Exhibit 10.1

 

***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.

 

SIXTH AMENDMENT
TO THE
COLLABORATIVE RESEARCH AND LICENSE AGREEMENT

 

THIS SIXTH AMENDMENT TO THE COLLABORATIVE RESEARCH AND LICENSE AGREEMENT (the
“Sixth Amendment”) is made by and between SENOMYX, INC. (“Senomyx”), a Delaware
corporation, having a principal place of business at 4767 Nexus Centre Drive,
San Diego, CA 92121, and NESTEC, LTD. (“Nestlé”), a Swiss company, having a
principal place of business at Avenue Nestlé 55, CH-1800 Vevey, Switzerland.

 

WHEREAS, Senomyx and Nestlé entered into that certain Collaborative Research and
License Agreement dated as of April 18, 2002, as amended by that certain First
Amendment dated October 23, 2003, that certain Second Amendment dated April 17,
2005, that certain Third Amendment dated March 22, 2006, that certain Fourth
Amendment dated April 14, 2008 and that certain Fifth Amendment dated September
15, 2008 (collectively, the “Agreement”); and

 

WHEREAS, the parties wish to amend the Agreement in the manner set forth in this
Sixth Amendment (capitalized terms used but not otherwise defined in this Sixth
Amendment shall have the meanings given such terms in the Agreement).

 

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

 

AGREEMENT

 

1.                                        Appendix A to the Agreement is hereby
amended by either adding or amending, as provided below, the following
definitions:

 

“[***] Category” means [***] applications in the [***] Category in [***].

 

“Base Royalty Payment” has the meaning set forth in Section 7.4(A)(ii)(c) of the
Agreement.

 

 “[***]” means the [***] of Umami Products [***] by or on behalf of Nestlé or
its Affiliates.

 

“Incremental Royalty Payment” has the meaning set forth in Section 7.4(A)(ii)(c)
of the Agreement.

 

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“[***] Category” means [***], which are ready to eat [***].

 

“Relevant Category” means the [***] Category, or the [***] Category, or the
[***] Category, or the [***] Category, the [***] Category or the [***] Category
for [***] Products and the [***] Category, or the [***] Category for [***]
Products.

 

“Royalty Rate” means as set forth in Section 7. 4(A)(ii)(c) of the Agreement.

 

“Umami Field” means the [***] Category, the [***] Category, the [***] Category,
the [***] Category, the [***] Category and the [***] Category and specifically
excludes the [***] Category, the [***] Category, and the New Category, except as
provided for under Section 3.2. The Umami Field does not include [***].

 

“Weight” or “W” means the weight of S336 (in kilograms) used in Umami Products
[***] applicable Calendar Year by or on behalf of Nestlé or its Affiliates.

 

2.                                      Section 7.4(A)(ii)(c) of the Agreement
is hereby amended and restated in its entirety with respect to royalties payable
on sales of Umami Products that are manufactured using S336 ([***]) as described
below. With respect to royalties payable on sales of Umami Products that are
manufactured using [***], the provisions of Section 7.4(A)(ii)(c) from the
Agreement prior to the effective date of this Sixth Amendment shall continue to
apply.

 

“(1) S336 Royalty Calculation. On or after April 1, 2010, with respect to Umami
Products that are manufactured using S336 ([***]) during the remainder of the
Royalty Term, Nestlé shall pay a nonrefundable royalty on W as described below. 
For each Calendar Year, Nestlé will pay an annual base royalty (“Base Royalty
Payment”) to Senomyx for W up to [***] kilograms as set forth in the table
below.

 

Calendar Year

 

Base Royalty Payment

2010

 

[***]

2011

 

[***]

2012

 

[***]

2013

 

[***]

2014 and each Calendar Year thereafter

 

[***]

 

In addition, in the event that for any Calendar Year W is greater than or equal
to [***] kilograms, Nestlé will pay an additional [***] per kilogram of W in
excess of the first [***] kilograms of W, subject to adjustment as set forth
below (hereinafter, the “Incremental Royalty Payment”).  Notwithstanding the
foregoing, in the event that W for

 

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any Calendar Year has decreased from W for the immediately preceding Calendar
Year, the Incremental Royalty Payment amount due will not decrease.  In such
event, the Incremental Royalty Payment amount due will be [***] described below,
if applicable).

 

The Incremental Royalty Payment rate will remain constant through the end of
2013. Commencing for the 2014 Calendar Year and beyond, the Incremental Royalty
Payment under this Section 7.4(A)(ii)(c) will be increased annually [***]
Calendar Year.  The first adjustment will be effective on January 1, 2014 and
annually on each anniversary thereafter.

 

It is understood and agreed that during a given Calendar Year the Incremental
Royalty Payments are incremental to the Base Royalty Payment for that Calendar
Year.

 

For the avoidance of doubt, the royalties payable by Nestlé will be exclusive of
any manufacturing costs. Where it is agreed that Senomyx will manufacture or
procure the manufacture of any Umami Compound, Nestlé will pay (or will procure
that its Affiliates shall pay) the agreed manufacturing costs of any Umami
Compound in accordance with this Agreement. Where Nestle or any of its
Affiliates will manufacture or procure the manufacture of any Umami Compound by
a Third Party, then Nestle or the applicable Affiliate shall pay the applicable
manufacturing costs of any Umami Compound and such payments to any Third Party
shall not reduce amounts payable to Senomyx pursuant to this Agreement.

 

(2) S336 Royalty Payments Timing. Notwithstanding the first sentence of Section
7.6, the first Base Royalty Payment under the foregoing terms for the period
April 1, 2010 through December 31, 2010 will be due within thirty (30) days of
the effective date of the Sixth Amendment.  Nestlé will pay the Base Royalty of
[***] at that time in a single lump sum.  Within [***] days of the end of each
quarterly period of 2010 in which royalties are earned during the 2010 ([***]),
Nestlé shall pay any Incremental Royalty Payments due to Senomyx based on the
actual W recorded for applicable Umami Products [***] applicable quarterly
period.

 

Notwithstanding the first sentence of Section 7.6, within [***] days following
January 1st of each Calendar Year beginning in 2011, Nestlé shall pay the
applicable Base Royalty Payment in a single lump sum.  Within [***] days of the
end of each quarterly period of the Calendar Year in which such Royalties are
earned, Nestlé shall pay any additional Royalty due to Senomyx for W greater
than or equal to [***] kilograms based on the actual W recorded for Umami
Products [***] the applicable period.

 

 (3) [***] Royalty Payment. On or after [***], in the event that Nestlé has not
achieved [***] in Umami Products of at least [***], either party [***] based on
the scope of the exclusive and geographical rights then granted to Nestlé. In
such circumstance, in order that Senomyx [***] in Umami Products, Nestlé shall
provide Senomyx with a report detailing on an annual basis [***] to Nestlé (or
its respective Affiliate) [***] basis. The parties [***] Royalty Payment,
considering the [***] under the circumstances. The terms and conditions of any
[***] having regard to all the circumstances. In the event that the parties
[***] Royalty Payment within of a party [***], either party may [***] referred
to in this Section 7.4(A)(ii)(c) shall constitute a Dispute and be resolved
according to the

 

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mediation provisions (but not the arbitration provisions) set forth in Section
17.4. In such instance, each party shall bear their own out-of-pocket expenses
for the conduct of such negotiations, including attorneys fees, and the party
[***]. For avoidance of doubt, a [***] Royalty Payment shall not [***] in
accordance with this Section 7.4(A)(ii)(c) [***] Royalty Payment, [***] subject
to Nestle’s right [***] hereof.

 

(4) Royalty Reporting for Umami Products Manufactured With S336. Notwithstanding
the second sentence of Section 7.6, with each royalty payment under
Section7.4(A)(ii)(c) related to Umami Products that are manufactured using S336
([***]), Nestlé (or its respective Affiliate) will furnish to Senomyx a
statement in sufficient detail to permit confirmation of the accuracy of the
royalty payment made and such statement shall consist of the following
information: (i) the W; (ii) the [***] Nestlé (or its respective Affiliate)
during the applicable period and [***] the applicable period; and (iii) [***]; 
For the avoidance of doubt, even if no quarterly Incremental Royalty Payment is
owed to Senomyx under Section7.4(A)(ii)(c) above [***], Nestlé will provide such
reports showing (i) through (iv) above to assist Senomyx with its financial
forecasting.”

 

3.                                      Section 8.1(A) is hereby amended so that
each reference to the term “Compound” shall hereafter be replaced with the term
“Selected Compound”.

 

4.                                      Sections 8.1(B) and (C) of the Agreement
are hereby amended such that all license grants under their respective
subsections (iii) through (viii) are hereafter limited solely to S336 [***].

 

5.                                      The following subsection is hereby added
at the end of Section 8.1(B) of the Agreement:

 

“and (ix) a nonexclusive, nontransferable (except as permitted under Section
17.12), license under the Senomyx Technology to use S336 [***], solely for
non-commercial development of Umami Products in the [***] Category.”

 

6.                                        The following subsection is hereby
added at the end of Section 8.1(C) of the Agreement:

 

“;and (ix) a nonexclusive, nontransferable (except as permitted under Section
17.12), license under the Senomyx Technology to make, have made, use, sell,
offer for sale, have sold, import and export Umami Products that contain S336
[***], in the [***] Category.”

 

7.             A new Section 8.1(D) is hereby added to the Agreement as follows:

 

“Within [***] of the date of [***] which has been [***], which includes [***],
Nestlé must notify Senomyx in writing of [***] in the applicable Relevant
Categories [***].  Such written notice from Nestlé shall include [***] (if
different than those set forth in Section [***]).  In the event that Senomyx
does not receive such written notification and proposal within [***] Umami
Compound under the Agreement.  If Nestlé properly submits written notice within
such [***] the parties shall negotiate in good faith for a period not to exceed
[***] from the date of such written notice to [***] that is mutually
satisfactory to both parties. In such circumstance, the parties agree to
negotiate in good faith and to consider [***] under the circumstances.  The
terms and conditions of [***] referred to in this Section 8.1(D) will [***] the
circumstances.   In the event that the parties are [***] terms within [***] and
that the unresolved matters referred to above in

 

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this Section 8.1(D) shall constitute a Dispute and be resolved according to the
mediation provisions (but not the arbitration provisions) set forth in Section
17.4.  In such instance, each party shall bear their own out-of-pocket expenses
for the conduct of such negotiations, including attorneys fees, and the party
[***] shall pay the entire costs for the conduct of the mediation. For avoidance
of doubt, a party’s request to [***]. If Nestle requests that the parties [***]
period or following such mediation, or if neither party has invoked the dispute
resolution provisions of Section 17.4, then [***] an Umami Compound under the
Agreement.

 

8.                                        As an express condition to this
Amendment and notwithstanding anything in the Agreement to the contrary, the
parties acknowledge and agree that except with respect to the rights to S336
[***] Relevant Categories and territories) expressly granted in Section 8.1,
Nestlé has no rights under Senomyx Technology (and Senomyx will have no
obligations to Nestle or its Affiliates) relating to any Compounds that enhance
and/or mimic the taste of monosodium glutamate and Senomyx will not be subject
to any restrictions or limitations under the Agreement or otherwise on its
ability to commercialize or license Compounds that enhance and/or mimic the
taste of monosodium glutamate for any use either directly or through Third Party
collaborations, licenses or other commercial arrangements.

 

9.                                        Except as specifically amended by this
Sixth Amendment, the terms and conditions of the Agreement shall remain in full
force and effect.

 

10.                                 This Sixth Amendment will be governed by the
laws of the State of California, U.S.A., as such laws are applied to contracts
entered into and to be performed entirely within such State.

 

11.                                 This Sixth Amendment may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

 

IN WITNESS WHEREOF, the parties have executed this Sixth Amendment effective as
of the date last signed by the parties below.

 

SENOMYX, INC.

 

NESTEC LTD.:

 

 

 

 

 

By:

/s/Kent Snyder

 

By:

/s/Bruce McConnell

 

 

 

 

 

Name:

Kent Snyder

 

Name:

Bruce McConnell

 

 

 

 

 

Title:

CEO

 

Title:

Vice President

 

 

 

 

 

Date:

7/15/10

 

Date:

15 July 2010

 

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