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.

 

Execution Copy

Confidential

 

COLLABORATIVE RESEARCH, DEVELOPMENT,

COMMERCIALIZATION

AND LICENSE AGREEMENT

 

BETWEEN

 

SENOMYX, INC.

 

AND

 

FIRMENICH SA

 

 

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COLLABORATIVE RESEARCH, DEVELOPMENT,
COMMERCIALIZATION AND LICENSE AGREEMENT

 

THIS AGREEMENT is entered into as of the Effective Date by and between SENOMYX,
INC., a Delaware Corporation having offices at 4767 Nexus Centre Drive, San
Diego, CA 92121, U.S.A. (“Senomyx”) and FIRMENICH SA, a Swiss Company, having
its principal place of business at 1, route des Jeunes, 1211 Geneva 8,
Switzerland (“Firmenich”).

 

BACKGROUND

 

Firmenich and Senomyx entered into a Collaborative Research, Development,
Commercialization and License Agreement, dated December 14, 2007 (“First
Agreement”), for a research and development program to discover and develop
compounds which modulate the human TRPM8 receptor and provide a cooling taste
effect.   Firmenich and Senomyx also entered into a Collaborative
Commercialization and License Agreement dated November 5, 2008 (“Second
Agreement”) wherein Senomyx granted Firmenich certain license rights to
Senomyx’s proprietary compound, S8475

 

Firmenich and Senomyx now desire to enter into this Agreement for a research and
development program during the Collaborative Period to discover and/or develop
Compounds that are Synthetic Compounds for use in the Fields (the “Collaborative
Program”). Upon proper exercise of the Option set forth in Section 8.6 of this
Agreement, the Collaborative Program will be automatically expanded to also
include a second research and development program to discover and/or develop
Compounds that are Natural Compounds.

 

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 or Appendix B, which are both
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 manage the Collaborative Program and will (i) provide strategic
direction and performance criteria for the Collaborative Program; (ii) direct
the efforts of the Collaborative Program and monitor progress and communicate
status of the Collaborative Program;

 

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(iii) facilitate the cooperation between the parties; (iv) approve the
achievement of milestones, and (v) continue to communicate following the
Collaborative Period regarding the development and commercialization of
Products.  The Steering Committee will consist of two (2) representatives
designated by Senomyx and two (2) representatives designated by Firmenich. 
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,
unless otherwise agreed, 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 approval by both parties.
Decisions of the Steering Committee will be made by unanimous vote, at a meeting
where all four voting representatives are represented, or by unanimous written
consent. All unresolved disputes will be settled in accordance with
Section 17.4, or as otherwise mutually agreed in writing.

 

3.              Collaborative Program.

 

3.1                               Research.   During the Collaborative Period,
Senomyx will collaborate with Firmenich in the Collaborative Program (i) on an
Exclusive basis with respect to Field I in the Territory and (ii) on a
Co-Exclusive basis with respect to Field II in the Territory.

 

3.1.1                     The Collaborative Program will be conducted pursuant
to the Research Plan.

 

3.1.2                     During the Collaborative Period, Senomyx will use its
reasonable commercial efforts using the Research Fees provided under Section 7.2
to perform the activities outlined in the Research Plan.  Senomyx shall not be
obligated to perform research and development activities under the Collaborative
Program for more than […***…] Target Sweeteners at any one time.  Senomyx will
prepare a data package containing technical information such as […***…], and
results of […***…] as Senomyx shall reasonably determine for Compounds under the
Collaborative Program]. Such data package will also designate the specific
Target Sweetener(s) that the Selected Compound may be used to enhance under the
license grants in Section 8, which shall be determined in advance by […***…]
(the “Intended Purpose”).  For the avoidance of doubt, the Compounds set forth
in the data package will be Synthetic Compounds, unless the Option is properly
exercised pursuant to Section 8.6.

 

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In addition to the data package(s), Senomyx will provide a reasonable quantity
of the applicable Compound material (laboratory synthesized grade) for
evaluation by Firmenich.  For each Compound and Selected Compound evaluated by
Firmenich under this Agreement, Firmenich will use commercially reasonable
precautions in the evaluation of such compound including, without limitation,
not exceeding concentration and exposure limits provided by Senomyx and
following other guidelines provided by Senomyx with respect to any tasting by
humans.  For each taste test of a Compound or Product conducted prior to
Regulatory Approval in the applicable country and as permitted by local law,
Firmenich will require each participant to sign an attestation of informed
consent that is reasonable for tasting an experimental compound.  With respect
to any such testing or evaluation activities, Firmenich will […***…].  Fimenich
shall involve Senomyx in any […***…] and will provide access to Senomyx to all
related information.  Upon prior notice to Firmenich, notwithstanding Section 10
of this Agreement, Senomyx may […***…] accordingly.

 

At the time of submitting a data package, Senomyx will also propose the […***…]
of the applicable Compound.  Upon selection of a Selected Compound by Firmenich
pursuant to Section 3.1.3 below, the Steering Committee will agree upon in good
faith […***…] based on the following considerations: (i) a […***…] shall be
considered as part of the […***…]; (ii) any […***…] which have been shown to be
[…***…] of the Selected Compound shall also be considered to be part of the
[…***…]; and (iii) […***…] which have been shown to […***…] shall not be
considered as part of the […***…]  Such determination by the Steering Committee
shall be completed by the first regularly scheduled Steering Committee meeting
following the selection of a Selected Compound.

 

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[…***…] example

 

[…***…]

 

If such […***…] is agreed by the Steering Committee, then any compound that
[…***….]

 

3.1.3                     During the Collaborative Period, Firmenich will use
its reasonable commercial efforts to perform the activities in accordance with
the Research Plan, including the evaluation of the data package(s) provided by
Senomyx under Section 3.1.2.  Such evaluation may not exceed […***…] from the
receipt of the applicable data package and Compound material.

 

3.1.4                     During the Collaborative Period, Firmenich may select
Compound(s) for development under the Collaborative Program after evaluation of
the data package by Firmenich, as provided for under Section 3.1.3. In order to
effect the selection of a Compound under this Section 3.1.4, Firmenich shall
notify Senomyx of its selection of a Compound for the Intended Purpose within
the period specified in Section 3.1.3. Once a Compound is

 

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selected by Firmenich under this Section 3.1.4 or under Section 8.7, Senomyx
will […***…]  Notwithstanding anything in this Agreement to the contrary, the
parties agree that a Compound that is selected under this Section 3.1.4 or under
Section 8.7 shall not be deemed a Selected Compound unless and until Firmenich
has paid to Senomyx […***…].

 

3.1.5                     During the Collaborative Period, the parties 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 3.1 will expire.  If no Compounds are selected as Selected Compounds
during the Collaborative Period pursuant to this Section 3.1, […***…].

 

3.2                               Product Development and Commercialization.
Firmenich, upon execution and for the duration of this Agreement, will
diligently proceed with the evaluation of Compounds and the development,
manufacture, marketing and sales of Products as set forth below.

 

3.2.1                     Product Development.  Firmenich will be responsible
for Product formulation work and […***…].  Within […***…] of the selection of a
Selected Compound, Firmenich will prepare a plan for product development
(“Product Development Plan”) for Products incorporating such Selected Compound
for review by the Steering Committee (the “Product Development Plan”), which
will be incorporated into the minutes of the Steering Committee; however,
Firmenich shall have sole discretion to determine the Product Development Plan. 
The Product Development Plan(s) will set forth the following:  (i) specific
types of products for potential inclusion of the Selected Compound(s);
(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 formulation, manufacturing and consumer acceptance testing. Firmenich
will use its commercially reasonable and diligent efforts to perform the
activities set forth in the Product Development Plan(s).    For the avoidance of
doubt, Firmenich will be responsible for formulating the product prototype(s) to
be used in consumer panels and consumer acceptance testing of Product
prototypes, including the […***…] with such activities, in accordance with the
activities outlined in the Product Development Plan(s).

 

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3.2.2                     Product Commercialization.

 

3.2.2.1           Within […***…] from the date of compound selection for each
Selected Compound, Firmenich shall submit a Strategic Marketing Plan to the
Steering Committee for Products containing such Selected Compound, which will be
incorporated into the minutes of the Steering Committee; however, […***…] 
Firmenich will update such Strategic Marketing Plan on a […***…] basis and such
updates shall be provided to the Steering Committee and incorporated into the
minutes of the Steering Committee.  The Strategic Marketing Plan will […***…]
and neither Firmenich nor any of its Affiliates […***…]  In addition, Firmenich
will use reasonable commercial efforts to develop Product
prototypes/formulations and present such samples to […***…] for the […***…]
product categories as identified in the Strategic Marketing Plan within […***…]
from the first Regulatory Approval Date for each Selected Compound.  Firmenich
will provide the Steering Committee with […***…] updates on such efforts.

 

3.2.2.2           Within […***…] from each Regulatory Approval Date for each
Selected Compound […***…], Firmenich shall use reasonable commercial efforts to
commence commercial sale of […***…] containing such Selected Compound […***…]. 
To the extent Firmenich does not commence commercial sale of […***…] containing
such Selected Compound within within […***…] of such date […***…], then Senomyx
may, at its sole discretion and upon […***…] advance written notice to
Firmenich, terminate the rights granted to Firmenich in Section 8 or reduce the
license granted to a non-exclusive license for the Territory or Fields as a
whole or applicable portions, and the definitions of Territory and/or Field
shall be deemed modified accordingly in respect of such Selected Compound
[…***…].

 

3.2.2.3           Within […***…] from each Regulatory Approval Date for each
Selected Compound […***…], Firmenich shall use reasonable commercial efforts to
commence commercial sale of […***…] containing such Selected Compound that will
be incorporated into an end product of Firmenich’s customer sold […***…].  To
the extent Firmenich does not commence commercial sale of …***…] containing such
Selected Compound within […***…], then Senomyx may, at its sole option and upon
[…***…] advance written notice

 

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to Firmenich, terminate the rights granted to Firmenich in Section 8 or reduce
the license granted to a non-exclusive license for the Territory or Fields as a
whole or applicable portions, and the definitions of Territory and/or Field
shall be deemed modified accordingly in respect of such Selected Compound
[…***…].

 

3.2.2.4           For the avoidance of doubt, Firmenich will be responsible for
the cost of manufacturing, packaging, promotion, advertising, sales and
distribution.

 

3.2.2.5           In accordance with the efforts and resources Firmenich would
use for a compound owned by it or to which it has rights, which is of similar
market potential at a similar stage in development as the applicable Selected
Compound, Firmenich will fill the market demand for such Selected Compound in
the Fields following commencement of marketing at any time during which it has
Exclusive or Co-Exclusive rights for such Selected Compound under this
Agreement.

 

3.2.2.6           If Firmenich elects to abandon, discontinue, or forgo
development and commercialization of Products in any country, Firmenich’s
licenses in such country under Section 8 will terminate and Firmenich will have
no right to practice or use the Senomyx Technology in such country, and all
rights, title and interest in and to the Senomyx Technology in such country will
revert to and become the sole property of Senomyx.

 

3.2.2.7           For purposes of this Section 3.2.2, if Regulatory Approval in
a country is obtained for a Compound prior to its selection by Firmenich, the
Regulatory Approval Date for such country shall be deemed to be […***…].

 

3.3                   Regulatory.

 

3.3.1                     FEMA GRAS filings for Compound(s) shall be made by
[…***…] Regulatory filings for Compounds […***…] shall be made […***…].     
[…***…] will provide a regulatory plan(s) for Selected Compound(s) to the
Steering Committee from time to time, which may include […***…].  The Steering
Committee shall provide advice and input into such regulatory plan(s). 
Notwithstanding the foregoing, in the event of a disagreement within the
Steering Committee regarding such regulatory plan(s), […***…] shall have the
authority to make any final decision.  Firmenich and Senomyx will cooperate to
the extent necessary to permit […***…] to perform the

 

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foregoing activities.  In addition, at the request of […***…] will provide
[…***…] with reasonable advice and assistance in connection with the regulatory
approval process for Selected Compounds […***…].

 

3.3.2                     Unless otherwise required by local law in the relevant
country, all regulatory filings made or filed for Compounds will be owned
exclusively by Senomyx and shall be subject to the license grant pursuant to
Section 8. In the event that due to local law in a relevant country such a
regulatory filing is owned by Firmenich, then Firmenich agrees that Senomyx is
hereby granted an Exclusive, royalty-free, worldwide, transferable, perpetual
license (with a right to sub-license) such regulatory filing, and such
regulatory filings shall be subject to the license grant pursuant to Section 8.
Such license grant from Firmenich to Senomyx shall survive the termination or
expiration of this Agreement and Firmenich agrees to cooperate and provide
reasonable assistance to Senomyx to maintain such regulatory filings, if any, in
good standing.

 

3.3.3                     Subject to subsections (a) and (b) below, […***…] the
out-of-pocket costs […***…] associated with (i) the regulatory approval process
for each Selected Compound including, without limitation, […***…]; and (ii) the
following […***…] and are required or may be required to complete a […***…] for
each Selected Compound and which are […***…]  For the avoidance of doubt,
out-of-pocket costs exclude […***…] unless agreed by the Steering Committee.

 

(a)    […***…] will […***…] for any additional out-of-pocket costs associated
with the regulatory approval process for each Selected Compound […***…].

 

(b)    Notwithstanding anything to the contrary in this Agreement, in no
event will the total aggregate out-of-pocket costs to Senomyx associated with
the regulatory approval process […***…] for all Selected Compounds in respect of
Synthetic Compound(s) […***…].  Upon proper exercise of the Option set forth in
Section 8.6, then the total aggregate out-of-pocket costs to Senomyx, as
described in the preceding sentence, shall not exceed […***…] for Natural
Compound(s) which is in addition to the […***…] for the

 

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Synthetic Compound(s).  Firmenich shall reimburse Senomyx for […***…] incurred
in accordance with this Section 3.3.3 in excess of such amount.

 

(c)    […***…] that are reimbursable pursuant to this Section 3.3.3 shall not
reflect any mark-up. In addition, each party shall have the right to review the
costs described in this Section 3.3.3 in […***…], provided that such costs will
be maintained as Confidential Information under Section 10.

 

3.4       For each Compound and Selected Compound evaluated by Firmenich under
this Agreement, Firmenich will use commercially reasonable precautions in the
evaluation of such compound including, without limitation, not exceeding
concentration and exposure limits provided by Senomyx and following other
guidelines provided by Senomyx with respect to any tasting by humans.  For each
taste test conducted prior to Regulatory Approval in the applicable country and
as permitted by local law, Recipient will require each participant to sign an
attestation of informed consent that is reasonable for tasting an experimental
compound.  With respect to any such testing or evaluation activities and with
respect to commercial Products, Firmenich will […***…].  Fimenich shall involve
Senomyx in any […***…] and will provide access to Senomyx to all related
information.  Upon prior notice to Firmenich, notwithstanding Section 10 of this
Agreement, Senomyx may […***…] accordingly.

 

4.              Collaboration with an Affiliate or Third Party.  During the
Collaborative Period Senomyx will not provide research and development services
to its Affiliates or any Third Party for the discovery or commercialization of
Compounds that enhance the sweetness intensity of Target Sweeteners for
application in the Fields, subject to the co-exclusive rights in Field II. 
After the Collaborative Period and for the remainder of the Term of the
Agreement, provided [...***…] and subject also to Firmenich’s continuing
compliance with the terms of this Agreement, Senomyx agrees not to grant any
rights under Senomyx Technology to its Affiliates or any Third Party for use in
the [...***…], and that also have [...***…] for [...***…] subject to the
[...***…].  For the avoidance of doubt, during the Term, Senomyx will have the
right to enter into collaborative programs with its Affiliates and/or with Third
Parties including, but not limited to, collaborative programs to (i) subject to
8.5, discover compounds that modulate sweetness for use outside the Fields;
(ii) modulate modalities other than sweetness within the Fields; and […***…]

 

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[…***…]

 

Based upon the size of the market opportunity, the probability of success, the
timing of potential commercialization of new flavor ingredients and the amount
of funding from existing collaborators (including amounts under this Agreement),
Senomyx acknowledges that its research program to identify synthetic flavor
ingredients that can enhance the sweetness of Target Sweeteners is currently one
of its highest priority programs. In the event that Senomyx determines […***…],
including the Research Plan, Senomyx will […***…] on a program by program basis
taking into account factors such as […***…] for the applicable program, the
[…***…] and […***…] from the program, the […***…] that Senomyx is […***…] for
the conduct of a given program, the […***…] to Senomyx as well as other facts
and circumstances that may be relevant at that time. If at any time during the
Collaborative Period Senomyx, based on relevant facts and circumstances at such
time, determines that […***…], Senomyx shall notify Firmenich and the parties
shall then convene a special meeting of the Steering Committee within ten
(10) days thereafter. Among the facts and circumstances that Senomyx shall
consider in making such a determination shall be:

 

(i) […***…]

(ii) […***…]

(iii) […***…]

(iv) […***…].

 

During any such specially convened meeting, the Steering Committee shall discuss
alternative approaches to provide for the […***…] that Senomyx determines that
it is […***…], including without limitation […***…] for the conduct of the
Research Plan […***…] However, no such […***…] unless and until the

 

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[…***…] are mutually agreed by Senomyx and Firmenich in writing.

 

5.              Law and Regulation.  The Compounds, Selected Compounds, and any
other materials 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.  Each party will report to the other a written
summary of results of research and development work it carries out, if any,
under this Agreement at […***…]. 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.  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.

 

7.              Financial Terms.

 

7.1

 

7.1.1                     License Fee.  In partial consideration for the license
and Option grants for the Collaborative Program under Sections 8.1.1, 8.1.2 and
8.6, Firmenich shall pay to Senomyx a fee of US $20,000,000 to be paid according
to the following schedule:

 

(a)   US $10,000,000 within twenty (20) days of the Effective Date; and

(b)   US $10,000,000 within thirty (30) days of the earlier of (i) the
occurrence of first Regulatory Approval of [...***…] and written notification of
determination by Firmenich pursuant to Section 7.1.2 that [...***…] is
Commercially Viable; or (ii) the occurrence of both first Regulatory Approval of
a Selected Compound [...***…] and written notification of determination by
Firmenich pursuant to Section 7.1.2 that such Selected Compound is Commercially
Viable.

 

Such payments shall be non-refundable and non-creditable.

 

7.1.2                     Determination of Commercial Viability.  For purposes
of Section 7.1.1(b), Firmenich will conduct an evaluation of whether the
applicable Compound is Commercially Viable.  Firmenich shall be solely
responsible for […***…], that it incurs to perform such evaluations.  During
such evaluations, Firmenich will provide regular written updates, but not less
often than by the […***…], to Senomyx including the progress and results of such
evaluation. If

 

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Firmenich determines that the applicable Compound is not Commercially Viable,
then Firmenich shall deliver a final written update that shall include […***…]
For the avoidance of doubt, the determination of whether a Compound is
Commercially Viable only relates to […***…]

 

7.1.2.1           Evaluation of […***…].  With respect to […***…], Firmenich
will have until […***…] to provide written notice to Senomyx that it has
determined […***…] is Commercially Viable.  In the event that Senomyx does not
receive such written notice from Firmenich within the timeframe set forth above
or in the event that Firmenich determines that S6973 is not Commercially Viable,
then notwithstanding any other provision of this Agreement to the contrary
(including, without limitation, Sections 4, 8.5 and 8.7), Firmenich shall have
no further rights to S6973 (including salt forms thereof) under this Agreement
and Senomyx will be free to license S6973 (including salt forms thereof) to an
Affiliate(s) or a Third Party(ies), and to enter into discovery and development
collaborations with an Affiliate(s) or a Third Party(ies), in the Fields for the
purpose of developing and commercializing S6973 (including salt forms thereof).

 

7.1.2.2           Other Compounds.  In the event that Senomyx has not received
payment under Section 7.1.1(b), then with respect to any Compound […***…],
Firmenich will have up to […***…] from receipt of the data package under
Section 3.1.2 for the applicable Compound to provide written notice to Senomyx
that it has determined such Compound is Commercially Viable.  In the event that
Senomyx does not receive such written notice from Firmenich within the timeframe
set forth above or in the event that Firmenich determines that such Compound is
not Commercially Viable, then notwithstanding any other provision of this
Agreement to the contrary, such Compound will thereafter not be considered a
Selected Compound under the Agreement.  In such event, Firmenich agrees to
reimburse Senomyx pursuant to Section 3.3.3 for work performed until such date
and any non cancelable costs.  For the avoidance of doubt, costs incurred by

 

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Senomyx for such Compound will be included in the […***…] for purposes of
Section 3.3.3.

 

7.2                               Research and Development Support.

 

7.2.1                     Research Fees.  During the Collaborative Period,
Firmenich will pay Senomyx annual research fees of […***…] for the Collaborative
Program including the activities performed pursuant to the Research Plan
(“Research Fees”).  These payments will be made in advance in equal quarterly
installments in the amount of […***…].  The first payment of […***…] will be
made within […***…] following the Effective Date.  In addition to the foregoing,
Firmenich and Senomyx have agreed that at the first meeting of the Steering
Committee following the Effective Date of this Agreement, the parties will
discuss […***…]. Such discussion shall include a consideration of […***…] and
other related details for the […***…], including […***…].

 

7.2.2                     Option for Natural Compounds.  In the event the Option
is exercised pursuant to Section 8.6, the annual Research Fees for the
Collaborative Program shall automatically increase upon receipt of such notice
by […***…] such that the total annual Research Fees will be […***…]. These
payments will be made in advance in equal quarterly installments in the amount
of […***…].  For the avoidance of doubt, in the event the Option is exercised,
all work on Synthetic Compounds will continue unless the parties mutually agree
otherwise at the time the Option is exercised or thereafter, in which case the
parties shall also […***…]. In the event that the work for Synthetic
Compound(s) is discontinued in accordance with the previous sentence, work on
Natural Compounds may continue independently, provided that:  (i) work on
Synthetic Compound(s) may not be discontinued at […***…]; (ii) Firmenich must
have previously paid to Senomyx […***…] under both Sections 7.1.1(a) and (b);
and (iii) the parties will negotiate in good faith any appropriate changes to
the Agreement […***…].  In the event the Option is exercised pursuant to
Section 8.6, Firmenich will reimburse Senomyx for […***…]

 

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[…***…] up to a maximum amount equal to […***…]. The parties recognize that
Firmenich and/or Senomyx may have the in-house capabilities required to perform
certain research or development activities associated with Natural Compounds. 
The Steering Committee will discuss the relative capabilities of the two parties
and decide the most appropriate party to perform such activities.

 

7.2.3                     Extension of Collaborative Period.  The parties hereby
agree that Firmenich will have the option to extend the Collaborative Period
upon the following terms and conditions:

 

7.2.3.1           Firmenich shall have three (3) consecutive options (“Extension
Options”) to extend the Collaborative Period each for consecutive one (1) year
periods following the second year of the Collaborative Period.  In the event
Firmenich elects to exercise an Extension Option, the Collaborative Period shall
be extended on the same terms and conditions as set forth in the Agreement,
subject to an increase in Research Fees in accordance with Section 7.2.3.3. The
Extension Options herein granted are not assignable separate and apart from this
Agreement. […***…] prior to the end of the final Extension Option, either party
may request the Steering Committee to discuss whether to grant an additional
extension if such extension would be mutually beneficial to the parties;
however, this does not guarantee an extension would be granted and neither party
shall have any obligation to enter into any such extension.

 

7.2.3.2           Each Extension Option is conditional upon Firmenich providing
Senomyx written notice of its election to exercise the Extension Option at least
[…***…] prior to the end of the Collaborative Period or any prior extension
thereof.  Failure of Firmenich to properly notify Senomyx will be deemed by
Senomyx as an election by Firmenich not to extend the Collaborative Period and,
in such event, the parties’ research and development obligations pursuant to
Section 3 of the Agreement will expire and thereafter Firmenich shall have no
right to exercise any subsequent Extension Option.

 

7.2.3.3           In the event the Extension Options are exercised pursuant to
this Section 7.2.3, the annual Research Fees for the

 

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Collaborative Program shall automatically increase to the following:

 

Collaborative
Period

 

Total annual
Research Fees in
the event the Option
has not been
exercised under
Section 8.6

 

Total annual Research
Fees in the event the
Option has been
exercised under
Section 8.6

 

Year 3

 

[…***…]

 

[…***…]

 

Year 4

 

[…***…]

 

[…***…]

 

Year 5

 

[…***…]

 

[…***…]

 

 

These payments will be made in advance in equal quarterly installments.  The
table above assumes that […***…]. In the event the parties mutually agree to a
different arrangement with respect to ongoing research, the parties shall also
revise the funding amounts in the table above.

 

7.2.4                     Payment Terms for Research Fees.  Payments for any
period which is less than three (3) months of the Collaborative Period will be
prorated based on the actual number of days in such period. These Research Fees
are inclusive of […***…]. These payments do not include: (i) […***…] associated
with providing support for the Collaborative Program; or (ii) the costs of any
unanticipated materials or equipment as requested and agreed to by the Steering
Committee. Additional Research Fees, if any, may be proposed to the Steering
Committee and agreed to in writing.

 

7.3                               Milestone Payments.

 

7.3.1                     Synthetic Compounds.  With respect to Compounds that
are Synthetic Compounds, Firmenich will pay Senomyx the non-creditable,
non-refundable milestone payments below within […***…] of the occurrence of the
following milestone events under this Agreement:

 

[***]

 

Payment†

 

First [***]

 

[***]

 

Each subsequent [***]

 

[***]

*

 

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[***]

 

Payment

 

First [***]

 

[***]

 

Each subsequent [***]

 

[***]

*

 

[***]

 

Payment

 

First [***]

 

[***]

 

Each subsequent [***]

 

[***]

*

 

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*[…***…].

 

†[…***…].

 

For purposes of this Section 7.3.1, if […***…] is obtained for a Compound prior
to […***…], the date of […***…] shall be deemed to be the date Firmenich
[…***…].

 

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Milestone Example:

 

[…***…]

 

7.3.2                     Option for Natural Compounds.  In the event the Option
is exercised under Section 8.6, with respect to Compounds that are Natural
Compounds, Firmenich will pay Senomyx the non-creditable, non-refundable
milestone payments below within […***…] of the occurrence of the following
milestone events under this Agreement:

 

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[***]

 

Payment

 

First [***]

 

[***]

 

Each subsequent [***]

 

[***]

*

 

[***]

 

Payment

 

First [***]

 

[***]

 

Each subsequent [***]

 

[***]

*

 

[***]

 

Payment

 

First [***]

 

[***]

 

Each subsequent [***]

 

[***]

*

 

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*[…***…]

 

For purposes of this Section 7.3.2, if […***…] is obtained for a Compound prior
to […***…], the date of […***…] shall be deemed to be the date Firmenich
[…***…].

 

7.4                               Minimum Annual Royalties.

 

7.4.1                     Synthetic Compounds.  During the Royalty Term,
Firmenich will pay the following minimum annual royalties to Senomyx for
Synthetic Compounds:

 

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7.4.1.1    Following first […***…] of a Selected Compound that is a Synthetic
Compound:

 

Royalty Year for first
Selected Compound

 

Minimum Annual Royalty Payment
Due (for the applicable Royalty Year,
as defined below)

 

[***] Royalty Year

 

[***]

 

[***] Royalty Year

 

[***]

 

[***] Royalty Year

 

[***]

 

[*** Royalty Year

 

[***]

 

[***] Royalty Year and successive years

 

[***]

 

 

7.4.1.2    Following first […***…] of a Selected Compound that is a Synthetic
Compound:

 

Royalty Year after
[***] for first Selected Compound

 

Minimum Annual Royalty Payment
Due (for the applicable Royalty Year,
as defined below)

 

[***] Royalty Year

 

[***]

 

[***] Royalty Year

 

[***]

 

[***] Royalty Year

 

[***]

 

[***] Royalty Year

 

[***]

 

[***] Royalty Year, and successive years

 

[***]

 

 

7.4.2             Option for Natural Compounds.  In the event the Option is
exercised under Section 8.6, during the Royalty Term, within […***…] following
Firmenich’s […***…] for each Natural Compound that Firmenich selects under
Section 3.1.4, Firmenich and Senomyx shall […***…] minimum annual royalty
[…***…] the amounts due under Section 7.4.1) based on […***…] (as compared to
the […***…] that are […***…]) for such […***…] based on information contained in
the […***…] (which shall contain […***…]), with the first such […***…] minimum
annual royalty to be due (i) with respect to the […***…] commencing for the
[…***…] Royalty Year, and […***…] each year thereafter in accordance with

 

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any […***…] in […***…]; and (ii) with respect to […***…], commencing on the
[…***…] Royalty Year following such approval and […***…] each year thereafter in
accordance with any […***…] in […***…]. The […***…] with respect to any such
[…***…] minimum annual royalty shall be reflected in the minutes of the […***…]
and shall be […***…]. In the event that […***…] the […***…] minimum annual
royalties due for any Natural Compound under this Section 7.4.2, the […***…] in
accordance with the […***…] Agreement.

 

7.4.3         Payment Terms for Minimum Annual Royalties.  For purposes of this
Section 7.4, if […***…] is obtained for a Compound prior to […***…], the date of
[…***…] shall be deemed to be the date Firmenich […***…].  Minimum annual
royalty payments are non-refundable.

 

The amount by which the earned royalties provided for in Section 7.5 paid for a
given Royalty Year (as defined below) is less than the amount of the relevant
minimum annual royalty shall be paid by Firmenich to Senomyx within […***…] from
the end of that Royalty Year.

 

In the event of the expiration or termination of this Agreement, the minimum
annual royalty for the final Minimum Annual Royalty Year shall be paid on such
expiration or termination date on a pro-rata basis and shall be non-refundable
and non-creditable.

 

7.5          Royalty for Products.

 

During the Royalty Term, Firmenich will pay to Senomyx a royalty equal to the
applicable Royalty Rate multiplied by Net Sales of Products. The Royalty Rate
will be calculated at the end of each calendar quarter during the Royalty Term,
and will be based on cumulative Net Sales during the applicable Royalty Year, as
follows:

 

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·      If the cumulative Net Sales for the applicable Royalty Year as of the end
of the applicable calendar quarter are equal to or less than Threshold One, then
the Royalty Rate shall be […***…].

 

·      If the cumulative Net Sales as of the end of the applicable calendar
quarter are greater than Threshold One but less than Threshold Two for such
Royalty Year as reflected on the table in Appendix B attached to this Agreement,
then the royalty rate will be […***…].

 

·      Through the end of the […***…], if the cumulative Net Sales as of the end
of the applicable calendar quarter are equal to or greater than Threshold Two
for such Royalty Year as reflected on the table in Appendix B attached to this
Agreement, then the royalty rate will be […***…]

 

·      Beginning in the […***…], if the cumulative Net Sales as of the end of a
calendar quarter are greater than Threshold Two for such Royalty Year as
reflected on the table in Appendix B attached to this Agreement, then the
royalty rate will be […***…] on the […***…], and […***…] on the […***…].

 

The amount due each calendar quarter will be equal to the applicable Royalty
Rate multiplied by the cumulative Net Sales of Product during the applicable
Royalty Year, less any royalty payments actually paid with respect to calendar
quarters during the same Royalty Year. An example of the calculation methodology
for a sample Royalty Year is provided on Appendix B.

 

Sales by Firmenich and its Affiliates in all cases (including, without
limitation, to related parties such as Affiliates and joint ventures) shall be
conducted through arms-length transactions based on fair market value.  In the
event of a dispute between the parties regarding the fair market value,
[…***…].   In the event that Firmenich sells Products to its Affiliates, amounts
payable to Senomyx will be based on the greater of (i) […***…]; (ii) […***…] or
(iii) […***…].  For the avoidance of doubt, […***…]

 

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[…***…].

 

7.6          Payment Terms.  The amounts 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 each Product.  With each such
quarterly payment, Firmenich (or its respective Affiliate) will furnish to
Senomyx a statement in sufficient detail to permit confirmation of the accuracy
of the payment made, which sets forth […***…] the relevant sales information,
including […***…].  In addition, with respect to payments to Senomyx for sales
of Selected Compound […***…], Firmenich (or its respective Affiliate) will
furnish to Senomyx a royalty statement to permit confirmation of the accuracy of
the royalty payment made, which includes […***…].

 

7.7          Currency of Payment. All payments to be made under this Agreement,
including the amounts payable to Senomyx by Firmenich, 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 […***…].  Translation of
sales and all components of the royalty calculation recorded in local currencies
to United States dollars will be performed in a manner consistent with
Firmenich’s normal practices used to prepare its financial statements audited by
an independent auditor for internal and external reporting purposes, which uses
a widely accepted published exchange rate.

 

7.8          Taxes Withheld.  Any income or other tax that Firmenich, 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, Firmenich 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 promptly furnish to Senomyx proper evidence of the taxes paid on
Senomyx’s behalf.

 

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7.9          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 […***…]; provided, however, that in no event
will such rate exceed the maximum legal annual interest rate.  The payment of
such interest will not limit Senomyx from exercising any other rights it may
have as a consequence of the lateness of any payment.

 

7.10        Records of […***…], Net Sales and Royalty Calculations.  During the
Royalty Term and for a period of […***…] thereafter, Firmenich will keep
complete and accurate records of […***…] to calculate Net Sales of each Product
and royalty payment calculations in sufficient detail to allow the accrued
royalties to be determined accurately in accordance with International Financial
Reporting Standards (“IFRS”) and to verify the royalty payments and Royalty Rate
pursuant to Section 7.5.  Senomyx, with reasonable written notice to Firmenich
and not to exceed once per year, will have the right to […***…] to verify the
accuracy of the reports of […***…] and […***…].  […***…]  Senomyx agrees not to
disclose Confidential Information concerning royalty payments reports, and all
other information learned in the course of an audit or inspection, except to the
extent necessary for Senomyx to enforce its rights under this Agreement or if
disclosure is required by law.

 

8. Grants.

 

8.1          Grant of Rights.

 

8.1.1 Field I.   Subject to the terms and conditions of this Agreement, Senomyx
hereby grants to Firmenich an Exclusive, nontransferable (except as permitted
under Sections 8.2.1 and 17.12), license under the Senomyx Technology, to
(i) use Compound(s) for evaluation during the Collaborative Period in Field I in
the Territory for the intended purpose of enhancing the sweet taste of a Target
Sweetener; and (ii) to make, have made, use, sell, offer for sale, have sold,
import and export Products incorporating a Selected

 

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Compound for use in Field I in the Territory for the applicable Intended
Purpose.

 

8.1.2 Field II.   Subject to the terms and conditions of this Agreement, Senomyx
hereby grants to Firmenich a Co-Exclusive, nontransferable (except as permitted
under Sections 8.2.1 and 17.12), license under the Senomyx Technology, to
(i) use Compound(s) for evaluation during the Collaborative Period in Field II
in the Territory for the intended purpose of enhancing the sweet taste of a
Target Sweetener; and (ii) to make, have made, use, sell, offer for sale, have
sold, import and export Products incorporating a Selected Compound for use in
Field II  in the Territory for the applicable Intended Purpose.

 

8.1.3  Collaboration Program […***…].  Senomyx hereby grants to Firmenich a
non-exclusive, non-sublicensable and non-transferable (except as permitted under
Sections 8.2.1 and 17.12) license under the Collaboration Program IP to […***…]
under the Collaborative Program (but only to the extent […***…] as reflected in
the Research Plan […***…].  Notwithstanding the foregoing, it is understood and
agreed that Firmenich may not exercise or use any of the rights granted under
the […***…] unless and until such time as […***…], and Firmenich has exercised
its right to effect […***…] as set forth below. It is further understood and
agreed that Firmenich shall be prohibited from exercising or using any of the
rights granted under […***…] (i) during any period if it is in material breach
of this Agreement, or (ii) if […***…] occurs after the end of the […***…] under
the Agreement. Any use by Firmenich of the […***…] prior to Firmenich’s proper
exercise of […***…] shall invalidate this Section 8.1.3 ab initio.  […***…]
following Firmenich’s written notice of […***…] subsequent to […***…] Senomyx
shall promptly use […***…] from the aforementioned […***…] in order to give
Firmenich the full benefits and rights of the […***…] but only to the extent
that it would not cause Senomyx to incur out-of-pocket expenses […***…]
Nevertheless, Firmenich acknowledges and agrees that this Section 8.1.3 shall
not obligate Senomyx to maintain […***…] or to continue to perform any
obligations under […***…] either during or following the Term of this Agreement.
Similarly, this Section 8.1.3 does not impose on Senomyx any obligation to
[…***…] prior to or following […***…]

 

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In addition to […***…] set forth in the paragraph above, following Firmenich’s
written notice to Senomyx of a […***…], (i) Senomyx shall provide Firmenich with
[…***…] and […***…], such as information regarding […***…] to the extent
necessary to evaluate […***…] or to support […***…] of any […***…] and […***…]
but only to the extent that such […***…]; and (ii) Senomyx shall provide
Firmenich with […***…] and a copy of […***…] if any, but only to the extent that
[…***…].

 

In the event of the first occurrence of an event under subsection (A) under the
definition of a […***…] (as defined on Appendix A) during the Collaborative
Period, Senomyx shall promptly notify Firmenich of such occurrence. In the event
that […***…] occurs during the Collaborative Period, Firmenich shall have the
option, in its sole discretion, within […***…] thereafter to […***…]  To
exercise this option, Firmenich shall send written notice of its election to
Senomyx and, immediately upon the sending of such notification, Firmenich shall
be permitted to exercise its rights under […***…], except in the event that
Firmenich is in material breach of this Agreement. Upon Firmenich’s exercise of
[…***…] the Collaborative Program as reflected in the Research Plan. For
avoidance of doubt, […***…] Notwithstanding anything in this Agreement to the
contrary, this Section 8.1.3 shall terminate automatically upon the earlier of
(i) termination or expiration of this Agreement and (ii) the […***…] of the
Effective Date of this Agreement, except that […***…]

 

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[…***…].

 

8.1.4 Regulatory Approval of […***…].  Provided that Firmenich (i) has selected
[…***…] for development under the Collaborative Program pursuant to
Section 3.1.4, and (ii) has determined that […***…] is Commercially Viable in
accordance with Section 7.1.2.1, then in the event that […***…] the provisions
of this Section 8.1.4 shall apply. Beginning as of […***…] and continuing on the
last day of each […***…] thereafter if […***…] has still not occurred by such
date, within […***…] following the end of such […***…] Senomyx shall […***…], as
reflected in the […***…]. If any […***…] reflects that […***…], then the parties
shall convene a special meeting of the Steering Committee to […***…], subject to
Senomyx’s obligations to any other Third Party under existing agreements. The
parties acknowledge and agree that after such meeting Senomyx shall […***….] At
such specially convened Steering Committee meeting, notwithstanding the
provisions of Section 3.3.1, provided that Firmenich is not then in material
breach of this Agreement […***…] and following such […***…] to the extent that
the […***…] would not cause Senomyx to violate its obligations to any Third
Party under existing agreements, to: (i) […***…] for use in the Fields;
(ii) […***…] presented to the Steering Committee pursuant to Section 3.3.1;
(iii) […***…] and […***…] any additional […***…] for use in the Fields that in
[…***…] for use in the Fields, it being understood however that […***…] for
which the

 

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parties have previously agreed […***…] between the parties and that […***…]; and
(iv) […***…] for use in the Fields. Notwithstanding the immediately preceding
sentence, […***…] previously presented to the Steering Committee […***…] the
Steering Committee and the Steering Committee shall […***…] to the […***…].
Firmenich acknowledges and agrees that […***…]. Firmenich agrees to undertake
any and all activities authorized under this Section 8.1.4 in good faith and
[…***…]. Except to the extent that this Section 8.1.4 expressly modifies the
provisions of Section 3.3.1, this Section 8.1.4 shall not be deemed to modify
any other section of this Agreement.

 

8.2          Limitations to Licenses.

 

8.2.1       Except as provided below, Firmenich may not sublicense its rights
under Section 8 to Third Parties.  Firmenich may sublicense its rights […***…],
on the condition that Firmenich assumes the responsibility for performance due
by any such sublicensee under a sublicense of the obligations imposed upon
Firmenich in the license under the Agreement (including, without limitation,
diligence obligations under Section 3 of this Agreement, the timely payment by
Firmenich under Section 7 of the Agreement and the conditions of sales under
Section 8.2.2 of the Agreement).  Firmenich will agree to be responsible for and
to guarantee payment of royalties due on […***… by […***…].

 

8.2.2       For the avoidance of doubt, Firmenich and its Affiliates shall not
knowingly sell or provide Selected Compound(s) or Product(s) to any third party
for use outside the Fields or for use other than for the intended purpose of
enhancing the sweet taste of one or more Target Sweeteners. Firmenich and its
Affiliates shall […***…] with its purchasers which include the […***…] upon
Firmenich in this Section 8.  If Firmenich (or any of its Affiliates) […***…]
Selected Compound(s) or Product(s) outside of the Fields licensed to Firmenich
under this Section 8 or other than for the intended purpose of enhancing the
sweet taste of a Target Sweetener, then Firmenich (and its Affiliates) will

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[…***…]: (a) […***…]; (b)[ …***…]; and (c) […***…] until such time that it
receives […***…]  In the event that […***…] Firmenich becomes aware […***…]
Selected Compound(s) or Product(s) outside of the Fields licensed to Firmenich
under Section 8 or other than for the intended purpose of enhancing the sweet
taste of a Target Sweetener, then Firmenich shall promptly notify Senomyx and
immediately discontinue sales of Products to such purchasers until such time
that Senomyx agrees to authorize future sales, in its reasonable determination.

 

8.2.3       With respect to any rights licensed to Senomyx by […***…],
notwithstanding the exclusive licenses granted in this Section 8, Firmenich
acknowledges that (i) academic, government and other not-for-profit
organizations are not precluded from practicing such rights for educational and
research purposes.; and (ii) the research leading to such rights was funded in
part by the U.S. Government, and the U.S. Government has certain rights as set
forth in 37 CFR 401.  Firmenich agrees to comply with all obligations resulting
from such government rights, including, but not limited to, the requirement that
any Products embodying such rights sold in the United States must be
substantially manufactured in the United States to the extent required by 35
U.S.C. Sec. 204, if such statute is applicable. No earned royalty will be
collected or paid hereunder to […***…] on Products sold to, or otherwise
exploited for, the account of the United States government as provided for in
the license to the United States government.  Firmenich will reduce the amount
charged for Products sold to or otherwise exploited by the United States
Government by an amount equal to the earned royalty for such product otherwise
due […***…].

 

8.3          Grant of Rights from Firmenich to Senomyx.

 

8.3.1       Senomyx Selected Compound-Containing Formulations License.  For the
avoidance of doubt, Firmenich […***…] Senomyx Selected Compound-Containing
Formulations […***…].

 

With respect to: (i) Senomyx Selected Compound-Containing Formulations that
[…***…], and (ii) Senomyx Selected Compound-Containing Formulations that […***…]

 

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[…***…], […***…] hereby grants to […***…] and its Affiliates a non exclusive,
royalty-free, sublicenseable, nontransferable (except as permitted under
Section 17.12) worldwide license under such Patent Rights and under such […***…]
Know-How that […***…] to make, have made, use, sell, offer for sale, have sold,
import and export products […***…].  If this Agreement terminates or […***…],
then the licenses granted in the immediately preceding sentence shall be
automatically expanded to include any and all Fields and/or territories for
which […***…].

 

In the event that […***…] or its Affiliates desire a license to a Senomyx
Selected Compound-Containing Formulation that consists of […***…] to make, use
or sell a Selected Compound […***…], and requests such a license from […***…],
[…***…] shall negotiate in good faith with […***…] (or its Affiliates)
commercially reasonable terms and conditions, including the appropriate amount
and form of consideration to be paid to […***…] for such rights.  […***…] agrees
that the terms and conditions offered to […***…] (and its Affiliates) shall be
no less favorable […***…], and in the event that […***…] and […***…] (or its
Affiliates) enter into such a license and […***…] subsequently offers to any
other Third Party a license to such Patent Rights on terms more favorable than
the applicable terms of the license with […***…] (or its Affiliates), then
[…***…] shall notify […***…] of such more favorable terms […***…] If this
Agreement terminates or […***…], then […***…] rights under the preceding
sentence shall apply equally to the […***…]  Notwithstanding anything else in
this document, any rights granted by […***…] under this paragraph shall be
non-sublicenseable unless otherwise decided by […***…], at its sole and absolute
discretion.

 

In addition, in the event that a […***…] desires a license to a Senomyx Selected
Compound-Containing Formulation that consists of […***…] to make, use or sell a
Selected Compound […***…],and

 

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requests such a license from […***…] commercially reasonable terms and
conditions, including the appropriate amount and form of consideration to be
paid by […***…] for such rights.

 

8.3.2                     Senomyx Compound(s) Manufacturing Methods.  With
respect to Senomyx Compound Manufacturing Methods, […***…] hereby grants to
[…***…] and its Affiliates a […***…], nontransfereable (except as permitted
under Section 17.12) worldwide license under Patent Rights and under […***…]
Know-How that […***…] to make, have made, use, sell, offer for sale, have sold,
import and export products […***…] the Fields.

 

If this Agreement terminates or […***…], then […***…] hereby grants to […***…]
and its Affiliates a non-exclusive, royalty-free, sublicenseable,
nontransferable (except as permitted under Section 17.12) worldwide license
under Patent Rights and under […***…] Know-How that […***…] Senomyx Compound
Manufacturing Methods for all Selected Compounds, in the case of termination of
this Agreement, or for applicable Selected Compounds, in the case that […***…]
(i) to make, have made, use, sell, offer for sale, have sold, import and export
products […***…] (ii) to make, have made, use, sell, offer for sale, have sold,
import and export products […***…]

 

During the Term of this Agreement, in the event that […***…] desires a license
to a Senomyx Compound Manufacturing Method for which […***…] to make, use or
sell a Selected Compound […***…] and requests such a license from […***…] shall
negotiate in good faith with such […***…] commercially reasonable terms and
conditions, including the appropriate amount and form of consideration to be
paid by […***…] for such rights.

 

8.3.3                     If Firmenich identifies any […***…] that it considers
may be relevant or useful for the research purposes under this Agreement,
Senomyx may request a license of the relevant […***…] and Firmenich may in its
sole discretion grant a license of the […***…].  Where Firmenich consents to a
license in this Section 8.3.3,

 

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Firmenich will grant a fully paid, non-exclusive, non-transferable license to
use the relevant […***…] for research purposes solely related to Senomyx’s
performance of its obligations pursuant to this Agreement.  For the avoidance of
doubt […***…].

 

8.4                               Limited Product Applications.  In the event
that (a) Firmenich has commenced sales of Products and determined in good faith
that […***…] due to limited product applications(s) within the Fields, and
(b) […***…] have […***…] Products in such product application(s) that […***…],
then upon good faith request of Firmenich the Steering Committee will […***…]
and to […***…]. The Steering Committee will document any such changes to […***…]
in the minutes of the Steering Committee. In such event, and provided Firmenich
is then in compliance with the other terms of this Agreement and subject to
Firmenich’s continuing compliance with the terms of this Agreement, […***…]

 

8.5                               Right of First Negotiation for […***…] Product
Categories.  In the event that an Exclusive license becomes available for
Compounds in the field of […***…], Firmenich shall have the following rights.  
Before Senomyx first grants such a license to any Third Party (other than
Senomyx’s existing licensee for the applicable field), Senomyx will present that
opportunity first to Firmenich.  Firmenich must inform Senomyx of commercial
interest in such opportunity in writing within […***…] of receipt of written
notice from Senomyx and such written response shall include proposed, and in
good faith, […***…] for a potential collaboration in the applicable field.  In
the event that Senomyx does not receive such written notification and proposal
within […***…] then Senomyx shall be free to retain such rights for itself or
its Affiliates and/or enter into agreements with one or more Third Parties for
their use of any Compound for use in the applicable field.  If Firmenich submits
a proposal, the parties shall negotiate in good faith to complete a license
agreement for such Compound in the applicable field for a period not to exceed
[…***…]. In the event that the parties do not enter into a license agreement for
such Compound within […***…], then Senomyx shall be free to retain such rights
for itself or its Affiliates and/or enter into agreements with one or more Third
Parties for their use of any Compound for use in the applicable field. For
avoidance of doubt, Firmenich acknowledges

 

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and agrees that Senomyx shall have sole and absolute discretion to determine
whether the terms offered by Firmenich during such negotiation process, if any,
are acceptable to Senomyx and therefore Senomyx shall have sole and absolute
discretion whether to enter into any such agreement with Firmenich on the terms
offered.

 

8.6                               Grant of Option — Natural Compounds.  Subject
to the terms and conditions of this Agreement, Senomyx hereby grants to
Firmenich an exclusive option (“Option”) to expand the Collaborative Program and
the license grant under Section 8.1 to include Natural Compounds in addition to
Synthetic Compounds.   The Option shall expire on the earlier of (i) […***…]
from the Effective Date (provided, however, that if Firmenich […***…], the
[…***…] from the Effective Date, except that in no event shall […***…]); or
(ii) […***…] from the date that Senomyx notifies Firmenich in writing that
Senomyx has […***…] (“Option Expiration Date”).  The Option is conditional upon
Firmenich providing written notice of its election to exercise the Option to
Senomyx on or before the Option Expiration Date. Upon proper exercise of the
Option, the licenses set forth in this Section 8.6 will be on the same terms and
conditions as set forth in this Agreement including, without limitation,
diligence obligations under Section 3 and royalties under Section 7.5; provided,
however, that effective upon exercise of the Option, the […***…] pursuant to
Section 7.2, 7.3.2 and 7.4.2.  If the Option is not properly exercised by the
Option Expiration Date then, subject to the immediately following paragraph, the
Option and all rights and obligations under this Section 8.6 will terminate and
Senomyx shall be free to retain rights to Compounds that are Natural Compounds
for itself or its Affiliates and/or enter into agreements with one or more Third
Parties for their use of any Compounds that are Natural Compounds for use in the
Fields.

 

Notwithstanding the foregoing, in the event that the Option is not properly
exercised by Firmenich prior to the Option Expiration Date as provided above,
for […***…] immediately following the Option Expiration Date in the event that
Senomyx desires to enter into an agreement with a Third Party to initiate
discovery and development of Compounds that are Natural Compounds for use in the
Fields, Senomyx will notify Firmenich in writing and Firmenich will have […***…]
to exercise the Option under the same terms set forth above.  If the Option is
not properly exercised within

 

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[…***…], the rights and obligations under this paragraph will terminate and
Senomyx shall be free to retain rights to Compounds that are Natural Compounds
for itself or its Affiliates and/or enter into agreements with one or more Third
Parties for their use of any Compounds that are Natural Compounds for use in the
Fields.

 

The rights under this Section 8.6 are not assignable separate and apart from
this Agreement.

 

8.7                               After the Collaborative Period.  Upon
expiration of the Collaborative Period, in the event that Firmenich has selected
a Selected Compound(s) pursuant to Section 3.1.4 then, provided it maintains its
Exclusive and Co-Exclusive licenses to such Selected Compound, Firmenich shall
have the following rights. Subject to Section 7.1.2.1, during […***…], Senomyx
will not grant a license under Senomyx Technology to any Third Party to […***…]
for use in the Fields (subject to the Co-Exclusive rights in Field II) for the
Intended Purpose of […***…]. At any time during […***…] Firmenich, upon written
notice to Senomyx, […***…] as set forth in this Agreement including, without
limitation, […***…].  In such event, the applicable […***…]

 

In addition to the restrictions set forth in the immediately preceding
paragraph, in the event that Firmenich has selected a Selected
Compound(s) pursuant to Section 3.1.4 then, provided it maintains its Exclusive
and Co-Exclusive licenses to such Selected Compound, during […***…], Senomyx
will not grant a license under Senomyx Technology to any Third Party […***…] for
use in the Fields (subject to the Co-Exclusive rights in Field II) for the
Intended Purpose of […***…].  Notwithstanding anything in this Agreement to the
contrary, if during […***…] Senomyx grants a license under Senomyx Technology to
a Third Party […***…] then even if such Third Party is subsequently deemed
[…***…] during such […***…] Senomyx shall have no obligation to terminate such
license and Senomyx shall not be deemed to be in breach of this Section 8.7.

 

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9.  Ownership of Intellectual Property.

 

9.1                               Retention of Rights.  Senomyx retains all
rights in Senomyx Technology not expressly licensed, or assigned in this
Agreement.  Firmenich retains all rights in Firmenich Technology not expressly
licensed, or assigned in 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.  Subject to Sections 9.5 and 9.6, Senomyx
hereby irrevocably assigns to Firmenich all right, title and interest in and to
any such Senomyx Sole Inventions that consist of improvements to the Firmenich
Technology (“Firmenich Improvements”), including, without limitation, […***…],
and all claims within Patent Rights claiming such Senomyx 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 Firmenich, then Senomyx
agrees either to waive the enforcement of such rights against Firmenich and any
sublicensees and assignees, or to grant Firmenich 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                               Firmenich Sole Inventions.  Firmenich will own
all Inventions and other Know-How made solely by its employees and agents under
this Agreement (“Firmenich Sole Inventions”), and all claims within Patent
Rights claiming such Inventions and Know-How.  Subject to Sections 9.5 and 9.6,
Firmenich hereby irrevocably assigns to Senomyx all right, title and interest in
and to any such Firmenich Sole Inventions that consist of improvements to the
Senomyx Technology (“Senomyx Improvements”), including, without limitation,
[…***…], and all claims within Patent Rights claiming such Firmenich Sole
Inventions, subject to any licenses granted to Firmenich pursuant to Section 8. 
In the event that Firmenich is legally unable to assign such rights to Senomyx,
then Firmenich 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

 

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sublicense through multiple tiers of sublicense, to such rights, subject to any
license granted to Firmenich pursuant to Sections 8.

 

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 Firmenich (the “Joint Inventions”) and all claims within
Patent Rights claiming such Joint Inventions will be owned jointly by Firmenich
and Senomyx.  Subject to Sections 9.5 and 9.6, Firmenich hereby irrevocably
assigns to Senomyx all interest in and to any Joint Inventions that consist of
Senomyx Improvements, including, without limitation, […***…] and all claims
within Patent Rights claiming such Joint Inventions, subject to the licenses
granted to Firmenich pursuant to Section 8. In the event that Firmenich is
legally unable to assign such rights to Senomyx, then Firmenich 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 Firmenich pursuant
to Sections 8. Subject to Sections 9.5 and 9.6, Senomyx hereby irrevocably
assigns to Firmenich all interest in and to any Joint Inventions that consist of
Firmenich Improvements, including, without limitation, […***…] 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 Firmenich, then Senomyx agrees either to waive
the enforcement of such rights against Firmenich and any sublicensees and
assignees, or to grant Firmenich 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                     […***…]  For the avoidance of doubt, all […***…]
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 […***…]

 

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[…***…] developed by […***…] under this Agreement 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 […***…] developed by […***…]
under this Agreement and all claims within Patent Rights claiming such […***…]
will be owned by […***…], subject to the license to […***…] pursuant to […***…] 
For the purposes of the previous sentence and […***…] Notwithstanding anything
to the contrary in this Agreement, […***…] will have no right to practice the
[…***…] of the Fields.

 

9.5.4                     […***…]  Prior to […***…], Firmenich will not […***…]
on […***…] and will not disclose such […***…]  In the event that Firmenich
[…***…], then Firmenich hereby grants to Senomyx a non exclusive, royalty-free,
sublicenseable, nontransferable (except as permitted under Section 17.12)
worldwide license under Patent Rights and under Firmenich Know-How that […***…]:
(i) to make, have made, use, sell, offer for sale, have sold, import and export
[…***…] (ii) to make, have made, use, sell, offer for sale, have sold, import
and export […***…], and (iii) to make, have made, use, sell, offer for sale,
have sold, import and export […***…]

 

9.6                               Methods of […***…]

 

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
Firmenich under this Agreement that consist of methods of […***…] and

 

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all claims within Patent Rights claiming such Inventions will be owned […***…].

 

9.6.2                     Methods of […***…]  Anything in this Agreement to the
contrary notwithstanding and subject to the license grants in Section 8.3.2,
[…***…], and shall be under no obligation to disclose […***…], any […***…]
developed […***…].  For the avoidance of doubt, […***…] shall have the right to
file Patent Rights claiming such […***…], subject to Section 10 of this
Agreement.

 

9.6.3                     Methods of […***…].  Prior to […***…] will not file
patent applications on methods of […***…], including any […***…] thereof, and
will not […***…].  In the event that […***…] such information […***…], then
[…***…] hereby grants to […***…] a non exclusive, royalty-free, sublicenseable,
nontransferable (except as permitted under Section 17.12) worldwide license
under Patent Rights and under Firmenich Know-How that […***…] to such methods of
[…***…] (i) to make, have made, use, sell, offer for sale, have sold, import and
export products […***…]; (ii) to make, have made, use, sell, offer for sale,
have sold, import and export […***…] party (and such party’s Affiliates), and
(iii) to make, have made, use, sell, offer for sale, have sold, import and
export products […***…]

 

9.7                               Other Inventions.  Ownership of any Inventions
made pursuant to this Agreement but not included in Sections 9.2, 9.3, 9.4, 9.5
or 9.6 will be determined by inventorship.

 

9.8                               Inventorship and Assignment.  United States
patent law will determine inventorship of patentable inventions.  Senomyx and
Firmenich agree to execute all documentation necessary to perfect all
assignments of Patent Rights contemplated in this Agreement.

 

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.

 

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10.       Treatment of Confidential Information; Publicity.

 

10.1                        Confidentiality.  Subject to the terms and
conditions of this Agreement, each of Senomyx and Firmenich agrees that, during
the Term and for a period of […***…] thereafter, it will keep confidential, and
will cause its Affiliates to keep confidential, all of the other party’s
Confidential Information.  Neither Senomyx nor Firmenich 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
Firmenich each agree that any disclosure to any of its Affiliaties, 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 received from the other
party including, without limitation, all copies and extracts of documents,
within […***…] of the date of receipt of the request of such other party;
provided, however, 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 of 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 the request and expense 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 Firmenich independently and/or jointly with Senomyx
that constitutes a Senomyx Improvement or information developed by Senomyx
independently and/or jointly with Firmenich that constitutes a Firmenich
Improvement.

 

10.5                        Confidential Financial Information.  The parties
agree that the material financial and business terms of this Agreement will be
considered Confidential Information of both parties.  Notwithstanding the
foregoing, either party may disclose such terms in legal proceedings or as are
required to be disclosed in its financial statements, by law or SEC regulation,
or under an obligation of confidentiality to bona fide potential sublicensees. 
Senomyx may provide a copy of this Agreement or other Confidential Information
provided under this Agreement including, without limitation, progress and
royalty reports to the extent required by its licensors […***…] under an
obligation of confidentiality.  Either party will have the further right to
disclose the material financial terms of this Agreement under an obligation of
confidentiality to […***….]  Notwithstanding the foregoing, the parties will
agree upon a press release to announce the execution of this Agreement and
[…***…] and other […***…] under the Agreement.  Thereafter, Firmenich and
Senomyx may each disclose to Third Parties the information contained in such
press release without the need for further approval by the other party.

 

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10.6                        Permitted Use and Disclosures. Each party may use or
disclose Confidential Information disclosed to it by the other party to the
extent such information is included in the Firmenich Technology, Senomyx
Technology or Joint Patent Rights, 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 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).  Any
disclosure of Confidential Information shall be limited to the minimum necessary
to comply with such requirements.

 

10.7                        Publication of Results.  Subject to this Section 10,
results and data obtained by either party in the course of this Agreement may be
submitted for publication by such party in accordance with such party’s
customary practices.  The publishing party will send a copy of the proposed
publication to the non-publishing party and will allow such party […***…] from
the date of receipt for review and comment.  The non-publishing party may,
within […***…] object to the proposed publication on the grounds that either the
publication contains Confidential Information of the non-publishing party in
which case any such data determined in fact to be Confidential Information shall
be removed from the publication before it is published or the publication may
prejudice a subsequent patent application by the non-publishing party in which
case the publishing party shall delay publication for a further […***…] or until
such patent application is filed, if earlier.  If no answer is received from the
non-publishing party within […***…] of receipt of the proposed publication, the
publishing party will be free to submit such proposed publication.

 

10.8                        Confidential Research Information.  Subject to the
provisions of Sections 3.3.2 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 Agreement will
be owned exclusively by that party and considered Confidential Information of
that party subject to the confidentiality requirements of this Section 10.
Firmenich will not provide to a Third Party any materials provided to it by
Senomyx and Senomyx will

 

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not provide to a Third Party any materials provided to it by Firmenich. However,
Firmenich may […***…]

 

11. Intellectual Property Enforcement and Defense of Claims.

 

11.1                        Notice of Infringement.  If Senomyx or Firmenich
determines that any Senomyx Technology, Firmenich 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 and 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 such event, with respect to […***…] under this Agreement in
the country in which the infringement action is initiated, Firmenich shall have
the right to join in such infringement suit or similar action at its own
expense.  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 Firmenich of its intent not to take such steps, then provided Firmenich
retains relevant exclusive rights under this Agreement in the country in which
the infringement action is initiated, Firmenich shall have the right to do so at
its expense; provided, however, that if Senomyx has commenced negotiations with
an alleged infringer for discontinuance of such infringement within […***…],
Senomyx shall have an additional […***…] to conclude its negotiations before
Firmenich may bring suit for such infringement or take other similar action.  In
the event Firmenich brings such suit for infringement or takes other similar
action, Senomyx shall have the right to join in such infringement suit or
similar action at its own expense.

 

11.3                        Firmenich Technology.  With respect to Firmenich
Technology, Firmenich shall have the sole right, but not the obligation, to take
action to stop such infringement at its own expense. For the avoidance of doubt,
Firmenich shall be entitled to take action under this Section 11.3
notwithstanding any action or negotiation commenced by Senomyx under
Section 11.2. With respect to

 

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Patent Rights owned by Firmenich pursuant to Section 9.5.3 claiming […***…]
where the infringement is […***…] Firmenich will have the right to take action
to stop infringement of the claims in such Patent Rights which claim […***…]
only against Third Parties that are […***…]

 

11.4                        Recovery.  With respect to suits under Section 11.2
and […***…] owned by Firmenich pursuant to Section 9.5.3, the recoveries will be
allocated in the following order: (a) […***…]; (b) Senomyx will be reimbursed an
amount equivalent to […***…]; and (b) Firmenich will receive […***…].  With
respect to suits brought under Section 11.3 […***…]

 

11.5                        Counsel and Assistance.  If either party brings an
action under Section 11.2, or 11.3, such party will be entitled to control such
action, hire and retain counsel, make decisions, settle on any terms, provided
that a party joining the action may be represented by counsel of its choice.  At
the request and expense of either party, the other party will give the
requesting party all reasonable assistance required to file and conduct any such
proceeding.

 

11.6                        Defense of Infringement Claims for Senomyx
Technology.  Firmenich will cooperate with Senomyx, at Senomyx’s expense, in the
defense of any suit, action or proceeding against Firmenich or Senomyx or
Senomyx’s Affiliates alleging the infringement of the intellectual property
rights of a Third Party by reason of Firmenich’s or Senomyx’s use of any Senomyx
Technology licensed to Firmenich under this Agreement.  The parties must notify
each other promptly in writing of the commencement of any such suit, action,
proceeding or claim of infringement.  Firmenich will give to Senomyx full and
sole authority, information and assistance necessary to defend, hire counsel,
make decisions or settle on […***…] terms any such suit, action or proceeding
and Firmenich will execute all documents, provide pertinent records, and take
all other actions, including requiring persons within its control to give
testimony, which may be reasonably required in connection with the defense or
settlement of such litigation.

 

11.7                        Defense of Infringement Claims for Firmenich
Technology.  Senomyx will cooperate with Firmenich, at Firmenich’s expense, in
the defense of any suit, action or proceeding against Senomyx or Firmenich
alleging the infringement of the intellectual property rights of a Third Party
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Senomyx’s use of any Firmenich Technology licensed to Senomyx under this
Agreement.  The parties must notify each other promptly in writing of the
commencement of any such suit, action, proceeding or claim of infringement.  At
the expense of Firmenich, Senomyx will give to Firmenich full and sole
authority, information and assistance necessary to defend, hire counsel, make
decisions or settle on […***…] terms any such suit, action or proceeding and
Senomyx will execute all documents, provide pertinent records, and take all
other actions, including requiring persons within its control to give testimony,
which may be reasonably required in connection with the defense or settlement of
such litigation.

 

12. Patent Prosecution and Maintenance.  Each party will bear the cost of filing
and prosecuting the patents and patent applications associated with inventions
owned or assigned to that party.  Firmenich will […***…] for […***…] for the
applicable Selected Compounds in the applicable country), […***…], of the
reasonable out-of-pocket costs incurred […***…] for […***…] patents and patent
applications for the Selected Compound(s).   With respect to such patent
applications after Firmenich has selected a Selected Compound, the parties will
discuss and agree at least […***…] before the due date of international filings
or at least […***…] before the due date of […***…], […***…] to file patent
applications claiming Selected Compounds and Firmenich shall […***…]. 
Notwithstanding the foregoing, if […***…] decides it does not wish to have a
patent application claiming a Selected Compound(s) either (i) filed or
(ii) prosecuted […***…] or […***…] decides that it does not wish to have
maintained a patent claiming a Selected Compound(s), […***…], […***…] may still
(i) file or (ii) prosecute such patent application, or may maintain such patent
[…***…]; provided, however, that if […***…] actually files or prosecutes such
patent application or maintains such patent […***…], Firmenich will […***…] for
such application or maintenance costs of such patent in such country, and
[…***…].  Senomyx agrees to […***…] relating to claims within the Senomyx Patent
Rights claiming Selected Compounds or use thereof in the Fields, including
without limitation, by […***…] thereto upon request.  Firmenich shall hold all
such information disclosed to it under this Section as Confidential Information
under Section 10.

 

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13. Manufacturing.

 

13.1                Manufacturing in the Fields.  All actual […***…]
manufacturing and commercial scale-up of Selected Compounds will be […***…]
including, without limitation, manufacturing […***…].  In addition, Firmenich
shall […***…] for any material required for its internal evaluations including
prototype and product development efforts.  Subject to the terms and conditions
of this Agreement, Firmenich may, in […***…].

 

13.2                Preferred […***…].

 

13.2.1             If Senomyx has a right to be a supplier of Selected Compounds
in the fields of […***…] under […***…], then Senomyx agrees to […***…].

 

13.2.2             Firmenich agrees to negotiate in good faith with existing
Senomyx collaborators that license any Selected Compounds from Senomyx to supply
such Senomyx collaborators with their requirements of Selected Compounds on
commercially reasonable terms […***…] comparable to other customers purchasing
[…***…] such materials with comparable […***…] and other comparable […***…].

 

14.       Term and Termination.

 

14.1        Term.  The term of this Agreement will begin on the Effective Date
and will continue through the end of the Royalty Term, unless terminated earlier
in accordance with the provisions of Section 14.2 or 14.3 hereof (the “Term”).

 

14.2        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.

 

14.3        Termination for Breach. Either party has the right to terminate this
Agreement at any time for a material breach of this Agreement by the other
party, provided that the breaching party has not cured such breach within
[…***…] after written notice thereof by the non-breaching party.  The
non-breaching party, upon termination of this Agreement, may […***…].

 

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14.4        Termination by Firmenich. After the Collaborative Period, Firmenich
will have the right to terminate this Agreement without cause upon […***…] prior
written notice to Senomyx.

 

15.       Effect of Termination.

 

15.1                        Upon termination of this Agreement pursuant to
Section 14, Firmenich will have no right to practice within or use of 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.

 

Upon the expiration of the Term pursuant to Section 14.1, but not termination of
this Agreement under Section 14.2, 14.3 or 14.4, […***…].  For the avoidance of
doubt, this […***…].  Notwithstanding anything to the contrary in this
Agreement, […***…].

 

15.2                        Notwithstanding the foregoing Section 15.1, […***…]
after the date of termination that takes effect prior to the end of the
applicable Royalty Term for a Product, […***…] subject to the terms of this
Agreement, including, but not limited to, […***…]. Such determination shall be
made on a […***…].  Firmenich may not […***…].

 

15.3                        Expiration or termination of this Agreement will not
relieve the parties of any obligation accruing prior to such expiration or
termination

 

15.4                        Survival.  The obligations and rights of the parties
under Sections 3.3.2, 3.4, 7.6 — 7.10, 8.2.2, 8.2.3, 8.3.1, 8.3.2, 9, 10, 13.2.1
(second sentence only), 14, 15, 16, 17, and Appendix A, will survive termination
or expiration of this Agreement.

 

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16. Warranties and Indemnification.

 

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

 

16.1.1              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 applicable
law of its state or country of incorporation, except to the extent that any
noncompliance would not have a material adverse effect on its ability to perform
its obligations under this Agreement.

 

16.1.2              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.

 

16.1.3              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 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 of any
court, governmental body or administrative or other agency having authority over
it; and (iii) all necessary consents, approvals and authorizations of all
governmental authorities and other persons required to be obtained by it in
connection with the Agreement have been obtained.

 

16.2                        EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
SENOMYX MAKES NO WARRANTIES OF ANY KIND.  IN PARTICULAR, (i) SENOMYX (INCLUDING
ITS OFFICERS, EMPLOYEES AND AGENTS) EXPRESSLY DISCLAIMS ANY REPRESENTATIONS AND
WARRANTIES, WHETHER EXPRESS OR IMPLIED, RELATING TO SENOMYX TECHNOLOGY; AND
(ii) SENOMYX FURTHER DISCLAIMS ANY EXPRESS OR IMPLIED

 

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WARRANTY (a) OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF SENOMYX
TECHNOLOGY OR SENOMYX PATENT RIGHTS; (b) THAT THE PRACTICE OF SENOMYX TECHNOLOGY
OR ANYTHING MADE, USED, SOLD OR OTHERWISE DISPOSED OF UNDER ANY LICENSE GRANTED
UNDER THIS AGREEMENT WILL NOT INFRINGE A PATENT, COPYRIGHT, TRADEMARK OR OTHER
RIGHT OF A THIRD PARTY;  AND (c) REGARDING THE PATENTABILITY OF ANY SENOMYX
TECHNOLOGY, INCLUDING, WITHOUT LIMITATION, SENOMYX TECHNOLOGY CLAIMED IN PATENT
APPLICATIONS AS PART OF SENOMYX PATENT RIGHTS. IN ADDITION, NOTHING IN THIS
AGREEMENT MAY BE DEEMED TO BE A REPRESENTATION OR WARRANTY BY SENOMYX OF THE
ACCURACY, SAFETY, EFFICACY, OR USEFULNESS, FOR ANY PURPOSE, OF THE SENOMYX
TECHNOLOGY.

 

16.3                        Senomyx Indemnification.  Senomyx shall indemnify
Firmenich, its Affiliates and their respective directors, officers, employees
and agents (collectively, “Firmenich 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; (c) any gross negligence or willful
misconduct (but not patent infringement which is covered in Section 11) on the
part of Senomyx or its Affiliates in performing any activity contemplated by
this Agreement including, but not limited to, product liability claims arising
out of any tests conducted solely by Senomyx; or (d) the practice by Senomyx of
any license granted by Firmenich hereunder.  Notwithstanding the foregoing,
Senomyx shall have no obligation to indemnify a Firmenich Indemnitee to the
extent, and only to the extent, that Firmenich has an obligation to indemnify
any Senomyx Indemnitee pursuant to Section 16.4 for any such Losses.

 

16.4        Firmenich Indemnification.  Firmenich 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
Firmenich of this Agreement; (b) any representation or warranties made by
Firmenich herein having been incorrect or misleading; (c) any gross negligence
or willful misconduct (but not patent infringement which is covered in
Section 11) on the part of Firmenich or its Affiliates in performing any
activity contemplated by this Agreement; (d) any development,

 

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manufacturing, formulation, handling, storage, shipment, sale or other
disposition of any Compound, Selected Compound or any Intermediate by or through
Firmenich or its Affiliates or its permitted sublicensees; (e) a product
liability claim on any Product; (f) the practice by Firmenich of any license
granted hereunder.  Notwithstanding the foregoing, Firmenich 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 Firmenich Indemnitee
pursuant to Section 16.3 for any such Losses.

 

16.5                            Limitation of Liability.  NOTWITHSTANDING
ANYTHING TO THE CONTRARY IN THIS AGREEMENT, NEITHER PARTY WILL SEEK OR BE
RESPONSIBLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES IN ANY AMOUNT UNDER ANY
THEORY OF LIABILITY INCLUDING TORT, CONTRACT, NEGLIGENCE OR OTHERWISE UNDER THIS
AGREEMENT AND NEITHER PARTY WILL SEEK OR BE RESPONSIBLE FOR ANY PUNITIVE DAMAGES
IN ANY AMOUNT (INCLUDING, WITHOUT LIMITATION, ANY AND ALL CLAIMS ARISING
PURSUANT TO SECTION 14 OR THIS SECTION 16).

 

16.6                            With respect to rights licensed to Senomyx by
[…***…], Firmenich hereby agrees to indemnify, defend and hold harmless […***…],
as appropriate, and their respective officers, directors, employees, sponsors
and agents from and against all damages or other amounts payable to a Third
Party (including product liability) resulting or arising from Firmenich’s use of
the rights granted herein to the extent that such indemnification by Firmenich
is required by […***…] pursuant to the agreement between Senomyx and […***…].

 

17.  Miscellaneous.

 

17.1                        Force Majeure.  Neither party will lose any rights
hereunder or be liable to the other party for damages or losses on account of
failure of performance by the defaulting party (other than a payment default) if
the failure is occasioned by war, fire, explosion, flood, (e.g. El Niño),
earthquake, strike, lockout, embargo, act of God, or any other similar cause
beyond the control of the defaulting party; provided, however, that the party
claiming force majeure has exerted all reasonable commercial efforts to avoid or
remedy such force majeure and thereafter takes all reasonable steps to mitigate
any such delay in performance hereunder and any damages that may be incurred by
the other party thereby.

 

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

 

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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.

 

17.4.1              Negotiation.  The parties recognize that disputes 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 or any court action relating to patent rights,
Senomyx’s president and Firmenich’s Corporate Vice President, Research and
Development 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.

 

17.4.2              Arbitration.  Any Dispute arising out of or relating to this
Agreement which is not resolved between the parties or the designated officers
of the parties pursuant to this Section 17.4 will be resolved by final and
binding arbitration conducted in […***…] The arbitration will be conducted by
three (3) arbitrators who are knowledgeable in the subject matter at issue in
the dispute.  Senomyx will select one arbitrator, and one arbitrator will be
selected by Firmenich.  The third arbitrator will be selected by mutual
agreement of the two arbitrators selected by the parties. The decision of the
arbitrators will be final and binding on the parties and may be sued on or
enforced by the party in whose favor it runs in any court of competent
jurisdiction at the option of such party.

 

17.4.3              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, including in
Switzerland, 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 Controlled by such party. In addition, arbitration
will not be used to resolve disputes concerning Patent Rights Controlled by
either party.  Subject to Section 17.4.1, disputes concerning Patent Rights,
including, but not limited to, disputes concerning patent ownership, claim
language, claim scope and issues of validity will be

 

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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.

 

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 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 Firmenich and Senomyx will be independent contractors and that the
relationship between the parties will not constitute a partnership or agency of
any kind.  Neither Firmenich 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 the Collaborative Program on
and after the Effective Date, and supersedes and terminates all prior agreements
and understandings between the parties, with respect to the subject matter of
this Agreement.  For the avoidance of doubt, […***…] between the parties shall
continue to apply with respect to the activities of the parties prior to the
Effective Date.  For the avoidance of doubt, this Agreement does not supersede,
modify or terminate the First Agreement or the Second Agreement.  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
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terms of any Appendix hereto will be resolved in favor of the text of this
Agreement.

 

17.8                        Waiver.  Except as specifically provided for in this
Agreement, the waiver from time to time by either of the parties of any rights
or the failure to exercise any remedy will not operate or be construed as a
continuing waiver of the same right or remedy or any of the other of such
party’s rights or remedies provided in this Agreement.

 

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
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 constitute the parties
partners with each other or any Third Party.

 

17.11                 Notices.  Any 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 carrier 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.

 

 

4767 Nexus Centre Drive

 

 

San Diego, CA 92121

 

 

U.S.A.

 

 

Facsimile number:

 

 

(858) 404-0750

 

 

Attention: General Counsel with a copy to the President

 

 

 

If to Firmenich, to:

 

Firmenich SA

 

 

1, route des Jeunes,

 

 

1211 Geneva 8

 

 

Switzerland

 

 

Facsimile number: +41.22.780.23.97

 

 

Attention: General Counsel

 

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.

 

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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 (i) to a successor to substantially all of the assets of such party to
which this Agreement relates, whether by merger, sale of stock, sale of assets
or other transaction or (ii) 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, consolidation or change of
Control (as defined in the term “Affiliate” in Appendix A — Definitions) of
either party with or into another party and, subject to the foregoing
provisions, no consent for any such merger, consolidation, similar
reorganization or change of Control will be required hereunder.  Any assignment
in contravention of the provisions of this Section 17.12 shall be null and void
ab initio.

 

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

 

17.14                 Rights Upon Bankruptcy.  All rights and licenses granted
under or pursuant to this Agreement are, and shall otherwise be deemed to be,
for purposes of Section 365(n) of Title 11 of the United States Code and other
similar laws in any jurisdiction where a Party is situated (collectively, the
“Bankruptcy Laws”), executor contracts and non-assignable personal licenses of
rights to “intellectual property” as defined under the Bankruptcy Laws.  If a
case is commenced during the Term by or against a Party under Bankruptcy Laws
then, unless and until this Agreement is rejected as provided in such Bankruptcy
Laws, such Party (in any capacity, including debtor-in-possession) and its
permitted successors and assigns (including, without limitation, a trustee)
shall perform all of the obligations provided in this Agreement to be performed
by such Party.  If a case is commenced during the Term by or against a Party
under the Bankruptcy Laws, and this Agreement is rejected as provided in the
Bankruptcy Laws and the other Party, who is not commencing, or otherwise the
subject of, a case under the Bankruptcy Laws (the “Non-Bankrupt Party”), elects
to retain its rights hereunder as provided in the Bankruptcy Laws, then the
Party subject to such case under the Bankruptcy Laws (in any capacity, including
debtor-in-possession) and its permitted successors and assigns (including,
without limitation, a trustee), shall provide to the Non-Bankrupt Party, to the
extent the Non-Bankrupt Party

 

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is a licensee hereunder, […***…]  All rights, powers and remedies of the
non-bankrupt Party as provided herein are in addition to and not in substitution
for any and all other rights, powers and remedies now or hereafter existing at
law or in equity (including, without limitation, the Bankruptcy Laws) in the
event of the commencement of a case by or against a Party under the Bankruptcy
Laws.  Additionally, in the event of any insolvency of Senomyx or the entry by
it into any formal insolvency administration under United States law, it is the
intention of the Parties that this Agreement shall not terminate and shall
continue pursuant to the principles governing insolvency proceedings under
United States law.  In particular, it is the intention and understanding of the
Parties to this Agreement that the rights granted to the Parties under this
Section 17.14 are essential to the Parties’ respective businesses and the
Parties acknowledge that damages are not an adequate remedy.

 

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

 

FIRMENICH SA

FIRMENICH SA

 

 

 

 

By:

/s/ Paul-Louis Gay

 

By:

/s/ Friedrich Busse

 

 

     Paul-Louis Gay

 

 

     Friedrich Busse

 

 

 

CFO & Corporate VP Global Services

Corporate VP Strategic Development

 

 

Date:

28 July 09

 

Date:

28 July 09

 

 

 

SENOMYX, INC.

 

 

 

 

 

By:

/s/ Kent Snyder

 

 

 

 

 

     Kent Snyder

 

 

 

 

 

 

Title:

   President, CEO and Chairman

 

 

 

 

Date:

  July 28, 2009

 

 

 

 

 

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APPENDIX A - DEFINITIONS

 

“Affiliate” means any entity which, directly or indirectly, Controls, is
Controlled by or is under common Control with a party.  “Control” means
(i) having the actual, present capacity to elect a majority of the directors of
such affiliate; (ii) having the power to direct at least […***…] of the voting
rights entitled to elect directors; or (iii) […***…] where the local law will
not permit foreign equity participation of a majority, ownership or control,
directly or indirectly, of the maximum percentage of such outstanding stock or
voting rights permitted by local law.

 

“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.

 

“Co-Exclusive” means that the right may be granted by Senomyx to only one
(1) party (and such party’s Affiliates) in addition to Firmenich.  For the
avoidance of doubt, the foregoing shall not be construed to prevent Senomyx from
performing its obligations under this Agreement.

 

“Collaborative Period” means the period beginning on the Effective Date and
ending two (2) years thereafter, unless terminated earlier in accordance with
Section 14 or extended in accordance with Section 7.2.3.

 

“Collaborative Program” has the meaning set forth under “Background” above.

 

“Collaborative Program IP” means all Patent Rights and Know-How that is […***…]
pursuant to the applicable Research Plan, but only to the extent […***…] as of
the effective date of any […***…]

 

“Commercialization Date” means for each Selected Compound the first day of the
calendar quarter immediately following the date of […***…] such Selected
Compound to be sold […***…]

 

“Commercially Viable” means the applicable Compound that in Firmenich’s sole
determination will […***…] of the Compound for the Intended Purpose of enhancing
the relevant Target Sweetener for use within the Fields, after taking into
account the following: (i) […***…] technical requirements (such as […***…]);
(ii) […***…] targets; (iv) […***…]; (iv) […***…] requirements; and (v) […***…]
targets.

 

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“Compounds” means the following:  a molecule(s) that is under the control of
Senomyx, and primarily has an enhancing effect on the sweetness of a Target
Sweetener.    Unless and until the proper exercise of the Option set forth in
Section 8.6 of this Agreement, Compounds shall be expressly limited to Synthetic
Compounds.  Following proper exercise of the Option, Compounds shall include
Natural Compounds in addition to Synthetic Compounds.

 

“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 disclosed orally or in writing by the disclosing party  to
the other party.  Information developed by Firmenich independently or jointly
with Senomyx that is or should be assigned to Senomyx pursuant to Section 9
shall be deemed Confidential Information of Senomyx and information developed by
Senomyx independently or jointly with Firmenich that is or should be assigned to
Firmenich pursuant to Section 9 shall be deemed Confidential Information of
Firmenich; and (ii) with respect to a party, other information developed jointly
by Firmenich and Senomyx shall be deemed to be the other party’s Confidential
Information for the purpose of the confidentiality obligations hereunder except
in respect of use by such other party.

 

“Control” or “Controlled” means, with respect to intellectual property,
possession by a party, as of the Effective Date or during the Agreement, 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.

 

[…***…] means, with respect to any Selected Compound, as determined by the
Steering Commmittee pursuant to Section 3.1.2.

 

“Discovered During the Collaborative Period” means, with respect to a Compound,
that it was first identified by Senomyx as […***…].

 

“Effective Date” means the date that this Agreement is signed by the last party
to sign above.

 

[…***…] Technology” means (i) […***…] and associated […***…] having the intended
effect of improving the […***…] in a Formulation or Product or (ii) […***…]
(other than […***…] and […***…] that are […***…]) developed by Firmenich and
that have […***…] with the Selected Compound.

 

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“Exclusive” means exclusive even as to the party granting the license; provided,
however, that Senomyx may exercise such rights for the purpose of performing its
obligations under this Agreement.

 

“Field I” means any and all forms of foods and beverages for human consumption
excluding (i) nonalcoholic beverages; (ii) Gum; (iii) Sugar and Chocolate
Confectionery and (iii) Therapeutics.

 

“Field II” means non-alcoholic dry powdered beverages for human consumption.
Notwithstanding the foregoing, Field II specifically excludes (i) Gum;
(iii) Sugar and Chocolate Confectionery and (iii) Therapeutics.

 

“Fields” means both Field II and I.

 

“Firmenich Competitor” means […***…].

 

“Firmenich Know-How” means, any know-how relating to […***…] which is not
covered by Firmenich Patent Rights but is necessary or appropriate for purposes
of the activities to be conducted under this Agreement, and which is Controlled
by Firmenich as of the Effective Date or which becomes Controlled by Firmenich
during the Term.  Firmenich Know-How excludes Know-How under Jointly Owned
Technology.

 

“Firmenich Patent Rights” means, any Patent Rights relating to […***…], that are
necessary or appropriate for purposes of the activities to be conducted under
this Agreement, and which are Controlled by Firmenich as of the Effective Date
or which become Controlled by Firmenich during the Term.  Firmenich Patent
Rights excludes Patent Rights under Jointly Owned Technology.

 

“Firmenich Technology” means Firmenich Patent Rights and Firmenich Know-How. 
For the avoidance of doubt, Firmenich Technology includes Firmenich Improvements
as defined in Section 9.2.

 

“Gum” means […***…].

 

“Intended Purpose” shall have the meaning set forth in Section 3.1.2.

 

“Intermediate” means intermediates useful for making the applicable Compound.

 

“Invention” means any invention including, without limitation, any new and
useful process, method, or composition of matter, or improvement, whether or not
patentable, made in the course of the Agreement.

 

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

 

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“Joint Patent Rights” means all Patent Rights containing one or more claims to a
Joint Invention.

 

“Jointly Owned Technology” means Know-How and/or Patent Rights with respect to
Inventions that are jointly owned by Firmenich and Senomyx.  For the avoidance
of doubt, Jointly Owned Technology does not include Firmenich Improvements or
Senomyx Improvements.

 

“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.

 

“Major Country(ies)” means […***…].

 

“Major Firmenich Customer” means any Firmenich customer where (a) such customer
is one of Firmenich’s […***…] as measured by […***…]; and (b) […***…] in the
market or product segment where the Product is used.

 

“Modulator Selling Price” means for the applicable quarterly reporting period
the […***…]  Notwithstanding the foregoing, in the event that the Steering
Committee determines […***…], the Steering Committee shall […***…] for a given
period; provided, however, that if the Steering Committee […***…], then
[…***…].  In the event that […***…] applicable Selected Compound, […***…].  In
the event of […***…] the Modulator Selling Price, the parties […***…].

 

“Natural Compounds” means Compounds that are natural as defined by […***…].

 

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“Net Sales” means, with respect to a Product, the […***…] by Firmenich and its
Affiliates and/or permitted sublicensees on any sales or other transfer of the
Product, less the following items:

 

i)                 […***…];

 

ii)              […***…];

 

iii)           […***…];

 

iv)          […***…]; and

 

v)             […***…].

 

Notwithstanding the foregoing, […***…].

 

“Non-Major Country” means any country that is not a Major Country.

 

“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.

 

“Product(s)” means a (i) Selected Compound(s) as a standalone product; and
(ii) product(s) that incorporates a Selected Compound.

 

[…***…] means Firmenich’s exercising of its rights to […***…] and to receive and
exercise the rights set forth in Section 8.1.3 of this Agreement for the limited
period set forth therein.

 

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[…***…] means the occurrence of: (A) any one or more of the following events:
(i) […***…] by or against […***…] (other than as a result of […***…]),
(ii) […***…] (other than as a result of […***…]), (iii) […***…] (other than as a
result of […***…]), (iv) […***…], or (v) […***…] set forth in subsections
(i) through (iv) […***…]; AND (B) […***…]

 

“Regulatory Approval” means in respect of (i) the United States of America and
Brazil, receipt of notification from Flavor and Extract Manufacturers’
Association of the United States (“FEMA”) of determination as Generally
Recognized As Safe; (ii) Mexico, approval by the Mexican Health authorities and
inclusion in the lists of permitted flavoring substances in the Acuerdo por el
que se determinan las sustancias permitidas como aditivos y coadyuvantes en
alimentos, bebidas y suplementos alimenticios; (iii) the People’s Republic of
China, approval by the State Food & Drug Administration of the Peoples’ Republic
of China and inclusion in the list of permitted flavoring agents (reference
GB270, as of the date of this Agreement); (iv) France and the United Kingdom,
approval by the European Food Safety Authority […***…], in the community list of
flavoring substances as laid down in Regulation (EC) No. 1334/2008, or as
subsequently amended; (v) Japan, approval by the Japan Ministry of Health, Labor
and Welfare for use as a flavoring agent in accordance with the Japanese Food
Sanitation Law; and (vi) […***…].  In the event the regulatory requirements are
amended or the parties desire to use a different regulatory pathway for any
country, the Steering Committee will revise this definition as necessary and
document such revisions in the minutes of the Steering Committee.

 

“Regulatory Approval Date” means the date in a particular country that the
Regulatory Approval is granted.

 

“Research Plan” means the detailed scientific research plan attached hereto as
Appendix C that describes the research program, defines the key activities and
responsibilities of the parties, research milestones and timeline for the
Collaborative Program.  The Research Plan will include a brief description of
the anticipated process required to obtain appropriate regulatory approval(s). 
The Research Plan is incorporated by reference into this Agreement.  The
Research Plan may be updated from time to time by the Steering Committee and
such updates will be maintained in the records of the Steering Committee.

 

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“Royalty Term” means, in the case of any Product and as to […***…], the period
of time commencing on the first commercial sale of such Product […***…] and
ending upon the date that there no longer exists a Valid Claim in a Patent Right
controlled by Senomyx or its Affiliates covering the manufacture, use or sale of
such Product (or Selected Compound contained therein) […***…] in which the
Product is sold, with the limitation that for […***…] the Royalty Term for
[…***…] shall end upon the date that there no longer exists a Valid Claim in a
Patent Right controlled by Senomyx or its Affiliates covering the manufacture,
use or sale of such Product (or Selected Compound contained therein) […***…] or
[…***…]

 

“Royalty Year” means each twelve-(12)-month period commencing on the
Commercialization Date for the first Selected Compound and each anniversary
thereof.

 

“Selected Compound(s)” means a Compound(s) that is selected for development
pursuant to Section 3.1.4 or Section 8.7.

 

[…***…] shall mean any […***…]  Notwithstanding the foregoing, […***…] excludes
any Know-How that does not relate to, or claims within Patent Rights that do not
claim any Compound(s).

 

[…***…] shall mean any […***…]  Notwithstanding the foregoing, […***…] excludes
any Know-How that does not relate to, or claims within Patent Rights that do not
claim any Selected Compound(s).

 

“Senomyx Compound Manufacturing Methods” means new methods of […***…] thereof,
developed by Firmenich independently or together with Senomyx.

 

“Senomyx Know-How” means any Know-How related to the […***…], which is not
covered by the Senomyx Patent Rights, but is necessary or appropriate for
purposes of the activities to be conducted under this Agreement, and which is
Controlled by Senomyx as of the Effective Date or which becomes Controlled by
Senomyx during the Term.  Senomyx Know-How excludes Know-How under Jointly Owned
Technology.

 

“Senomyx Patent Rights” means any Patent Rights relating to […***…] and, that
are necessary or appropriate for purposes of the activities to be conducted
under the Agreement, and which are Controlled by Senomyx as of the Effective
Date or which become Controlled by Senomyx during the Term.   Senomyx Patent
Rights excludes Patent Rights under Jointly Owned Technology.

 

“Senomyx Technology” means the Senomyx Patent Rights, and Senomyx Know-How. For
the avoidance of doubt, Senomyx Technology includes Senomyx Improvements as
defined in Section 9.3.

 

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“Strategic Marketing Plan” means a worldwide marketing plan prepared by
Firmenich for Selected Compounds which includes at least the following items:

 

(i)

 

[***];

(ii)

 

[***];

(iii)

 

[***]

(iv)

 

[***]

(v)

 

[***].

 

“Similarity Index Test” means […***…].

 

“Substantially Similar Modifications” means […***…].

 

“Sugar and Chocolate Confectionery” means […***…].

 

“Steering Committee” has the meaning set forth in Section 2.

 

“Synthetic Compounds” means Compounds that are not Natural Compounds.

 

“Target Sweeteners” means any of the following sweeteners:  sucrose, fructose,
stevioside, rebaudioside […***…]

 

“Term” has the meaning set forth in Section 14.1.

 

“Territory” means worldwide.

 

“Therapeutics” means any […***…]

 

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

 

“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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APPENDIX B — CALCULATION OF NET ROYALTIES

 

[…***…]

 

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APPENDIX C — RESEARCH PLAN

 

Collaborative Program Overview — The key objective of the Collaborative Program
is to discover novel compounds that enhance the target sweeteners sucrose,
fructose and rebaudioside […***…].

 

Specific Goals — The overall goal of this program is to develop novel compounds
with sweet taste enhancement properties that meet the desired criteria below:

 

i.

 

[***]

ii.

 

[***]

iii.

 

[***]

iv.

 

[***]

v.

 

[***]

 

Senomyx Sweet Taste Enhancer Program Status — Senomyx has developed […***…].

 

[…***…]

 

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[…***…]

 

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[…***…]

 

Research Plan — […***…]

 

Phase I: […***…]

 

[…***…]

 

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[…***…]

 

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·             […***…]

 

Phase II: […***…]

 

[…***…]

 

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·                  […***…]

 

·                  […***…]

 

·                  […***…]

 

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[…***…]

 

Phase III: […***…]

 

[…***…]

 

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[…***…]

 

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[…***…]

 

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