under Sections 8.3 and 17.12) license under the Senomyx Technology to
(i) [***] Senomyx [***] Compounds [***] for [***] of [***] Products in [***]
Product Category III in the Territory; (ii) make, have made, use, sell, offer
for sale, have sold, import and export [***] Products containing Selected
Senomyx [***] Compounds in [***] Product Category III in the Territory; and
(iii) make and have made Selected Senomyx [***] Compounds to be used by
Ajinomoto and/or its Affiliates (only if pursuant to a permitted sublicense as
provided for in Section 8.3) in [***] Products in [***] Product Category III in
the Territory, subject to Section 13.

 

(D)  [***] Product Category IV. With respect to [***], an Exclusive,
nontransferable (except as permitted under Sections 8.3 and 17.12) license under
the Senomyx Technology to (i) [***] Senomyx [***] Compounds [***] for [***] of
[***] Products in [***] Product Category IV in the Territory; (ii) make, have
made, use, sell, offer for sale, have sold, import and export [***] Products
containing Selected Senomyx [***] Compounds in [***] Product Category IV in the
Territory; and (iii) make and have made Selected Senomyx [***] Compounds to be
used by Ajinomoto and/or its Affiliates (only if pursuant to a permitted
sublicense as provided for in Section 8.3) in [***] Products in [***] Product
Category IV in the Territory, subject to Section 13.   

 

8.3          Limitations on Licenses. Except as provided below, Ajinomoto
may not sublicense its rights under Section 8 to third parties. Ajinomoto
may sublicense its rights under Section 8.1 and/or 8.2 to any Affiliates, on the
condition that Ajinomoto assumes the responsibility for performance due by any
such sublicensee under a sublicense of the obligations imposed upon Ajinomoto in
the license under this Agreement (including, without limitation, diligence
obligations under Section 3 of this Agreement and timely payment by Ajinomoto
under Section 7). Ajinomoto will agree to be responsible for and to guarantee
payment of royalties due on [***] by any of Ajinomoto’s sublicensees hereunder.

 

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8.4          Grant of Rights from Ajinomoto to Senomyx.

 

8.4.1.       Possible Future Grants. If Ajinomoto identifies any Ajinomoto
Technology that may be relevant or useful for the research purposes under this
Agreement, [***] license for Senomyx to use the relevant Ajinomoto Technology
for the [***]. For the avoidance of doubt, this license will not include the
right to sub-license unless Ajinomoto gives its consent, which may be withheld
for any reason.

 

8.4.2        [***]; Patent License. Ajinomoto hereby grants to Senomyx a
non-exclusive, sublicenseable, royalty-free, perpetual license under any
Ajinomoto Patent Rights made in the course of the Collaborative Program during
the Collaborative Period, claiming [***] (i) to make, have made, use, sell,
offer for sale, have sold, import and export in any country outside of the
Territory products containing Senomyx [***] Compounds, Senomyx [***] Compounds
and Selected Senomyx [***] Compounds; (ii) to make, have made, use, sell, offer
for sale, have sold, import and export within the Territory outside of the [***]
Field products containing Senomyx [***] Compounds, Senomyx [***] Compounds and
Selected Senomyx [***] Compounds; (iii) only for so long as the rights in the
Co-Exclusive Field remain Co-Exclusive, to make, have made, use, sell, offer for
sale, have sold, import and export in the Territory in the Co-Exclusive Field
products containing Senomyx [***] Compounds, Senomyx [***] Compounds and
Selected Senomyx [***] Compounds; and (iv) in the event that Ajinomoto’s
Exclusive or Co-Exclusive licenses under Section 8 terminate, to make, have
made, use, sell, offer for sale, have sold, import and export in any country
inside the Territory in the [***] Field products containing Senomyx [***]
Compounds, Senomyx [***] Compounds and Selected Senomyx [***] Compounds;
provided, however, that the forgoing shall not be deemed to restrict or
otherwise limit the scope of the licenses granted to Ajinomoto under Section 8.
Notwithstanding anything to the contrary herein, this Section 8.4.2 shall not be
construed as granting any rights to Senomyx under any [***] under Section 9.5.1
or [***] under Section 9.5.2.  

 

8.4.3        [***]; Covenant Not To Sue. Ajinomoto hereby grants to Senomyx and
its Affiliates, licensees and sublicensees a worldwide royalty-free, perpetual
immunity from suit

 

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by Ajinomoto or its Affiliates based on any claim of [***] developed in the
course of the Collaborative Program during the Collaborative Period, relating to
[***] (i) to make, have made, use, sell, offer for sale, have sold, import and
export in any country outside of the Territory products containing Senomyx [***]
Compounds, Senomyx [***] Compounds and Selected Senomyx [***] Compounds; (ii) to
make, have made, use, sell, offer for sale, have sold, import and export within
the Territory outside of the [***] Field products containing Senomyx [***]
Compounds, Senomyx [***] Compounds and Selected Senomyx [***] Compounds;
(iii) only for so long as the rights in the Co-Exclusive Field remain
Co-Exclusive, to make, have made, use, sell, offer for sale, have sold, import
and export in the Territory in the Co-Exclusive Field products containing
Senomyx [***] Compounds, Senomyx [***] Compounds and Selected Senomyx [***]
Compounds; and (iv) in the event that Ajinomoto’s Exclusive or Co-Exclusive
licenses under Section 8 terminate, to make, have made, use, sell, offer for
sale, have sold, import and export in any country inside the Territory in the
[***] Field products containing Senomyx [***] Compounds, Senomyx [***] Compounds
and Selected Senomyx [***] Compounds; provided, however, that the foregoing
shall not be deemed to restrict or otherwise limit the scope of the licenses
granted to Ajinomoto under Section 8. Notwithstanding anything to the contrary
in this Agreement, including without limitation, the provisions of Section 10.2,
(i) this Section 8.4.3 shall not be construed as granting any rights to Senomyx
under any [***] under Section 9.5.1 or [***] under Section 9.5.2, (ii) Ajinomoto
shall be under no obligation to disclose to Senomyx any [***] Ajinomoto elects
to retain as Know-How, (iii) Senomyx shall not be relieved of its obligations
under Section 10 with respect to such Know-How or any other Ajinomoto
Confidential Information and (iv) Senomyx shall have no right to disclose any
such Know-How constituting Ajinomoto’s Confidential Information to sublicensees
under Section 8.4.2 or to any other licensees or sublicensees.

 

8.4.4        Procurement of Certain Rights for Ajinomoto from Third Parties. In
the event that during the Collaborative Period Ajinomoto desires a license under
[***] within the Territory claiming [***] Senomyx [***] Compounds and/or
Selected Senomyx [***] Compounds within the [***] Field, Senomyx hereby agrees
to request [***] license for Ajinomoto under such Patent Rights to make, have
made, use, sell, offer for sale, have sold, import and export [***]

 

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Products in the Territory in the [***] Field in a manner consistent with the
licenses granted to Ajinomoto under Section 8.

 

8.5          Regulatory Filings and Regulatory Filing Data. [***] a license to
any regulatory filings, Regulatory Approvals and associated Regulatory Filing
Data described in Section 3.6 [***] in order to practice the licenses set forth
in Sections 8.1, 8.2 and 8.3 above.  

 

8.6          Expansion of License for the [***] Category. In the event that, at
any time during the Term, any rights to Senomyx [***] Compounds and/or [***] in
the [***] Category currently held by [***] in the Territory become available,
Senomyx shall immediately notify Ajinomoto and Ajinomoto shall have [***], for
[***] from the date Ajinomoto receives such notice, [***] (i) [***] hereunder to
Ajinomoto and (ii) the [***] Field, to the extent such rights become available.
By way of example, were all such rights held by [***] to become available,
Ajinomoto shall have [***], for [***] from the date Ajinomoto receives such
notice, to (i) [***] granted hereunder to Ajinomoto pursuant to Sections
8.1(B) and 8.2(B) [***] and (ii) expand [***] Product Category I and [***]
Product Category IV to include the [***] Category without restriction.

 

9.     Ownership of Intellectual Property.

 

9.1          Retention of Rights. Senomyx retains all rights in Senomyx
Technology not expressly licensed, assigned or jointly owned pursuant to the
terms of this Agreement. Ajinomoto retains all rights in Ajinomoto Technology
not expressly licensed, assigned or jointly owned pursuant to the terms of this
Agreement. Except as otherwise expressly provided in this Agreement, nothing in
this Agreement is intended to convey or transfer ownership or the grant of any
license or sublicense by one party to the other party of any rights in any
Confidential Information, Patent Rights or Know-How Controlled by a party.

 

9.2          Senomyx Sole Inventions. Senomyx will own all Inventions and other
Know-How made solely by its employees and agents under this Agreement[***] (the
“Senomyx Sole Inventions”), and all claims within Patent Rights claiming such
Inventions and Know-How. Senomyx hereby irrevocably assigns to Ajinomoto all
right, title and interest in and to any such Senomyx Sole Inventions [***] that
consist of improvements to the Ajinomoto Technology, excluding Jointly Owned
Technology (“Ajinomoto Improvements”), and all claims within Patent Rights
claiming such Senomyx

 

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Sole Inventions, subject to any license granted to Senomyx pursuant to
Section 8. In the event that Senomyx is legally unable to assign such rights to
Ajinomoto, then Senomyx agrees either to waive the enforcement of such rights
against Ajinomoto and any sublicensees and assignees, or to grant Ajinomoto an
Exclusive, irrevocable, perpetual, worldwide, fully paid-up license, with right
to sublicense through multiple tiers of sublicense, to such rights, subject to
any license granted to Senomyx pursuant to Section 8.

 

9.3          Ajinomoto Sole Inventions. Ajinomoto will own all Inventions and
other Know-How made solely by its employees and agents under this
Agreement[***], (“Ajinomoto Sole Inventions”), and all claims within Patent
Rights claiming such Inventions and Know-How. Ajinomoto hereby irrevocably
assigns to Senomyx all right, title and interest in and to any such Ajinomoto
Sole Inventions [***] that consist of improvements to the Senomyx Technology,
excluding Jointly Owned Technology (“Senomyx Improvements”), including, without
limitation, Senomyx [***] Compounds, Senomyx [***] Compounds and Selected
Senomyx [***] Compounds and all claims within Patent Rights claiming such
Ajinomoto Sole Inventions, subject to any license granted to Ajinomoto pursuant
to Section 8. In the event that Ajinomoto is legally unable to assign such
rights to Senomyx, then Ajinomoto agrees either to waive the enforcement of such
rights against Senomyx and any sublicensees and assignees, or to grant Senomyx
an Exclusive, irrevocable, perpetual, worldwide, fully paid-up license, with
right to sublicense through multiple tiers of sublicense, to such rights,
subject to any license granted to Ajinomoto pursuant to Section 8.
Notwithstanding anything to the contrary in this Agreement, at no time during or
for [***] after the Term will Ajinomoto file Patent Rights disclosing Senomyx
Confidential Information.  

 

9.4          Joint Inventions. All Inventions and other Know-How made under this
Agreement jointly by employees or agents of Senomyx and employees or agents of
Ajinomoto (the “Joint Inventions”) and all claims within Patent Rights claiming
such Joint Inventions will be owned jointly by Ajinomoto and Senomyx. Ajinomoto
hereby irrevocably assigns to Senomyx all interest in and to any Joint
Inventions made in the course of the Collaborative Program during the
Collaborative Period that consist of Senomyx Improvements, including, without
limitation, Senomyx [***] Compounds, Senomyx [***] Compounds and Selected
Senomyx [***] Compounds, thereof, and all claims within Patent Rights claiming
such Joint Inventions, subject to the licenses granted to Ajinomoto pursuant to
Section 8. In the event that Ajinomoto is legally unable to assign such rights
to Senomyx, then Ajinomoto agrees either to waive the enforcement of such rights
against Senomyx and any sublicensees and assignees, or to grant Senomyx an
Exclusive, irrevocable, perpetual, worldwide, fully paid-up license, with right
to sublicense through multiple tiers of sublicense, to such

 

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rights, subject to any license granted to Ajinomoto pursuant to Section 8.
Senomyx hereby irrevocably assigns to Ajinomoto all interest in and to any Joint
Inventions made in the course of Collaborative Program during the Collaborative
Period that consist of Ajinomoto Improvements, and all claims within Patent
Rights claiming such Joint Inventions, subject to any licenses granted to
Senomyx pursuant to Section 8. In the event that Senomyx is legally unable to
assign such rights to Ajinomoto, then Senomyx agrees either to waive the
enforcement of such rights against Ajinomoto and any sublicensees and assignees,
or to grant Ajinomoto an Exclusive, irrevocable, perpetual, worldwide, fully
paid-up license, with right to sublicense through multiple tiers of sublicense,
to such rights, subject to any license granted to Senomyx pursuant to Section 8.

 

9.5          [***].

 

9.5.1        [***]. All [***] (excluding [***]) Controlled by [***] prior to the
Effective Date (the “[***]”) and all claims within Patent Rights claiming such
[***] will be owned [***].

 

9.5.2        [***]. Notwithstanding anything to the contrary contained in
Sections 9.2, 9.3 or 9.4, all [***] (excluding [***])  developed by [***] after
the Effective Date which consist of improvements to [***] or which are [***]
(the “[***]”) and all claims within Patent Rights claiming such [***] will be
owned [***].   

 

9.5.3        [***]. Notwithstanding anything to the contrary contained in
Sections 9.2, 9.3, 9.4 or 9.5.2, all [***] made in the course of the
Collaborative Program during the Collaborative Period and all claims within
Patent Rights claiming such [***] will be owned [***], subject to [***].
Anything in this Agreement to the contrary notwithstanding, [***] shall be under
no obligation to disclose to [***] any [***] elects to retain as Know-How.
Notwithstanding anything to the contrary in this Agreement, [***] will have no
right to practice, except as expressly provided for in Section 11.4, the [***].

 

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9.6          [***].   

 

9.6.1        [***] Products. Notwithstanding anything to the contrary contained
in Sections 9.2, 9.3 or 9.4, all Inventions and Know-How developed by Ajinomoto
[***] that consist of [***] Products (specifically excluding [***]) and all
claims within Patent Rights claiming such Inventions will be owned [***].   

 

9.6.2        [***]. Notwithstanding anything to the contrary contained in
Sections 9.2, 9.3 or 9.4, all Patent Rights in Inventions developed by Ajinomoto
[***] which consist of [***] will be owned [***]. Anything in this Agreement to
the contrary notwithstanding, [***] Senomyx’s interest in such Patent Rights
shall be subject to and part of the license grants to Ajinomoto pursuant to
Section 8, including without limitation, Ajinomoto’s right to have [***] by a
Third Party using the [***]. In the event that Senomyx licenses rights,
including without limitation, the right [***], under its interest in such Patent
Rights to any Third Party, Senomyx and Ajinomoto will negotiate in good faith
[***]; provided, however, that Ajinomoto shall have the option, to negotiate
with Senomyx’s Third Party licensees to [***] Senomyx [***] Compounds or
Selected Senomyx [***] Compounds to any of Senomyx’s licensees. Anything in this
Agreement to the contrary notwithstanding, such Patent Rights shall not be used
by Ajinomoto to [***] Senomyx [***] Compounds or Senomyx [***] Compounds without
[***] or otherwise. Anything in this Agreement to the contrary notwithstanding,
in the event of [***], Senomyx shall [***]

 

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[***]. Anything in this Agreement to the contrary notwithstanding, Ajinomoto
shall solely own, and be under no obligation to disclose to Senomyx, any [***]
Ajinomoto developed solely by Ajinomoto employees or agents that [***].

 

9.7          Other Inventions. Any Inventions not included in Sections 9.2, 9.3,
9.4, 9.5 or 9.6 will be owned by their inventors including, without limitation,
(i) any Invention by an Ajinomoto Scientist that is not a Joint Invention or a
Senomyx Improvement made [***] shall be owned solely by Ajinomoto; or (ii) any
Invention by a Senomyx scientist that is not a Joint Invention or an Ajinomoto
Improvement made [***] shall be owned solely by Senomyx.

 

9.8          Inventorship and Assignment. United States federal intellectual
property law will determine inventorship of and ownership of patentable
inventions, including, without limitation, Inventions conceived jointly by the
parties and Inventions conceived solely by one party or the other. Subject to
the provisions of Section 6, each of Senomyx and Ajinomoto agrees to promptly
disclose to the other party Inventions and Know-How owned or to be owned by such
other party pursuant to the provisions of Section 9, and to execute all
documentation necessary to perfect all assignments of Inventions, and Patent
Rights contemplated under Section 9.

 

9.9          CREATE Act. The parties intend for this Agreement to qualify for
the benefits of the Cooperative Research and Technology Enhancement (CREATE) Act
(35 U.S.C. 103(c)). Accordingly, each party agrees, without demanding any
further consideration therefor, at the request of the other party, to do (and
cause its employees to do) all lawful and just acts that may be or become
necessary for evidencing, maintaining, recording and perfecting the benefits of
the CREATE Act.

 

9.10        Markings. Ajinomoto agrees to mark and to cause any Affiliate or
sublicensee to mark any [***] Products (or their containers or labels) made,
sold or otherwise disposed of by it or them with any notice of Patent Rights
necessary or desirable under applicable law, as determined by Ajinomoto in its
reasonable discretion after consultation with Senomyx, to enable the Senomyx
Patent Rights or Joint Patent Rights, as applicable, to be enforced to their
full extent in any country where [***] Products are made, used or sold by
Ajinomoto or its Affiliates.  

 

10. Treatment of Confidential Information; Publicity.

 

10.1        Confidentiality. Subject to the terms and conditions of this
Agreement, each of Senomyx and Ajinomoto agrees that, during the Term and for a
period of [***] thereafter, it will keep confidential, and will cause its

 

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Affiliates to keep confidential, all of the other party’s Confidential
Information. Neither Senomyx nor Ajinomoto nor any of their respective
Affiliates will use the other party’s Confidential Information, except as
expressly permitted by this Agreement.

 

10.2        Disclosure to Related Parties. Senomyx and Ajinomoto each agree that
any disclosure to any of its Affiliates, or to its or their respective
directors, officers, employees contractors, consultants, sublicensees or agents
of the other party’s Confidential Information will be made only if and to the
extent necessary to carry out its responsibilities under this Agreement and to
exercise the rights granted to it hereunder, will be limited to the extent
consistent with such responsibilities and rights, and will be provided only to
such persons or entities who are under an obligation of confidentiality no less
stringent than as set forth in this Agreement. Each party will use reasonable
efforts to take such action, and to cause its Affiliates to take such action, to
preserve the confidentiality of the other party’s Confidential Information,
which will be the same efforts as it would customarily take to preserve the
confidentiality of its own Confidential Information.

 

10.3        Return of Confidential Material Upon Termination. Upon termination
of this Agreement, each party, upon the other party’s request, will return or
destroy all Confidential Information, including without limitation, any Know-How
licensed under this Agreement, received from the other party, including without
limitation all samples and copies and extracts of documents and all Confidential
Information stored in machine readable form, within [***] of the date of receipt
of the request of such other party; provided, however, that Ajinomoto may retain
any Know-How with respect to which it retains a license pursuant to Section 15.2
and one copy of the Confidential Information may be retained in a secure
location with limited access for ensuring legal compliance with any ongoing
obligation of confidentiality.

 

10.4        Exceptions to Confidential Information. Confidential Information
will not include any information which the receiving party can prove by
competent written evidence:

 

(A)  is now, or hereafter becomes, through no act or failure to act on the
part of the receiving party, generally known or available;

 

(B)   is known by the receiving party prior to receiving such information, as
evidenced by its records;

 

(C)   is hereafter furnished to the receiving party without restriction as to
disclosure or use by a third party lawfully entitled to furnish such
information;

 

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(D)  is independently developed by the employees, agents or contractors of the
receiving party without the aid, application or use of the disclosing party’s
Confidential Information; or

 

(E)   is the subject of a written permission to disclose provided by the
disclosing party.

 

A party may also disclose the other party’s Confidential Information where
required to do so by law, legal process, securities related regulations or by
stock exchange rules; provided, however, that, in such event, the party required
to disclose such information must give advance written notice of such disclosure
to the other party to the extent reasonably possible and must cooperate with the
other party’s efforts to seek at its expense, at the request of the other party,
all confidential treatment and protection for such disclosure as is permitted by
applicable laws, regulations and rules; provided further that the relevant party
may disclose the other party’s Confidential Information only to those persons to
whom disclosure is so required. Anything in this Section 10.4 to the contrary
notwithstanding, the exceptions provided in (B) and (D) above shall not apply to
information developed by Ajinomoto independently and/or jointly with Senomyx
that constitutes an Ajinomoto Improvement or information developed by Senomyx
independently and/or jointly with Ajinomoto that constitutes a Senomyx
Improvement.

 

10.5        Confidential Information Regarding this Agreement. The parties agree
that the terms and conditions of this Agreement will be considered Confidential
Information of both parties. Notwithstanding the foregoing, either party
may disclose such terms and conditions in legal proceedings or as are required
to be disclosed in its financial statements, by law, legal process, securities
related regulations or by stock exchange rules, or under an obligation of
confidentiality to bona fide permitted potential sublicensees. Either party will
have the further right to disclose such terms and conditions regarding this
Agreement under an obligation of confidentiality to any [***]. Senomyx agrees
not to discuss [***] with its [***].

 

10.6        Confidential Research Information. Subject to the provisions of
Sections 3.6 and 9 regarding ownership of certain regulatory data and
intellectual property, the parties agree that all results and data generated
from the research and development by a party under the Collaborative Program
will be owned [***] and considered Confidential Information of [***] subject to
the confidentiality requirements of the Section 10. Ajinomoto will not provide
to a Third Party any materials including, without limitation, Substances
provided to it by Senomyx and Senomyx will not provide to a Third Party any
materials provided to it by Ajinomoto.

 

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10.7        Use of Data for Promotional Purposes. Either party may (i) make
public statements regarding Senomyx [***] Compounds, Senomyx [***] Compounds or
[***] Products by announcing the achievement of milestones, following
consultation with the other party and with the prior written consent of the
other party, which consent will not be unreasonably withheld, and (ii) without
the prior consent of the other party, make public statements regarding the
overall general success rate(s) achieved by and/or for its customers under this
Agreement; provided, however, that it may not disclose any chemical structures,
screens, or the other party’s identity.

 

10.8        Permitted Use and Disclosures. Each party may use or disclose the
other party’s Confidential Information to the extent such information is
included in the Ajinomoto Technology, Senomyx Technology or Joint Inventions,
and to the extent such use or disclosure is reasonably necessary and permitted
in the exercise of the rights granted hereunder, in filing or prosecuting patent
applications, prosecuting or defending litigation, complying with applicable
governmental or stock exchange regulations, or court orders or otherwise
submitting information to tax or other governmental authorities, conducting
taste testing, submitting information for regulatory applications, or making a
permitted sublicense or otherwise exercising rights expressly granted to the
other party pursuant to the terms of this Agreement; provided, however, that if
a party is required to make any such disclosure of the other party’s
Confidential Information, other than pursuant to a confidentiality agreement, it
will give reasonable advance notice of such disclosure to the other party where
reasonably possible and, save to the extent inappropriate in the case of patent
applications, will use its reasonable efforts to secure confidential treatment
of such Confidential Information in consultation with the other party prior to
such disclosure (whether through protective orders or otherwise) and disclose
only the minimum necessary to comply with such requirements.

 

10.9        Publication of Results. The parties acknowledge that scientific
lead-time is a key element of the value of the research and development
activities under the Collaborative Program and further agree that scientific
publications must be strictly monitored to prevent any adverse effect from
premature publication of results of the research or development activities
hereunder. At least [***] prior to submission of any material related to the
research or development activities hereunder for publication or presentation,
the submitting party shall provide to the other party a draft of such material
for its review and comment. The receiving party shall provide any comments to
the submitting party within [***] of receipt of such materials. No publication
or presentation with respect to the research or development activities hereunder
shall be made unless and until the other party’s comments on the proposed
publication or presentation have been addressed and changes have been agreed
upon and any information reasonably determined by the other party to be
Confidential Information has been removed. If requested by the other party, the
submitting party shall withhold material from submission

 

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for publication or presentation for an additional [***] to allow for the filing
of a patent application or the taking of such measures to establish and preserve
proprietary rights in the information in the material being submitted for
publication or presentation.

 

10.10      Press Releases. Notwithstanding the foregoing, the parties will agree
upon a press release to announce the execution of this Agreement and its
material terms, the form of which press release is attached as Appendix B to
this Agreement. Thereafter, Ajinomoto and Senomyx may each disclose to third
parties the information contained in such press releases as described in
Appendix B without the need for further approval by the other party. Additional
press releases or other similar public communication by either party relating to
this Agreement shall be approved in advance by the other party, which approval
shall not be unreasonably withheld or delayed, and disclosures of information
for which consent has previously been obtained, and information of a similar
nature to that which has been previously disclosed publicly in accordance with
this Agreement, shall not require advance approval.

 

11.  Intellectual Property Enforcement and Defense of Claims.

 

11.1        Notice of Infringement. If Senomyx or Ajinomoto determines that any
Senomyx Technology or Jointly Owned Technology is being infringed by a Third
Party’s activities and that such infringement could affect the exercise by the
parties of their respective rights and obligations under this Agreement, it
shall promptly notify the other party in writing and provide such other party
with any evidence of such infringement that is reasonably available. Promptly
after the receipt of such written notice, the parties shall meet and discuss in
good faith how to stop such infringement. The pursuing party shall consider in
good faith any comments from the other party and shall keep the other party
reasonably informed of any steps taken to stop such infringement.

 

11.2        Senomyx Technology. With respect to Senomyx Technology or Jointly
Owned Technology, Senomyx shall have the first right to take action to remove
such infringement using commercially appropriate steps, including without
limitation, the filing of an infringement suit or other similar action. In the
event Senomyx fails to take commercially appropriate steps to remove any
infringement of any such Senomyx Technology or Jointly Owned Technology within
[***] following notice of such infringement, or earlier notifies Ajinomoto of
its intent not to take such steps, then Ajinomoto shall have the right to do so
[***]; provided, however, that if Senomyx has commenced negotiations with an
alleged infringer for discontinuance of such infringement within such [***]
period, Senomyx shall have an additional [***] to conclude its negotiations
before Ajinomoto may bring suit for such infringement or take other similar
action.

 

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11.3                        [***]. With respect to patented [***] shall have the
first right to take action to remove such infringement using commercially
appropriate steps, including without limitation, the filing of an infringement
suit or other similar action. In the event [***] fails to take commercially
appropriate steps to remove any infringement of any such patented [***], within
[***] following notice of such infringement, or earlier notifies [***] of its
intent not to take such steps, then [***] shall have the right to do so [***];
provided, however, that if [***] has commenced negotiations with an alleged
infringer for discontinuance of such infringement within such [***] period,
[***] shall have an additional [***] to conclude its negotiations before [***]
may bring suit for such infringement or take other similar action.

 

11.4                        [***]. With respect to Patent Rights owned by [***]
pursuant to Section 9.5.3 claiming [***] will have the right to take action to
stop infringement of the claims in such Patent Rights outside of the Territory
and outside of the [***] Field which claim [***] only against Third Parties that
are [***].

 

11.5                        Other Technology. With respect to technology of a
party that is not Senomyx Technology or Jointly Owned Technology, the owner of
such technology shall have the sole right, but not the obligation, to take
action to stop such infringement.

 

11.6                        Recovery. Any amounts recovered by a party pursuant
to Section 11.2,  Section 11.3, or 11.4 whether by settlement or judgment, shall
be used to reimburse the parties for their reasonable costs and expenses in
making such recovery (which amounts shall be allocated pro rata, in accordance
with the relative amount of expenses incurred by each party, if insufficient to
cover the aggregate amount of such expenses), with any remainder being retained
by the party [***].

 

11.7                        Third Party Litigation. In the event that a Third
Party institutes a patent or other infringement suit (including any suit
alleging the invalidity or unenforceability of the Patent Rights of a party or
its Affiliates) against either party or its respective Affiliates or permitted
sublicensees under this Agreement during the Term, alleging that the
Exploitation of the [***] Products in the [***] Field in the Territory or any
other activities hereunder, infringes one or more Patent Rights or other
intellectual property rights held by such Third Party (an “Infringement Suit”),
the parties shall

 

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cooperate with one another in defending such suit. With respect to Jointly Owned
Technology, the parties shall jointly direct and control any Infringement Suit
with respect to [***] Products or any Jointly Owned Technology. Each party shall
have the sole right to direct and control (including the right to cease to
defend, settle or compromise) any Infringement Suit with respect to its
Technology. The parties shall [***] of any costs and expenses of such defense
with respect to the Joint Technology.   

 

12.       Patent Prosecution and Maintenance. Each party will bear the cost of
filing, prosecuting and maintaining patents and patent applications associated
with [***] Compounds or Inventions owned by or assigned to such party. Ajinomoto
will [***] in the Territory licensed under this Agreement claiming Senomyx [***]
Compounds and Selected Senomyx [***] Compounds. Anything in this Agreement to
the contrary notwithstanding, if any Third Party is also a licensee under
(i) such patents and patent applications, (ii) patents or patent applications in
the Territory claiming [***], (iii) any other Joint Patent Rights (as defined
below), then Ajinomoto will [***]. Ajinomoto will no longer have to [***]. The
parties will share equally the cost of filing, prosecution and maintaining
patents and patent applications associated with Jointly Owned Technology (“Joint
Patent Rights”). With respect to Selected Senomyx [***] Compound(s), the parties
will discuss and agree at least [***] before the due date of international
filings or at least [***] before the due date of [***], in which
countries/regions to file patent applications claiming Selected Senomyx [***]
Compounds and Ajinomoto shall [***]. Notwithstanding the foregoing, if Ajinomoto
decides it does not wish to have a patent application covering a Selected
Senomyx [***] Compound(s) filed in a particular country, Senomyx may still file
such patent application in such country; provided, however, that if Senomyx
actually files such patent application in such country, Ajinomoto will [***]. If
Senomyx elects to [***] of Senomyx Patent Rights or Joint Patent Rights claiming
a Senomyx [***] Compound or a Selected Senomyx [***] Compound in a particular
country in the Territory and in the [***] Field, then in each such case, Senomyx
shall [***] to meet any deadlines by which an action must be taken to establish
or preserve any such Senomyx Patent Rights or Joint Patent Rights,

 

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as applicable, in such country and [***] of such Senomyx Patent Rights or Joint
Patent Rights, as applicable, [***] in such country. If Ajinomoto elects to
[***], then Ajinomoto shall notify Senomyx of such election and (i) Senomyx
shall, and shall cause its Affiliates, as applicable, to (x) reasonably
cooperate with Ajinomoto in this regard, and (y) in the case of Joint Patent
Rights, [***] all [***] such Joint Patent Rights in such country, and
(ii) Ajinomoto shall [***]; provided, however, that Ajinomoto may [***]. Senomyx
agrees to [***] relating to the Senomyx Patent Rights in the Territory claiming
Senomyx [***] Compounds or Selected Senomyx [***] Compounds or use thereof in
the [***] Field, including without limitation, by [***] thereto. Ajinomoto shall
hold all such information disclosed to it under this Section as Confidential
Information under Section 10.

 

13.       Manufacturing. For the avoidance of doubt, Senomyx will [***] for
Senomyx [***] Compounds, Senomyx [***] Compounds and/or Selected Senomyx [***]
Compounds, with the exception of [***] quantities provided by Senomyx under
Section 3.2 and Section 3.3.

 

14.       Term, Early Conclusion and Termination.

 

14.1                        Term. The term of this Agreement will begin on the
Effective Date and will continue through the end of the last-to-expire Royalty
Term, unless terminated earlier by either party or both parties in accordance
with the provisions of this Section 14 (the “Term”).

 

14.2                        Termination by Ajinomoto. During the Collaborative
Period, Ajinomoto will have the right to terminate this Agreement without cause
[***] prior written notice to Senomyx; provided, however, if such termination
occurs prior to the end of the Collaborative Period, to provide for the orderly
wind down of research activities under the Collaborative Program, Ajinomoto
shall [***]. After the Collaborative Period, Ajinomoto will have the right to
terminate this Agreement without cause upon [***] prior written notice to
Senomyx.

 

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14.3                        Termination By Mutual Agreement. The parties
may terminate this Agreement at any time, in whole or in part, by mutual written
agreement executed by both parties.

 

14.4                        Termination for Breach. Either party has the right
to terminate this Agreement at any time in the event of a material breach of
this Agreement by the other party (including without limitation a material
breach of one or more representations and warranties), provided that the
breaching party has not cured such breach within [***] after written notice
thereof by the non-breaching party. The terminating party, upon termination of
this Agreement, may [***].

 

14.5                        Termination Upon Insolvency. Either party
may terminate this Agreement if, at any time, the other party shall file in any
court or agency pursuant to any statute or regulation of any state, country or
jurisdiction, a petition in bankruptcy or insolvency or for reorganization or
for an arrangement or for the appointment of a receiver or trustee of that party
or of its assets, or if such other party proposes a written agreement of
composition or extension of its debts, or if such other party shall be served
with an involuntary petition against it, filed in any insolvency proceeding, and
such petition shall not be dismissed within [***] after the filing thereof, or
if such other party shall propose or be a party to any dissolution or
liquidation, or if such other party shall make an assignment for the benefit of
its creditors.

 

14.6                        Rights in Bankruptcy. All rights and licenses
granted under or pursuant to this Agreement by Senomyx are, and shall otherwise
be deemed to be, for purposes of Section 365(n) of the United States Bankruptcy
Code, licenses of rights to “intellectual property” as defined under Section 101
of the United States Bankruptcy Code. The parties agree that Ajinomoto, as a
licensee of such rights under this Agreement, shall retain and may fully
exercise all of its rights and elections under the United States Bankruptcy Code
to the extent so allowable. In such event, any court with jurisdiction
thereunder may, upon Ajinomoto’s request, wish to consider the following items
in connection with such licenses to the extent consistent with the United States
Bankruptcy Code, the rights of other Third Party licensees, licensors and other
creditors of Senomyx and the rights granted in this Agreement:

 

(A)               the possibility of providing Ajinomoto with [***] necessary
for Ajinomoto to practice the licenses granted under this Agreement;

 

(B)                 the possibility of providing Ajinomoto and other then
current licensees on a pro rata basis [***] that are in Senomyx possession;

 

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(C)                 the possibility of providing Ajinomoto with all documents
describing or setting forth any [***] (but only to the extent relevant to the
licenses granted herein) in Senomyx’s possession related to Ajinomoto
Improvements conceived by Senomyx and/or Joint Inventions and assist with any
patent filings in connection therewith;

 

(D)                the possibility of providing Ajinomoto with a complete list
of all relevant [***] necessary for Ajinomoto to practice the licenses granted
under this Agreement and a copy of the necessary documentation in connection
therewith;

 

(E)                  the possibility of causing any relevant [***] to be [***]
or its designee in a manner that takes into account possible rights of other
Third Party licensees; 

 

(F)                  the possibility of authorizing Ajinomoto or its designee,
when applying for corresponding [***] submitted by Senomyx to any [***]; and

 

(G)                 the possibility of taking any other steps which may be
reasonably necessary to enable Ajinomoto or its Affiliates to use or operate
under any [***] obtained pursuant to or in connection with this Agreement or to
obtain a new corresponding [***] as necessary to practice the licenses granted
in this Agreement.

 

14.7                        Limitation of Liability. NOTWITHSTANDING ANYTHING TO
THE CONTRARY IN THIS AGREEMENT, NEITHER PARTY WILL SEEK OR BE RESPONSIBLE FOR
[***] IN EXCESS OF [***] IN THE AGGREGATE UNDER ANY THEORY OF LIABILITY
INCLUDING TORT, CONTRACT, NEGLIGENCE OR OTHERWISE UNDER THIS AGREEMENT AND
NEITHER PARTY WILL SEEK OR BE RESPONSIBLE FOR [***] (INCLUDING, WITHOUT
LIMITATION, ANY AND ALL CLAIMS ARISING PURSUANT TO THIS SECTION 14 OR
SECTION 16).

 

14.8            Termination of a Collaborative Program. Ajinomoto may terminate
either [***] Program I or [***] Program II prior to the end of the Collaborative
Period, without cause upon [***] prior written notice to Senomyx; provided,
however, that Ajinomoto will remain obligated to pay Research Fees in accordance
with Section 7.3 based on the number of Senomyx scientists determined by the
Steering Committee needed to complete the research for the non-terminated
program which shall be [***] for the remainder of the Collaborative Period. In
the event that Ajinomoto terminates either [***] Program I or [***] Program II,
with respect to

 

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the terminated program the rights and obligations provided for under Section 3
and the licenses granted to Ajinomoto under Section 8 will terminate.

 

15.       Effect of Expiration or Termination.

 

15.1                        Termination of Licensed Rights. Subject to the
provisions of Section 15.2, upon termination of this Agreement pursuant to
Section 14, Ajinomoto will have no right to practice or use the Senomyx
Technology, and all rights, title and interest in and to the Senomyx Technology
will revert to and become the sole property of Senomyx, unless otherwise agreed
upon in writing by the parties on or before the effective date of such
termination. In the event of any termination of this Agreement, any licenses
granted by Ajinomoto pursuant to Section 8.4.1 shall immediately terminate and
all rights, title and interest in and to any Ajinomoto Technology granted
thereunder will revert to and become the sole property of Ajinomoto. In
addition, in the event of termination of this Agreement pursuant to Section 14,
the licenses under Section 8.5 will terminate.

 

15.2                        Retained Rights.

 

15.2.1                  General. Upon the expiration of the Term pursuant to
Section 14.1, or termination of this Agreement pursuant to Section 14.5, but not
termination of this Agreement under Section 14.2, 14.3 or 14.4, [***] under
[***]. Without limiting the generality of the provisions of Section 15.4,
(i) following expiration of the Term, [***], consistent with the provisions of
Section 9, and (ii) following expiration of the Term or termination of this
Agreement for any reason, [***], consistent with the provisions of Section 9.
For the avoidance of doubt, this Section 15.2 will not be construed to grant any
rights under Senomyx Patent Rights following termination of this Agreement for
any reason.

 

15.2.2                  Covenant Not To Sue for Senomyx Know-How. Senomyx hereby
grants to Ajinomoto and its Affiliates, in the event of termination of this
Agreement pursuant to Section 14.4 on or after the [***] of the Effective Date,
but not termination of this Agreement under Section 14.2, 14.3 or 14.5, a
non-sublicensable, fully paid-up immunity from suit by Senomyx or its Affiliates
based on any claims of [***] to make, have made, use, sell, offer for sale, have
sold, import and export [***] in the [***]. Notwithstanding the foregoing, such
grant will not take effect unless the termination is a result of an event that
has been declared a material breach by an unreversed and unappealable

 

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decision of a court or other appropriate body of competent jurisdiction.
Notwithstanding anything to the contrary in this Agreement, (i) Senomyx shall be
under no obligation to disclose to Ajinomoto any [***] following such
termination, (ii) Ajinomoto shall not be relieved of its obligations under
Section 10 with respect to [***] and (iii) Ajinomoto shall have no right to
disclose any such [***] to any licensees or sublicensees.

 

15.3                        Accrued Rights. Termination or expiration of this
Agreement for any reason shall be without prejudice to any rights that shall
have accrued to the benefit of a party prior to such termination or expiration.
Such termination or expiration shall not relieve a party from obligations that
are expressly indicated to survive the termination or expiration of this
Agreement. Anything in this Agreement to the contrary notwithstanding, in the
event of termination of this Agreement by Ajinomoto pursuant to Sections 14.4 or
14.5, Ajinomoto shall be relieved of its obligation to pay to Senomyx (i) any
remaining Research Fee installments otherwise payable pursuant to Section 7.3
after the effective date of the termination (“Termination Date”), (ii) the wind
down funding otherwise payable pursuant to Section 14.2, and (iii) if the
Termination Date falls on a date prior to the end of a Minimum Annual Royalty
Year, any amount by which the relevant royalties earned prior to such
Termination Date is less than the Minimum Annual Royalty applicable to such
Minimum Annual Royalty Year.

 

15.4                        Survival. The obligations and rights of the parties
under Sections 7.10, 7.11, 8.4.2, 8.4.3, 9, 10, 11.2 through 11.7, 14, 15, 16,
17, and Appendix A, will survive termination or expiration of this Agreement;
provided, however, that notwithstanding the foregoing, in no event shall
Section 7.11 survive for more than [***].

 

16.       Warranties and Indemnification.

 

16.1                        Mutual Representations and Warranties. The parties
make the following representations and warranties to each other:

 

(A)                              Corporate Power. Each party hereby represents
and warrants that as of the Effective Date such party (i) is duly organized and
validly existing under the laws of the jurisdiction of its incorporation and has
full corporate power and authority to enter into this Agreement and to carry out
the provisions of this Agreement; (ii) has the requisite power and authority and
the legal right to own and operate its property and assets, to lease the
property and assets it operates under lease, and to carry on its business as it
is now being conducted; and (iii) is in compliance with all requirements of
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noncompliance would not have a material adverse effect on its ability to
perform its obligations under this Agreement.

 

(B)        Due Authorization. Each party hereby represents and warrants that as
of the Effective Date such party (i) has the requisite power and authority and
the legal right to enter into this Agreement and to perform its obligations
hereunder; and (ii) has taken all necessary action on its part to authorize the
execution and delivery of this Agreement and to authorize the performance of its
obligations hereunder and the grant of rights extended by it hereunder.

 

(C)        Binding Agreement. Each party hereby represents and warrants to the
other that as of the Effective Date (i) this Agreement has been duly executed
and delivered on its behalf and is a legal and valid obligation binding upon it
and is enforceable in accordance with its terms; (ii) the execution, delivery
and performance of this Agreement by such party does not conflict with any
requirement of applicable law or regulation or stock exchange rule or any
provision of the articles of incorporation, bylaws or any similar instrument of
such party, as applicable, in any material way, (iii) the execution, delivery
and performance of this Agreement by such party does not conflict with any
agreement, instrument or understanding, oral or written, to which it is a party
or by which it may be bound, nor violate any law or regulation, or order of any
court, governmental body or administrative or other agency having jurisdiction
or authority over it; and (iv) all necessary consents, approvals and
authorizations of all governmental authorities and other persons required to be
obtained by it in connection with this Agreement have been obtained.

 

(D)       Litigation. Neither party is aware of any pending or threatened
litigation (and has not received any communication) that alleges that such
party’s activities related to this Agreement has violated, or that by conducting
the activities as contemplated herein such party would violate, any of the
intellectual property rights of any other party.

 

(E)         Debarment. Neither party nor any of its Affiliates has been debarred
or is subject to debarment and neither such party nor any of its Affiliates will
use in any capacity, in connection with the activities to be performed under
this Agreement, any party who has been debarred pursuant to Section 306 of the
Federal Food, Drug, and Cosmetic Act, as amended, or who is the subject of a
conviction described in such section. Each party will inform the other party in
writing immediately if it or any party who is performing services hereunder is
debarred or is the subject of a conviction described in Section 306, or if any
action, suit, claim, investigation or legal or administrative proceeding is
pending or, to such party’s knowledge, is threatened, relating to the debarment
or conviction of such party or any party performing activities hereunder.

 

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16.2                        Representations, Warranties and Covenants Regarding
Senomyx Technology. Senomyx represents, warrants and covenants as follows: 
(i) as of the Effective Date, Senomyx is either the legal or beneficial owner or
Controls and has the lawful right to license the Senomyx Technology to Ajinomoto
in accordance with the terms of this Agreement; (ii) as of the Effective Date,
to the best of Senomyx’s knowledge, there is no Third Party claim, lawsuit or
threat of a lawsuit relating to the Senomyx Technology and Senomyx is not aware
of any threats or warnings of such a Third Party suit; (iii) Senomyx has not, as
of the Effective Date, and except as otherwise permitted under this Agreement,
will not for the duration of the Term, enter into any research program or grant
any rights in Senomyx Technology to any Third Party that would conflict with the
exercise of the rights granted to Ajinomoto under this Agreement; (iv) as of the
Effective Date, Senomyx has the right to disclose the information set forth in
Section 3 regarding [***]; (v) as of the Effective Date, rights under the
Senomyx Technology in the Territory in the [***] Category with respect to
Senomyx [***] Compounds and/or Senomyx [***] Compounds have only been granted to
[***]; and (vi) as of the Effective Date, no intellectual property rights [***]
are included in the Senomyx Technology being licensed to Ajinomoto under this
Agreement (however, Ajinomoto acknowledges that intellectual property rights of
[***] by Senomyx under this collaboration, but are not being [***] pursuant to
Section 8 of this Agreement).

 

16.3                        Warranty Disclaimer.  

 

16.3.1              EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, (1) 
SENOMYX (INCLUDING ITS OFFICERS, EMPLOYEES AND AGENTS) EXPRESSLY DISCLAIMS ANY
REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS OR IMPLIED, RELATING TO SENOMYX
TECHNOLOGY; AND (2) SENOMYX FURTHER DISCLAIMS ANY EXPRESS OR IMPLIED WARRANTY
(i) OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF SENOMYX TECHNOLOGY
OR SENOMYX PATENT RIGHTS; (ii) THAT THE PRACTICE OF SENOMYX TECHNOLOGY WILL NOT
INFRINGE A PATENT, COPYRIGHT, TRADEMARK OR OTHER RIGHT OF A THIRD PARTY; AND
(iii) REGARDING THE PATENTABILITY OF ANY SENOMYX TECHNOLOGY, INCLUDING, WITHOUT
LIMITATION, SENOMYX TECHNOLOGY CLAIMED IN PATENT APPLICATIONS AS PART OF SENOMYX
PATENT RIGHTS.

 

16.3.2              EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, (1) 
AJINOMOTO (INCLUDING ITS OFFICERS, EMPLOYEES AND AGENTS) EXPRESSLY DISCLAIMS ANY
REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS OR IMPLIED,

 

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RELATING TO AJINOMOTO TECHNOLOGY; AND (2) AJINOMOTO FURTHER DISCLAIMS ANY
EXPRESS OR IMPLIED WARRANTY (i) OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OF AJINOMOTO TECHNOLOGY OR AJINOMOTO PATENT RIGHTS; (ii) THAT THE
PRACTICE OF AJINOMOTO TECHNOLOGY WILL NOT INFRINGE A PATENT, COPYRIGHT,
TRADEMARK OR OTHER RIGHT OF A THIRD PARTY; AND (iii) REGARDING THE PATENTABILITY
OF ANY AJINOMOTO TECHNOLOGY, INCLUDING, WITHOUT LIMITATION, AJINOMOTO TECHNOLOGY
CLAIMED IN PATENT APPLICATIONS AS PART OF AJINOMOTO PATENT RIGHTS.

 

16.4                        Indemnification of Ajinomoto. Senomyx shall
indemnify Ajinomoto, its Affiliates and their respective directors, officers,
employees and agents (collectively, “Ajinomoto Indemnitees”), and defend and
save each of them harmless, from and against any and all losses, damages,
liabilities, costs and expenses (including without limitation, reasonable
attorneys’ fees and expenses) (collectively, “Losses”) in connection with any
and all Third Party suits, investigations, claims or demands (collectively,
“Third Party Claims”) arising from or occurring as a result of (a) any material
breach by Senomyx of this Agreement; (b) any representation or warranties made
by Senomyx herein having been incorrect or misleading in any material respect;
(c) any gross negligence or willful misconduct on the part of Senomyx or its
Affiliates in performing any activity contemplated by this Agreement (for the
avoidance of doubt, failure by Senomyx to disclose to Ajinomoto a [***] known to
Senomyx with respect to a Senomyx [***] Compound or Selected Senomyx [***]
Compound, [***], which [***] is a direct and proximate cause of the Loss, would
be considered gross negligence); (d) a material violation of any contractual or
fiduciary duty owed by any Senomyx Indemnitee (as defined in Section 16.5) to a
Third Party; (e) any alleged or actual misappropriation or infringement of any
Third Party’s intellectual property rights by a Senomyx Indemnitee; or (f) any
alleged or actual misappropriation or infringement of any Third Party’s
intellectual property rights arising out of any use of the Senomyx Technology
(except for Jointly Owned Technology or [***]). Notwithstanding the foregoing,
Senomyx shall have no obligation to indemnify an Ajinomoto Indemnitee to the
extent, and only to the extent, that Ajinomoto has an obligation to indemnify
any Senomyx Indemnitee pursuant to Section 16.5 for any such Losses.

 

16.5                        Indemnification of Senomyx. Ajinomoto shall
indemnify Senomyx, its Affiliates and their respective directors, officers,
employees and agents (collectively “Senomyx Indemnitees”), and defend and save
each of them harmless, from and against any and all Losses in connection with
any and all Third Party Claims arising from or occurring as a result of (a) any
material breach by Ajinomoto of this Agreement ; (b) any representation or
warranties

 

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made by Ajinomoto herein having been incorrect or misleading in any material
respect; (c) any gross negligence or willful misconduct on the part of Ajinomoto
or its Affiliates in performing any activity contemplated by this Agreement (for
the avoidance of doubt, failure by Ajinomoto to disclose to Senomyx a [***]
known to Ajinomoto with respect to a Senomyx [***] Compound or Selected Senomyx
[***] Compound, [***], which [***] is a direct and proximate cause of the Loss,
would be considered gross negligence); (d) any development, manufacturing,
formulation, handling, storage, shipment, sale or other disposition of a Senomyx
[***] Compound, Senomyx [***] Compound or a Selected Senomyx [***] Compound by
or through Ajinomoto or its Affiliates or its permitted sublicensees; (e) a
product liability claim on any [***] Product; (f) a material violation of any
contractual or fiduciary duty owed by any Ajinomoto Indemnitee to a Third Party;
(g) any alleged or actual misappropriation or infringement of any Third Party’s
intellectual property rights by an Ajinomoto Indemnitee; or (h) any alleged or
actual misappropriation or infringement of any Third Party intellectual property
rights arising out of any use of the Ajinomoto Technology (except for Jointly
Owned Technology) or the [***] (except to the extent any Losses arise in
connection with the use of [***] by or on behalf of Senomyx). Notwithstanding
the foregoing, Ajinomoto shall have no obligation to indemnify a Senomyx
Indemnitee, except to the extent, and only to the extent, Senomyx has an
obligation to indemnify any Ajinomoto Indemnitee pursuant to Section 16.4 for
any such Losses.

 

16.6                        Notice of Claim. The indemnified party shall give
the indemnifying party prompt written notice (an “Indemnification Claim Notice”)
of any Losses or discovery of fact upon which such indemnified party intends to
base a request for indemnification under Section 16.4 or Section 16.5, but in no
event shall the indemnifying party be liable for any Losses that 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 are 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. All indemnification claims
in respect of a party, its Affiliates or their respective directors, officers,
employees and agents (collectively, the “Indemnitees” and each an “Indemnitee”)
shall be made solely by such party to this Agreement (the “Indemnified Party”).

 

16.7                        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 [***] 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

 

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acknowledgment that the indemnifying party is liable to indemnify any Indemnitee
in respect of the Third Party Claim, nor shall it constitute a waiver by the
indemnifying party of any defenses it may assert against any Indemnitee’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 immediately deliver to the indemnifying party all original notices
and documents (including without limitation, court papers) received by any
Indemnitee in connection with the Third Party Claim. Should the indemnifying
party assume the defense of a Third Party Claim, the indemnifying party shall
not be liable to the Indemnified Party or any other Indemnitee for any legal
expenses subsequently incurred by such Indemnified Party or other Indemnitee 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 an Indemnitee from and against
the Third Party Claim, the Indemnified Party shall reimburse the indemnifying
party for any and all costs and expenses (including without limitation,
attorneys’ fees and costs of suit) and any Losses incurred by the indemnifying
party in its defense of the Third Party Claim with respect to such Indemnitee.

 

16.8                        Right to Participate in Defense. Without limiting
the provisions of Section 16.7, any Indemnitee shall be entitled to participate
in, but not control, the defense of such Third Party Claim and to engage counsel
of its choice for such purpose; provided, however, that such engagement shall be
at the Indemnitee’s own expense unless (a) the engagement thereof has been
specifically authorized by the indemnifying party in writing, (b) the
indemnifying party has failed to assume the defense and engage counsel in
accordance with Section 16.7 (in which case the Indemnified Party shall control
the defense), or (c) in the Indemnitee’s reasonable judgment, a material
conflict of interest between the Indemnitee and the indemnifying party exists in
respect of such Third Party Claim, provided that, in any event, the other
provisions of this Section 16.8 shall continue to apply to such Third Party
Claim.

 

16.9                        Settlement. With respect to any Losses relating
solely to the payment of money damages in connection with a Third Party Claim
and that will not result in the Indemnitee’s becoming subject to injunctive or
other relief or otherwise adversely affect the business of the Indemnitee in any
manner, and as to which the indemnifying party shall have acknowledged in
writing the obligation to indemnify the Indemnitee 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

 

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indemnifying party has assumed the defense of the Third Party Claim in
accordance with Section 16.7, 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 or delayed).
The indemnifying party shall not be liable for any settlement or other
disposition of a Loss by an Indemnitee 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 Indemnitee 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, except
in the event the Indemnified Party has assumed control of the defense of such
Third Party Claim pursuant to Section 16.8(b).

 

16.10                 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 Indemnitee 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 the 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 Indemnitees 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 expenses in
connection therewith.

 

16.11                 Expenses. Except as provided above, the reasonable and
verifiable costs and expenses, including without limitation, fees and
disbursements of counsel, 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.

 

17.       Miscellaneous.

 

17.1                        Force Majeure. Neither party shall be held liable or
responsible to the other party or be deemed to have defaulted under or breached
this Agreement for failure or delay in fulfilling or performing any term of this
Agreement when such failure or delay is caused by or results from events beyond
the reasonable control of the non-performing party, including without
limitation, fires, floods, earthquakes, hurricanes, typhoons, landslides,
embargoes, shortages, epidemics, quarantines, war, acts of war (whether war be
declared or not) or

 

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terrorism, insurrections, riots, civil commotion, strikes, lockouts or other
labor disturbances, acts of God or acts, omissions or delays in acting by any
governmental authority. The non-performing party shall notify the other party of
such force majeure within [***] after such occurrence by giving written notice
to the other party stating the nature of the event, its anticipated duration,
and any action being taken to avoid or minimize its effect. The suspension of
performance shall be of no greater scope and no longer duration than is
necessary and the non-performing party shall use commercially reasonable efforts
to remedy its inability to perform; provided, however, that in the event the
suspension of performance continues for [***] after the date of the occurrence,
the parties shall meet to discuss in good faith how to proceed in order to
accomplish the purposes of this Agreement.

 

17.2                        Governing Law and Jurisdiction. This Agreement will
be governed by the laws of [***], as such laws are applied to contracts entered
into and to be performed entirely within such state.

 

17.3                        Binding Effect. This Agreement will be binding upon
and inure to the benefit of the successors and permitted assigns of the parties.
Any assignment not in accordance with this Agreement will be void.

 

17.4                        Dispute Resolution.

 

(A)       Negotiation. The parties recognize that disputes or controversies as
to certain matters may from time to time arise during the Term, which relate to
either party’s rights and/or obligations hereunder (“Disputes”). It is the
objective of the parties to establish procedures to facilitate the resolution of
Disputes arising under this Agreement in an expedient manner by mutual
cooperation and negotiation. The parties agree that prior to any arbitration
concerning this Agreement, Senomyx’s duly authorized representative and
Ajinomoto’s duly authorized representative will meet in person or by
video-conferencing in a good faith effort to resolve any disputes concerning
this Agreement. Within [***] of a formal request by either party to the other
party, either party may, by written notice to the other party, have such dispute
referred to their respective officers designated or their successors, for
attempted resolution by good faith negotiations, such good faith negotiations to
begin within [***] after such notice is received.

 

(B)       Arbitration. Any Dispute arising out of or relating to any provision
of or in connection with this Agreement or the interpretation, enforceability,
performance, breach, termination or validity hereof, including, without
limitation, this arbitration clause, shall be solely and finally settled by
binding arbitration pursuant to [***]. Any such arbitration shall be held in
[***]

 

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[***]. There shall be [***] and [***]. In such latter case, each party shall
name [***]. Within [***] following appointment of the arbitrator or arbitrators,
if there are to be [***] arbitrators, the arbitrator(s) will hold a conference
with the parties to the arbitration to establish a schedule pursuant to which an
award will be rendered within [***] of such conference.  Each party hereto shall
bear its own costs and expenses, but the compensation and costs and expenses of
the arbitrators shall be borne equally between the parties participating in the
arbitration. The English language shall be used in any and all arbitral
proceedings and all documents, exhibits and other evidence shall be translated
into the English language. Judgment upon any award rendered by the
arbitrator(s), including without limitation, an award for specific performance
or equitable relief as provided below, may be entered in any court having
jurisdiction or application may be made to such court for confirmation of such
award or a judicial acceptance of such award, and for an order of enforcement,
or other legal remedy, as the case may be. The parties hereby waive all
jurisdictional defenses in connection with any arbitration hereunder or the
enforcement of an order or award rendered pursuant thereto (assuming that the
terms and conditions of this arbitration clause have been complied with) and
defenses based on the general invalidity of the underlying agreement or this
arbitration clause. Notwithstanding the foregoing, in no event will a demand for
arbitration be made, or effective if made, following the time when the
institution of a legal or equitable proceeding based on such claim, dispute or
other matter in question would be barred by the applicable statute of
limitations.

 

(C)       Specific Performance. Each party hereby acknowledges that the remedies
at law of the other Party for a breach or threatened breach of this Agreement
may be inadequate and, in recognition of this fact, any party, upon posting any
bond as determined by the arbitral tribunal, and in addition to all other
remedies that may be available, shall be entitled to seek, from the arbitral
tribunal, equitable relief in the form of specific performance, injunctions or
any other equitable remedy deemed appropriate to such arbitral tribunal.

 

(D)       Interlocutory Relief. Notwithstanding anything to the contrary in this
Section 17.4, either party may seek immediate injunctive or other interim relief
from any court of competent jurisdiction with respect to any breach of Sections
9 or 10 hereof, or otherwise to enforce and protect the Patent Rights,
copyrights, trademarks, or other intellectual property rights

 

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Controlled by such party. In addition, arbitration will not be used to resolve
disputes concerning Patent Rights Controlled by either party. Disputes
concerning Patent Rights, including, without limitation, Disputes concerning
patent ownership, claim language, claim scope and issues of validity will be
settled in a court of law. Any arbitration ruling that relies on an
interpretation of Patent Rights will have no binding effect in a court of law on
any Patent Rights related to this Agreement, unless such Patent Rights have been
adjudicated in a court of law.

 

(E)  Cumulative Remedies. Subject to Section 14.7, all remedies available to
either party for breach of this Agreement are cumulative and may be exercised
concurrently or separately, and the exercise of any one remedy will not be
deemed an election of such remedy to the exclusion of any other remedy.

 

17.5                        Severability. If any term, covenant or condition of
this Agreement or the application thereof to any party or circumstance is, to
any extent, held to be invalid or unenforceable, then the remainder of this
Agreement, or the application of such term, covenant or condition to parties or
circumstances other than those as to which it is held invalid or unenforceable,
will not be affected thereby and each term, covenant or condition of this
Agreement will be valid and enforced to the fullest extent permitted by law; the
parties covenant and agree to renegotiate any such term, covenant or condition
or the application thereof in good faith in order to provide a reasonably
acceptable alternative to the term, covenant or condition of this Agreement or
the application thereof that is held invalid or unenforceable, it being the
intent of the parties that the basic purposes of this Agreement are to be
effectuated.

 

17.6                        Independent Contractors. It is expressly agreed that
Ajinomoto and Senomyx will be independent contractors and that the relationship
between the parties will not constitute a partnership or agency of any kind.
Neither Ajinomoto nor Senomyx will have the authority to make any statements,
representations or commitments of any kind, or to take any action, which will be
binding on the other party, without the prior written authorization of the other
party to do so.

 

17.7                        Entire Agreement; Amendment. This Agreement sets
forth all of the covenants, promises, agreements, warranties, representations,
conditions and understandings between the parties with respect to [***] Program
I and [***] Program II, and supersedes and terminates all prior agreements and
understandings between the parties, with respect to the subject matter of this
Agreement, including without limitation, that certain Materials Transfer
Agreement, dated May 17, 2005, between the parties hereto, which is hereby
terminated and of no further force or effect. Notwithstanding the foregoing, any
information or materials provided by Senomyx under such Materials Transfer
Agreement shall be considered Confidential Information of Senomyx and will be
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limitation, Section 9 and Section 10.  There are no covenants, promises,
agreements, warranties, representations, conditions or understandings, either
oral or written, between the parties other than as set forth in this Agreement.
No subsequent alteration, amendment, change or addition to this Agreement will
be binding upon the parties unless reduced to writing and signed by the
respective authorized officers of the parties. This Agreement will not be
strictly construed against either party. Any conflict between the terms set
forth in the text of this Agreement and the terms of any Appendix hereto will be
resolved in favor of the text of this Agreement.

 

17.8                        Waiver. Any waiver of any rights under this
Agreement shall only be effective if in writing and signed by the party waiving
such right. The waiver by either party of any rights will not operate or be
construed as a waiver of the subsequent exercise of the same right or remedy or
any of the other rights of such party or of any remedies provided in this
Agreement and no failure of or delay in exercising any rights or remedy shall
operate as a waiver of such right or remedy.

 

17.9                        Construction. The term “Article” or “Section” can
refer to any single paragraph level found in this Agreement or any collection of
multiple paragraphs thereunder.

 

17.10                 No Third Party Beneficiaries. No Third Party, including
without limitation, any employee of any party to this Agreement (except as
specifically provided in this Agreement), will have or acquire any rights by
reason of this Agreement. Nothing contained in this Agreement will be deemed to
make the parties partners of each other or any Third Party.

 

17.11                 Notices. Any request, notices or communications provided
for in this Agreement to be made by either party to the other party must be in
writing, in English, and will be made by prepaid air mail or overnight courier
with return receipt addressed to the other party at its address set forth below.
Any such notice or communication may also be given by hand, or facsimile to the
appropriate designation. Notices will be sent:

 

If to Senomyx, to:

 

Senomyx, Inc.

 

 

11099 North Torrey Pines Road

 

 

La Jolla, CA 92037

 

 

U.S.A.

 

 

Facsimile number: (858) 404-0750

 

 

Attention: General Counsel with a copy to the President

 

 

 

If to Ajinomoto, to:

 

Ajinomoto Co., Inc.

 

 

15-1, Kyobashi 1-chome,

 

 

Chuo-ku, Tokyo 104-8315,

 

 

Japan

 

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Facsimile number:  [***]

Attention:  [***]

 

With a copy to:

[***]

 

By like notice, either party may specify or change an address to which notices
and communications must be thereafter sent. Notices sent by mail, facsimile or
overnight carrier will be effective upon receipt and notices given by hand will
be effective when delivered.

 

17.12                 Assignment. Notwithstanding any provision of this
Agreement to the contrary, neither party may assign any of its rights or
obligations under this Agreement in any country to any third party without the
prior written consent of the non-assigning party, which consent will not be
unreasonably withheld; provided, however, that either party may assign its
rights and obligations under this Agreement without the consent of the other
party [***] to any Affiliate. [***]  Notwithstanding the foregoing, any such
assignment to an Affiliate will not relieve the assigning party of its
responsibilities for performance of its obligations under this Agreement. This
Agreement will survive any merger or consolidation of either party with or into
another party and, [***]. Any assignment in contravention of the provisions of
this Section 17.12 shall be null and void ab initio.

 

17.13                 Headings. The headings and captions in this Agreement are
for convenience of reference only and in no way define, describe, extend or
limit the scope or intent of this Agreement or the intent of any provision
contained in this Agreement.

 

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

 

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IN WITNESS WHEREOF, the parties, through their authorized officers, have
executed this Agreement as of the Effective Date.

 

 

SENOMYX, INC.

 

AJINOMOTO CO., INC.

 

 

 

By:

  /s/ Kent Snyder

 

By:

  /s/ Tohru Nishiyama

 

 

 

Name:  Kent Snyder

 

Name:  Tohru Nishiyama

Title:  President and Chief Executive Officer

 

Title:  Member of the Board & Corporate

 

 

Executive Deputy President

 

 

 

Date:

  March 23, 2006

 

Date:

  March 23, 2006

 

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APPENDIX A - DEFINITIONS

 

“Affiliate” means any corporation, company, partnership, joint venture,
association or other entity, which directly or indirectly controls, is
controlled by or is under common control with a party. As used in this
definition, the term “control” means direct or indirect beneficial ownership of
at least fifty percent (50%) (or such lesser percentage which is the maximum
allowed to be owned by a foreign corporation in a particular jurisdiction) of
the outstanding securities having voting rights for the election of directors in
a corporation or of the comparable equity interest in any other type of entity.

 

“Agreement” means this agreement, together with all appendices attached to it,
as it may be amended or supplemented from time to time hereafter by a written
agreement executed by authorized representatives of both parties.

 

“[***]” means new [***] of [***] developed by Ajinomoto independently or
together with Senomyx.

 

“Ajinomoto Know-How” means, to the extent useful for purposes of the activities
to be conducted under this Agreement, Know-How Controlled by Ajinomoto as of the
Effective Date [***] and Know-How under Jointly Owned Technology.

 

“Ajinomoto Patent Rights” means, to the extent useful for purposes of the
activities to be conducted under this Agreement, Patent Rights Controlled by
Ajinomoto as of the Effective Date [***] and Patent Rights under Jointly Owned
Technology, including, without limitation, any Patent Rights containing one or
more claims to an Invention made solely by employees or agents of Ajinomoto.

 

“Ajinomoto Technology” means Ajinomoto Patent Rights and Ajinomoto Know-How.

 

“[***] Category” means [***].

 

“Co-Exclusive” means, with respect to the Territory and Co-Exclusive Field, that
the right may be granted by Senomyx to [***] and may not be granted to [***].
For the avoidance of doubt, the foregoing shall not be construed to prevent
Senomyx from performing its obligations under this Agreement.  

 

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“Co-Exclusive Field” shall mean [***] Product Category II to the extent rights
granted therein by Senomyx to Ajinomoto are Co-Exclusive.

 

“Collaborative Period” means the period beginning on the Effective Date and
ending three (3) years thereafter, unless extended by Ajinomoto as provided
above.  

 

“Collaborative Program” means [***] Program I and [***] Program II.  

 

“Confidential Information” of a party means all Inventions, Know-How or other
information, including, without limitation, information and material (whether or
not patentable) regarding technology, products, research, development,
manufacturing, marketing, finances, personnel or other business information or
objectives which is designated as “Confidential” or “Proprietary” in writing by
the disclosing party, whether by letter or by the use of an appropriate stamp or
legend, prior to or at the time any such Inventions, Know-How or other
information is disclosed by the disclosing party to the other party.
Notwithstanding the foregoing to the contrary, Inventions, Know-How or other
information which is orally, electronically or visually disclosed by a party
will constitute Confidential Information of a party if the disclosing party,
within [***] after such disclosure, delivers to the other party a human or
machine readable written document or documents describing the Inventions,
Know-How or other information and referencing the place and date of such oral,
visual, electronic or written disclosure and the names of the persons to whom
such disclosure was made and identifies such Inventions, Know-How or other
information as “Confidential” or “Proprietary”. [***].

 

“Control” or “Controlled” means, with respect to intellectual property,
possession by a party, as of the Effective Date or during the Term, of the
ability to grant a license or sublicense in accordance with the terms of this
Agreement, without violating the terms of any agreement by such party with any
Third Party.

 

“Exclusive” means exclusive even as to the party granting the license; provided,
however, that [***].

 

“[***] Licensee” means [***] holding, as of the Effective Date, any rights that
are Co-Exclusive with Ajinomoto in the Territory and/or Exclusive rights to
Senomyx [***] Compounds and/or [***] Compounds in the [***] Category in the
Territory.

 

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“Exploit” or “Exploitation” means to make, have made, import, use, sell, offer
for sale, or otherwise dispose of, including without limitation, all discovery,
research, development, registration, modification, enhancement, improvement,
manufacture, storage, formulation, exportation, transportation, distribution,
promotion and marketing activities related thereto.

 

“[***]” shall mean [***], to make a food product.

 

“FTE” means the annual full time equivalent of one (1) Senomyx scientist.

 

“[***] Category” means [***].

 

“Important Country” means [***].

 

“Invention(s)” means any invention including, without limitation, any new and
useful process, method, or composition of matter, or improvement, whether or not
patentable.  

 

“Joint Invention(s)” has the meaning set forth in Section 9.4.

 

“Jointly Owned Technology” means Know-How and/or Patent Rights with respect to
Joint Inventions that are jointly owned by Ajinomoto and Senomyx.

 

“Know-How” means information and data, whether or not patentable, which is not
generally known to the public, including, without limitation, designs, concepts,
formulae, software, techniques, practices, processes, methods, knowledge, skill,
experience, expertise, technical information, and data, including
pharmacological, toxicological and clinical test data, analytical and quality
control data, patent and legal data or marketing, sales and manufacturing data.

 

“Net Sales” means, with respect to [***], the gross amount invoiced by Ajinomoto
and its Affiliates and/or permitted sublicensees on any [***] of the [***], less
the following items:

 

i)                 [***];

 

ii)              [***];

 

iii)           [***]; and

 

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iv)          any tax, tariff, duty or other governmental charge (other than an
income tax) levied on [***] that is borne by [***].

 

Net Sales will be determined from the books and records of Ajinomoto, its
Affiliates and/or its permitted sublicensees, maintained in accordance with the
generally accepted accounting principles consistently applied of the country
where [***]. Notwithstanding anything herein to the contrary, Net Sales
involving [***] by Ajinomoto or an Affiliate of Ajinomoto shall [***].

 

“[***] Category” means [***].

 

“Patent Rights” means all rights associated with all U.S. or foreign (including
regional authorities such as the European Patent Office) utility or provisional
patents or patent applications, including any improvements, continuations,
continuations-in-part, or divisionals or any substitute or equivalent
applications, and any patent issuing thereon, including any reissue,
reexamination or extension thereof.

 

“[***] Compounds” means all the compounds Controlled by Senomyx, except for
[***] and Senomyx [***] Compounds.

 

“[***] Compounds” means compounds Controlled [***] by Senomyx [***], except for
Senomyx [***] Compounds.

 

“Product Development Plan” has the meaning set forth in Section 3.5.

 

“Regulatory Approval” means any regulatory approvals, licenses, permits or
consents issued by any governmental authority, authorizing the use of the
Senomyx [***] Compounds and/or Senomyx [***] Compounds in food products for
human consumption.

 

“Regulatory Approval Date” means the date that a Regulatory Approval is granted
that will allow a Senomyx [***] Compound and/or a Selected Senomyx [***]
Compound(s) to be manufactured, used for the [***] Products in the [***] Field
and/or sold in a particular country in the Territory.  

 

“Research Plans” means the detailed scientific research plans that define the
key activities, responsibilities of the parties, research milestones and
timeline for the [***] Program I and [***] Program II to be conducted under this
Agreement. The Research Plans are incorporated by reference into this Agreement
and will be maintained in the records of the Steering Committee.

 

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“Royalty Term” means, in the case of any [***] and as to any country within the
Territory, the period of time commencing on [***] of such [***] in such country
and ending upon the date that there no longer exists a Valid Claim in any
Senomyx Patent Rights claiming the manufacture, use or sale of such [***]) in
any country within the Territory in which such [***]. Notwithstanding the
foregoing, jointly owned Ajinomoto Sole Inventions or [***] will [***];
provided, however, that such [***].

 

“[***] Category” means:

 

(i)                                     [***]; and

 

(ii)                                  [***];

 

provided, however, that the [***] Category does not include [***].

 

“Selected Senomyx [***] Compound(s)” means the Senomyx [***] Compound(s)
selected by Ajinomoto for development.

 

“[***]” shall mean any [***]. Notwithstanding the foregoing, [***] excludes any
Know-How that does not relate to, or claims within Patent Rights that do not
claim the use of, any [***].

 

“Senomyx [***] Compounds” means [***].  

 

“Senomyx Know-How” means any Know-How related to the Senomyx [***] Compounds,
Senomyx [***] Compounds, and/or
Know-How under

 

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Jointly Owned Technology, which is not covered by the Senomyx Patent Rights, but
which is useful for purposes of the activities to be conducted under this
Agreement, and which is Controlled by Senomyx or its Affiliates as of the
Effective Date or which becomes Controlled by Senomyx or its Affiliates [***].

 

“Senomyx [***] Compounds” means [***].

 

“Senomyx Patent Rights” means any Patent Rights relating to Senomyx [***]
Compounds, Senomyx [***] Compounds, and/or Patent Rights under Jointly Owned
Technology, that are useful for purposes of the activities to be conducted under
this Agreement, and which are Controlled by Senomyx or its Affiliates as of the
Effective Date [***].

 

“Senomyx Technology” means the Senomyx Patent Rights and Senomyx Know-How.

 

“[***] Field” means the following:  [***].

 

“[***] Category” means [***]. For the purpose of this definition [***].

“Substances” mean [***].

 

“Territory” means the following Asian countries, which list will at all times be
subject to U.S. trade embargoes: 

 

[***]

 

[***]

 

[***]

 

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[***]

 

[***]

 

[***]

 

“Third Party(ies)” means any party other than a party to this Agreement or an
Affiliate of Senomyx or Ajinomoto.

 

“[***] Compound(s)” means compounds that [***].

 

“[***] Field” means [***] Product Category I, [***] Product Category II,
[***]Product Category III and [***] Product Category IV.

 

“[***] Product(s)” means an Ajinomoto product(s) or an Ajinomoto Affiliate’s
product(s) (pursuant to a permitted sublicense under Section 8.3) that
incorporates one or more Senomyx [***] Compound(s) and/or Selected Senomyx [***]
Compound(s), each for human consumption.

 

“[***]Product Category I” means [***]. Notwithstanding the foregoing, the [***]
Product Category I specifically excludes [***].

 

“[***]Product Category II” means [***]. Notwithstanding the foregoing, the [***]
Product Category II specifically excludes [***].

 

“[***]Product Category III” means [***]. Notwithstanding the foregoing, the
[***] Product Category III specifically excludes [***].

 

“[***]Product Category IV” means [***]. Notwithstanding the foregoing, the [***]
Product Category IV specifically excludes [***]

 

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[***].

 

“Valid Claim” means a claim of a pending patent application or an issued patent
within the Patent Rights, which has not (i) expired or been canceled; (ii) been
declared invalid by an unreversed and unappealable decision of a court or other
appropriate body of competent jurisdiction; (iii) been admitted to be invalid or
unenforceable through reissue, disclaimer or otherwise; and/or (iv) been
abandoned.

 

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A APPENDIX B

 

FORM OF PRESS RELEASE

 

[g95021kk03i001.jpg]

 

SENOMYX ANNOUNCES NEW COLLABORATIVE RESEARCH,
DEVELOPMENT, COMMERCIALIZATION AND LICENSE AGREEMENT
WITH
AJINOMOTO CO., INC.

 

LA JOLLA, CA – March xx, 2006 – Senomyx, Inc. (NASDAQ: SNMX), a leading company
focused on using proprietary technologies to discover and develop novel flavor
ingredients for the packaged food and beverage industry, announced today that it
has entered into a new research, development, commercialization and license
agreement with Ajinomoto Co., Inc., a market leader in food and culinary
products. During the three-year collaborative period, the company will work with
Ajinomoto on the discovery and development of novel flavor ingredients on an
exclusive basis in the soup, sauce and culinary aids, and noodle product
categories and on a co-exclusive basis in the bouillon product category within
Japan and other Asian markets, including China and additional key countries.
Ajinomoto has agreed to pay Senomyx an upfront license fee, discovery and
development funding, and specified payments upon the achievement of milestones
during the collaborative period. Upon commercialization, Senomyx will be
entitled to royalty payments based on sales of Ajinomoto products containing any
flavor ingredients developed under the agreement.

 

“We are extremely pleased to establish a new collaboration with Ajinomoto, a
leader within Japan and other Asian markets. We believe this collaboration
provides further validation of our approach while creating access within a
number of large product categories,” stated Kent Snyder, President and Chief
Executive Officer of Senomyx. “In addition, this collaboration supports our
strategy of establishing partnerships with market leading companies that provide
regional expertise on the taste characteristics preferred by local consumers.
Our goal is to continue to leverage our discovery and development

 

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capabilities by establishing additional collaborations with market leaders
seeking to create a competitive advantage for their products,” added Snyder.

 

“Senomyx now has eight product discovery and development collaborations with six
of the world’s foremost packaged food and beverage companies: Ajinomoto, Cadbury
Schweppes, Campbell Soup, Coca-Cola, Kraft Foods, and Nestlé,” Snyder noted.

 

Conference Call:

Senomyx will host a conference call at 9:00 a.m. Eastern Time (6:00 a.m. Pacific
Time) today to discuss the Company’s new collaborations. To access the call in
the U.S. dial XXXXXX or from outside the U.S. dial XXXXXX. The participant
passcode for this conference call is XXXXXX. Additionally, the call will be
webcast under the Investor Relations section of Senomyx’s website at
www.Senomyx.com and will be archived there for 30 days following the conclusion
of the conference call.

 

About Senomyx, Inc. (www.senomyx.com)

 

Senomyx is a leading company focused on using proprietary taste receptor-based
assays, screening technologies and optimization chemistry to discover and
develop novel flavors, flavor enhancers and taste modulators for the packaged
food and beverage industry. Senomyx’s current programs focus on the development
of flavors, flavor enhancers and taste modulators in the savory, sweet, salt and
bitter taste areas. Senomyx has entered into product discovery and development
collaborations with six of the world’s leading packaged food and beverage
companies: Ajinomoto Co., Inc., Cadbury Schweppes, Campbell Soup Company, The
Coca-Cola Company, Kraft Foods Global, Inc. and Nestlé SA.

 

About Ajinomoto Co., Inc. (www.ajinomoto.com)

 

Ajinomoto is one of the world’s top amino acids and food products manufacturers
and is renowned for its technology and the quality of its products. Its
business, established in 1909, is conducted all over the world and has an annual
turnover of around US$10 billion.

 

Forward-Looking Statements

 

Statements included in this press release that are not a description of fact are
forward-looking statements, including, but not limited to, statements regarding
potential payments under our collaboration with Ajinomoto, plans for our taste
receptor research, commercial potential, future products or additional
collaborations. The inclusion of forward-looking statements should not be
regarded as a representation by us that any of our plans, projections or future
financial, scientific or business objectives will be achieved. Our actual
results may differ materially from any projected future results set forth in
this release as a result of the risks and uncertainties inherent in our business
including, without limitation, difficulties or delays in developing, testing,
obtaining regulatory approval, producing and marketing our flavors, flavor
enhancers, taste modulators and related technologies; whether we will be able to
further extend or expand

 

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our collaboration with Ajinomoto or enter into additional collaborations; our
ability to collect royalties under our collaborations; the progress and timing
of our scientific programs; changes in the laws or regulations of the United
States and other countries that could adversely affect our and our
collaborators’ ability to develop and commercialize our products; whether any of
our collaborations will result in the discovery and development of novel
flavors, flavor enhancers or taste modulators, improve the nutritional profile
of products incorporating them or otherwise enhance our market position; our
ability to protect our intellectual property and proprietary technology and to
maintain and enforce our licensing arrangements with various third party
licensors;  our ability to define the scope and validity of patent protection
for our products and technologies; competition from other companies and flavor
manufacturers and other risks detailed in our Securities and Exchange Commission
filings, including our Annual Report on Form 10-K for the fiscal year ended
December 31, 2004 and our Quarterly Report on Form 10-Q for the period ended
September 30, 2005. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. All
forward-looking statements are qualified in their entirety by this cautionary
statement and we undertake no obligation to revise or update this news release
to reflect events or circumstances after the date hereof.

 

Contact: 

 

Gwen Rosenberg

Senomyx, Inc.

Executive Director, Investor Relations & Corporate Communications

858-646-8369

gwen.rosenberg@senomyx.com

 

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