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Exhibit 10.16  

***Text Omitted and Filed Separately

with the Securities and Exchange Commission.

Confidential Treatment Requested

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

200.83 and 230.406.  

        Confidential 

COLLABORATIVE RESEARCH,

DEVELOPMENT, COMMERCIALIZATION

AND LICENSE AGREEMENT  

 BETWEEN  

 SENOMYX, INC.

AND

THE COCA-COLA COMPANY  

 
  
 

    Table of Contents    
    

	COLLABORATIVE RESEARCH, DEVELOPMENT, COMMERCIALIZATION AND LICENSE AGREEMENT	 	1
	1.	 	DEFINITIONS	 	1
	2.	 	OBJECT OF AGREEMENT	 	1
	3.	 	COLLABORATIVE R&D PROGRAM	 	2
	4.	 	STEERING COMMITTEE	 	2
	 	 	4.1 Formation of Steering Committee	 	2
	 	 	4.2 Role of Steering Committee	 	2
	 	 	4.3 Composition	 	2
	 	 	4.4 Operation	 	3
	 	 	4.5 Meetings	 	3
	 	 	4.6 Minutes	 	3
	5.	 	RESEARCH PLAN	 	3
	 	 	5.1 Initial Research Plan	 	3
	 	 	5.2 Implementation of Research Plan	 	3
	 	 	5.3 Determination of Commercially Viable Enhancing Compound(s)	 	4
	 	 	5.4 Notification of Selected Compound	 	4
	 	 	5.5 KO Compounds and KO Related Compounds	 	4
	 	 	5.6 [***] Enhancing Compounds	 	4
	6.	 	DEVELOPMENT	 	5
	 	 	6.1 Initial Development Plan	 	5
	 	 	6.2 Implementation of Development Plan	 	5
	 	 	6.3 Regulatory	 	5
	 	 	6.4 Costs of Regulatory Filings	 	5
	 	 	6.5 Additional Safety Studies or Regulatory Approvals	 	6
	 	 	6.6 Cooperation	 	6
	7.	 	COMMERCIALIZATION	 	6
	 	 	7.1 Commercialization Plan	 	6
	 	 	7.2 Format of Commercialization Plan	 	7
	8.	 	RIGHTS, OBLIGATIONS AND LIMITATION OF THE PARTIES	 	7
	 	 	8.1 Inside the Fields	 	7
	 	 	8.2 Outside the Fields	 	7
	 	 	8.3 Preferred Relationship	 	8
	 	 	8.4 Manufacturing	 	8
	 	 	8.5 Rights to a New High-Potency [***]	 	8
	9.	 	FINANCIAL TERMS	 	9
	 	 	9.1 Annual Research Support	 	9
	 	 	9.2 Credit Toward Royalties During Collaborative R&D Period	 	9
	 	 	9.3 Milestone Payments	 	10
	 	 	9.4 Royalty for Beverages Incorporating Product Compounds	 	10
	 	 	9.5 Minimum Annual Royalties	 	13
	 	 	9.6 Adjustment of Values for Minimum Royalties	 	15
	 	 	9.7 Payment Terms	 	15
	 	 	9.8 Currency of Payment	 	16
	 	 	9.9 Taxes Withheld	 	16
	 	 	9.10 Late Payment	 	16
	 	 	9.11 Records of Unit Sales, Net Sales and Royalty Calculations	 	16
	10.	 	GRANTS	 	17
	 	 	 	 	 

ii

 

	 	 	10.1 Non-exclusive Grant by SENOMYX of Rights Regarding Evaluation of Enhancing Compounds	 	17
	 	 	10.2 Non-exclusive Grant by SENOMYX of Rights to Make and Have Made Selected Compounds	 	17
	 	 	10.3 Non-Exclusive Grant of Rights by SENOMYX to Make, Have Made, Use and Sell Beverages and Beverage Bases with Selected Compound	 	18
	 	 	10.4 Exclusive Grant of Rights by SENOMYX Regarding Selected Compounds and Beverages and Beverage Bases that Incorporate Selected Compounds	 	18
	 	 	10.5 Co-Exclusive Grant of Rights by SENOMYX Regarding Selected Compounds and Powdered Beverage Bases incorporating Selected Compounds	 	18
	 	 	10.6 Contingent Third Party Rights to Field II	 	18
	 	 	10.7 Limitation on Licenses	 	19
	 	 	10.8 If KO Does Not Pay Minimum Royalties	 	19
	 	 	10.9 Most Favored Licensee	 	19
	 	 	10.10 Obligations Related to Sublicenses	 	19
	 	 	10.11 Non-exclusive Grant of Rights from KO to SENOMYX for Research Purposes	 	20
	 	 	10.12 Non-exclusive Grant of Rights from KO to SENOMYX for KO Related Compounds	 	20
	 	 	10.13 Exclusive Grant of Rights from KO to SENOMYX for KO Related Compounds	 	20
	 	 	10.14 Non-Exclusive Grant of Rights to SENOMYX Trademark	 	20
	11.	 	OWNERSHIP OF INTELLECTUAL PROPERTY	 	21
	 	 	11.1 Transfer of Rights	 	21
	 	 	11.2 SENOMYX Inventions	 	21
	 	 	11.3 KO Inventions	 	21
	 	 	11.4 Joint Inventions	 	22
	 	 	11.5 Other Inventions	 	22
	 	 	11.6 Markings	 	22
	 	 	11.7 Inventorship and Assignment	 	23
	12.	 	PATENT PROSECUTION AND MAINTENANCE	 	23
	 	 	12.1 Prosecution of Patents	 	23
	 	 	12.2 Inventions under Collaboration	 	23
	13.	 	INTELLECTUAL PROPERTY ENFORCEMENT AND DEFENSE OF CLAIMS	 	24
	 	 	13.1 Defense of Infringement Claims for SENOMYX Technology	 	24
	 	 	13.2 Defense of Infringement Claims for KO Technology	 	24
	14.	 	TREATMENT OF CONFIDENTIAL INFORMATION: REPORTING REQUIREMENTS, PUBLICITY, LAW AND REGULATIONS	 	25
	 	 	14.1 Confidentiality	 	25
	 	 	14.2 Disclosure to Related Parties	 	25
	 	 	14.3 Return of Confidential Material	 	25
	 	 	14.4 Exceptions to Confidential Information	 	26
	 	 	14.5 Confidential Financial Information	 	26
	 	 	14.6 Confidential Research Information	 	26
	 	 	14.7 Permitted Use and Disclosures	 	27
	 	 	14.8 Use of Data for Promotional Purposes	 	27
	 	 	14.9 Publication of Results	 	28
	 	 	14.10 Publicity	 	28
	 	 	14.11 Reporting, Law and Regulation	 	28
	15.	 	TERM, EARLY CONCLUSION, AND TERMINATION	 	28
	 	 	15.1 Term	 	28
	 	 	15.2 Early Conclusion of the Collaborative R&D Period by KO	 	28
	 	 	15.3 Termination By Mutual Agreement	 	29
	 	 	15.4 Termination By KO for Acquisition of SENOMYX By a KO Competitor	 	29
	 	 	 	 	 

iii

 

	 	 	15.5 Effect of Termination	 	29
	 	 	15.6 Survival	 	29
	16.	 	WARRANTIES AND INDEMNIFICATION	 	29
	 	 	16.1 Mutual Representations and Warranties	 	29
	 	 	16.2 Corporate Power	 	29
	 	 	16.3 Due Authorization	 	30
	 	 	16.4 Binding Agreement	 	30
	 	 	16.5 Warranties Regarding SENOMYX Technology	 	30
	 	 	16.6 Warranties Relating to KO Technology	 	32
	17.	 	MISCELLANEOUS	 	34
	 	 	17.1 Force Majeure	 	34
	 	 	17.2 Governing Law and Jurisdiction	 	34
	 	 	17.3 Binding Effect	 	34
	 	 	17.4 Dispute Resolution	 	34
	 	 	17.5 Severability	 	36
	 	 	17.6 Independent Contractors	 	36
	 	 	17.7 Entire Agreement	 	36
	 	 	17.8 Amendment	 	36
	 	 	17.9 Interpretation	 	37
	 	 	17.10 Waiver	 	37
	 	 	17.11 Construction	 	37
	 	 	17.12 No Third Party Beneficiaries	 	37
	 	 	17.13 Notices	 	37
	 	 	17.14 Assignment	 	38
	 	 	17.15 Merger or Consolidation	 	38
	 	 	17.16 Counterparts	 	38
	APPENDIX A—DEFINITIONS	 	40
	APPENDIX B—RESEARCH PLAN	 	46
	APPENDIX C—DEVELOPMENT PLAN	 	47
	APPENDIX D—COMMERCIALIZATION PLAN	 	49
	APPENDIX E—EXCEPTIONS TO KO RIGHTS TO KO COMPOUND (TO BE PROVIDED BY KO)	 	50

iv

   COLLABORATIVE RESEARCH, DEVELOPMENT, COMMERCIALIZATION AND LICENSE AGREEMENT  

        This
Agreement is entered into as of the April 22, 2002 (the "Effective Date") by and between SENOMYX, INC., a Delaware
Corporation having its principal place of business at 11099 North Torrey Pines Road, La Jolla, CA 92037 ("SENOMYX") and THE COCA-COLA
COMPANY, a Delaware Corporation, having its principal place of business at One Coca-Cola Plaza, Atlanta, Georgia 30313 ("KO"). 

BACKGROUND  

        WHEREAS, 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 of compounds that will ultimately be commercialized as taste and olfaction products. KO is in the business of developing, manufacturing
and marketing consumer products. SENOMYX and KO desire to collaborate in research and development to discover and commercialize compounds that enhance the  [***] taste of commercial [***] for use in the fields
defined below. 

        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 capitalized terms are defined in Appendix A and incorporated into this Agreement by reference. 

2.     OBJECT OF AGREEMENT  

        The goals of the collaboration between KO and SENOMYX are: 

        a)    to
implement a program for the research and development of Enhancing Compounds to be marketed for use in accordance with Section 10; and 

        b)    to
provide KO with rights to Product Compound(s) as provided in Section 10. 

3.     COLLABORATIVE R&D PROGRAM  

        The parties will collaborate during the Collaborative R&D Period to discover Enhancing Compounds and develop Selected Compounds, pursuant to the Research Plan and
the Development Plan (collectively, the "Collaborative R&D Program"). This Agreement establishes a Collaborative R&D Program of three years
("Collaborative R&D Period"). 

4.     STEERING COMMITTEE  

        4.1    Formation of Steering Committee    

        No
later than ten days after the Effective Date, the parties will establish a joint steering committee ("Steering Committee"). 

        4.2    Role of Steering Committee    

        The
Steering Committee will manage the Collaborative R&D Program and will: 

          (i)  provide
strategic direction and performance criteria for the Collaborative R&D Program; 

         (ii)  monitor
progress and communicate status of the Collaborative R&D Program; 

1

 

        (iii)  facilitate
the cooperation of the parties under the Collaborative R&D Program; 

        (iv)  communicate
during the Commercialization Period regarding the development of Selected Compound(s) and the commercialization of Beverages and Beverage Bases
incorporating Selected Compounds; 

         (v)  review
and amend if necessary the Research Plan and the Development Plan; 

        (vi)  determine
which of the Enhancing Compound(s) that KO determines is are commercially viable will be selected for development as Selected Compound(s); and 

       (vii)  establish
the protocol for determining the enhancement level of Enhancing Compounds, and Selected Compounds, and agree on the level of enhancement of Enhancing
Compounds. 

        4.3    Composition    

        The
Steering Committee will consist of two representatives officially designated by SENOMYX and two representatives officially designated by KO, all of whom may change from time to time. 

        4.4    Operation    

        Each
official member of the Steering Committee will have one vote. All Steering Committee decisions will be made by unanimous vote and at a meeting where all four official members
participate. Any unresolved disputes will be subject to the procedures outlined in Section 17.4, or as otherwise mutually agreed upon by the parties in writing. 

        4.5    Meetings    

        The
Steering Committee will first meet no later than thirty days after the Effective Date and at least four times per year during the Collaborative R&D Period and the Commercialization
Period of this Agreement using mutually agreed upon meeting locations and formats including teleconferencing and videoconferencing. Each party will bear its own expenses relating to the meetings and
activities of the Steering Committee. Subject to the approval of the Steering Committee, which shall not be unreasonably withheld, each party may request the attendance of subject matter experts, who
may or may not be employees of either party, as desired at Steering Committee meetings as non-voting, unofficial, ad-hoc members. 

        4.6    Minutes    

        During
the Collaborative Period and the Commercialization Period, SENOMYX will promptly prepare and deliver to the members of the Steering Committee, the minutes of such meetings for
review and approval by both parties. 

5.     RESEARCH PLAN.  

        5.1    Initial Research Plan    

        The
initial research plan is set forth in Appendix B and incorporated into this Agreement by reference ("Research Plan"). 

        5.2    Implementation of Research Plan    

        SENOMYX
will use best efforts, using the resources received under Section 9.1, to perform the activities outlined in the Research Plan. SENOMYX represents and KO acknowledges that
the total resources to be deployed for pursuit of the program objectives will be significantly more than those provided under Section 9.1. SENOMYX will designate a project team comprising
personnel with the technical qualifications and expertise that are reasonably required to accomplish the activities outlined in the Research Plan. If there are any changes in the members of the
project team, SENOMYX will ensure that replacement members will have the equivalent technical qualifications and expertise. 

2

 

        SENOMYX
will provide KO reasonable access to the aggregate results of the screening program including the identity of the compounds screened and information about active compounds
(compounds exhibiting activity in the assay) found. SENOMYX will provide KO with information on all Enhancing Compounds, including information on stability,solubility, in
vitro toxicity and in vivo toxicity, samples of Enhancing Compounds adequate for full evaluation (the amount of which shall be
determined by the Steering Committee), and manufacturing cost estimates ("Data Package(s)"). 

        KO
will use best efforts to perform the activities in accordance with the Research Plan, including the evaluation of the Data Packages provided by SENOMYX for Enhancing Compounds. 

        5.3    Determination of Commercially Viable Enhancing Compound(s)    

        Each
time SENOMYX provides a Data Package, KO will determine whether an Enhancing Compound in such Data Package is commercially viable for use in Beverages and Beverage Bases in the
Fields. Such determination will be made with the assistance of SENOMYX under the criteria identified in Section 9.3(b), and such other criteria due to the specifics of the Enhancing Compound or
Development Plan. Such determination will be made within a mutually agreeable period from receiving such Data Package, not to exceed  [***]. 

        5.4    Notification of Selected Compound    

        At
the Steering Committee meeting directly following the evaluation of such Data Package, KO will notify the Steering Committee of the results of the evaluation and the Steering
Committee will determine if an Enhancing Compounds in such Data Package will be selected for development under the Development Plan ("Selected
Compound(s)"). 

        5.5    KO Compounds and KO Related Compounds    

        KO
represents that it has found a compound having a [***] effect for among others  [***] ("KO Compound"). KO has also identified a list of  [***] that KO would be interested in investigating for  [***] effects ("KO Related Compounds"). Prior to KO disclosing the KO Compound and the KO Related Compounds to
SENOMYX, though
it is anticipated that such disclosure will be no later than [***] following the Effective Date, KO will provide SENOMYX with a
complete report detailing its patent searches, including any freedom to operate opinions, covering the KO Compounds and KO Related Compounds. The Steering Committee will decide which if any of the KO
Related Compounds will be synthesized by SENOMYX and investigated using SENOMYX Technology to determine whether any of the KO Related Compounds exhibit enhancing effects with the Target  [***].

        5.6    [***] Enhancing Compounds    

        The
Collaborative R&D Program contemplates the investigation of [***] compounds for commercial  [***] potential. SENOMYX and KO acknowledge that the
Collaborative R&D Program would initially concentrate on the discovery of  [***] compounds. The initiation of and the terms for the discovery of  [***]
compounds will be mutually agreed upon in writing by the Steering Committee. The parties will negotiate in good faith, any
amendment to the Agreement relating to incremental costs for enabling technologies mutually deemed necessary for the discovery and commercialization of  [***] compounds. 

6.     DEVELOPMENT.  

        6.1    Initial Development Plan    

        The
initial development plan is set forth in Appendix C and incorporated into this Agreement by reference ("Development Plan"). 

        SENOMYX
will use best efforts using the resources received under Section 9.1 to perform the activities assigned to it in the Development Plan. SENOMYX represents and KO
acknowledges that 

3

 

the
total resources to be deployed for pursuit of the program objectives will be significantly more than those provided under Section 9.1. 

        KO
will use best efforts to perform the activities assigned to it in the Development Plan. 

        6.2    Implementation of Development Plan    

        The
implementation of the Development Plan will: 

          (i)  commence
upon the Steering Committee's selection of a Selected Compound(s) that will be developed under the Development Plan; and 

         (ii)  end
upon FEMA GRAS determination for such Selected Compound, and if applicable the receipt of an FDA no action letter or completion of any additional safety studies
requested by FDA. 

        6.3    Regulatory    

          (i)  Under
the Development Plan, as part of its obligation to perform the activities assigned to it, SENOMYX will make all regulatory filings to obtain approval for the use
of the Selected Compound(s). 

         (ii)  SENOMYX
will exclusively own all regulatory filings made or filed by SENOMYX for a Selected Compound(s), and regulatory filings will be subject to the license grants
pursuant to Section 10. SENOMYX will appoint a regulatory consultant who will be obligated to provide non-confidential updates on the regulatory strategies and filings on other
programs at SENOMYX. Additionally, SENOMYX will, in good faith, attempt to facilitate the mutual exchange of information on the regulator strategy as it relates to the  [***] program. 

        6.4    Costs of Regulatory Filings    

        SENOMYX
will be responsible for the reasonable costs associated with FEMA GRAS determination. SENOMYX will not be responsible for costs that exceed the greater of either: 

          (i)  the
costs of obtaining FEMA GRAS determination for [***]; or 

         (ii)  [***]. 

        Any
costs incurred by KO in obtaining FEMA GRAS determination for a Selected Compound that becomes a Product Compound, will be  [***]. 

        6.5    Additional Safety Studies or Regulatory Approvals    

        The
Steering Committee will agree on: 

          (i)  any
additional safety studies to be performed on the Selected Compound(s); 

         (ii)  the
additional regulatory approvals or determinations to be obtained for the Selected Compound(s); and 

        (iii)  the
allocation of costs and resources between KO and SENOMYX associated with such activities over and above those stated in Section 6.4. 

        6.6    Cooperation    

        KO
will cooperate to the extent reasonably necessary to assist SENOMYX in the performance of the foregoing activities and SENOMYX will provide KO with copies of all filings, data and
determinations on the Selected Compound(s). 

4

 

        In
addition, each party is obligated to: 

          (i)  give
timely notice to the other party for any adverse events and product recall actions relating to Beverages or Beverage Bases incorporating Product Compounds; and 

         (ii)  report
such adverse events as required by law. 

7.     COMMERCIALIZATION  

        7.1    Commercialization Plan    

        As
an overall goal of the Commercialization Plan, KO desires to market current and new Beverages and Beverage Bases incorporating Product Compounds. Prior to completion of the activities
set forth in the Development Plan for the Selected Compound(s), KO will prepare a detailed plan for the commercialization of Beverages and Beverage Bases incorporating Product Compounds that includes,
as a minimum, the guidelines stated below in Section 7.2 (the "Commercialization Plan"). The Commercialization Plan will be attached as
Appendix D to this Agreement, and incorporated into the Agreement by reference. 

        7.2    Format of Commercialization Plan    

        The
Commercialization Plan will include: 

          (i)  commercially
reasonable timelines; 

         (ii)  specific
diligence timelines for KO and SENOMYX; 

        (iii)  the
geographic scope of commercialization, including each country worldwide; 

        (iv)  terms
and conditions of manufacturing of Product Compounds; and 

         (v)  general
information on packaging, promoting, advertising, distribution, selling and supply of Beverages and Beverage Bases incorporating a Product Compound. 

        Thereafter
KO will provide general sales forecasting reports for Beverages and Beverage Bases incorporating a Product Compound on an annual basis for the remainder of the
Commercialization Period. Such sales forecasting reports shall include quantifiable information, including projected Unit Case sales and market research data, if available, with an annual forecast of
Product Compound requirements for the next Calendar Year, submitted to SENOMYX at least [***] before the beginning of the next
Calendar Year. The Steering Committee will meet as appropriate to review and assess, for purposes of establishing future manufacturing needs, the sales forecast report. In accordance with the
Commercialization Plan, KO will be responsible for formulating and testing Beverages and Beverage Bases incorporating Product Compounds including the cost associated with such activities. 

8.     RIGHTS, OBLIGATIONS AND LIMITATION OF THE PARTIES  

        8.1    Inside the Fields    

        During
the Term of the Agreement SENOMYX agrees not to provide research and development services or grant any rights to SENOMYX Technology to a Third Party for use in the discovery or
commercialization of Compounds for application in the Fields, subject to the co-exclusive rights in Field II, the early conclusion provision under Section 15.2, and KO's royalty
payment obligations under Section 10.8.2. 

        8.2    Outside the Fields    

        SENOMYX
will have the right to enter into collaborative programs with Third Parties, including but not limited to collaborative programs to discover Compounds for use outside the Fields.
Furthermore, nothing in this Agreement will limit the right of 

5

 

        SENOMYX
to license or commercialize Compounds as [***] enhancers of  [***], which are: 

          (i)  not
incorporated into beverages; and 

         (ii)  intended
only for non-commercial end use by consumers. 

        Subject
to the rights of the Third Party set forth in Section 10.5, SENOMYX will not promote or allow, where possible, any Third Party to promote such  [***] enhancers to be used with a Competitive Product
in the Fields. 

        8.3    Preferred Relationship    

        SENOMYX
and KO acknowledge that SENOMYX may collaborate with Third Parties in programs unrelated to Compounds. Such collaboration may result in the discovery of technologies and
compounds that have application in the Fields. Unless otherwise precluded under this Agreement or Third Party agreements, SENOMYX will provide KO with non-confidential information
regarding such new technologies and use reasonable effort to negotiate mutually acceptable commercial terms for KO to obtain a license to such new technologies for use in the Fields. 

        8.4    Manufacturing    

        The
parties will collaborate to identify a manufacturer and/or enter into supply and manufacturing agreements with a mutually agreed upon Third Party(ies) regarding Product Compounds;
provided however, SENOMYX will have the option to be the preferred manufacturer of any such Product
Compounds, subject to KO's approval which shall not be unreasonably withheld. Nothing in this Section 8.4 shall prevent KO from identifying and/or entering into supply and manufacturing
agreements with secondary manufacturers of any Product Compound. 

        8.5    Rights to a New High-Potency [***]    

        This
Agreement does not preclude SENOMYX from entering into a collaboration for the discovery, development and commercialization of compounds that are high-potency  [***], as long as such compounds do not
enhance the intensity of other  [***] including the Target [***] at concentrations below
the threshold of [***] for such compounds ("High-Potency
[***]"). During the first [***] following the Effective Date and before entering
into a collaboration with a Third Party for the discovery, development, and commercialization of High-Potency [***],
suitable for use in the Fields, SENOMYX will provide written notice of non-confidential terms to KO. Within [***] of
such notice, KO may exercise a right of first refusal by entering into a binding definitive agreement on terms [***]. If KO
decides not to enter into a collaboration under such Third Party's terms, SENOMYX may, with no further notification or obligation, enter into collaboration with any Third Party; provided, however,
that the terms of such Third Party collaboration will be [***]. 

6

   9.     FINANCIAL TERMS  

        9.1    Annual Research Support    

        9.1.1    Funding Amount    

        Each
year during the Collaborative R&D Period, KO will pay SENOMYX [***] for the services provided in accordance
with the Agreement. [***], KO will cease making payments for research and development and instead make annual payments of  [***](prorated for any amount
previously paid for research and development for such year) in order to adapt and continue to
develop the then existing capabilities/intellectual property for further enhancement of commercial opportunities during the Collaborative R&D Period. 

        9.1.2    Payment Terms    

        KO
will make payments that: 

          (i)  are
in advance; 

         (ii)  on
an equal quarterly basis; and 

        (iii)  total
[***] (subject to Section 15) and are allocated and recognizable by SENOMYX during
the three year Collaborative R&D Period. 

        9.1.3    Timing of Payment    

        The
first payment will be made within [***] following the Effective Date. 

        9.1.4    Excluded Items    

        The
allocation of these payments do not include: 

          (i)  KO's
costs associated with providing support for the collaboration; and 

         (ii)  the
costs of any unanticipated materials as requested and agreed to by the parties. 

        9.2    Credit Toward Royalties During Collaborative R&D Period    

        If
during any year of the Collaborative R&D Period KO is paying royalties, then all royalties up to [***] will be
waived. Any royalties not waived (i.e.. in excess of [***]) under the preceding sentence will be credited against any future
amounts owed for Annual Research Support under Section 9.1 in such year during the Collaborative R&D Period. 

        9.3    Milestone Payments    

        KO
will pay SENOMYX the following non-creditable, non-refundable milestone payments within  [***] of the occurrence of the following milestone events, as determined by the Steering Committee: 

        a)    [***]; 

        b)    [***]; 

        c)     [***]; and 

        d)    [***]. 

        9.4    Royalty for Beverages Incorporating Product Compounds    

        KO
will pay to SENOMYX a royalty on Beverages incorporating a Product Compound [***]: 

        a)    [***]; and 

        b)    [***]. 

7

 

        9.4.1    The Base Component    

        The
Base Component will be calculated by multiplying [***]. KO will use reasonable effort to convert such
calculation into [***] and, upon the mutual agreement of the parties, the Base Component will be adjusted so that it will be  [***]. 

        9.4.2    The Cost Savings Component    

        The
Cost Savings Component for each Beverage incorporating Product Compounds is dependent on two components: 

           i)  [***]; and 

          ii)  [***]. 

        The
royalty rate will be determined by the following matrix: 

	 
	 	 
	 	Royalty Rate (R)

	[***]
 
	 	 

	 	[***]
	 	[***]
	 	[***]
	 	[***]

	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]

        To
determine the [***], the parties will use the following equation: 

        [***]

        [***]

        [***]. 

        [***]. 

        For
Beverages incorporating Product Compounds sold by KO, its Affiliates and Bottlers where in the Product Compound is a KO Related Compound, the royalties calculated in this
Section 9.4 will be [***]. 

        9.5    Minimum Annual Royalties    

        9.5.1    Minimum Annual Royalties for Product Compounds having a
[***]    

        During
the Commercialization Period, KO will pay minimum annual royalties to SENOMYX to maintain the exclusive license under Section 10.4: 

        [***]

        [***]

        [***]. 

        9.5.2    Minimum Annual Royalties for Product Compounds having
[***]    

        During
the Commercialization Period, KO will pay [***] royalties to SENOMYX to maintain the exclusive license
under Section 10.4: 

        [***]

        The
amount due for any such [***] period is the  [***]. The amounts paid for [***] any amounts due
SENOMYX for royalties over the [***] royalties in the subsequent  [***]. 

8

 

        9.5.3    Minimum Royalties where two Product Compounds are Used    

        If
KO is selling Beverages or Beverage Bases incorporating more than one Product Compound, then the applicable minimum royalty will be the minimum royalty for the Product Compound having
the greater enhancing effect. 

        9.6    Adjustment of Values for Minimum Royalties    

        The
minimum annual royalty values in Section 9.5.1 e) and 9.5.2 e) will be [***] of the Commercialization
Period and beyond, for: (i) [***], using the first year of Commercialization Period as the base year; and,
(ii) [***] year of the Commercialization Period as the base year. 

        9.7    Payment Terms    

        9.7.1    Timing    

        As
set forth in this Agreement, the royalties will be paid within [***] after the end of each calendar quarter
period in which such royalties are earned during the
Commercialization Period for each Beverage and Beverage Base incorporating a Product Compound. The Royalty Shortfall will be paid within  [***] after the end of each Calendar Year. 

        9.7.2    Reporting    

        With
each such quarterly payment, KO 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: 

          i.)  the
total number of Unit Cases of each such Beverage incorporating Product Compound sold; 

         ii.)  the
SP, the PSR; 

        iii.)  the
Cost; 

         iv.)  the
royalty rate (R); 

          v.)  the
Net Sales, if applicable; 

         vi.)  the
royalties payable in United States dollars; 

       vii.)  the
method used to calculate the royalty payment; 

      viii.)  the
exchange rate used; and 

         ix.)  other
information employed to calculate the royalty payment for such Beverage incorporating Product Compound. 

9

           9.8    Currency of Payment    

        All
payments to be made under this Agreement, including the royalties payable to SENOMYX by KO, will be paid in United States dollars by wire transfer (or other means acceptable to
SENOMYX) to a bank account designated by SENOMYX. 

        With
respect to each quarter, for countries other than the United States, whenever conversion of Cost, SP, Net Sales, or 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 last business day of the applicable reporting period. 

        9.9    Taxes Withheld    

        Any
income or other tax that KO, or any of its Affiliates or sublicensees are 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. KO 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. 

        9.10    Late Payment    

        In
the event that any payment, including royalty payments, due hereunder is not made when due, the payment will accrue interest from that date due at the rate of  [***]; 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. 

        9.11    Records of Unit Sales, Net Sales and Royalty Calculations    

        9.11.1    Records Relating to Royalties    

        KO
will keep complete and accurate records of sales and all other information necessary to calculate royalties due to SENOMYX for any Beverage or Beverage Base incorporating a Product
Compound. The records will be maintained during the Commercialization Period and for a period of 3 years thereafter. The records will be in sufficient detail to allow the accrued royalties to
be determined accurately in accordance with United States generally accepted accounting principles and to verify the royalty payments pursuant to Section 9.4. 

        9.11.2    Audit of Records Relating to Royalties    

        SENOMYX,
with reasonable written notice to KO, 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 royalty payments. Such accountant must execute a confidentiality agreement prior to
entering KO'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 KO 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 an underpayment of more than  [***] from
the amount of the royalties due under this Agreement, in which event, KO will bear the full cost of such audit. In
all events, KO will pay any underpayment with interest in accordance with Section 9.10. Any overpayment made by KO will be refunded to KO. 

        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 

10

 

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 KO and KO hereby grants to SENOMYX the following rights, as of the later of
30 days after execution of this Agreement or of the expiration of the waiting period under the Hart Scott Rodino Act, if any notification and report under the Act is required: 

        10.1    Non-exclusive Grant by SENOMYX of Rights Regarding Evaluation of Enhancing Compounds    

        10.1.1    In Field I    

        SENOMYX
hereby grants to KO a perpetual, nontransferable, non-exclusive, worldwide license under the Target IP to use Enhancing Compound(s) for evaluation in Field I. 

        10.1.2    In Field II    

        SENOMYX
hereby grants to KO a perpetual, nontransferable, non-exclusive, worldwide license under the Target IP to use Enhancing Compound(s) solely for evaluation in Field II. 

        All
rights granted by SENOMYX to KO under this Section will be subject to timely payment by KO of all payments under this Agreement. 

        10.2    Non-exclusive Grant by SENOMYX of Rights to Make and Have Made Selected Compounds    

        SENOMYX
hereby grants KO a perpetual, nontransferable, non-exclusive, worldwide license under the Target IP to make and have made Selected Compounds for use by KO and its
Affiliates in Beverages and Beverage Bases in the Fields. 

        All
rights granted by SENOMYX to KO under this Section will be subject to timely payment by KO of all payments under this Agreement. 

        10.3    Non-Exclusive Grant of Rights by SENOMYX to Make, Have Made, Use and Sell Beverages and Beverage Bases with Selected
Compound    

        SENOMYX
hereby grants to KO a perpetual, nontransferable, non-exclusive worldwide license under Target IP to make, have made, use and sell, Beverages and Beverage Bases that
incorporate Selected Compounds in Field I. 

        All
rights granted by SENOMYX to KO under this Section will be subject to timely payment by KO of all payments under this Agreement. 

        10.4    Exclusive Grant of Rights by SENOMYX Regarding Selected Compounds and Beverages and Beverage Bases that Incorporate Selected
Compounds    

        SENOMYX
hereby grants to KO a perpetual, nontransferable exclusive worldwide license under Target IP to make, have made, use and sell Beverages and Beverage Bases that incorporate
Selected Compounds in Field I. 

        The
license will include the right to sublicense the use and sale of Product Compounds to be embodied in a Competitive Product in Field I. The license will include the right to
sublicense the use and sale of one Selected Compound (that is not a Product Compound) to be embodied in a Competitive Product in Field I, with the prior written consent of SENOMYX which will not be
unreasonably withheld. 

11

 

        All
rights granted by SENOMYX to KO under this Section will be subject to timely payment by KO of all payments under this Agreement. 

        10.5    Co-Exclusive Grant of Rights by SENOMYX Regarding Selected Compounds and [***] Beverage Bases incorporating
Selected Compounds    

        SENOMYX
hereby grants to KO a perpetual, nontransferable co-exclusive, (only one other licensee) with respect to one other Third Party, worldwide license under Target IP to
make, have made, use and sell [***] Beverage Bases incorporating Selected Compounds in Field II. 

        All
rights granted by SENOMYX to KO under this Section will be subject to timely payment by KO of all payments under this Agreement. 

        10.6    Contingent Third Party Rights to Field II    

        SENOMYX
has existing collaborations with a Third Party for the discovery of molecules that modify taste, other than Enhancer Compounds, for products in Field II. SENOMYX agrees to use
best efforts for a period of [***] following the Effective Date to amend such collaboration agreement to include the discovery
of [***] for use in Field II. The rights granted to KO in Field II are contingent on the rights granted to such Third Party
under the amended collaboration. 

        10.7    Limitation on Licenses    

        None
of the rights granted hereunder are intended to give KO the right to sell Enhancing Compounds, Selected Compounds or Product Compounds. The foregoing does not prevent KO from
supplying Product Compounds to a sublicensee pursuant to a sublicense. 

        10.8    If KO Does Not Pay Minimum Royalties    

        If
at the end of any Calendar Year the royalties paid by KO to SENOMYX for such Calendar Year, as provided for under Section 9.4, are less than the minimum royalties due under
Section 9.5 for such Calendar Year, and KO does not pay SENOMYX the corresponding Royalty Shortfall for such year, then: 

        10.8.1    KO's exclusive license under Section 10.4 will terminate; 

        10.8.2    SENOMYX's obligations under Section 8.1, Section 8.2, Section 8.3 and Section 8.5 will
terminate; 

        10.8.3    KO's co-exclusive license under Section 10.5 will continue in effect until SENOMYX, in its sole
discretion, notifies KO that it will become non-exclusive; 

        10.8.4    KO's non-exclusive license under Section 10.2 will continue in effect; and 

        10.8.5    KO's non-exclusive license under Section 10.3 will continue in effect. 

        The
non-exclusive license will be subject to the royalties provided for under Section 9.4, but not subject to the minimum annual royalties obligation under
Section 9.5. 

        10.9    Most Favored Licensee    

        [***]. 

        10.10    Obligations Related to Sublicenses    

        KO
will have the right to grant sublicenses under this Section 10.10 to Third Parties, Affiliates, and Bottlers. In respect of sublicenses to Third Parties; such rights granted
will be contingent on: 

          (i)  KO
obtaining sublicensing terms, including royalty obligations [***]; and 

         (ii)  KO
receiving [***]. 

12

 

        Sublicenses
granted by KO would be subject to SENOMYX receiving at least the same obligations, including royalties, as SENOMYX would receive under this Agreement
("Obligated Royalties"). Payments received by KO from any party under such sublicense, other than an Affiliate or Bottlers,  [***]. Any payments paid to KO
by its sublicensees, other than under sublicenses to Affiliates and Bottlers for Beverages and
Beverage Bases, [***]. KO would be liable for the royalty payments to SENOMYX due by any sublicensee. 

        All
rights granted by KO to sublicensees under this Section will be subject to KO's diligence obligations under this Agreement, the timely payment by KO of all payments under this
Section and compliance with other obligations in the sublicense agreement. 

        10.11    Non-exclusive Grant of Rights from KO to SENOMYX for Research Purposes    

        KO
hereby grants to SENOMYX a royalty free, non-exclusive, worldwide license to use the KO Technology for research purposes under this Agreement, with the right to grant
sublicenses for research purposes; provided, however, that any such sublicense shall be subject to the prior written approval of KO, which shall not be unreasonably withheld. 

        10.12    Non-exclusive Grant of Rights from KO to SENOMYX for KO Related Compounds    

        KO
hereby grants to SENOMYX a fully paid, perpetual, exclusive, worldwide license, to make and have made KO Related Compounds, with the right to sublicense outside the Fields. 

        10.13    Exclusive Grant of Rights from KO to SENOMYX for KO Related Compounds    

        KO
hereby grants to SENOMYX a fully paid, exclusive, worldwide, fully-transferable license, to use, sell, offer for sale, have sold, import and export KO Related Compounds outside the
Fields. 

        10.14    Non-Exclusive Grant of Rights to SENOMYX Trademark    

        Subject
to the terms and conditions of the Agreement, SENOMYX hereby grants to KO a non-exclusive, nontransferable worldwide license to use the trademark of SENOMYX
("Trademark") during the Term solely in connection with the marketing and sale of the 

        Beverages
incorporating Product Compounds; provided, however, that: (i) KO must comply with all applicable laws and regulations with respect to the Trademark and must not do or
suffer to be done any act or thing that would impair SENOMYX's rights; and (ii) KO agrees not to adopt or use any other trademark, words or symbol that features or includes the word SENOMYX or
any marks which are confusingly similar to the Trademark. 

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. 

        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 Know-How; provided,
however, SENOMYX hereby irrevocably assigns to KO all interest in and to any such Inventions and Know-How that consist solely of improvements to KO technology, including but not limited to
the KO Compound and KO Related Compounds, and all Patent Rights claiming such Inventions and other Know-How. SENOMYX agrees to give KO prompt notice of the making, conceiving or reducing
to practice of any such Invention. In the event that SENOMYX is legally unable to assign such rights to KO, then SENOMYX agrees either 

13

 

to
waive the enforcement of such rights against KO and any sublicensees and assignees, or to grant KO an exclusive, irrevocable, perpetual, worldwide, fully-paid license, with right to
sublicense through multiple tiers of sublicense, to such rights. 

        11.3    KO Inventions    

        KO
will own all Inventions and other Know-How made solely by its employees and agents, including those related to product formulations,  [***] and [***], and
all Patent Rights claiming such
Inventions and Know-How, and SENOMYX will have no rights to such Inventions, Know-How and product formulations. 

        KO
hereby irrevocably assigns to SENOMYX all interest in and to any such Inventions and other Know-How that consist solely of improvements to SENOMYX Technology, Enhancing
Compounds, or Selected Compounds, and all Patent Rights claiming such Inventions and Know-How. KO agrees to give SENOMYX prompt notice of the making, conceiving or reducing to practice of
any such Invention. In the event that KO is legally unable to assign such rights to SENOMYX, then KO 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 KO (the "Joint Inventions") and all Joint
Patent Rights will be owned jointly by KO and SENOMYX. 

        KO
hereby irrevocably assigns to SENOMYX all interest in and to any Joint Inventions that consist of improvement to SENOMYX Technology, Enhancing Compounds, or Selected Compounds and
uses thereof, and all Joint Patent Rights claiming such Joint Inventions. In the event that KO is legally unable to assign such rights to SENOMYX, then KO 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. 

        SENOMYX
hereby irrevocably assigns to KO all interest in and to any Joint Inventions that consist of improvement to KO Technology, including any improvements to KO Technology relating to
beverage product formulations and uses thereof, and all Joint Patent Rights claiming such Joint Inventions. In the event that SENOMYX is legally unable to assign such rights to KO, then SENOMYX agrees
either to waive the enforcement of such rights against KO and any sublicensees and assignees, or to grant KO 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 11.2, 11.3, or 11.4 will be owned by their inventors. 

        11.6    Markings    

        KO
agrees to mark and to cause any Affiliate or sublicensee to mark any Beverage or Beverage Base (or their containers or labels) made, sold or otherwise disposed of by it or them with
any notice of Patent Rights if mutually desirable by the parties or necessary under applicable law to enable the SENOMYX Patent Rights or Joint Patent Rights, as applicable, to be enforced to their
full extent in any country where Beverages and Beverage Bases incorporating Product Compounds are made, used, or sold. In addition, KO agrees to mark and to cause any Affiliate or sublicensee to mark
any Beverages and Beverage Bases incorporating Product Compounds (or their containers or labels) made, sold or otherwise disposed of by it or them with a SENOMYX trademark if desirable by KO. 

14

           11.7    Inventorship and Assignment    

        United
States patent law will determine inventorship of patentable inventions. SENOMYX and KO agree to execute all documentation necessary to perfect all assignments of Inventions,
Know-How and Patent Rights contemplated in this Agreement. 

12.   PATENT PROSECUTION AND MAINTENANCE  

        12.1    Prosecution of Patents    

        Each
party will bear the cost of filing and prosecuting the patents and patent applications associated with inventions owned or assigned to that party. SENOMYX will bear the cost of
filing and prosecuting the patents and patent applications in the U.S. and PCT for the first Selected Compound. KO will reimburse SENOMYX for the reasonable out-of-pocket costs
for the prosecution of all national phase applications of all countries selected in the PCT application, and all maintenance fees and annuities for any patents issuing from those applications. The
Steering Committee will make recommendations on additional patent applications to be filed. In addition, KO would agree to pay the cost of all patents and patent applications for additional Selected
Compounds up to [***] per year for each such additional Selected Compound. KO would no longer have to pay for patent
applications, maintenance fees and annuities if the license granted under Section 10.4 were terminated. SENOMYX will keep KO fully apprised of all proceedings related to the patent applications
and patents for Selected Compounds. If KO determines that continuing prosecution of an application, or the continuation of payment of maintenance fees and annuities is not warranted, KO will notify
SENOMYX in writing within [***] of the date it wishes to discontinue prosecution of a patent, and the obligation to pay for such
costs incurred after notification would end. 

        12.2    Inventions under Collaboration    

        The
control and expense of the filing, prosecution and maintenance of any Patent Rights or other intellectual property rights claiming Inventions that are not covered under
section 11.1 will be as follows: 

        12.2.1    Prosecution of Sole Inventions    

        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
that are 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. 

        12.2.2    Prosecution of Joint Inventions    

        SENOMYX
will have the first right to file, prosecute (including an opposition or interference) and maintain Joint Patent Rights or other intellectual property rights claiming Inventions
that are made jointly by the parties. KO will cooperate in, the filing, prosecution and maintenance of Joint Patent Rights and will share equally in the expenses incurred with respect thereto. 

13.   INTELLECTUAL PROPERTY ENFORCEMENT AND DEFENSE OF CLAIMS  

        13.1    Defense of Infringement Claims for SENOMYX Technology    

        KO
will cooperate with SENOMYX, at SENOMYX's expense, in the defense of any suit, action or proceeding against SENOMYX or SENOMYX's Affiliates alleging the infringement of the
intellectual property rights of a Third Party due to SENOMYX's use of any SENOMYX Technology under this Agreement. 

15

 

        The
parties must notify each other promptly in writing of the commencement of any such suit, action, proceeding or claim of infringement. 

        SENOMYX
will have 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 KO
will in good faith 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. 

        With
respect to Target IP, if SENOMYX does not commence a particular infringement action within [***] of receiving
notice, KO, after notifying SENOMYX in writing, will be entitled to bring such infringement action or any other appropriate action or claim at its own expense. The party conducting such action will
consider in good faith the other party's comments on the conduct of such action and will have 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 the other party will in good faith 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. SENOMYX will be  [***]. The party conducting the action
will have the right to deduct all court costs it pays for such enforcement from any
recovery from any settlement or judgment that is attributable to the losses of the other party under such action. 

        13.2    Defense of Infringement Claims for KO Technology    

        SENOMYX
will cooperate with KO, at KO's expense, in the defense of any suit, action or proceeding against SENOMYX or KO alleging the infringement of the intellectual property rights of a
Third Party due to KO's or SENOMYX's use of any KO 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 KO, SENOMYX will give to KO 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 KO 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.   TREATMENT OF CONFIDENTIAL INFORMATION: REPORTING REQUIREMENTS, PUBLICITY, LAW AND REGULATIONS  

        14.1    Confidentiality    

        Subject
to the terms and conditions of this Agreement, SENOMYX and KO 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 Affiliates by the other party. Neither SENOMYX nor KO nor any of their respective Affiliates will use the other party's Confidential Information except as
expressly permitted in this Agreement. 

        14.2    Disclosure to Related Parties    

        SENOMYX
and KO 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: 

           i)  will
be made only if and to the extent necessary to carry out its responsibilities under this Agreement and to exercise the rights granted hereunder; 

          ii)  will
be limited to the extent consistent with such responsibilities and rights; and 

16

 

         iii)  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 similar Confidential Information. 

        14.3    Return of Confidential Material    

        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 30 days of the request of the other party; provided, however, one copy of the Confidential Information may be retained in a
secure location with limited access for legal purposes only. 

        14.4    Exceptions to Confidential Information    

        Confidential
Information will not include any information, which the receiving party can prove by competent written evidence: 

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

          ii)  is
known by the receiving party at the time of receiving such information, as evidenced by its records; 

         iii)  is
hereafter furnished to the receiving party without restriction as to disclosure or use by a Third Party lawfully entitled to furnish such information; 

          iv)  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 

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

        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. 

        14.5    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. 

        14.6    Confidential Research Information    

        The
parties agree that all results and data generated from the research under the Collaborative R&D Program will be owned exclusively by SENOMYX and considered Confidential Information
of SENOMYX subject to the confidentiality requirements of Section 14. KO will not provide to a Third Party any Materials provided by SENOMYX to KO. 

17

 

        14.7    Permitted Use and Disclosures    

        Each
party may use or disclose Confidential Information disclosed to it by the other party 

           i)  to
the extent such information is included in the KO Technology, SENOMYX Technology or Joint Patent Rights, and 

          ii)  to
the extent such use or disclosure is reasonably necessary and permitted in the exercise of the rights granted hereunder in: 

        a)    filing
or prosecuting patent applications; 

        b)    prosecuting
or defending litigation; 

        c)     complying
with applicable governmental regulations, or court orders or otherwise submitting information to tax or other governmental authorities; 

        d)    conducting
clinical trials; 

        e)    submitting
information for food additive approval applications; or 

        f)     making
a permitted sublicense or otherwise exercising rights expressly granted to the other party pursuant to the terms of this Agreement. 

        If
a party is required to make any such disclosure of the other party's Confidential Information, other than pursuant to a confidentiality agreement, it will give reasonable advance
notice of such disclosure to the other party where reasonably possible and, save to the extent inappropriate in the case of patent applications, will use its reasonable efforts to secure confidential
treatment of such Confidential Information in consultation with the other party prior to such disclosure (whether through protective orders or otherwise) and disclose only the minimum necessary to
comply with such requirements. 

        14.8    Use of Data for Promotional Purposes    

        Either
party may (i) make public statements regarding Enhancing Compounds, Selected Compounds, Product Compounds or Beverages incorporating Product Compounds by announcing the
achievement of milestones therefor, following consultation with the other party and with the written consent of the other party to the form and content of the public statement, and (ii) without
the prior consent of the other party, make public statements regarding the overall success rate(s) (excluding any competitively sensitive information of KO) achieved by and/or for its customers with
the use SENOMYX Technology; provided, however, that it may not disclose any chemical structures, screens or the other party's identity. 

        14.9    Publication of Results    

        Subject
to the express provisions of this Agreement, 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 KO and will allow KO  [***] from the date of receipt for review, comment and reasonable approval.

        14.10    Publicity    

        Except
as required by law and as provided in this Agreement, 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. Notwithstanding the foregoing, the parties will agree upon a press release to announce the execution of this Agreement and
the material terms. Thereafter, KO 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. 

18

 

        14.11    Reporting, Law and Regulation    

        Each
party will, within 30 days of the end of each quarterly Steering Committee meeting, report to the other a written summary of the results of the research and development work
it carries out, if any, under this Agreement. Each party agrees to prepare and exchange written and electronic reports concerning any results and data required by either party as supporting
information for any regulatory filings. In addition, SENOMYX will provide KO with its audited annual financials reports in a timely manner, subject to certain confidential information being redacted
therefrom. The exchange of such report may be reasonably supplemented, at the request of the party receiving the report, by correspondence and/or upon reasonable prior notice, visits to the other
party's facilities. While carrying out the obligations set forth in the Agreement, the parties will ensure compliance with all applicable laws and regulations, including, without limitation, all
environmental, competition and import and export laws and regulations. 

15.   TERM, EARLY CONCLUSION, AND TERMINATION  

        15.1    Term    

        The
term of this Agreement will begin on the Effective Date and will continue through the end of the Commercialization Period, unless terminated earlier in accordance with the provisions
of Section 15.3, or 15.4 hereof (the "Term"). 

        15.2    Early Conclusion of the Collaborative R&D Period by KO    

        KO
may conclude the Collaborative R&D Program prior to the end of the Collaborative R&D Period, without cause by; 

          (i)  providing
SENOMYX with 60 days prior written notice, and 

         (ii)  paying
SENOMYX an early conclusion fee of [***]; 

provided,
however, if such written notice of early conclusion by KO occurs within the [***] of the Collaborative R&D Period, KO
will be obligated to pay the research funding in accordance with Section 9.1 for the [***]. KO's obligations for research
funding for the remainder of the Collaborative R&D Period under Section 9.1 will cease. In the event that KO notifies SENOMYX of early conclusion, the rights and obligations provided for under
Section 8.1, 8.2, 8.3, and 8.5, the licenses granted under Section 10.4, and 10.5 and the [***] provision under
10.9 will all terminate. 

        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 By KO for Acquisition of SENOMYX By a KO Competitor    

        KO
may terminate this Agreement due to the merger or consolidation of SENOMYX by a KO Competitor. 

        15.5    Effect of Termination    

        Upon
termination of this Agreement pursuant to Section 15.3 or Section 15.4, KO will have no right to practice the Target IP or use the Target IP and all rights, title and
interest in and to the Target IP will revert to and become the sole property of SENOMYX. 

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

19

           15.6    Survival    

        The
obligations and rights of the parties under Section 6.3 (ii), Section 9.11, Section 11, Section 14, Section 15.5, Section 15.6,
Section 16, and Section 17 and Appendix A, will survive termination or expiration of this Agreement. 

16.   WARRANTIES AND INDEMNIFICATION  

        16.1    Mutual Representations and Warranties    

        The
parties make the following representations and warranties to each other: 

        16.2    Corporate Power    

        Each
party hereby represents and warrants that, to the best of its knowledge, as of the Effective Date, such party: 

          (i)  is
duly organized, validly existing under the laws of the state of its incorporation, and in good standing; 

         (ii)  has
all requisite corporate 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. 

        16.3    Due Authorization    

        Each
party hereby represents and warrants that, to the best of its knowledge, as of the Effective Date, such party: 

          (i)  has
the requisite corporate power and authority and the legal right to execute and deliver this Agreement and to perform its obligations hereunder; 

         (ii)  has
taken all necessary action on its part to authorize the execution and delivery of this Agreement, the performance of its obligations hereunder and the grant of
rights extended by it hereunder, and no action or corporate procedure is necessary to authorize this Agreement, the performance of its obligations hereunder or the grant of rights extended hereunder. 

        16.4    Binding Agreement    

        Each
party hereby represents and warrants to the other that, to the best of its knowledge, 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. 

20

 

        16.5    Warranties Regarding SENOMYX Technology    

        SENOMYX
warrants to KO as of the Effective Date the following: 

        16.5.1    SENOMYX Express Warranties    

        As
of the Effective Date: 

          (i)  To
the best of SENOMYX's knowledge, SENOMYX has the lawful right to license the SENOMYX Technology to KO in accordance with the terms of this Agreement; 

         (ii)  SENOMYX
is not precluded under any license or other agreement with a Third Party from entering into this Agreement and granting the rights to KO provided hereunder; 

        (iii)  To
the best of SENOMYX's knowledge, the activities to be performed by SENOMYX under this Agreement will not infringe any patents, copyrights, trademarks or other right
of a third party; and 

        (iv)  SENOMYX
has not been served with a Third Party suit relating to the SENOMYX Patent Rights. 

        16.5.2    SENOMYX Disclaimer    

        EXCEPT
AS EXPRESSLY SET FORTH IN THIS AGREEMENT, SENOMYX (INCLUDING ITS OFFICERS, EMPLOYEES AND AGENTS) EXPRESSLY DISCLAIMS ANY FURTHER REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS OR
IMPLIED, RELATING TO SENOMYX TECHNOLOGY; INCLUDING ANY EXPRESS OR IMPLIED WARRANTY 

          (i)  OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF SENOMYX TECHNOLOGY OR SENOMYX PATENT RIGHTS; AND 

         (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. 

        16.5.3    SENOMYX Indemnification.    

        SENOMYX
hereby agrees to defend and indemnify KO, and its respective officers, directors, employees, agents, Affiliates, and Bottlers (collectively, the "KO
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 KO Indemnitee based on SENOMYX's negligence or willful misconduct (but not patent infringement) including but
not limited to, product liability claims arising out of any tests conducted solely by SENOMYX on any compounds and any environmental claims against KO Indeminitees 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 KO RESULTING FROM THIS AGREEMENT. 

21

 

        16.6    Warranties Relating to KO Technology    

        KO
represents and warrants to SENOMYX as of the Effective Date the following: 

        16.6.1    KO Express Warranties    

        As
of the Effective Date: 

          (i)  To
the best of KO's knowledge KO has the lawful right to license (or sublicense, as the case may be) the KO Technology to SENOMYX in accordance with the terms of this
Agreement; (except as set forth in Appendix E); 

         (ii)  KO
is not precluded under any license or other agreement with a Third Party from entering into this Agreement and granting the rights to SENOMYX provided hereunder; 

        (iii)  To
the best of KO's knowledge, the activities to be performed by KO under this Agreement will not infringe any patents, copyrights, trademarks or other right of a
third party; and 

        (iv)  KO
has not been served with a Third Party suit relating to the KO Patent Rights. 

        16.6.2    KO Disclaimer    

        EXCEPT
AS EXPRESSLY SET FORTH IN THIS AGREEMENT, KO (INCLUDING ITS OFFICERS, EMPLOYEES AND AGENTS) EXPRESSLY DISCLAIMS ANY FURTHER REPRESENTATIONS AND WARRANTIES OF ANY KIND, WHETHER
EXPRESS OR IMPLIED, RELATING TO KO TECHNOLOGY: INCLUDINGANY EXPRESS OR IMPLIED WARRANTY 

          (i)  OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF KO TECHNOLOGY OR KO PATENT RIGHTS; AND 

         (ii)  THAT
THE PRACTICE OF KO TECHNOLOGY WILL NOT INFRINGE A PATENT, COPYRIGHT, TRADEMARK, OR OTHER RIGHT OF A THIRD PARTY; AND 

        (iii)  REGARDING
THE PATENTABILITY OF ANY KO TECHNOLOGY, INCLUDING KO TECHNOLOGY CLAIMED IN PATENT APPLICATIONS AS PART OF KO PATENT RIGHTS. 

        16.6.3    KO Indemnification    

        KO
hereby agrees to defend and indemnify SENOMYX, and its respective officers, directors, employees and agents (collectively, the "SENOMYX
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 SENOMYX Indemnitee based on 

          (i)  SENOMYX's
negligence or willful misconduct (but not patent infringement) including but not limited to, product liability claims arising out of any tests conducted
solely by KO on any compounds and any environmental claims against SENOMYX Indeminitees relating to KO's performance or failure to perform under this Agreement; 

         (ii)  any
development, manufacture, use, handling, storage, sale, or other disposition of a Selected Compound, Product Compound by or through KO or its Affiliates or its
permitted sublicensees; 

        (iii)  a
product liability claim on any Beverage or Beverage Base incorporating Product Compounds; 

        (iv)  the
practice by KO of any license granted hereunder; or 

22

 

         (v)  infringement
by KO 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 trade secret or Patent Rights. 

        IN
NO EVENT WILL KO BE LIABLE FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES SUFFERED BY SENOMYX RESULTING FROM THE EXERCISE OF ANY RIGHTS GRANTED IN ACCORDANCE WITH THIS AGREEMENT. 

        16.6.4    KO Indemnification Of Certain SENOMYX Licensors    

        KO
hereby agrees to indemnify, defend and hold [***] and its respective officers, sponsors, directors, employees,
and agents 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 KO provided for under Section 10 and pursuant to any agreement between  [***] and SENOMYX, including product liability. 

        16.6.5    For Certain KO Licensees or Sublicensees    

        KO
hereby agrees to indemnify, defend and hold SENOMYX Indemnitees and its respective officers, sponsors, directors, employees, and agents 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 KO for a
sublicense under Section 10.10. 

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 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 by the laws of the State of Delaware, as such laws are applied to contracts entered into and to be performed entirely within such state. 

        17.3    Binding Effect    

        This
Agreement will be binding upon and inure to the benefit of the successors and permitted assigns of the parties. 

23

 

        17.4    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 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 Chief Executive Officer and KO's president of Coca-Cola Ventures, or another Senior Vice President of
KO, will meet in person, or by video-conferencing and will use best efforts to resolve any disputes concerning this Agreement. 

        Within
30 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 17.4 will be resolved by final and
binding arbitration conducted in San Diego, California (unless the parties mutually agree to another location) in accordance with the rules of the American Arbitration Association. The arbitration
will be conducted by an arbitrator who is knowledgeable in the general subject matter at issue in the dispute. 

        The
parties will agree on the arbitrator and if they cannot agree, the arbitrator will be selected in accordance with the procedures of the American Arbitration Association. 

        In
conducting the arbitration, the arbitrator 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 damages and recommend injunctions. 

        The
parties will share equally the arbitrator's fees and expenses pending the resolution of the arbitration. 

        The
decision of the arbitrator 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 17.4, either party may seek immediate injunctive or other interim relief from any court of competent jurisdiction with
respect to any breach of Sections 9 or 10 hereof, or otherwise to enforce and protect the Patent Rights, copyrights, trademarks, or other intellectual property rights 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 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. 

24

 

Notwithstanding
the foregoing or the outcome of the arbitration proceeding, each party will bear its own expenses including, without limitation, attorneys fees and court costs, even if the arbitrators
have the discretion to award such fees and costs to the prevailing party. 

        17.5    Severability    

        If
any term 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 to parties or circumstances other than those as to which it is held invalid or unenforceable, will not be affected thereby and each term of this Agreement will be valid and
enforced to the fullest extent permitted by law. The parties agree to renegotiate such term in good faith in order to provide a reasonably acceptable alternative to the term 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 KO and SENOMYX will be independent contractors and that the relationship between the parties will not constitute a partnership or agency of any kind. Neither
KO 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    

        This
Agreement sets forth all of the covenants, promises, agreements, warranties, representations, conditions and understandings between the parties, on the Effective Date, and
supersedes and
terminates all prior agreements and understandings between the parties, with respect to the subject matter hereof. There are no prior or contemporaneous covenants, promises, agreements, warranties,
representations, conditions or understandings, either oral or written, between the parties other than as set forth in this Agreement. 

        17.8    Amendment    

        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. 

        17.9    Interpretation    

        This
Agreement will not be strictly construed against either party. Any conflict between the terms set forth in the text of this Agreement and the terms of any Appendix hereto will be
resolved in favor of the text of this Agreement. 

        17.10    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. 

        17.11    Construction    

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

25

           17.12    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. 

        17.13    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) 404-0750
	

Attention: Corporate Counsel with a copy to the President
	

If to KO, to:	
 	

The Coca-Cola Company

One Coca-Cola Plaza, N.W

Atlanta, GA 30013

Facsimile number:
	

Attention: Senior Vice President Technical, with a copy to the Chief Intellectual Property 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. 

        17.14    Assignment    

        Not
withstanding any provision of this Agreement to the contrary, either 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. 

        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 business 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. 

        17.15    Merger or Consolidation    

        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. 

26

 

        17.16    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. 

	THE COCA-COLA COMPANY	 	 
	

By:	
 	

/s/  DAVID M. TAGGART      
	
 	

 
	

Title:	
 	

Vice President and Treasurer
	
 	

 
	

Date:	
 	

April 22, 2002
	
 	

 
	

SENOMYX, INC.	
 	

 
	

By:	
 	

/s/  PAUL A. GRAYSON      
	
 	

 
	

Title:	
 	

Chairman and CEO
	
 	

 
	

Date:	
 	

April 22, 2002
	
 	

 

27

 
COLLABORATIVE RESEARCH, DEVELOPMENT, COMMERCIALIZATION AND LICENSE 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. 

        "Base
Component" has the meaning set forth in Section 9.4. 

        "Beverages"
means non-alcoholic beverages sold under the Trademarks of KO or its Affiliates made from Beverage Bases. 

        "Beverage
Base" means [***]. 

        "Bottlers"
has the meaning set forth in Section 9.4.2. 

        "Calendar
Year" means a period of a year beginning January 1 and ending December 31. 

        "Collaborative
R&D Period" means the period beginning on the Effective Date and ending 36 months thereafter, unless concluded earlier in accordance with Section 15. 

        "Collaborative
R&D Program" has the meaning set forth in Section 3. 

        "Commercialization
Period" means, in the case of any Product Compound and Beverage or Beverage Base incorporating Product Compounds, the period of time commencing on FEMA GRAS
determination of such Product Compound and Beverage or Beverage Base incorporating Product Compounds or if the Steering Committee determines that there is a need for additional safety studies or
regulatory approvals as per Section 6.5, upon receipt of such approval, 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 Compound, Beverage or Beverage Base incorporating Product Compounds in any country in which the Product Compound, Beverage or Beverage
Bases incorporating Product Compounds is sold. 

        "Commercialization
Plan" has the meaning set forth in Section 7. 

        "Competitive
Product" means a product in Field I sold by a KO competitor. 

        "Compound"
means a substance that enhances the [***]. 

        "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, 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 30 days after such disclosure, delivers 

28

 

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 R&D 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. 

        "Consumer
Price Index" means the U.S. Department of Labor statistic for All Urban Consumers (CPI-U) U.S. City Average for all items. Changes in the CPI will be measured based
on annual average. 

        "Cost"
or "C" has the meaning set forth in Section 9.4.2. 

        "Cost
Savings Component" has the meaning set forth in Section 9.4.2. 

        "Data
Package" has the meaning set forth in Section 5.2. 

        "Development
Plan" has the meaning set forth in Section 6. 

        "Effective
Date" means this Agreement becomes effective on the date on which it is signed by the last of the parties required to execute it. 

        "Enhancing
Compound(s)" means a molecule (not including KO Compound) under the Control of SENOMYX that: (i) has an enhancing effect on the  [***] at a concentration of [***]
, and (ii) is
not [***] at a concentration of [***]. 

        "FEMA
GRAS" means the process by which a compound is determined to be Generally Recognized as Safe by the Flavor and Extract Manufacturers Association expert panel. 

        "Field
I" means [***]. 

        "Field
II" means [***]. 

        "Fields"
means both Field II and I. 

        "High-Potency
[***]" will have the meaning set forth in Section 8.5. 

        "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 R&D 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. 

        "KO
Compound" means the specific compound identified by KO as having a [***] effect for  [***], the structure of
which will be disclosed to SENOMYX by KO no later than [***] following the Effective Date. 

        "KO
Know-How" means all Know-How Controlled by KO provided to SENOMYX for the activities to be conducted under this Agreement. 

29

 

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

        "KO
Related Compounds" means the specific set of [***] effect for  [***], the structures of which will be disclosed to SENOMYX by KO no later than  [***] following the Effective Date. 

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

        "Materials"
mean antagonists, agonists, inhibitors, compounds, and chemicals, including without limitation, Enhancing Compounds, Selected Compounds, and Product Compounds. 

        "Net
Sales" means, with respect to a Beverage Base, the gross amount invoiced by KO and its Affiliates on any sales or other transfer of the Beverage Base, less the following items: 

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

          ii)  credits,
rebates, charge-back rebates, reimbursements or similar payments, including those for amortization of equipment for capabilities and performance
programs, and strategic availability/pouring rights 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 Beverages incorporating Product Compounds previously sold; and 

          iv)  any
tax, tariff, duty or other governmental charge (other than an income tax) levied on the sale, transportation, freight or delivery of a Beverage or Beverage Bases
incorporating a Product Compound 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 KO and its Affiliates maintained in accordance with United States generally accepted accounting principles. 

        "Patents"
means all patent and patent applications which are controlled by SENOMYX as of the Effective Date or developed by SENOMYX in the course of the Collaborative R&D Period under
the Research Plan which specifically claim a Product Compound, a process for manufacturing a Product Compound, or the use of a Product Compound in a Beverage or Beverage Base. 

        "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
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
Compounds" means Selected Compounds used by KO in Beverages or Beverage Bases. 

        "Research
Plan" has the meaning set forth in Section 5. 

        "Royalty
Shortfall" has the meaning set forth in Section 9.5. 

        "Selected
Compound(s)" has the meaning set forth in Section 5.4. 

        "SENOMYX
Know-How" means all Know-How, 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 R&D Program. 

30

  

        "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 R&D Program, but excluding any Joint Patent Rights. 

        "SENOMYX
Technology" means all of the SENOMYX Patent Rights and SENOMYX Know-How, including Target IP. 

        "Steering
Committee" has the meaning set forth in Section 4. 

        "Target
IP" means the SENOMYX Patent Rights and SENOMYX Know-How on the composition of matter and use of (i) Enhancing Compounds, (ii) Selected Compounds and
(iii) Beverages and Beverages incorporating Product Compounds. 

        "Target  [***]" means any of the following  [***]. 

        "Target
[***] Price" or "TSP" has the meaning set forth in Section 9.4.2. 

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

        "Third
Party(ies)" means any party other than a party to this Agreement excluding Affiliates of SENOMYX or KO or Bottlers. 

        "Unit
Case" means the equivalent of [***]. 

        "Valid
Claim" means a claim under an issued patent or patent application 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. 

        "X"
means the ratio of Y/W 

        Where
W is [***]; 

        Y
is [***]; and 

        A
is the enhancement factor. 

        For
a given Enhancing Compound with an associated enhancement factor A, A multiplied by X will always equal 1. 

        The
following examples illustrate the definition: 

        [***]

31

 
COLLABORATIVE RESEARCH, DEVELOPMENT, COMMERCIALIZATION AND LICENSE AGREEMENT  

 APPENDIX B—RESEARCH PLAN  

        [***]

32

 
COLLABORATIVE RESEARCH, DEVELOPMENT, COMMERCIALIZATION AND LICENSE AGREEMENT  

 APPENDIX C—DEVELOPMENT PLAN  

        [***]

33

 

        [***]

34

 
COLLABORATIVE RESEARCH, DEVELOPMENT, COMMERCIALIZATION AND LICENSE AGREEMENT  

 APPENDIX D—COMMERCIALIZATION PLAN  

        [Intentionally Omitted.] 

35

 
 
 

COLLABORATIVE RESEARCH, DEVELOPMENT, COMMERCIALIZATION AND LICENSE AGREEMENT    
    
    Appendix E—Exceptions to KO rights to KO Compound (To be provided by KO)    
    

36

   ***Text Omitted and Filed Separately

with the Securities and Exchange Commission.

Confidential Treatment Requested

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

200.83 and 230.406.  

FIRST AMENDMENT TO

COLLABORATIVE RESEARCH, DEVELOPMENT,

COMMERCIALIZATION AND LICENSE AGREEMENT  

        This Amendment is entered into as of April 7, 2004, by and between SENOMYX, INC., a Delaware
corporation having its principal place of business at 11099 North Torrey Pines Road, La Jolla, CA 92037 ("SENOMYX") and THE
COCA-COLA COMPANY, a Delaware corporation, having its principal place of business at One Coca-Cola Plaza, Atlanta, Georgia 30313
("KO"). 

BACKGROUND  

        WHEREAS, SENOMYX and KO have previously entered into that certain Collaborative Research, Development,
Commercialization and License Agreement, dated as of April 22, 2002 (the "Original Agreement"); and 

        WHEREAS, the parties hereto have agreed to amend the Original Agreement, and desire to enter into this Amendment for the purpose of
documenting such amendment as required by Section 17.8 of the Original Agreement. 

        NOW, THEREFORE, in consideration of the foregoing premises, the parties hereby agree to amend the Original Agreement as follows: 

AGREEMENT  

	1.
	Section 3
of the Original Agreement shall be amended by deleting the final sentence thereof, and inserting a new sentence in substitution therefor which shall read as follows: 

"Subject
to Section 15 hereof, this Agreement establishes a Collaborative R&D Program for a term of six years, commencing on the Effective Date and concluding on April 22, 2008 (the
"Collaborative R&D Period")." 

	2.
	Section 9.1.2
of the Original Agreement shall be amended by deleting the same in its entirety, and by inserting in substitution therefor a new Section 9.1.2 which shall
read as follows: 

"9.1.2  Payment Terms

KO
will make payments that: 

	(i)
	are
in advance;

	(ii)
	on
an equal quarterly basis; and

	(iii)
	(subject
to Section 15) total [***] and are allocated and recognizable by SENOMYX during the six year
Collaborative R&D Period."

	3.
	Section 10.12
of the Original Agreement is hereby amended to delete the word "exclusive" where it appears therein, and to insert in substitution therefor the word
"non-exclusive."

	4.
	Section 15.2
of the Original Agreement shall be amended as follows:

	(a)
	By
inserting "(a)" prior to the initial text of said Section, such that all such text shall be denominated as Section 15.2(a); and 

1

 

	(b)
	By
inserting a new Section 15.2(b) following the text of Section 15.2(a), which shall read as follows:

	"(b)
	KO
may conclude the Collaborative R&D Program prior to the end of the Collaborative R&D Period, without paying SENOMYX any early conclusion fee, in the event that SENOMYX shall have
failed to achieve the milestone set forth in Section 9.3(b) of this Agreement on or prior to April 22, 2006, by providing written notice to SENOMYX thereof not later than  [***]. In the event
KO should provide any such notice, the Collaborative R&D Period shall end immediately and KO shall not have
any further obligations to pay research funding under Section 9, provided that KO will not be relieved from making research funding payments through and including the quarterly payment due in
April 2006. In the event that KO so notifies SENOMYX of early conclusion, the rights and obligations provided for under Section 8.1, 8.2, 8.3, and 8.5, the licenses granted under
Section 10.4 and 10.5 and the most favorable terms provision under 10.9 will all terminate."

	5.
	Section 16.6.3(i) of
the Original Agreement is hereby amended by deleting the word "SENOMYX's" which appears therein, and inserting in substitution therefor the word
"KO's."

	6.
	Section 17.14
of the Original Agreement is hereby amended by deleting the word "either" which appears in the first sentence therein, and by inserting in substitution therefor
the word "neither."

	7.
	Appendix A
of the Original Agreement shall be amended by deleting the definition "Collaborative R&D Period" and by inserting in substitution therefor the following new
definition: 

"Collaborative
R&D Period' has the meaning set forth in Section 3." 

	8.
	Except
for the aforesaid amendments, the Original Agreement shall remain in full force and effect in accordance with the original terms thereof. The parties do hereby ratify and
reaffirm all of their obligations under the Original Agreement, as amended by this Amendment. 

        IN WITNESS WHEREOF, the parties, through their authorized officers, have executed this Amendment as of the date set forth hereinabove. 

	THE COCA-COLA COMPANY	 	 
	

 	

 	
 	

 
	By:	/s/  RALPH CARLTON      
	 	 
	Title:	Vice President
	 	 
	Date:	 	 	 
	 	
	 	 
	

 	

 	
 	

 
	SENOMYX, INC.	 	 
	

 	

 	
 	

 
	By:	/s/  KENT SNYDER      
	 	 
	Title:	President & CEO
	 	 
	Date:	April 7, 2004
	 	 
	 	 	 	 

2

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Table of Contents

COLLABORATIVE RESEARCH, DEVELOPMENT, COMMERCIALIZATION AND LICENSE AGREEMENT Appendix E—Exceptions to KO rights to KO Compound (To be provided by KO)<Page>

                                                                   Exhibit 10.12

                        EXCLUSIVE DISTRIBUTION AGREEMENT

     THIS EXCLUSIVE DISTRIBUTION AGREEMENT (the "Agreement") is made and entered
into this 1st day of January, 2004 (the "Effective Date"), by and between:

                           NORTH ELECTRIC COMPANY, INC., a North Carolina
                           corporation duly organized under law and having
                           an usual place of business at 6131 Falls of
                           Neuse Road, Suite 205, Raleigh, NC 27609
                           (hereinafter referred to as "NECI"),

                                       AND

                           International Network Technology Ltd., a Hong
                           Kong corporation duly organized under law and
                           having an usual place of business at 610 Lippo
                           Sun Plaza, 28 Canton Road, Tsimshatsui,
                           (hereinafter referred to as the "DISTRIBUTOR").

                                    RECITALS

     WHEREAS, NECI is in the business of researching, developing, marketing and
selling a suite of network assurance products and supplies (software and
hardware), for the telecommunications industry; and

     WHEREAS, Distributor is a telecommunications company with operations and
facilities throughout the Pacific Rim (as hereinafter defined); and

     WHEREAS, Distributor is in the business of selling and marketing products
similar to NECI's products and supplies, and the Distributor wishes to be
appointed as the exclusive distributor of NECI's products and supplies in the
Pacific Rim and NECI is willing to make such appointment in accordance with the
terms of this Agreement.

     NOW, THEREFORE, in consideration of the payments to be made herein and the
mutual covenants and promises herein contained, the receipt and sufficiency of
which is hereby acknowledged, accepted and agreed to, the parties, intending to
be legally bound, hereby agree as follows:

                                                                    Page 1 of 17
<Page>

                              ARTICLE 1: DEFINITION

     As used in this Agreement, the following words shall have the following
meaning:

     (a)    EFFECTIVE DATE:        First date noted above

     (b)    TERM:                  A four (4) year period commencing with the
                                   Effective Date and concluding in December 31,
                                   2007.

     (c)    PRODUCTS               All software and hardware products and
                                   supplies, and accessory and related items as
                                   set forth and identified on Exhibit "A"
                                   annexed hereto and made a part hereof as if
                                   set out verbatim (collectively, the
                                   "Products").

     (d)    PARTY:                 A signatory to this Agreement, and affiliates
                                   owned or controlled by or in common control
                                   with a signatory to this Agreement and the
                                   successors or assignees of any such signatory
                                   of affiliates, wherever located.

     (e)    PERSON:                Any individual, partnership, firm,
                                   corporation, association, government, or any
                                   other organization or entity.

     (f)    TERRITORY:             The Countries of: China PRC, Hong Kong,
                                   Macau, Singapore, Malaysia, Vietnam, Laos,
                                   Cambodia, Thailand, India, South Korea,
                                   Japan, Taiwan, Brunei, Indonesia,
                                   Philippines, PNG, Australia and New Zealand
                                   (collectively, the "Territory" or "Pacific
                                   Rim").

                         ARTICLE 2: DISTRIBUTION RIGHTS

     2.1    APPOINTMENT. Subject to the terms and conditions of this Agreement,
NECI hereby appoints Distributor, and Distributor hereby accepts its
appointment, as NECI's exclusive distributor for the sale of Products in the
Territory. Distributor shall have the right to engage sub-distributor(s) with
regard to distribution of the Products and such sub-distributor(s) shall be
governed by the terms of this Agreement.

                                                                    Page 2 of 17
<Page>

     2.2    NO DIRECT SALES IN THE TERRITORY. During the Term of this Agreement,
NECI will not sell, transfer, or otherwise make available Products for delivery
or use in the Territory, nor shall NECI sell, transfer or otherwise make
available Products to any Person who NECI knows, intends to sell, transfer or
otherwise make available such Products for delivery or use in the Territory.
NECI shall promptly refer to Distributor any and all inquiries NECI receives
from a Person or inquiries relating to a sale or transfer of the Product in or
into the Territory.

                        ARTICLE 3: DUTIES OF DISTRIBUTOR

     3.1    BEST EFFORTS. Distributor shall use its best efforts to develop and
promote markets for, and to sell, the Products in the Territory.

     3.2    NON-COMPETITION; PROMOTIONS; ETC. During the Term of this Agreement,
the Distributor shall at its expense:

            (a)  Advertise and promote the Products in the Territory in a best
                 efforts and appropriate means, including but not limited to,
                 participation in relevant trade fairs, public demonstrations of
                 the Products, prompt and effective responses to trade and
                 customer inquiries and regular visits to customers and,
                 potential customers. If Distributor intends to utilize any of
                 NECI's logos or trademarks, the Distributor shall first provide
                 NECI with a copy of the presentation and obtain NECI's written
                 consent to use such presentation. Distributor (or any of its
                 sub-distributors) shall be solely responsible for its own
                 expenses connected with the promotion and sale of the Products,
                 including but not limited to, wages, salaries, commissions and
                 expenses directly or indirectly related to advertising, trade
                 shows, exhibitions and promotional activities;

            (b)  Maintain a suitable sales and service organization in each
                 country constituting the Pacific Rim with a sufficient number
                 of properly trained personnel to enable Distributor to
                 discharge the duties undertaken by it;

            (c)  Maintain a laboratory for customer demonstrations, training,
                 and for use in reproducing, analyzing, and correcting customer
                 problems which laboratory shall contain at least one of each of
                 the Products as listed on Exhibit A (the delivery, costs and
                 payment of which shall be determined by the parties hereto
                 after good faith negotiations); and

                                                                    Page 3 of 17
<Page>

            (d)  Prepare a marketing plan ("Plan") and to update the same at
                 least yearly. The Plan shall contain, at a minimum,
                 Distributor's best efforts to compile information on
                 competitive products; estimated sales volume; anticipated
                 quantities of the Products to be purchased; governmental
                 registration requirements; and marketing issues. The Plan shall
                 be shared with NECI.

     3.3    TRAINING; USE OF PRODUCTS. In concern with NECI, Distributor shall
at its own expense establish reasonable procedures to assure that its employees,
subdistributors and other agents are properly trained and that Distributor is
satisfying the requirements of this Agreement. The costs of the training center
and allocation of responsibilities shall be determined by the parties hereto
after good faith negotiations.

     3.4    CONFIDENTIALITY. Distributor will take all precautions to protect
confidential information received from NECI and identified by NECI as
confidential ("Confidential Information"). Distributor shall not disclose or
divulge any Confidential Information to any third person, except as required by
a judicial or governmental order. Information in the public domain or prepared
by NECI (or by Distributor with the prior approval of NECI) for the purpose of
distribution to customers or otherwise available, shall not be deemed to be
Confidential Information.

     3.5    PROHIBITED SALES AND CONDUCT. Distributor agrees not to sell, and
agrees to use such efforts as are necessary to ensure that Distributor's
sub-distributors and agents do not sell any of the Products outside of the
Pacific Rim. Further, Distributor agrees to present the Products fairly to
potential customers, not to disparage the Products, any Product trademarks or
NECI in any way and to do all things reasonable to promote the reputation of the
Products and the value of any Product trademarks.

     3.6    NON-COMPETITION AND EXCLUSIVITY. Distributor agrees that during the
Term of this Agreement, it will not sell or distribute any products, supplies,
or accessory items in the Pacific Rim that are in conflict with any of the
Products that it is selling and distributing pursuant to the terms and
conditions of this Agreement, and Distributor shall exclusively sell and
distribute only the Products.

     3.7    NECI AUDIT. At least once every calendar year during the Term, NECI
shall have the right and option (and at its sole loss and expense), upon three
(3) calendar days written notice to Distributor to enter Distributor's premises
and to examine Distributor's written and electronic files and records for the
purposes of conducting an audit of Distributor's activities to ensure compliance
with the terms of this Agreement.

                                                                    Page 4 of 17
<Page>

                            ARTICLE 4: DUTIES OF NECI

     4.1    REQUIREMENTS BY DISTRIBUTOR. NECI shall supply Distributor's
requirements for the Products in the Pacific Rim consistent with Distributor's
forecasts of its expected requirements for the Products, with a maximum
lead-time of two (2) months from the day Distributor places an order. If NECI
believes that it will not be able to satisfy Distributor's requirements for the
Products, it shall promptly notify Distributor, specifying the reasons for the
expected delay and its duration at the time the Product order is placed and/or
one month prior to delivery of Product.

     4.2    MARKETING SUPPORT. NECI shall:

            (a)  Provide Distributor with information on marketing and
                 promotional plans of NECI for the Products as well as copies of
                 marketing, advertising, sales, technical training manuals and
                 available teaching and marketing aides and promotional
                 literature concerning the Products produced by or for NECI;

            (b)  NECI shall provide the training for Distributors and its agents
                 and sales personnel as set forth in Exhibit "B" annexed hereto;

            (c)  NECI shall redirect any enquiries, referrals and information of
                 existing or potential customers from the Pacific Rim to
                 Distributor with out delay upon its knowledge of such;

            (d)  NECI shall back Distributor up in all circumstances on their
                 relationship and the status of Distributor, advocating and
                 certifying in all domains Distributor's status positively;

            (e)  NECI shall maintain the same pricing as promulgated by
                 Distributor in the Pacific Rim whenever enquiries are received;

            (f)  For "Defect on Arrival" (DOA), NECI shall provide immediate
                 replacement;

            (g)  NECI shall arrange site visits to reference sites in U.S.A., as
                 may be requested by Distributor, for the purpose of
                 demonstrating how Products perform in real life situation; and

            (h)  NECI shall recognize Distributor's effort in localizing its
                 marketing materials or others for the purpose of marketing
                 Products in Pacific Rim, through pricing or otherwise.

                                                                    Page 5 of 17
<Page>

     4.3    TECHNICAL SUPPORT. NECI shall:

            (a)  provide full technical support to Distributor, through emails
                 or phone calls, during the Term of this agreement. Scope of
                 support includes diagnosis, analysis and provision of solution
                 to problems encountered. The time of such support shall not be
                 limited to office hours in U.S.A.

            (b)  NECI shall endeavor to resolve all technical problems as
                 encountered by Distributor, in relation to Products. In the
                 event of fundamental design problem, Distributor has the right
                 to demand for containment action.

                        ARTICLE 5: PATENTS AND TRADEMARKS

     5.1    LIMITED GRANT OF LICENSE. NECI hereinafter grants to Distributor the
limited right and license during the Term, to use, in the Pacific Rim, NECI's
trademarks and any trademark registrations, which NECI obtains and designates
for the Products, but only in connection with sales of the Products in the
Pacific Rim. Such trademarks license shall continue in effect only while
Distributor retains its distribution rights in the Pacific Rim. Distributor
agrees not to remove or obscure any Product label affixed by NECI. Upon the
termination of this Agreement for any reason, Distributor shall immediately
discontinue all uses of such corporate names, trademarks or trade names.

     5.2    USAGE. Whatever use Distributor makes of the corporate name, or any
trade names of NECI, if permitted as provided herein, shall be for the exclusive
benefit of NECI and Distributor shall not thereby acquire any rights in, to or
under any such name, trademark or trade name.

                           ARTICLE 6: SALE OF PRODUCTS

     6.1    MINIMUM SALE ESTIMATES FOR PRODUCTS. During the Term of this
Agreement, Distributor shall use its best efforts as set forth in Section 3.2
through 3.6 hereof, to achieve sales and performance estimates to be agreed by
the Parties on or before June 30, 2004 and annexed hereto as Exhibit "C" and
made a part hereof as if set out verbatim ("Sales Levels") and which may be
amended semi-annually thereafter upon the agreement of the Parties. The parties
agree that in reaching the annual Sales Levels they shall negotiate in good
faith with the intention of reaching an agreement and shall consider such
factors as: competition, pricing, Product(s) availability, delivery schedules,
resistance in the marketplace and the like. In the event of such agreement
cannot be reached, NECI shall supply Products to Distributor on a project basis,
with prices and deliveries to be negotiated.

                                                                    Page 6 of 17
<Page>

     6.2    ADJUSTMENT OF SALES ESTIMATES FOR PRODUCTS. For periods subsequent
to the initial year of the Term, Distributor shall prepare and submit to NECI
quarterly forecasts of the Minimum Sales Estimates which it expects to achieve
in the upcoming quarterly period, and said reports shall be submitted not later
than fifteen (15) calendar days prior to the commencement of the applicable
quarterly period.

                           ARTICLE 7: PRICE AND TERMS

     7.1    PRICING. The price for the Products to be charged by NECI to the
Distributor are as set forth on Exhibit "D" annexed hereto and made a part
hereof as if set out verbatim. All prices and changes shall be quoted in United
States Dollars.

     7.2    PAYMENT. NECI will invoice Distributor upon shipment of the Products
purchased by Distributor and payment shall be due within ninety (90) days
following delivery of the Product to Distributor and/or a letter of credit will
be established with terms of payment. All sales of Product shall be FOB Raleigh,
North Carolina. All payments shall be made by Distributor by wire transfer in
United States Dollars in immediately available funds, irrespective of
fluctuations in exchange rates.

     7.3    TAXES, ETC. The Distributor shall be responsible for all taxes,
          shipping, custom duties, freight, insurance and all other charges
          related to the shipping, delivery and sale of the Products by the
          Distributor. Export duties and customs, if any, shall be borne by
          NECI, at the U.S.A end.

                           ARTICLE 8: PRODUCT WARRANTY

     8.1    WARRANTY. NECI warrants that all Products: (a) will conform with all
specifications and descriptions thereof provided by NECI, (b) will be free of
defects in material, workmanship and design, (c) will be of merchantable
quality, suitable for the purposes for which they are intended to be used, (d)
will be compatible with existing equipment of Distributors customers, and (e)
will be compatible to other equipment being linked to Products, providing
Distributor will have the right to exchange or return existing inventory if
Products do not meet requirements (a) to (e).

            Warranty period for all Products delivered with in one year of this
agreement shall be 24 months from delivery or 18 months from installation
whichever shorter. Thereafter, the warranty period shall be 90 days. NECI shall
provide repair and return for any faulty hardware with 2 weeks, and shall
provide debug and solution to any software problem, free of charge during the
warranty period.

            Except as expressly provided above, NECI grants no other warranties
or conditions, express or implied, by statute this Agreement or any
communication by NECI regarding the Product, their fitness for any particular
purpose, their quality, their merchantability or otherwise.

                                                                    Page 7 of 17
<Page>

     8.2    DEFENSE AGAINST CLAIMS. In the event of any action, suit or
proceeding: (a) initiated by one or more of Distributor's customers (which term
includes any and all Persons receiving Products directly or indirectly from
Distributor, whether or not Distributor has been or will be compensated for such
Products received); and (b) naming NECI or Distributor as a party, NECI or
Distributor, at NECI's option, shall undertake principal responsibility for
defense of such action, suit or proceeding. The Parties agree to cooperate fully
in the defense of any such action, suit or proceeding.

     8.3    INSURANCE. No later than the Effective Date, NECI and Distributor
shall each cause the other to be named as an additional insured on their
respective liability insurance policies to the same extent as each would be
covered in its own right for the manufacturer and sale of Products.

                           ARTICLE 9: INDEMNIFICATION

     NECI shall indemnify, defend and hold harmless the Distributor and its
employees, servants, officers, directors, agents from and against all claims or
suits for

            (a)  bodily injury, including death, or property damage arising out
                 of the resale, or use of any Product, except if such injury,
                 damage, cost or expense is caused by the negligence, action or
                 inaction of Distributor or any party other than NECI;

            (b)  damages and loss caused by any fundamental design fault of
                 Products; or

            (c)  damages and loss caused by the legality of Patent or Trademark
                 owned by NECI.

     Distributor shall indemnify, defend and hold harmless NECI and its
employees, servants, officers, directors, agents and representatives from and
against any and all claims or suits for bodily injury, including death or
property damage with respect to any claims or suits arising out of or relating
to Distributor's negligence, breach of this Agreement or any misrepresentations
by Distributor.

                   ARTICLE 10: TERM OF AGREEMENT AND EXTENSION

            TERM. The term of this Agreement shall commence with the Effective
Date and conclude on 31st December, 2007.

                                                                    Page 8 of 17
<Page>

                             ARTICLE 11: TERMINATION

     11.1   DEFAULTS. NECI may, in its sole discretion, elect to terminate this
Agreement if Distributor fails to cure any material breach of the provisions of
this Agreement within thirty (30) days after written notice of such breach.
Without limiting the generality of the foregoing, it shall constitute a material
breach thereof if Distributor fails:

            (a)  to make timely payments for Products delivered to Distributor,
                 and in the event of a late payment during a payment default, to
                 take all steps necessary and appropriate to assure that
                 subsequent payments will be timely;

            (b)  to carry out the Distributor's duties as required hereunder; or

            (c)  to fully and completely comply, during the entire Term, with
                 all of the terms and conditions of Article 12 hereof.

       The Distributor has the same right as for NECI stated herein this clause
if NECI fails (b) and/or (c).

     11.2   INSOLVENCY. Each Party shall have the right, upon written notice, to
terminate this Agreement forthwith if the other Party commits or suffers any act
of bankruptcy, comes under the control of a receiver, becomes insolvent, makes
an assignment for the benefit of creditors of all or part of its assets, or
undergoes liquidation or dissolution.

     11.3   PRODUCT AVAILABILITY. Should North Electric Company be unable to
deliver product(s) designated in this distribution agreement by April 1, 2004,
this agreement shall be null and void.

     11.4   EFFECT OF TERMINATION. Distributor shall terminate all Product
distribution activities in the Pacific Rim immediately upon termination of this
Agreement. NECI will repurchase all inventories on hand at cost to Distributor.
In addition, Distributor shall deliver to NECI all Product materials supplied by
NECI and all Product marketing materials of any kind. The obligations of NECI
and Distributor relating to Confident Information, Remedies and Indemnification
shall survive any termination of this Agreement. Nothing herein shall limit any
remedies, which a party may have for the other's default, except as expressly
provided herein. Neither party shall be liable to the other for any damage in
connection with such party's termination of this Agreement by notice, in
accordance with the Section.

                                                                    Page 9 of 17
<Page>

                    ARTICLE 12: LIMITATIONS OF REPRESENTATION

     12.1   NO JOINT VENTURE. Distributor shall have no authority to represent
NECI as agent, or to bind NECI by any contract, representation, understanding,
act or deed concerning NECI (or any Product). Neither the making of this
Agreement nor the performance of any part of the provisions hereof shall be
construed to constitute Distributor as an agent or representative of NECI for
any purpose. This Agreement shall not be interpreted to establish a joint
venture or partnership.

     12.2   DISTRIBUTOR AS PRINCIPAL. Notwithstanding any term of this
agreement, all sales of Products made by Distributor will be in its own name and
for its own account, it being understood that Distributor is an independent
organization re-selling products which are purchased from NECI.

                               ARTICLE 13: GENERAL

     13.1   GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with the laws of the State of Delaware. The Parties consent to the
jurisdiction of the courts of the State of Delaware and the jurisdiction of the
Federal District Court in the State of Delaware and to service of process by
registered mail, return receipt requested or in any other manner provided by
law.

     13.2   COUNTERPARTS. For convenience of the Parties, this Agreement may be
executed in one or more counterparts, each of which shall be deemed an original
far all purposes, and all of which taken together shall constitute but one and
the same instrument.

     13.3   NOTICES. All notices, requests, demands, consents, waivers,
approvals and other communications hereunder shall be in writing and shall be
deemed to have been duly given (1) if delivered personally with receipt
acknowledged, (2) if transmitted by electronic mail, telex, telefax, telegraph,
or other like method, or (3) if mailed, postage prepaid, by certified mail,
return receipt requested, addressed as follows:

                 If to NECI;

                        North Electric Company, Inc.
                        6131 Falls of Neuse Road
                        Suite 205
                        Raleigh, NC 26709
                        Facsimile: 919-341-6010
                        Email: dan.ference@northelectriccompany.com

                                                                   Page 10 of 17
<Page>

                 With a copy to:

                        Peter B. Finn, Esq.
                        Rubin and Rudman LLP
                        50 Rowes Wharf
                        Boston, MA 02110
                        Facsimile: (617) 439-9556
                        Email: pfinn@rubinrudman.com

                 If to Distributor:
                        International Network Technology Ltd.
                        610 Lippo Sun Plaza
                        28 Canton Road
                        Tsimshatsui, Hong Kong
                        Facsimile: 852-3113-1002
                        Email: walter@intl-net.com

     or such other addresses as either Party may designate for itself by written
notice given to the other Party from time to time in the manner hereinabove
provided. Except as otherwise expressly provided herein, all communications
hereunder shall be deemed to be given, received and dated on the date when
delivered personally, on the date of receipt of telex or telefax, or on the date
of delivery or refusal (if refused) of certified or registered mail.

     13.4   SEVERABILITY. If any of the provisions of this Agreement are held
invalid or unenforceable and unless the invalidity or unenforceability thereof
does substantial violence to the underlying intent and sense of the remainder of
this Agreement, such invalidity or unenforceability of any other provisions of
this Agreement except those which the invalidated or unenforceable provisions
compromise an integral part of or are otherwise clearly inseparable from. In the
event any provision is held invalid or unenforceable, the Parties hereto shall
use their best efforts to agree upon a valid and enforceable provision which
shall be a reasonable substitute for such invalid or unenforceable provision in
light of the terms of this Agreement and, upon so agreeing, shall incorporate
such substitute provision in this Agreement.

     13.5   INTEGRATION. This Agreement, together with all Exhibits, contains
the entire understanding and agreement of the parties hereto with respect to the
subject matter contained herein, supersedes all prior oral or written
understandings and agreements relating thereto except as expressly otherwise
provided, and may not be altered, modified or waived in whole or in part, except
in writing, signed by duly authorized representatives of the Parties.

                                                                   Page 11 of 17
<Page>

     13.6   ASSIGNMENT. The rights granted to or obligations imposed upon the
Parties under this Agreement shall not be assignable, or otherwise delegable,
transferable, or subject to encumbrance in any manner or degree to or in favor
of any person for any purpose by any act of either Party or by operation of law
or otherwise, without the prior written consent of the other Party. Any attempt
to assign, delegate, transfer or encumber such rights or duties, in the absence
of the other Party's prior written consent, with the exception noted in the
preceding sentence, shall be void and of no force and effect.

     13.7   FORCE MAJEURE. Each of the parties hereto shall be excused from
their performance of its obligations hereunder in the event such performance is
prevented by force majeure, and such excuse shall continue so long as the
condition constituting such force majeure continues plus thirty (30) days after
the termination of such condition. For the purposes of this Agreement, force
majeure is defined to include causes beyond the control of Distributor or NECI,
including, without limitation, acts of God, acts, regulations or laws of any
government, war, terrorism, civil commotion, destruction of production
facilities or materials by fire, earthquake or storm, labor disturbances, or
medical epidemics.

     13.8   MEDIATION. In the event of any dispute or disagreement regarding
this Agreement or any of the terms hereof, the parties shall endeavor to
resolve, within thirty (30) days of receipt of written notice detailing such
dispute or disagreement, all such issues by mediation; and the parties hereby
appoint their respective Presidents to meet, confer and attempt to resolve the
differences. If the parties are, for whatever reason, unable to reach an
agreement, either party shall be entitled to proceed to adjudicate its rights in
an appropriate court.

     IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
duly executed, under seal, on the day and year first above written.

                                   NORTH ELECTRIC COMPANY, INC.

                                   By:
                                      ------------------------------------
                                                                   (name)
                                                                   (title)

                                      Hereunto Duly Authorized

                                   International Network Technology Ltd.

                                   By: /s/ Walter Yong       Nov. 28, 2003.
                                      -------------------------------------
                                      Walter Yong                  (name)
                                      Chief Operating Officer      (title)
                                      Hereunto Duly Authorized

                                                                   Page 12 of 17
<Page>

                                   EXHIBIT "A"

                              PRODUCTS AND SUPPLIES

                       NECI NETWORK ASSURANCE SYSTEM (NAS)

The NECI Network Assurance System consists of a set of components working
together to provide end-to-end active TDM and VoIP call quality testing. It
tests both connection signaling and call performance, ensuring high quality
voice services as perceived by network users. A number of packaging options are
available consisting of bundled hardware and software or software-only licenses.
Configurations can also support different numbers of interfaces and can also
support multiple NAPs within a single physical device. This agreement is signed
in view of the latest revolutionary developemtn to be released in December 2003.
Components of the NECI NAS include:

NETWORK ASSURANCE SYSTEM - CENTRAL SERVER (NAS-CS)
   Centralized test control, administration, and reporting system for the NECI
   Network Assurance System. The NAS-CS provides the ability to configure the
   NAS components and their interfaces, define test sequences, schedules, source
   and destination test endpoints, and generate and view test reports. The
   NAS-CS is provided in a rack-mount configuration. Options are available for
   120 VAC and -48VDC powering.

NETWORK ACCESS PROBE - SS7 SIGNALING (NAP-S)
   The NAP-S performs scheduling; test, and SS7 call control for the NAP-T. It
   interfaces to the SS7 network and is the Service Switching Point (SSP) for
   the Network Assurance System. It can be provided in a rack-mount
   configuration equipped with from 2 to 4 DS1 interfaces to the SS7 network.
   Options are available for 120 VAC and -48VDC powering.

NETWORK ACCESS PROBE - TIME DIVISION MULTIPLEX (NAP-T)
   The NAP-T performs voice path tests of the network including DTMF send and
   receive and PESQ voice quality measurements. Test call quality is measured
   with the embedded PESQ application using an artificial speech test stimulus
   with the results shown in a Mean Opinion Score (MOS). The NAP-T is connected
   to network TDM interfaces. It can be provided in a rack-mount configuration
   equipped with from 1 to 16 DS1 interfaces. Options are available for 120 VAC
   and -48VDC powering.

NETWORK ACCESS PROBE - DATA (NAP-D)
   The NAP-D performs scheduling, test, and SIP call control for VoIP networks
   via DTMF send and receive and PESQ voice quality measurements. Test call
   quality is measured with the embedded PESQ application using an artificial
   speech test stimulus with the results shown in a Mean Opinion Score (MOS).
   The NAP-D is connected to network IP interfaces. It can be provided in a
   rack-mount

                                                                   Page 13 of 17
<Page>

   configuration equipped with from 1 to 4 10/100BT Ethernet interfaces. Options
   are available for 120 VAC and -48VDC powering.

NETWORK ACCESS PROBES - OTHER
   NECI will continue to develop new types of Network Access Probes as part of
   the NECI Network Assurance System to support other test and interface
   capabilities.

SOFTWARE UPGRADE
   NECI plans to evolve the capabilities of NAS by providing new features and
   functions via software upgrades to existing products. These upgrades are
   available for an additional charge.

SOFTWARES SUPPORT
   Each software package in the NAS carries an Annual Software Support Contract
   (ASSC) fee that entitles the customer to software updates for any and all
   service affecting problems found worldwide free of charge. It also entitles
   the customer to any additional maintenance software updates which may be
   released free of charge. In the event of fundamental design problem, updates
   shall be issued free of charge.

                                                                   Page 14 of 17
<Page>

                                   EXHIBIT "B"

                                    TRAINING

NECI FACILITY BASED STANDARD TRAINING
NECI will provide training for up to 3 people free of charge at its headquarters
in Raleigh, North Carolina. The training period is expected to be 5 days in
duration. Travel and living expenses associated with the training will be the
responsibility of the Distributor. Standard training covers product sales and
capabilities, product installation, product operation and product support.

DISTRIBUTOR FACILITY BASED STANDARD TRAINING
If the Distributor prefers, NECI will provide 1 to 2 people to perform the
Standard Training at the Distributor's facility. In this case the training
period is expected to be 5 days in duration. In this case, the Distributor will
be responsible for the NECI trainers' travel and living expenses.

SALES SUCCESS ASSURANCE
NECI is fully committed to helping Distributor succeed. To assist in this, NECI
will provide free of charge 1 person to assist Distributor's sales staff on
sales calls and provide further on the job training of their sales team for up
to 4 weeks. The Distributor will be responsible for the NECI individual's travel
and living expenses.

FIRST CUSTOMER ORDER SUCCESS ASSURANCE
NECI is fully committed to helping Distributor succeed. To assist in this, NECI
will provide free of charge 1 person on site (both Distributor and customer site
as needed) for up to 4 weeks to help Distributor successfully deliver its first
customer order. The Distributor will be responsible for the NECI individual's
travel and living expenses.

ADDITIONAL TRAINING AVAILABLE
Distributor may want to consider additional training. NECI will make available
additional training in any or all of the 4 areas (product sales and
capabilities, product installation, product operation and product support)
covered in the standard training package. In this case, NECI Will work with the
Distributor to define the extent of the additional training desired and
negotiate an appropriate charge.

DISTRIBUTOR CONSULTING
NECI is fully committed to helping Distributor succeed. To assist in this, NECI
will also provide consulting services to assist Distributor establish the
organization and infrastructure required. In this case, NECI will work with the
Distributor to define the extent of the consulting desired and negotiate an
appropriate charge.

CERTIFICATION
NECI shall issue certificates to person having completed any of the training
provided by NECI.

                                                                   Page 15 of 17
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                                   EXHIBIT "C"

                                  SALES LEVELS

                                                                   Page 16 of 17
<Page>

                                   EXHIBIT "D"

                                PRICES AND TERMS

PRICING WILL BE NEGOTIATED ON A PROJECT-BY-PROJECT BASIS.

                                                                   Page 17 of 17

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