<PAGE>


                                                                   Exhibit 10.17


                                           *** TEXT OMITTED AND FILED SEPARATELY
                                                CONFIDENTIAL TREATMENT REQUESTED
                                          UNDER 17 C.F.R. SECTIONS 200.80(b)(4),
                                                              200.83 AND 230.406










                             COLLABORATIVE RESEARCH
                              AND LICENSE AGREEMENT


                                     BETWEEN

                                  SENOMYX, INC.

                                       AND

                                KRAFT FOODS, INC.


                                       1
<PAGE>


                  COLLABORATIVE RESEARCH AND LICENSE AGREEMENT


This Agreement is entered into as of the Effective Date by and between Senomyx,
Inc., a Delaware Corporation having offices at 11099 North Torrey Pines Road, La
Jolla, CA 92037 ("Senomyx") and Kraft Foods, Inc., a Delaware Corporation having
offices at 801 Waukegan Road, Glenview, IL 60025 ("Kraft").


                                   BACKGROUND

Senomyx conducts research in the field of chemosensation, an objective of which
is to study potential biological targets and develop assays for use in the
discovery and commercialization of products in taste and olfaction. Kraft is in
the business of developing, manufacturing and marketing consumer food products.
Senomyx and Kraft desire to collaborate in a research program to: (i) discover
compounds that [...***...] for use in [...***...]; and (ii) discover compounds
that [...***...] for use in [...***...].

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


                                  THE AGREEMENT

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

2.       STEERING COMMITTEE. No later than ten days after the Effective Date,
         the parties will establish a joint steering committee (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) monitor progress and
         communicate status of the Collaborative Program; (iii) facilitate the
         cooperation of the parties under the Collaborative Program; and (iv)
         confirm completion of milestones under the Collaborative Program. The
         Steering Committee will consist of two representatives designated by
         Senomyx and two representatives designated by Kraft. Each member of the
         Steering Committee will have one vote. The Steering Committee will meet
         no later than thirty days after the Effective Date and at least four
         times per year during the Collaborative Period using mutually agreed
         upon meeting locations and formats including tele-conferencing and
         video-conferencing. On an alternating basis, one party will promptly
         prepare and deliver to the members of the Steering Committee minutes of
         such meetings for review and approval of both parties. Decisions in the
         Steering Committee will be made by


                                       2       *CONFIDENTIAL TREATMENT REQUESTED
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         unanimous vote, at a meeting where all four voting representatives are
         present. All unresolved disputes will be settled in accordance with
         Section 18.4, or as otherwise mutually agreed upon in writing.

3.       COLLABORATIVE PROGRAM. The parties will collaborate in the conduct of
         the Collaborative Program in accordance with the Research Plan during
         the Collaborative Period. The Collaborative Program will consist of two
         phases: the [...***...] Phase and the [...***...] Phase, which may
         overlap.

         3.1      [...***...] PHASE.

                  (A)      Within [...***...] of the Effective Date, Kraft will,
                           at its expense, supply Senomyx with [...***...]
                           Tastants for screening in accordance with the
                           Research Plan. During the [...***...] Phase, Kraft
                           may provide additional [...***...] Tastants for
                           profiling as agreed to In writing by the parties and
                           approved by the Steering Committee.

                  (B)      Upon receipt of the [...***...] Tastants, Senomyx
                           will perform the activities outlined in the Research
                           Plan using reasonable efforts, and the resources
                           provided under Section 9.1.

                  (C)      Within [...***...] of receipt of the report regarding
                           the [...***...] Compounds, Kraft will perform sensory
                           testing and other evaluations on a limited number of
                           the [...***...] Compounds and may select [...***...]
                           Compound(s) for further development by notifying
                           Senomyx of such selection in writing by the end of
                           such [...***...] period. Such [...***...] period may
                           be extended by agreement; such agreement will not be
                           unreasonably withheld. [...***...] Compounds, if any,
                           chosen for further development become Selected
                           [...***...] Compounds.

                  (D)      Senomyx's obligations during the [...***...] Phase
                           will be completed upon the earlier of (i)
                           [...***...]; or (ii) upon [...***...]. If necessary,
                           Senomyx may provide additional optimization as agreed
                           to in writing by the parties and approved by the
                           Steering Committee.

         3.2      [...***...] PHASE.

                  (A)      Kraft may request that Senomyx pursue the
                           identification of [...***...] Compounds upon the
                           earlier of (i) [...***...]; or (ii) [...***...]


                                       3       *CONFIDENTIAL TREATMENT REQUESTED
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                           [...***...].


                  (B)      Upon initiation of the [...***...] Phase, Kraft will,
                           at its expense, supply Senomyx with [...***...]
                           Tastants for screening. During the [...***...] Phase,
                           Kraft may provide additional [...***...] Tastants for
                           profiling as agreed to in writing by the parties and
                           approved by the Steering Committee.

                  (C)      Upon receipt of the [...***...] Tastants, Senomyx
                           will perform the activities outlined in the Research
                           Plan using reasonable efforts, and the resources
                           provided under Section 9.1.

                  (D)      Within [...***...] of receipt of the report regarding
                           the [...***...] Compounds, Kraft will perform sensory
                           testing and other evaluations on a limited number of
                           the [...***...] Compounds; and may select [...***...]
                           Compound(s) for further development by notifying
                           Senomyx of such selection in writing by the end of
                           such [...***...] period. Such [...***...] period may
                           be extended by agreement; such agreement will not be
                           unreasonably withheld. [...***...] Compounds, if any,
                           chosen for further development become Selected
                           [...***...] Compounds.

                  (E)      Senomyx's obligations during the [...***...] Phase
                           will be completed upon the earlier of (i)
                           [...***...]; or (ii) upon [...***...]. If necessary,
                           Senomyx may provide additional optimization as agreed
                           to in writing by the parties and approved by the
                           Steering Committee.

         3.3      PRODUCT DEVELOPMENT AND COMMERCIALIZATION.

                  (A)      PRODUCT DEVELOPMENT. Within [...***...] of the
                           selection of a Selected Compound, Kraft will prepare
                           a plan for Product Development for approval by the
                           Steering Committee, which will be attached as
                           Appendix D to this Agreement, and incorporated into
                           the Agreement by reference. Kraft will perform the
                           Product Development outlined in Appendix D.

                  (B)      PRODUCT COMMERCIALIZATION. Within [...***...] of the
                           completion of the Product Development plan , Kraft
                           will prepare a plan for Product Commercialization for
                           approval by the Steering Committee, which will be
                           attached as Appendix D to this Agreement, and
                           incorporated into the


                                       4       *CONFIDENTIAL TREATMENT REQUESTED
<PAGE>


                  Agreement by reference. Kraft will perform the Product
                  Commercialization outlined in Appendix F.

                  (C)      Kraft will be responsible, [...***...] for all
                           formulation and regulatory approval of Products
                           arising out of this Agreement. [...***...] Senomyx
                           will cooperate to the extent reasonably necessary to
                           permit Kraft to perform the foregoing activities.

                  (D)      If Kraft elects to abandon, discontinue, or forgo
                           development or commercialization of any Product or
                           fails after a reasonable time to initiate development
                           or commercialization of any Product in any country
                           pursuant to Appendix D, Kraft's licenses under
                           Section 10 of this Agreement to such Product will
                           terminate and the right to make, have made, use, sell
                           and have sold such Product in such particular country
                           will revert to Senomyx. Kraft will have no obligation
                           for the Product or country where Kraft's rights are
                           terminated under this Section 3.3.

4.       PRINCIPAL SCIENTISTS. The principal scientists who will direct the
         respective research and development responsibilities of each party will
         be designated in writing by the Parties at the first meeting of the
         Steering Committee.

5.       COLLABORATION WITH AN AFFILIATE OR THIRD PARTY. During the Term,
         Senomyx will have the right to enter into the Collaborative Program
         with its Affiliates or with Third Parties including Collaborative
         Programs to discover compounds that [...***...] for use outside the
         applicable Field.

6.       LAW AND REGULATION. The Compounds, Selected Compounds and Materials
         provided by one party to the other under this Agreement must be used in
         compliance with all applicable laws and regulations. Senomyx and Kraft
         each certifies that it conducts tests IN VITRO or other tests that are
         only used for laboratory research purposes and that all Materials and
         chemicals that either party receives from the other under this
         Agreement will actually be used for these purposes only.

7.       SCIENTIFIC AND MANAGEMENT AUTHORITY. Scientific and management
         authority and responsibility for activities conducted under the
         Research Plan and Product Development and Commercialization will be
         governed by the Steering Committee; provided, however, that after the
         Collaborative Period, the parties will agree in writing to appoint a
         new committee to manage the activities under this Agreement.


                                       5       *CONFIDENTIAL TREATMENT REQUESTED
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8.       REPORTING. Each party will report to the other a written summary of
         results of research and development work it carries out, if any, within
         thirty days of the end of each calendar quarter. 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.

9.       FINANCIAL TERMS.

         9.1      ANNUAL RESEARCH SUPPORT. Each year during the Collaborative
                  Period Kraft will pay Senomyx $1,375,000 (which represents
                  the full time equivalent of [...***...] Senomyx scientists at
                  an annual rate of [...***...] per scientist based on a minimum
                  of [...***...] hours per year), such rate to be increased for
                  inflation using the Aon Consulting/Radford Division report for
                  industry compensation each year; provided, however, that if in
                  any calendar year the annual amount to be paid to Senomyx
                  exceeds [...***...], Kraft may elect, in its sole discretion,
                  to decrease the number of full time equivalents such that the
                  annual amount to be paid to Senomyx remains at [...***...].
                  These payments will be made in advance and, at a minimum, on
                  an equal quarterly basis. The first payment will be made
                  within [...***...] following the Effective Date. These
                  payments are inclusive of overhead, labor, and supplies. These
                  payments do not include (i) Kraft's costs associated with
                  providing [...***...] Tastants and [...***...] Tastants; (ii)
                  the costs of any unanticipated materials as requested and
                  agreed to by the parties; or (iii) the costs of high
                  throughput screening over 50,000 data points. Additional
                  funding, if any, will be proposed to the Steering Committee
                  and agreed to in writing by the parties.

         9.2      MILESTONE PAYMENTS. Kraft will pay Senomyx the following
                  non-creditable, non-refundable milestone payments within
                  thirty days of notification of the following milestone events:

                  (A)      [...***...] upon identification of the first relevant
                           Receptor for either a [...***...] Tastant or a
                           [...***...] Tastant;

                  (B)      [...***...] upon submission of the first Compound
                           data package to Kraft;

                  (C)      [...***...] upon the selection of each Selected
                           Compound by Kraft, which triggers exclusivity in the
                           applicable Field; and

                  (D)      [...***...] upon the first sale of each Product
                           Category, as defined in Appendix C, such payment will
                           be creditable against any future earned royalties.

         9.3      ROYALTY FOR [...***...] PRODUCTS. Kraft will pay to Senomyx
                  the following


                                       6       *CONFIDENTIAL TREATMENT REQUESTED
<PAGE>


                  earned royalties during the Royalty Term:

                  (A)      With respect to Net Sales during [...***...]
                           following the date of the first commercial sale of a
                           [...***...] Product(s), Kraft will pay Senomyx a
                           royalty equal to [...***...] on that portion of total
                           annual Net Sales of [...***...] Product(s) that is
                           less than [...***...], adjusted during the Royalty
                           Term using the Consumer Price Index ("CPI"). The
                           royalty rate of [...***...] for the first year wiLL
                           apply to each Product Category, as described on
                           Appendix C;

                  (B)      With respect to Net Sales after [...***...] of the
                           first commercial sale of a [...***...] Product(s),
                           Kraft will pay Senomyx a royalty equal to [...***...]
                           on that portion of total annual Net Sales of
                           [...***...] Product(s) that is less than [...***...],
                           adjusted during the Royalty Term using the CPI; and

                  (C)      At any time, Kraft will pay Senomyx a royalty equal
                           to [...***...] on that portion of total annual Net
                           Sales of [...***...] Product(s) that is equal to or
                           greater than [...***...], adjusted during the Royalty
                           Term using the CPI.

                  (D)      The royalty rate for New Products will be negotiated
                           at a future date and shall be separate and apart from
                           the other royalty rates established for the
                           [...***...] Products.

         9.4      ROYALTY FOR [...***...] PRODUCTS. Kraft will pay to Senomyx
                  the following earned royalties during the Royalty Term:

                  (A)      With respect to Net Sales during [...***...]
                           following the date of the first commercial sale of a
                           [...***...] Product, Kraft will pay Senomyx a royalty
                           equal to [...***...] on that portion of total annual
                           Net Sales of [...***...] Product(s) that is less than
                           [...***...], adjusted during the Royalty Term using
                           the Consumer Price Index ("CPI"). The royalty rate of
                           [...***...] for the first year will apply to each
                           Product Category, as described on Appendix C;

                  (B)      With respect to Net Sales after [...***...] of the
                           first commercial sale of a [...***...] Product, Kraft
                           will pay Senomyx a royalty equal to [...***...] on
                           that portion of total annual Net Sales of [...***...]
                           Product(s) that is less than [...***...], adjusted
                           during the Royalty Term using the CPI; and

                  (C)      At any time, Kraft will pay Senomyx a royalty equal
                           to [...***...] on that portion of total annual Net
                           Sales of [...***...] Product(s) that is equal to or
                           greater than [...***...], adjusted during the Royalty
                           Term using the CPI.


                                       7       *CONFIDENTIAL TREATMENT REQUESTED
<PAGE>


         9.5      MANUFACTURING AND CAPITAL CREDITS. Kraft may in its sole
                  discretion, manufacture or enter into supply and manufacturing
                  agreements with a mutually agreed upon Third Party regarding
                  Selected Compounds; provided however, Senomyx will have the
                  first right of negotiation and refusal to manufacture any such
                  Selected Compounds, subject to provisions of cost, quality and
                  quantity. If Kraft or a Third Party manufactures a Product(s)
                  [...***...] of the capital cost specific to such manufacture,
                  incurred by Kraft, shall be creditable toward the royalties to
                  be paid for such Product(s) under Section 9.3 (b) or Section
                  9.4; provided, however, that under no circumstances shall the
                  effective royalty rate under Section 9.3 (b) be reduced below
                  [...***...] or the effective royalty rate under Section 9.4 be
                  reduced below [...***...].

         9.6      PAYMENT METHOD. The royalties due under Section 9 will be paid
                  within thirty days 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, Kraft
                  will furnish to Senomyx a royalty statement in sufficient
                  detail to permit confirmation of the accuracy of the royalty
                  payment made, which sets forth on a country-by-country basis
                  the relevant sales information, including the total number of
                  units of each such Product sold, Net Sales, the royalties
                  payable in United States dollars, the method used to calculate
                  the royalty, the exchange rate used and other information
                  employed to calculate Net Sales for such Product.

         9.7      CURRENCY OF PAYMENT. All payments to be made under this
                  Agreement, including the royalties payable to Senomyx by
                  Kraft, will be paid in United States dollars by wire transfer
                  or other mutually acceptable means to a bank account
                  designated by Senomyx. With respect to each quarter, for
                  countries other than the United States, whenever conversion of
                  payments from any foreign currency are required, such
                  conversion will be made at the rate of exchange reported in
                  THE WALL STREET JOURNAL on the business day of the applicable
                  reporting period. Translation of sales recorded in local
                  currencies to United States dollars will be performed in a
                  manner consistent with Kraft's normal practices used to
                  prepare its audited financial statements for internal and
                  external reporting purposes, which uses a widely accepted
                  published exchange rate.

         9.8      TAXES WITHHELD. Any income or other tax that Kraft, 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,
                  Kraft will


                                       8       *CONFIDENTIAL TREATMENT REQUESTED
<PAGE>


                  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.

         9.9      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 one percent
                  per month; 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.

         9.10     RECORDS OF NET SALES AND ROYALTY CALCULATIONS. During the
                  Royalty Term and for a period of three years thereafter, Kraft
                  will keep complete and accurate records of sales and all other
                  information necessary to calculate Net Sales of each Product
                  in sufficient detail to allow the accrued royalties to be
                  determined accurately in accordance with United States
                  generally accepted accounting principles. Senomyx, with
                  reasonable written notice to Kraft, will have the right to
                  cause Senomyx's nationally recognized independent, certified
                  public accountant to audit such records at the place or places
                  of business where such records are customarily kept in order
                  to verify the accuracy of the reports of Net Sales and royalty
                  payments. Such accountant must execute a confidentiality
                  agreement prior to entering Kraft's premises, obligating such
                  accountant to keep all information disclosed to it
                  confidential and will only be permitted to disclose to Senomyx
                  the extent of any discrepancy between royalty payments made by
                  Kraft under this Agreement and the actual royalty required to
                  be so paid. Senomyx will bear the full cost of such audit
                  unless such audit discloses a variance of more than two
                  percent from the amount of the royalties due under this
                  Agreement, in which event, Kraft will bear the full cost of
                  such audit. In all events, Kraft will pay any underpayment
                  with interest in accordance with Section 9.9. 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.

10.      GRANTS. Subject to the terms and conditions of this Agreement, Senomyx
         hereby grants to Kraft the following rights:

         10.1     GRANT OF RIGHTS REGARDING [...***...] COMPOUNDS AND
                  [...***...] PRODUCTS:


                                       9       *CONFIDENTIAL TREATMENT REQUESTED
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                  (A)      Senomyx hereby grants to Kraft [...***...];

                  (B)      Senomyx hereby grants to Kraft [...***...]; and

                  (C)      Senomyx hereby grants to Kraft [...***...].

         10.2     GRANT OF RIGHTS REGARDING [...***...] COMPOUNDS AND
                  [...***...] PRODUCTS:

                  (A)      Senomyx hereby grants to Kraft [...***...];

                  (B)      Senomyx hereby grants to Kraft [...***...]; and

                  (C)      Senomyx hereby grants to Kraft [...***...].

         10.3     RIGHT TO NEGOTIATE LICENSE FOR NEW PRODUCTS. At any time,
                  Kraft will have the right to negotiate [...***...] license
                  under the Senomyx's Patents and Know-How to make, have made,
                  use, sell, have sold, import and export New Products. The
                  parties will negotiate language in good faith for such license
                  including the royalties on such New Products.

         10.4     LIMITATIONS TO LICENSES. Kraft may not sublicense its rights
                  under Section 10 to Third Parties, except for the purpose of
                  entering into collaborative development agreements between any
                  such Third Party and Kraft that provide the support, as is
                  appropriate at the time, for research, development or
                  commercialization of Product, and as agreed to by Senomyx in
                  writing. All rights granted by Senomyx to Kraft under Section
                  10 shall be subject to the timely payment by Kraft under
                  Section 9 of the Agreement.


                                      10       *CONFIDENTIAL TREATMENT REQUESTED
<PAGE>


         10.5     GRANT OF RIGHTS FROM KRAFT TO SENOMYX. For the sole purpose of
                  conducting research under this Agreement, Kraft hereby grants
                  to Senomyx a fully paid, non-exclusive, worldwide,
                  fully-transferable license, to use the Kraft Technology
                  pursuant to the Research Plan, with the right to grant
                  sublicenses; provided, however, that any such sublicense shall
                  be subject to the prior written approval of Kraft, which shall
                  not be unreasonably withheld.

         10.6     Notwithstanding the provisions contained within this
                  Agreement, Kraft may, at any time, negotiate a license for the
                  use of Selected [...***...] Compounds outside the Field.
                  However, the parties understand that any such license will be
                  subject to Third Party agreements entered into by Senomyx and
                  the final decision to enter into such license shall be made by
                  Senomyx, in its sole discretion.

11.      OWNERSHIP OF INTELLECTUAL PROPERTY.

         11.1     TRANSFER OF RIGHTS. Senomyx retains all rights 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. Except as expressly
                  set forth in this Agreement, nothing in this Agreement will be
                  construed to grant manufacturing rights.

         11.2     SENOMYX INVENTIONS. Senomyx will own all Inventions and other
                  Know-How made solely by its employees and agents and all
                  Patent Rights claiming such Inventions and other Know-How.
                  Senomyx hereby irrevocably assigns to Kraft all interest in
                  and to any such Inventions and other Know-How that consist of
                  improvements to Kraft Technology, subject to the licenses
                  granted to Senomyx under Section 10. The parties will look to
                  the definition of Kraft Technology in order to determine
                  whether any such Invention and Know-How is an improvement to
                  Kraft Technology. In the event that Senomyx is legally unable
                  to assign such rights to Kraft, then Senomyx agrees either to
                  waive the enforcement of such rights against Kraft and any
                  sublicensees and assignees, or to grant Kraft an exclusive,
                  irrevocable, perpetual, worldwide, fully-paid license, with
                  right to sublicense through multiple tiers of sublicense, to
                  such rights.

         11.3     KRAFT INVENTIONS. Kraft will own all Inventions and other
                  Know-How made solely by its employees and agents, and all
                  Patent Rights claiming such Inventions and other Know-How.
                  Kraft hereby irrevocably assigns to Senomyx all interest in
                  and to any such Inventions and other Know-How that consist of
                  improvements to Senomyx Technology, Compounds, or Selected
                  Compounds, subject to the licenses granted to Kraft under
                  Section 10. The parties will look to the definition of Senomyx
                  Technology in order to determine whether any such Invention
                  and Know-How is an improvement to


                                      11       *CONFIDENTIAL TREATMENT REQUESTED
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                  Senomyx Technology. In the event that Kraft is legally unable
                  to assign such rights to Senomyx, then Kraft 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 license, with
                  right to sublicense through multiple tiers of sublicense, to
                  such rights.

         11.4     JOINT INVENTIONS. All Inventions conceived jointly by
                  employees or agents of Senomyx and employees or agents of
                  Kraft (the "Joint Inventions") and all Joint Patent Rights
                  will be owned jointly by Kraft and Senomyx. Kraft hereby
                  irrevocably assigns to Senomyx all interest in and to any
                  Joint Inventions that consist of improvement to Senomyx
                  Technology, Compounds, or Selected Compounds and uses thereof,
                  and all Joint Patent Rights claiming such Joint Inventions,
                  subject to the licenses granted to Kraft under Section 10.
                  Senomyx hereby irrevocably assigns to Kraft all interest in
                  and to any such Inventions and other Know-How that consist of
                  improvements to Kraft Technology, subject to the licenses
                  granted to Senomyx under Section 10. In the event that Kraft
                  is legally unable to assign such rights to Senomyx, then Kraft
                  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 license, with right to sublicense through multiple
                  tiers of sublicense, to such rights. In the event that Senomyx
                  is legally unable to assign such rights to Kraft, then Senomyx
                  agrees either to waive the enforcement of such rights against
                  Kraft and any sublicensees and assignees, or to grant Kraft an
                  exclusive, irrevocable, perpetual, worldwide, fully-paid
                  license, with right to sublicense through multiple tiers of
                  sublicense, to such rights.

         11.5     OTHER INVENTIONS. Any Inventions not included in Sections
                  11.1, 11.2, 11.3, or 11.4 will be owned by their inventors.

         11.6     INVENTORSHIP AND ASSIGNMENT. United States patent law will
                  determine inventorship of patentable inventions. Senomyx and
                  Kraft agree to execute all documentation necessary to perfect
                  all assignments of Inventions, Know-How and Patent Rights
                  contemplated in this Agreement.

         11.7     MARKINGS. At least [...***...] prior to commercialization of
                  the first Product, Kraft will consider whether Kraft will mark
                  any Product with a Senomyx trademark or Senomyx patent.
                  However, the parties understand that Kraft will make the final
                  decision in Kraft's sole discretion.

12.      TREATMENT OF CONFIDENTIAL INFORMATION; PUBLICITY.

         12.1     CONFIDENTIALITY. Subject to the terms and conditions of this
                  Agreement, Senomyx and Kraft each agree that, during the Term
                  and for a period of [...***...] thereafter, it will keep
                  confidential, and will cause its Affiliates to keep
                  confidential, all Confidential Information that is disclosed
                  to it or to any of its


                                      12       *CONFIDENTIAL TREATMENT REQUESTED
<PAGE>


                  Affiliates by the other party. Neither Senomyx nor Kraft nor
                  any of their respective Affiliates will use the other party's
                  Confidential Information except as expressly permitted in this
                  Agreement.

         12.2     DISCLOSURE TO RELATED PARTIES. Senomyx and Kraft each agree
                  that any disclosure of the other party's Confidential
                  Information to any officer, employee, contractor, consultant,
                  sublicensee or agent of the other party or to any of its
                  Affiliates 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 each other's Confidential Information,
                  which will be the same efforts as it would customarily take to
                  preserve the confidentiality of its own Confidential
                  Information.

         12.3     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 pursuant to this
                  Agreement, including all copies and extracts of documents,
                  within thirty days of the request of the other party;
                  provided, however, one copy of the Confidential Information
                  may be retained for legal purposes.

         12.4     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 at the time of
                           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;

                  (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.


                                       13
<PAGE>


                  A party may also disclose Confidential Information of the
                  other party where required to do so by law or legal process;
                  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 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 law.

         12.5     CONFIDENTIAL FINANCIAL INFORMATION. The parties agree that the
                  material financial 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 under an obligation of
                  confidentiality to bona fide potential sublicensees. Either
                  party will have the further right to disclose the material
                  financial terms of this Agreement under an obligation of
                  confidentiality to any potential acquirer, merger partner,
                  bank, venture capital firm, or other financial institution to
                  obtain financing. Notwithstanding the foregoing, the parties
                  will mutually agree upon a press release consistent, in form
                  and content, with the draft press release attached as Appendix
                  E. Thereafter, Kraft 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.

         12.6     CONFIDENTIAL RESEARCH INFORMATION. Each party agrees that all
                  results and data generated from the research under the
                  Collaborative Program will be owned exclusively by the
                  generating party and considered Confidential Information of
                  the generating party subject to the confidentiality
                  requirements of Section 12. Neither Kraft nor Senomyx will
                  provide to a Third Party any Materials provided by the other
                  party.

         12.7     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 Kraft
                  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 clinical trials, [...***...], 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


                                      14       *CONFIDENTIAL TREATMENT REQUESTED
<PAGE>


                  to secure confidential treatment of such Confidential
                  Information in consultation with the other party prior to such
                  disclosure (whether through protective orders or otherwise)
                  and disclose only the minimum necessary to comply with such
                  requirements.

         12.8     USE OF DATA FOR PROMOTIONAL PURPOSES. Either party may (i)
                  make public statements regarding Compounds, Selected Compounds
                  or Products, following consultation with the other party and
                  with the written consent of the other party to the form and
                  content of the public statement. Such public statement shall
                  be consistent with the press release attached as Appendix E.

         12.9     PUBLICATION OF RESULTS. Subject to this Section 12, results
                  and data obtained by either party in the course of the
                  collaboration may be submitted for publication by Senomyx in
                  accordance with Senomyx's customary practices. Senomyx will
                  send a copy of the proposed publication to Kraft and will
                  allow Kraft thirty days from the date of receipt in which to
                  determine whether such publication contains subject matter for
                  which patent protection should be sought prior to disclosure,
                  or otherwise contains Kraft Confidential Information. If no
                  answer is received from Kraft within thirty days of receipt of
                  the proposed publication, Senomyx will be free to submit such
                  proposed publication.

         12.10    PUBLICITY. Except as required by law and as provided in this
                  Section 12, neither party may make any public announcement or
                  otherwise disclose the terms of this Agreement without the
                  prior written consent of the other party, which consent will
                  not be unreasonably withheld.

13.      INTELLECTUAL PROPERTY ENFORCEMENT AND DEFENSE OF CLAIMS.

         13.1     INTELLECTUAL PROPERTY ENFORCEMENT. Subject to the Third Party
                  obligations of Senomyx, each party will have the right, but
                  not the obligation, to bring proceedings against any Third
                  Party for the inappropriate use, including patent
                  infringement, of Patent Rights solely Controlled by it, at its
                  own risk and expense. If either party brings such an action,
                  such party will be entitled to control such action, hire and
                  retain counsel, make decisions, settle on any terms, and
                  retain any and all awards or damages obtained in any such
                  proceeding. 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.

         13.2     DEFENSE OF INFRINGEMENT CLAIMS FOR SENOMYX TECHNOLOGY. Kraft
                  will cooperate with Senomyx, at Senomyx's expense, in the
                  defense of any suit, action or proceeding against Kraft or
                  Senomyx or Senomyx's Affiliates alleging the infringement of
                  the intellectual property rights of a Third Party by reason of
                  Kraft's or Senomyx's use of any Senomyx Technology licensed to
                  Kraft under this Agreement. The parties must notify each other
                  promptly in


                                       15
<PAGE>


         13.3     writing of the commencement of any such suit, action,
                  proceeding or claim of infringement. At the expense of
                  Senomyx, Kraft will give to Senomyx full and sole authority,
                  information and assistance necessary to defend, hire counsel,
                  make decisions or settle on any terms any such suit, action or
                  proceeding and Kraft 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.

         13.4     DEFENSE OF INFRINGEMENT CLAIMS FOR KRAFT TECHNOLOGY. Senomyx
                  will cooperate with Kraft, at Kraft's expense, in the defense
                  of any suit, action or proceeding against Senomyx or Kraft or
                  Kraft's affiliates alleging the infringement of the
                  intellectual property rights of a Third Party by reason of
                  Kraft's or Senomyx's use of any Kraft 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 Kraft, Senomyx will give to Kraft full and sole
                  authority, information and assistance necessary to defend,
                  hire counsel, make decisions or settle on any 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.

14.      PATENT PROSECUTION AND MAINTENANCE. The control and expense of the
         filing, prosecution (including an opposition or interference) and
         maintenance of Patent Rights or other intellectual property rights
         claiming Inventions made solely by a party will be the sole
         responsibility of the party that made such Invention, and the party not
         filing the patent application will cooperate in such filing,
         prosecution and maintenance. Senomyx and Kraft will determine by mutual
         agreement which party will be responsible for, and will cooperate in,
         the filing, prosecution and maintenance of Joint Patent Rights and will
         share equally in the expenses incurred with respect thereto.

15.      TERM AND TERMINATION.

         15.1     TERM. The term of this Agreement will begin on the Effective
                  Date and will continue through [...***...], unless terminated
                  earlier in accordance with the provisions of Section 15.2,
                  15.3 or 15.4 hereof (the "Term").

         15.2     TERMINATION BY KRAFT. Kraft will have the right to
                  terminate this Agreement without cause at any time upon
                  [...***...] written notice, provided, however, if such
                  termination occurs prior to the end of the Collaborative
                  Period Kraft must provide [...***...].


                                      16       *CONFIDENTIAL TREATMENT REQUESTED
<PAGE>


         15.3     TERMINATION BY MUTUAL AGREEMENT. The parties may terminate
                  this Agreement at any time, in whole or in part, by mutual
                  written agreement executed by both parties.

         15.4     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
                  seek actual or general damages and remedies available to it at
                  law or in equity. NEITHER PARTY WILL SEEK PUNITIVE OR
                  CONSEQUENTIAL DAMAGES.

16.      EFFECT OF TERMINATION.

         16.1     Upon termination of this Agreement pursuant to Section 15,
                  Kraft 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.

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

         16.2     SURVIVAL. The obligations and rights of the parties under
                  Sections 9.10, 11.2 through 11.7, 12, 16, 17.2(B), 17.3,
                  17.4(B), 17.5, 18, and Appendix A, will survive termination or
                  expiration of this Agreement.

17.      WARRANTIES AND INDEMNIFICATION.

         17.1     MUTUAL REPRESENTATIONS AND WARRANTIES. The parties make the
                  following representations and warranties to each other:

                  (A)      CORPORATE POWER. Each party hereby represents and
                           warrants that as of the Effective Date such party (i)
                           is duly organized and validly existing under the laws
                           of the state of its incorporation and has full
                           corporate power and authority to enter into this
                           Agreement and to carry out the provisions hereof;
                           (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, except to the
                           extent that any noncompliance would not have a
                           material adverse effect on its ability to perform its
                           obligations under this Agreement.


                                      17       *CONFIDENTIAL TREATMENT REQUESTED
<PAGE>


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

                  (C)      BINDING AGREEMENT. Each party hereby represents and
                           warrants to the other that as of the Effective Date
                           (i) this Agreement has been duly executed and
                           delivered on its behalf and is a legal and valid
                           obligation binding upon it and is enforceable in
                           accordance with its terms; (ii) the execution,
                           delivery and performance of this Agreement by such
                           party does not conflict with any 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.

         17.2     WARRANTIES REGARDING SENOMYX TECHNOLOGY. Senomyx warrants to
                  Kraft as of the Effective Date the following:

                  (A)      To the best knowledge of Senomyx as of the Effective
                           Date: (i) Senomyx has the lawful right to use the
                           Senomyx Technology for the purpose of discovering
                           Compounds to be licensed to Kraft in accordance with
                           the terms of this Agreement; and (ii) no Third Party
                           suit exists relating to the Senomyx Patent Rights.

                  (B)      EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
                           SENOMYX (INCLUDING ITS OFFICERS, EMPLOYEES AND
                           AGENTS) EXPRESSLY DISCLAIMS ANY REPRESENTATIONS AND
                           WARRANTIES, WHETHER EXPRESS OR IMPLIED, RELATING TO
                           SENOMYX TECHNOLOGY. SENOMYX FURTHER DISCLAIMS ANY
                           EXPRESS OR IMPLIED WARRANTY (i) OF MERCHANTABILITY OR
                           FITNESS FOR A PARTICULAR PURPOSE OF SENOMYX
                           TECHNOLOGY OR SENOMYX PATENT RIGHTS; (ii) THAT THE
                           PRACTICE OF SENOMYX TECHNOLOGY WILL NOT INFRINGE A
                           PATENT, COPYRIGHT, TRADEMARK OR OTHER RIGHT OF A
                           THIRD PARTY; AND (iii) REGARDING THE PATENTABILITY OF
                           ANY SENOMYX TECHNOLOGY, INCLUDING SENOMYX TECHNOLOGY
                           CLAIMED IN PATENT APPLICATIONS AS PART OF SENOMYX
                           PATENT RIGHTS.


                                       18
<PAGE>


         17.3     SENOMYX INDEMNIFICATION. Senomyx hereby agrees to defend and
                  indemnify Kraft, and its respective officers, directors,
                  employees, and agents (collectively, the "Kraft Indemnitees")
                  from and against all damages or other amounts payable to a
                  Third Party, including reasonable attorneys' fees and costs of
                  litigation, resulting from a claim, demand, action, suit or
                  other proceeding brought or threatened by a Third Party
                  against a Kraft Indemnitee based on Senomyx's gross negligence
                  or willful misconduct (but not patent infringement) relating
                  to Senomyx's performance or failure to perform under this
                  Agreement. IN NO EVENT WILL SENOMYX BE LIABLE FOR ANY
                  INCIDENTAL OR CONSEQUENTIAL DAMAGES SUFFERED BY KRAFT
                  RESULTING FROM THIS AGREEMENT.

         17.4     WARRANTIES RELATING TO KRAFT TECHNOLOGY. Kraft represents and
                  warrants to Senomyx as of the Effective Date the following:

                  (A)      To the best knowledge of Kraft: (i) Kraft has the
                           lawful right to license (or sublicense, as the case
                           may be) the Kraft Technology to Senomyx in accordance
                           with the terms of this Agreement; and (ii) no Third
                           Party suits against Kraft exist relating to the Kraft
                           Patent Rights.

                  (B)      EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
                           KRAFT (INCLUDING ITS OFFICERS, EMPLOYEES AND AGENTS)
                           EXPRESSLY DISCLAIMS ANY REPRESENTATIONS AND
                           WARRANTIES OF ANY KIND, WHETHER EXPRESS OR IMPLIED,
                           RELATING TO KRAFT TECHNOLOGY. KRAFT FURTHER DISCLAIMS
                           ANY EXPRESS OR IMPLIED WARRANTY (i) OF
                           MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
                           OF KRAFT TECHNOLOGY, (ii) THAT THE PRACTICE OF KRAFT
                           TECHNOLOGY WILL NOT INFRINGE A PATENT, COPYRIGHT,
                           TRADEMARK, OR OTHER RIGHT OF A THIRD PARTY, AND (iii)
                           REGARDING THE PATENTABILITY OF ANY KRAFT TECHNOLOGY,
                           INCLUDING KRAFT TECHNOLOGY CLAIMED IN PATENT
                           APPLICATIONS AS PART OF KRAFT PATENT RIGHTS.

         17.5     KRAFT INDEMNIFICATION.

                  (A)      OF SENOMYX. Kraft hereby agrees to indemnify, defend
                           and hold Senomyx, and its respective officers,
                           directors, employees and agents (collectively, the
                           "Senomyx Indemnitees") harmless from and against all
                           damages, losses, liabilities, expenses and costs or
                           other amounts payable to a Third Party, including
                           reasonable attorneys' fees and costs of litigation,
                           resulting from a claim, demand, action, suit or other
                           proceeding brought or threatened by a Third Party
                           against a Senomyx Indemnitee based on (i) any
                           development, manufacture, use, handling, storage,
                           sale, or other disposition of a Selected Compound or
                           Product by or through Kraft or its Affiliates or its
                           permitted sublicensees (ii) the practice by Kraft of


                                       19
<PAGE>


                           any license granted hereunder, or (iii) infringement
                           by Kraft of Patent Rights of any Third Party; except
                           to the extent such damages or other amounts payable
                           are attributable to: (a) a violation of any
                           contractual or fiduciary duty owed by any Senomyx
                           Indemnitee to a Third Party, (b) any breach of this
                           Agreement by a Senomyx Indemnitee or a
                           misrepresentation by Senomyx in this Agreement, or
                           (c) trade secret misappropriation or patent
                           infringement by Senomyx covered by a Third Party's
                           Patent Rights. IN NO EVENT WILL KRAFT BE LIABLE FOR
                           ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES SUFFERED BY
                           SENOMYX RESULTING FROM THE EXERCISE OF ANY RIGHTS
                           GRANTED IN ACCORDANCE WITH THIS AGREEMENT.

                  (B)      OF CERTAIN SENOMYX LICENSORS. Kraft hereby agrees to
                           indemnify, defend and hold [...***...] and its
                           respective officers, sponsors, directors, employees,
                           and agents (collectively, the "IP Indemnitees")
                           harmless from and against all damages or other
                           amounts payable to a Third Party, including
                           reasonable attorneys' fees and costs of litigation,
                           resulting or arising from the exercise of rights
                           under the licenses granted from Senomyx to Kraft
                           provided for under Section 10 and pursuant to any
                           agreement between [...***...] and Senomyx, including
                           product liability.

18.      MISCELLANEOUS.

         18.1     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 Nino), 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
                  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.

         18.2     GOVERNING LAW AND JURISDICTION. This Agreement will be
                  governed by the laws of the State of California, as such laws
                  are applied to contracts entered into and to be performed
                  entirely within such state.

         18.3     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.

         18.4     DISPUTE RESOLUTION. 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. It is the objective of the parties to


                                      20       *CONFIDENTIAL TREATMENT REQUESTED
<PAGE>


                  establish procedures to facilitate the resolution of disputes
                  arising under this Agreement in an expedient manner by mutual
                  cooperation and without resort to arbitration. The parties
                  agree that prior to any arbitration concerning this Agreement,
                  Senomyx's head of R&D and Kraft's head of R&D will meet in
                  person or by video-conferencing in a good faith effort to
                  resolve any disputes concerning this Agreement. Within thirty
                  days 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
                  thirty days after such notice is received. 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 18.4 will be resolved by final and
                  binding arbitration conducted in San Diego, California (unless
                  the parties mutually agree to another location) in accordance
                  with Sections 1282 through 1288 of the California Code of
                  Civil Procedure. The arbitration will be conducted by three
                  arbitrators who are knowledgeable in the subject matter at
                  issue in the dispute. One arbitrator will be selected by
                  Senomyx, and one arbitrator will be selected by Kraft. The
                  third arbitrator will be selected by mutual agreement of the
                  two arbitrators selected by the parties. In conducting the
                  arbitration, the arbitrators will (i) determine what discovery
                  will be permitted, consistent with the goal of limiting the
                  cost and time which the parties must expend for discovery (and
                  provided that the arbitrators will permit such discovery they
                  deem necessary to permit an equitable resolution of the
                  dispute), (ii) ensure that the total time of the arbitration
                  from filing to a final decision or executed settlement
                  agreement is less than six months, and (iii) be able to decree
                  any and all relief of an equitable nature, including, but not
                  limited to, such relief as a temporary restraining order, a
                  preliminary injunction, a permanent injunction, specific
                  performance or repletion of property. The arbitrators will
                  also be able to award actual or general damages, but will not
                  award any other form of damage (e.g., consequential, punitive
                  or exemplary damages). The parties will share equally the
                  arbitrator's fees and expenses pending the resolution of the
                  arbitration, unless the arbitrators, pursuant to their its
                  right but not their obligations, requires the non-prevailing
                  party to bear all or any portion of the costs of the
                  prevailing party. 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.
                  Notwithstanding anything to the contrary in this Section 18.4,
                  either party may seek immediate injunctive or other interim
                  relief from any court of competent jurisdiction with respect
                  to any breach of Sections 10 or 12 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. Disputes concerning Patent
                  Rights, including, but not limited to, disputes concerning
                  patent ownership, claim language, claim scope and issues of
                  validity will be settled in a court of law. Any arbitration
                  ruling that relies on


                                       21
<PAGE>


                  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. In no event will a demand for arbitration be
                  made after the date when the institution of a legal or
                  equitable proceeding based on such claim, dispute or other
                  matter in question would be barred by the applicable statute
                  of limitations.

         18.5     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.

         18.6     INDEPENDENT CONTRACTORS. It is expressly agreed that Kraft and
                  Senomyx will be independent contractors and that the
                  relationship between the parties will not constitute a
                  partnership or agency of any kind. Neither Kraft 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.

         18.7     ENTIRE AGREEMENT; AMENDMENT. This Agreement sets forth all of
                  the covenants, promises, agreements, warranties,
                  representations, conditions and understandings between the
                  parties, and supersedes and terminates all prior agreements
                  and understandings between the parties, with respect to the
                  subject matter hereof. There are no covenants, promises,
                  agreements, warranties, representations, conditions or
                  understandings, either oral or written, between the parties
                  other than as set forth in this Agreement. No subsequent
                  alteration, amendment, change or addition to this Agreement
                  will be binding upon the parties unless reduced to writing and
                  signed by the respective authorized officers of the parties.
                  This Agreement will not be strictly construed against either
                  party. Any conflict between the terms set forth in the text of
                  this Agreement and the terms of any Appendix hereto will be
                  resolved in favor of the text of this Agreement.

         18.8     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


                                       22
<PAGE>


                  of the same right or remedy or any of the other of such
                  party's rights or remedies provided in this Agreement.

         18.9     CONSTRUCTION. The term "Article" or "Section" can refer to any
                  single paragraph level found in this Agreement or any
                  collection of multiple paragraphs thereunder.

         18.10    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.

         18.11    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.
                                             11099 North Torrey Pines Road
                                             La Jolla, CA  92037
                                             Facsimile number: (858) 404-0754
                                             Attention: Corporate Counsel with a
                                                        copy to the President

                  If to KRAFT, to:           KRAFT Foods
                                             Three Lakes Drive
                                             Northfield, IL 60096
                                             Facsimile number: 847-646-4431
                                             Attention: Patent Counsel with a
                                                        copy to VP of Research

                  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.

         18.12    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) in connection with the transfer or sale of all
                  or substantially all of its assets, or (ii) to any


                                       23
<PAGE>


                  Affiliate. In the event of such transaction, however,
                  intellectual property rights (including Know-How) of a party
                  to such transaction other than one of the parties to this
                  Agreement will not be included in the technology licensed
                  under this Agreement. Notwithstanding the foregoing, any such
                  assignment to an Affiliate will not relieve the assigning
                  party of its responsibilities for performance of its
                  obligations under this agreement. This Agreement will survive
                  any merger or consolidation of either party with or into
                  another party and no consent for any such merger,
                  consolidation or similar reorganization will be required
                  hereunder.

         18.13    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.


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

KRAFT FOODS, INC.


By:         [...***...]
            -------------------------------------

Title:       Senior V.P. R&D Quality
            -------------------------------------

Date:        December 6, 2000
            -------------------------------------


SENOMYX, INC.



By:          /s/ Paul A. Grayson
            -------------------------------------

Title:       President & CEO
            -------------------------------------

Date:        December 6, 2000
            -------------------------------------





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<PAGE>


                        COLLABORATIVE RESEARCH AGREEMENT

                            APPENDIX A - DEFINITIONS


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

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

"[...***...] Compound(s)" means [...***...], discovered in the course of the
Collaborative Program that [...***...] that may be optimized and further tested
[...***...] by Senomyx and for which Senomyx will prepare a written report of
data to be reviewed by Kraft.

"[...***...] Phase" means that part of the Collaborative Program wherein Senomyx
will pursue the identification of [...***...] Compounds.

"[...***...] Product(s)" means product(s) in Field II that incorporate Selected
[...***...] Compound(s).

"[...***...] Tastant(s)" means [...***...] and that are provided by Kraft to
Senomyx under this Agreement.

"Collaborative Period" means the period beginning on the Effective Date and
ending three years thereafter, unless terminated earlier in accordance with
Section 3 or 15. The Collaborative Period will terminate after three years
regardless of whether the Compound Research has been completed.

"Collaborative Program" means a research program during the Collaborative Period
to discover [...***...] in Fields to be conducted pursuant to the Research Plan.

"Compound(s)" means [...***...] Compound(s) and/or [...***...] Compound(s).

"Confidential Information" means all information, Inventions and Know-How
disclosed by one party to the other party pursuant to this Agreement, including,
without limitation, information and material (whether or not patentable)
regarding technology, products,


                                      25       *CONFIDENTIAL TREATMENT REQUESTED
<PAGE>


research, development, manufacturing, marketing, finances, personnel or other
business information or objectives which is designated as confidential in
writing by the disclosing party, whether by letter or by the use of an
appropriate stamp or legend, prior to or at the time any such material, trade
secret or other information is disclosed by the disclosing party to the other
party. Notwithstanding the foregoing to the contrary, Inventions, Know-How or
other information which is orally, electronically or visually disclosed by a
party, or is disclosed in writing without an appropriate letter, stamp or
legend, will constitute Confidential Information of a party if the disclosing
party, within thirty days after such disclosure, delivers to the other party a
written document or documents describing the Inventions, Know-How or other
information and referencing the place and date of such oral, visual, electronic
or written disclosure and the names of the persons to whom such disclosure was
made.

"Control" or "Controlled" means, with respect to intellectual property,
possession by a party, as of the Effective Date or during the Collaborative
Period, 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 that is in effect on the Effective Date.

"Effective Date" means the date that this Agreement is signed by the last party
to sign below.

"Field I" means [...***...].

"Field II" means [...***...].

"Fields" means collectively Field I and Field II.

"Invention" means any invention, including any new and useful process, method,
or composition of matter, or improvement thereto, whether or not patentable,
made in the course of the Collaborative Program.

"Joint Invention" has the meaning set forth in Section 11.4.

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

"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, Materials and data, including
pharmacological, toxicological and clinical test data, analytical and quality
control data, patent and legal data or marketing, sales and manufacturing data.


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<PAGE>


"Kraft Know-How" means, to the extent necessary for purposes of the activities
to be conducted under this Agreement, all Know-How Controlled by Kraft,
including, but not limited to, formulations in which Selected Compounds are
used, [...***...] and methods of incorporating and/or processing Selected
Compounds into Products.

"Kraft Patent Rights" means, to the extent necessary for purposes of the
activities to be conducted under this Agreement, all Patent Rights Controlled by
Kraft, including, without limitation, any Patent Rights containing one or more
claims to an Invention made solely by employees or agents of Kraft, but
excluding any Joint Patent Rights.

"Kraft Technology" means Kraft Patent Rights and Kraft Know-How.

"Materials" means [...***...], including without limitation, Compounds and
Selected Compounds.

"Net Sales" means, with respect to a Product, the gross amount invoiced by Kraft
and its Affiliates and/or permitted sublicensees on any sales or other transfer
of the Product, less the following items:

         i)       trade, quantity and cash discounts or rebates actually allowed
                  with respect to such sales;

         ii)      credits, rebates, charge-back rebates, reimbursements or
                  similar payments actually granted or given to wholesalers and
                  other distributors, buying groups, governmental agencies and
                  other institutions, but only to the extent actually allowed;

         iii)     credits or allowances actually granted for rejection or return
                  of Products previously sold; and

         iv)      any tax, tariff, duty or other governmental charge (other than
                  an income tax) levied on the sale, transportation or delivery
                  of a Product that is borne by the seller thereof and deducted
                  from sales under United States generally accepted accounting
                  principles.

Net Sales will be determined from the books and records of Kraft, its Affiliates
and/or its permitted sublicensees, maintained in accordance with United States
generally accepted accounting principles.

"New Product(s)" means any products outside those listed on Appendix C that
incorporate Selected [...***...] Compounds in Field I.

"Patent Rights" means all rights associated with all U.S. or foreign (including
regional authorities such as the European Patent Office) regular or provisional
patents or patent


                                      27       *CONFIDENTIAL TREATMENT REQUESTED
<PAGE>


applications, including any continuation, continuation-in-part, or division
thereof or any substitute application therefor or equivalent thereof, and any
patent issuing thereon, including any reissue, reexamination or extension
thereof and any confirmation patent or registration patent or patent of
additions based on any such patent.

"Product(s)" means [...***...] Product(s) and/or [...***...] Product(s).

"Product Category(ies)" means each category of [...***...] Products listed on
Appendix C.

"Product Development and Commercialization" means the program for development of
a Product conducted during the term of this Agreement as provided under Section
3.5.

"Receptor" or "Receptors" means [...***...].

"Research Plan" means the plan outlining the research to be performed during the
Collaborative Program agreed to by the Steering Committee at the first meeting
thereof within thirty days of the Effective Date.

"Royalty Term" means, in the case of any Product and as to any country, the
period of time commencing on [...***...] and ending upon the date that is
[...***...] in such country.

"Selected [...***...] Compound(s)" means those [...***...] Compound(s) selected
by Kraft for development, which are subject to certain payment and diligence
provisions.

"Selected Compound(s)" means Selected [...***...] Compound(s) and/or Selected
[...***...] Compound(s).

"Selected [...***...] Compound(s)" means those [...***...] Compound(s) selected
by Kraft for development, which are subject to certain payment and diligence
provisions.

"Senomyx Know-How" means all Know-How related to the Collaborative Program,
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
developed by Senomyx in the course of the Collaborative Program.

"Senomyx Patent Rights" mean all Patent Rights that are necessary or
appropriate for purposes of the activities to be conducted under this
Agreement, and which are Controlled by Senomyx as of the Effective Date or
developed by Senomyx in the course of the Collaborative Program, but
excluding any Joint Patent Rights.

"Senomyx Technology " means the Senomyx Patent Rights, and Senomyx Know-How.


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<PAGE>


"[...***...] Compounds" means [...***...], discovered in the course of the
Collaborative Program that [...***...] and for which Senomyx will prepare a
written report of data to be reviewed by Kraft.

"[...***...] Phase" means that part of the Collaborative Program wherein Senomyx
will pursue the identification of [...***...] Compounds.

"[...***...] Product(s)" means any product(s) listed on Appendix C that
incorporate Selected [...***...] Compound(s).

"[...***...] Tastants" means [...***...] provided by Kraft to Senomyx under this
Agreement.

"Steering Committee" has the meaning set forth in Section 2.

"Term" has the meaning set forth in Section 15.1.

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


                                      29       *CONFIDENTIAL TREATMENT REQUESTED
<PAGE>


                        COLLABORATIVE RESEARCH AGREEMENT

                         APPENDIX C - PRODUCT CATEGORIES





-        [...***...]





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