SENOMYX INC (Form: 10-Q, Received: 08/01/2013 08:41:42)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2013

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 000-50791

SENOMYX, INC.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)

33-0843840
(I.R.S. Employer Identification No.)

4767 Nexus Centre Drive
San Diego, California
(Address of principal executive offices)

92121
(Zip code)

(858) 646-8300
(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company in Rule 12b-2 of the Exchange Act.

Larger accelerated filer o		Accelerated filer x
Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company o

Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Total shares of common stock outstanding as of the close of business on July 23, 2013: 40,637,861

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SENOMYX, INC.

FORM 10-Q

TABLE OF CONTENTS

TABLE OF CONTENTS		2

PART I. FINANCIAL INFORMATION		3

Item 1.	Unaudited Financial Statements	3

	Condensed Balance Sheets as of June 30, 2013 and December 31, 2012	3

	Condensed Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2013 and 2012	4

	Condensed Statements of Cash Flows for the Six Months Ended June 30, 2013 and 2012	5

	Notes to Unaudited Condensed Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	18

Item 4.	Controls and Procedures	18

PART II. OTHER INFORMATION		19

Item 1A.	Risk Factors	19

Item 4.	Mine Safety Disclosures	32

Item 5.	Other Information	32

Item 6.	Exhibits	33

SIGNATURES		34

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PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED FINANCIAL STATEMENTS

SENOMYX, INC.

BALANCE SHEETS

(In thousands, except for share and per share data)

(Unaudited)

	June 30, 2013			December 31, 2012
	(Unaudited)			[Note]
Assets
Current assets:
Cash and cash equivalents	$	13,415		$	15,427
Short-term investments available-for-sale	10,012			21,365
Accounts receivable	1,300			2,702
Other current assets	580			845
Total current assets	25,307			40,339

Long-term investments available-for-sale	14,082			5,031
Property and equipment, net	6,821			7,910
Total assets	$	46,210		$	53,280

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable, accrued expenses and other current liabilities	$	5,722		$	6,538
Deferred rent	224			183
Leasehold incentive obligation	987			987
Deferred revenues	11,548			10,580
Total current liabilities	18,481			18,288

Deferred rent	1,015			1,138
Leasehold incentive obligation	2,633			3,126
Deferred revenues	1,250			5,000

Commitments

Stockholders’ equity:
Preferred stock, $.001 par value; 7,500,000 shares authorized; no shares issued or outstanding at June 30, 2013 (unaudited) and December 31, 2012	—			—
Common stock, $.001 par value; 120,000,000 shares authorized at June 30, 2013 (unaudited) and December 31, 2012; 40,637,861 and 40,100,483 shares issued and outstanding at June 30, 2013 (unaudited) and December 31, 2012, respectively	41			40
Additional paid-in capital	258,930			256,470
Accumulated other comprehensive income	(14		)	7
Accumulated deficit	(236,126		)	(230,789		)
Total stockholders’ equity	22,831			25,728
Total liabilities and stockholders’ equity	$	46,210		$	53,280

[NOTE: The balance sheet at December 31, 2012 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.]

See accompanying notes to condensed financial statements.

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SENOMYX, INC.

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except share and per share data)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012

Revenues:
Development revenues	$	6,186		$	6,095		$	12,223		$	13,240
Commercial revenues	1,481			836			2,926			1,973

Total revenues	7,667			6,931			15,149			15,213

Operating expenses:
Cost of commercial revenues	104			59			205			139
Research and development	6,968			7,167			14,348			14,306
General and administrative	2,933			2,818			5,953			5,759

Total operating expenses	10,005			10,044			20,506			20,204

Loss from operations	(2,338		)	(3,113		)	(5,357		)	(4,991		)

Other income	9			19			20			45

Net loss	(2,329		)	(3,094		)	(5,337		)	(4,946		)

Other comprehensive loss:
Unrealized loss on investments	(18		)	(12		)	(21		)	(34		)

Total other comprehensive loss	(18		)	(12		)	(21		)	(34		)

Comprehensive loss	$	(2,347	)	$	(3,106	)	$	(5,358	)	$	(4,980	)

Net loss per share, basic and diluted	$	(0.06	)	$	(0.08	)	$	(0.13	)	$	(0.12	)

Shares used in calculating net loss per share, basic and diluted	40,630,844			39,921,773			40,545,336			39,870,396

See accompanying notes to condensed financial statements.

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SENOMYX, INC.

STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Six Months Ended June 30,
	2013			2012
Operating activities
Net loss	$	(5,337	)	$	(4,946	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	1,465			1,344
Accretion of premium on available-for-sale securities	105			98
Amortization of leasehold incentive obligation	(493		)	(493		)
Stock-based compensation for employees and non-employee directors	1,866			2,215
Stock-based compensation for non-employees	8			1
Change in operating assets and liabilities:
Accounts receivable	1,402			557
Other current assets	233			162
Accounts payable, accrued expenses and other current liabilities	(847		)	(554		)
Deferred revenues	(2,782		)	(4,535		)
Deferred rent	(82		)	(43		)
Net cash used in operating activities	(4,462		)	(6,194		)

Investing activities
Purchases of property and equipment	(345		)	(1,319		)
Purchases of available-for-sale securities	(19,387		)	(21,078		)
Maturities of available-for-sale securities	21,595			31,636
Net cash provided by investing activities	1,863			9,239

Financing activities
Proceeds from issuance of common stock, net of issuance costs	587			456
Net cash provided by financing activities	587			456

Net change in cash and cash equivalents	(2,012		)	3,501
Cash and cash equivalents at beginning of period	15,427			15,964
Cash and cash equivalents at end of period	$	13,415		$	19,465

Supplemental disclosure of cash flow information:
Purchases of property and equipment included in accounts payable, accrued expenses and other current liabilities	$	64		$	41

See accompanying notes to condensed financial statements.

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SENOMYX, INC.

NOTES TO FINANCIAL STATEMENTS

1. Basis of Presentation

The financial statements of Senomyx, Inc. (“Senomyx” or the “Company”) at June 30, 2013 and for the three and six months ended June 30, 2013 and 2012 are unaudited. The unaudited financial statements have been prepared on the same basis as the Company’s audited financial statements and, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, necessary to state fairly the financial information therein. The results of operations for the three and six months ended June 30, 2013 are not necessarily indicative of the results that may be reported for the year ending December 31, 2013. For more complete financial information, these financial statements, and the notes thereto, should be read in conjunction with the audited financial statements for the year ended December 31, 2012, including the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 filed with the Securities and Exchange Commission (the “SEC”).

Use of Estimates

The preparation of financial statements in conformity with United States generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

Cost of commercial revenues represent royalties payable to third parties under the Company’s licensing agreements. Such amounts from the prior year have been reclassified from commercial revenues to conform to the current year presentation.

Cash and Cash Equivalents

The Company considers all highly liquid investments with a remaining maturity of three months or less when purchased to be cash equivalents. Cash equivalents are recorded at cost, which approximates market value.

Investments Available-for-Sale

The Company’s surplus cash is invested in United States Treasuries and United States government agency bonds with maturity dates of two years or less from the settlement date. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity with all amortization and accretion included in interest income. The Company’s investments are classified as available-for-sale and carried at estimated fair value with unrealized gains and losses reported in a separate component of accumulated other comprehensive income (loss). Realized gains and losses and declines in value judged to be other-than-temporary, if any, on available-for-sale securities are included in interest income. The cost of securities sold is based on the specific identification method. Interest on securities classified as available-for-sale is included in interest income.

Fair Value of Financial Instruments other than Investments Available-for-Sale

The carrying amount of cash and cash equivalents, accounts receivables, accounts payable and accrued expenses are considered to be representative of their respective fair value because of the short-term nature of those items.

Revenue Recognition

The Company’s revenue recognition policies are in compliance with the Revenue Recognition Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”). Some of the Company’s agreements contain multiple elements, including technological and territorial licenses and research and development services. In accordance with these agreements, the Company may be eligible for upfront fees, research and development funding, cost reimbursements, development milestones, commercial milestones, minimum periodic royalty payments and royalty payments. Development revenues include revenues from license fees, research and development funding, development milestones and cost reimbursements. Commercial revenues include revenues from commercial milestones, royalties on sales made by the Company’s collaborators of products incorporating the Company’s flavor ingredients and minimum periodic royalty payments.

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Pursuant to the Revenue Recognition — Multiple-Element Arrangements Topic of the FASB ASC, each required deliverable is evaluated to determine if it qualifies as a separate unit of accounting. For the Company this determination is generally based on whether the deliverable has “stand-alone value” to the customer. The arrangement’s consideration is then allocated to each separate unit of accounting based on the relative selling price of each deliverable. The estimated selling price of each deliverable is determined using the following hierarchy of values: (i) vendor-specific objective evidence of fair value; (ii) third-party evidence of selling price; and (iii) best estimate of selling price (“BESP”). The BESP reflects the Company’s best estimate of what the selling price would be if the deliverable was regularly sold by the Company on a stand-alone basis. The Company expects, in general, to use the BESP for allocating consideration to each deliverable. In general, the consideration allocated to each unit of accounting is then recognized as the related goods or services are delivered limited to the consideration that is not contingent upon future deliverables. For multiple-element arrangements entered into prior to January 1, 2011 and not materially modified thereafter, the Company continues to apply the Company’s prior accounting policy with respect to such arrangements.

Non-refundable license fees, if not associated with future Company performance, are recognized when received. Non-refundable license fees, if associated with future Company performance obligations, are attributed to a specific program or collaboration and recognized over the period of service for that specific program or collaboration. Amounts received for research funding are recognized as revenue as the services are performed. Revenue is deferred for fees received before earned. Revenues from development milestones are accounted for in accordance with the Revenue Recognition — Milestone Method Topic of the FASB ASC. Milestones are recognized when earned, as evidenced by written acknowledgment from the collaborator or other persuasive evidence that the milestone has been achieved, provided that the milestone event is substantive. A milestone event is considered to be substantive if its achievability was not reasonably assured at the inception of the agreement and the Company’s efforts led to the achievement of the milestone or the milestone was due upon the occurrence of a specific outcome resulting from the Company’s performance. If both of these criteria are not met, the milestone payment is recognized over the remaining minimum period of the Company’s performance obligations under the agreement, if any. The Company assesses whether a milestone is substantive at the inception of each agreement. Revenues from cost reimbursement are recognized when earned, as evidenced by written acknowledgment from the collaborator or other persuasive evidence.

Revenues from commercial milestones are recognized when earned, as evidenced by written acknowledgment from the collaborator or other persuasive evidence that the milestone has been achieved, as these milestone payments do not require the Company’s efforts, but result from the efforts of the collaborator . Royalties on sales made by the Company’s collaborators of products incorporating the Company’s flavor ingredients are recognized when a royalty report or other persuasive evidence is received, which is generally one quarter in arrears. Non-refundable minimum periodic royalty payments are recognized as revenues over the related royalty periods. Royalty terms are specific to each collaboration and collaborator and can vary from year to year. These terms vary based on factors such as the characteristics of the flavor ingredient and the product categories and geographies licensed by the collaborator. Periodically, as contractually specified, the Company’s collaborators are required to provide a report detailing all sales of products containing the Company’s flavor ingredients. To the extent that calculated royalties on sales of such products exceed the minimum periodic royalty payments made to date, the collaborators are required to remit to the Company the difference between royalties calculated and minimum periodic royalty payments made to date. The Company recognizes this difference as royalties on product sales at the time the report is received. To the extent that minimum periodic royalty payments through the end of any applicable period exceed calculated royalties, the Company is not required to refund the difference. Although the Company currently does not have any collaborations that include refundable minimum periodic royalty payments, in such a case, revenue would be deferred for refundable minimum periodic royalty payments received before earned.

Stock-Based Compensation

Total stock-based compensation expenses recognized for the three and six months ended June 30, 2013 and 2012 was comprised as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012

Research and development	$	380	$	472	$	770	$	924
General and administrative	570		661		1,104		1,292
Total stock-based compensation expenses	$	950	$	1,133	$	1,874	$	2,216

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At June 30, 2013, total unrecognized estimated compensation expenses related to non-vested stock options granted prior to that date was $7.4 million, which is expected to be recognized over a weighted average period of 2.2 years.

Net Loss Per Share

The Company calculated net loss per share in accordance with the Earnings Per Share Topic of the FASB ASC. Basic earnings per share (“EPS”) is calculated by dividing the net loss by the weighted average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted EPS is computed by dividing the net income or loss by the weighted average number of common share equivalents outstanding for the period determined using the treasury-stock method. Dilutive common share equivalents include the dilutive effect of in-the-money shares, which is calculated based on the average share price for each period using the treasury stock method. Under the treasury stock method, the exercise price of a share, the amount of compensation cost, if any, for future service that the Company has not yet recognized, and the amount of estimated tax benefits that would be recorded in paid-in capital, if any, when the share is exercised are assumed to be used to repurchase shares in the current period. For purposes of this calculation, common stock subject to repurchase by the Company, convertible preferred stock, options, and warrants are considered to be common stock equivalents and are only included in the calculation of diluted earnings per share when their effect is dilutive.

The following table sets forth the computation of basic and diluted net loss per share for the respective periods.

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Numerator:
Net loss (in thousands)	$	(2,329	)	$	(3,094	)	$	(5,337	)	$	(4,946	)
Denominator:
Weighted average common shares	40,630,844			39,921,773			40,545,336			39,870,396

Basic and diluted net loss per share	$	(0.06	)	$	(0.08	)	$	(0.13	)	$	(0.12	)

Outstanding antidilutive securities not included in diluted net loss per share calculation:
Options to purchase common stock	11,919,834			10,692,858			11,919,834			10,692,858
	11,919,834			10,692,858			11,919,834			10,692,858

Comprehensive Income (Loss)

The Comprehensive Income Topic of the FASB ASC requires that all components of comprehensive income (loss), including net income (loss), be reported in the financial statements in the period in which they are recognized. Comprehensive income (loss) is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. The Company’s accumulated other comprehensive income as of June 30, 2013 and December 31, 2012 consisted of unrealized gains or losses on investments available-for-sale and is reported in stockholders’ equity.

2. Balance Sheet Details

Investments Available-for-Sale

The following is a summary of investments available-for-sale at June 30, 2013 (in thousands):

	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value
United States Treasuries	$	7,518	$	2	$	—		$	7,520
United States government agency securities	16,590		—		(16		)	16,574

Total	$	24,108	$	2	$	(16	)	$	24,094

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The following is a summary of investments available-for-sale at December 31, 2012 (in thousands):

	Amortized Cost		Unrealized Gain		Unrealized Loss		Estimated Fair Value
United States Treasuries	$	5,533	$	1	$	—	$	5,534
United States government agency securities	20,856		6		—		20,862

Total	$	26,389	$	7	$	—	$	26,396

Investments the Company considers to be temporarily impaired at June 30, 2013 were as follows (in thousands, except for number of investments):

		Less than 12 Months of Temporary Impairment
Description	Number of investments	Estimated Fair Value		Unrealized Losses

United States government agency securities	8	$	14,858	$	(16	)
Total temporarily impaired securities	8	$	14,858	$	(16	)

The Company believes that the decline in value of these securities is temporary and primarily related to the change in market interest rates since purchase and that it is more likely than not that the Company will be able to hold these securities to maturity. Therefore the Company anticipates full recovery of their amortized cost basis at maturity.

Gross realized gains and losses on available-for-sale securities were immaterial during the three and six months ended June 30, 2013 and 2012. As of June 30, 2013, the Company held $10.0 million of available-for-sale securities with maturity dates within one year and $14.1 million with maturity dates over one year and less than two years.

3. Fair Value Disclosures

The following table presents information about the Company’s financial assets and financial liabilities measured at fair value on a recurring basis as of June 30, 2013, and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. The Company classifies money market funds and United States Treasuries as Level 1 assets.

Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. The Company obtains the fair value of Level 2 financial instruments from a third-party professional pricing service using quoted market prices for identical or comparable instruments. The Company’s professional pricing service gathers market prices from a variety of industry standard data providers, security master files from large financial institutions and other third-party sources. The service uses these multiple prices as inputs into a distribution-curve based algorithm to determine a fair value. The Company then validates the quoted fair values provided by the professional pricing service by comparing the service’s assessment of the fair values of the Company’s Level 2 investment portfolio balance against the fair values of the Company’s Level 2 investment portfolio balance provided by the Company’s investment managers. The Company classifies United States government agency securities as Level 2 assets. There were no transfers between Level 1 and Level 2 during the six months ended June 30, 2013 or 2012.

Level 3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. The Company does not hold any Level 3 assets. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

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Assets that have recurring measurements are shown below (in thousands):

			Fair Value Measurement at Reporting Date Using
Description	Balance as of June 30, 2013		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

Financial instruments owned:
Money market funds	$	12,051	$	12,051	$	—	$	—
United States Treasuries	7,520		7,520		—		—
United States government agency securities	16,574		—		16,574		—
Total financial instruments owned	$	36,145	$	19,571	$	16,574	$	—

4. Product Discovery, Development and Commercialization Collaborations

In April 2013, the Company amended and restated the Collaborative Research and Development Agreement with Firmenich dated July 28, 2009, as amended, to extend the collaborative research period through July 2016, subject to limited termination rights. The agreement is focused on discovering novel flavor ingredients intended to modify the sweet flavor of sucrose, fructose or various forms of rebaudioside. The significant deliverables under the agreement are research services and certain license rights. Firmenich will pay an additional non-refundable license fee of $5 million, of which $1 million was paid in the second quarter of 2013 and $3 million was paid in the third quarter of 2013. Firmenich will also pay approximately $13 million in research funding over the three-year extension period from July 2013 through July 2016, payable on a quarterly basis. Because of the proprietary nature of the Company’s technology, the Company has determined that the research services and license rights do not have standalone value and are therefore treated as a combined unit of accounting with development revenues to be recognized ratably over the collaborative research period. The Company may receive up to an additional $7 million based on specific objectives related to new sweet flavor ingredients, with a total of $14.1 million in substantive development milestones available under the amended agreement. Firmenich continues to have obligations for other milestone payments, cost reimbursements and royalty payments under an increased royalty rate structure based upon Firmenich sales of flavor ingredients developed under the collaboration.

During the six months ended June 30, 2012, the Company earned a development milestone of $500,000 related to its Cooling Taste Program.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited financial statements and related notes included in this quarterly report on Form 10-Q and the audited financial statements and notes thereto as of and for the year ended December 31, 2012 included with our Annual Report on Form 10-K for the year ended December 31, 2012 filed with the Securities and Exchange Commission, or SEC. Operating results are not necessarily indicative of results that may occur in future periods.

Certain statements contained in this quarterly report on Form 10-Q, including statements regarding the development, growth and expansion of our business, our intent, belief or current expectations, primarily with respect to our future operating performance, and the products we expect to offer and other statements regarding matters that are not historical facts, are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or Exchange Act, and are subject to the “safe harbor” created by these sections. Future filings with the SEC, future press releases and future oral or written statements made by us or with our approval, which are not statements of historical fact, may also contain forward-looking statements. Because such statements include risks and uncertainties, many of which are beyond our control, actual results may differ materially from those expressed or implied by such forward-looking statements. Some of the factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements can be found under the caption “Risk Factors,” and elsewhere in this quarterly report on Form 10-Q. Readers are cautioned not to place undue reliance on forward-looking statements. The forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made.

Overview and Recent Developments

We are a leading company using proprietary taste receptor technologies to discover, develop and commercialize innovative flavor ingredients for the packaged food, beverage and ingredient supply industries. We consider flavor ingredients to include flavors, such as savory flavors and cooling flavors, and flavor modulators, such as sweet and salt modifiers and bitter blockers. We also have an ongoing effort to discover and develop natural high intensity sweeteners. We believe our flavor ingredients will enable packaged food, beverage and ingredient companies to improve the nutritional profile of their products while maintaining or improving taste and generating cost of goods savings.

We have historically licensed our flavor ingredients to our collaborators on an exclusive or co-exclusive basis. We currently have product discovery, development and commercialization collaborations with several of the world’s leading packaged food, beverage and ingredient companies: Ajinomoto, Firmenich, Nestlé and PepsiCo. Depending upon the collaboration, our collaboration agreements provide for license fees, research and development funding, reimbursement of certain costs, development milestones based upon our achievement of research or development goals and, in the event of commercialization, commercial milestones, minimum periodic royalties and royalties on sales of products incorporating our flavor ingredients. We anticipate that we will derive all of our revenues from existing and future collaborations and from a direct sales strategy initiated in 2013 whereby we will sell certain of our flavor ingredients directly to flavor companies for re-sale to food and beverage companies.

In April 2013, we amended and restated our collaboration agreement with Firmenich to extend the collaborative research period through July 2016, subject to limited termination rights. The collaboration agreement is focused on discovering novel flavor ingredients intended to modify the sweet flavor of sucrose, fructose or various forms of rebaudioside. Firmenich will pay us an additional $5 million, of which $1 million was paid in the second quarter of 2013, $3 million was paid in the third quarter of 2013 and the remaining $1 million payable not later than July 2016. We may receive up to an additional $7 million based on specific objectives related to new sweet flavor ingredients. Firmenich has also agreed to pay us approximately $13 million in research funding over the three-year extension period through July 2016. Firmenich continues to have obligations for other milestone payments, cost reimbursements and royalty payments under an increased royalty rate structure based upon Firmenich sales of flavor ingredients developed under the collaboration. Firmenich will continue to have the exclusive right to commercialize our novel flavor ingredients for use in foods and select beverage categories; however, with respect to synthetic flavor ingredients, Firmenich’s period of exclusivity or co-exclusivity will be limited to a specified period of time. This period is typically 36 months following the first regulatory approval of a flavor ingredient in the United States, but in some circumstances may be up to 48 months. With respect to our S6973 flavor ingredient, the period of exclusivity will be determined based on the timing of future regulatory approval of another sweet flavor ingredient that is selected for development under the terms of the agreement. After the applicable period for each synthetic flavor ingredient, we may begin selling that flavor ingredient to other flavor companies. After the same period for each synthetic flavor ingredient, but not earlier than three months following the end of the research funding period, we may also elect to license the flavor ingredient to another third party on a non-exclusive basis. Firmenich may sell the flavor ingredient to food and beverage manufacturers at any time.

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In April 2013, concurrent with the amended and restated collaboration agreement, we entered into a supply agreement under which Firmenich has agreed to supply us with commercial quantities of certain sweet flavor ingredients selected for development under the collaboration agreement, including S9632 and S6973. The supply agreement has a term of ten years, and is exclusive through 2017 subject to limited exceptions. Pricing for purchases under the supply agreement will be determined in accordance with a pre-determined methodology and the supply agreement also contains other provisions intended to protect adequate supply and competitive pricing.

We have incurred significant losses since our inception in 1998 and, as of June 30, 2013 our accumulated deficit was $236 million. Our results of operations have fluctuated from period to period and likely will continue to fluctuate substantially in the future based upon:

· termination of any of our product discovery and development collaboration agreements;

· our ability to discover and develop flavor ingredients or the ability of our product discovery and development collaborators to incorporate them into packaged food, beverage and ingredient products;

· our receipt of milestone payments in any particular period;

· the ability and willingness of food and beverage companies to commercialize products incorporating our flavor ingredients on expected timelines, or at all;

· our ability to implement our direct sales strategy;

· our ability to enter into new product discovery and development collaborations and technology collaborations or to extend the terms of our existing collaboration agreements;

· our ability, or our collaborators’ ability, to successfully satisfy all pertinent regulatory requirements;

· the demand for our collaborators’ products containing our flavor ingredients; and

· general and industry specific economic conditions which may affect our collaborators’ research and development expenditures and commercialization efforts.

Results of Operations

Three Months Ended June 30, 2013 and 2012

Revenues

We recorded development revenues of $6.2 million and $6.1 million during the three months ended June 30, 2013 and 2012, respectively. The increase of $91,000 was primarily attributable to increased revenues from license fees amortization related to our Sweet Taste Program collaboration with Firmenich.

Our commercial revenues increased $645,000 from $836,000 for the three months ended June 30, 2012 to $1.5 million for the three months ended June 30, 2013. The increase in commercial revenues was partly due to increased royalties and a commercial milestone payment based on our collaborator’s sales of products containing flavor ingredients developed under our Sweet Taste Program. Also contributing to the increase in commercial revenues was a non-recurring payment related to a Savory Taste Program collaboration and increased royalties related to our Bitter Blockers Program.

Research and development payments, upfront fees, royalty revenues and cost reimbursements under our material collaborations with Firmenich and PepsiCo accounted for approximately 79% and 82% of total revenues for the three months ended June 30, 2013 and 2012, respectively.

Cost of Commercial Revenues

Our costs of commercial revenues were $104,000 and $59,000 for the three months ended June 30, 2013 and 2012, respectively. These amounts represent royalties payable under our third party licensing agreements. The increase is consistent with a corresponding increase in commercial revenues.

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Research and Development Expenses

Our research and development expenses (including stock-based compensation expenses charged to research and development) were $7.0 million and $7.2 million for the three months ended June 30, 2013 and 2012, respectively. A comparison of research and development expenses by category is as follows (in thousands):

	Three Months Ended June 30,
	2013		2012
Salaries and personnel	$	3,201	$	3,213
Facilities and depreciation	1,454		1,392
Outside services	776		608
Research and development supplies	587		788
Patent and licensing	382		494
Stock-based compensation	381		471
Miscellaneous	187		201
Total research and development expenses	$	6,968	$	7,167

Outside Services. Our outside services expenses were $776,000 and $608,000 for the three months ended June 30, 2013 and 2012, respectively. The increase of $168,000 in outside services expenses was primarily attributable to increased activities for safety studies in support of product candidate regulatory filings, as product candidates progressed from the screening and identification phase of our development process into the safety assessment and regulatory approval phase.

Research and Development Supplies. Our research and development supplies expenses were $587,000 and $788,000 for the three months ended June 30, 2013 and 2012, respectively. The decrease of $201,000 in research and development supplies expenses was primarily attributable to decreased expenditures for compound screening-related supplies and other supplies used in research and development activities, as product candidates progressed from the screening and identification phase of our development process into the safety assessment and regulatory approval phase.

General and Administrative Expenses

Our general and administrative expenses (including stock-based compensation expenses charged to general and administrative) were $2.9 million and $2.8 million for the three months ended June 30, 2013 and 2012, respectively.

Six Months Ended June 30, 2013 and 2012

Revenues

We recorded development revenues of $12.2 million and $13.2 million during the six months ended June 30, 2013 and 2012, respectively. The decrease of $1.0 million was partly attributable to a development milestone of $500,000 earned in the first quarter of 2012 related to our Cooling Taste Program. Also contributing was a decrease in revenues from license fees amortization related to our Sweet Taste Program collaboration with Firmenich, primarily due to an extension in the service period over which the original upfront license fee is being recognized as a result of the election by Firmenich to extend the collaboration in the second quarter of 2012.

Our commercial revenues increased $953,000 from $2.0 million for the six months ended June 30, 2012 to $2.9 million for the six months ended June 30, 2013. The increase in commercial revenues was largely due to increased royalties and a commercial milestone payment based on our collaborator’s sales of products containing flavor ingredients developed under our Sweet Taste Program. Other factors include increased royalties related to our Savory Taste Program and our Bitter Blockers Program.

Research and development payments, upfront fees, royalty revenues and cost reimbursements under our material collaborations with Firmenich and PepsiCo accounted for approximately 78% of total revenues for the six months ended June 30, 2013 and 2012.

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Cost of Commercial Revenues

Our costs of commercial revenues were $205,000 and $139,000 for the six months ended June 30, 2013 and 2012, respectively. These amounts represent royalties payable under our third party licensing agreements. The increase is consistent with a corresponding increase in commercial revenues.

Research and Development Expenses

Our research and development expenses (including stock-based compensation expenses charged to research and development) were $14.3 million for the six months ended June 30, 2013 and 2012. A comparison of research and development expenses by category is as follows (in thousands):

	Six Months Ended June 30,
	2013		2012
Salaries and personnel	$	6,597	$	6,535
Facilities and depreciation	2,854		2,693
Outside services	1,674		1,283
Research and development supplies	1,166		1,491
Patent and licensing	856		943
Stock-based compensation	771		924
Miscellaneous	430		437
Total research and development expenses	$	14,348	$	14,306

Outside Services. Our outside services expenses were $1.7 million and $1.3 million for the six months ended June 30, 2013 and 2012, respectively. The increase of $391,000 in outside services expenses was primarily attributable to increased activities for safety studies in support of product candidate regulatory filings, as product candidates progressed from the screening and identification phase of our development process into the safety assessment and regulatory approval phase.

Research and Development Supplies. Our research and development supplies expenses were $1.2 million and $1.5 million for the six months ended June 30, 2013 and 2012, respectively. The decrease of $325,000 in research and development supplies expenses was primarily attributable to decreased expenditures for compound screening-related supplies and other supplies used in research and development activities, as product candidates progressed from the screening and identification phase of our development process into the safety assessment and regulatory approval phase.

General and Administrative Expenses

Our general and administrative expenses (including stock-based compensation expenses charged to general and administrative) were $6.0 million and $5.8 million for the six months ended June 30, 2013 and 2012, respectively. The increase of $194,000 was primarily due to personnel-related expenses.

Liquidity and Capital Resources

Since our inception, we have financed our business primarily through research and development payments under our product discovery and development collaborations, private and public placements of stock, royalties and interest income. As of June 30, 2013 we had received $204.5 million in non-refundable license fees, research and development payments, cost reimbursements and development milestone payments from our collaboration agreements. In addition, we had received $194.4 million in proceeds from the sales of common and preferred stock, $14.9 million in royalties and commercial milestone payments and $12.5 million in interest income.

At June 30, 2013, we had $37.5 million in cash, cash equivalents and investments available-for-sale compared to $41.8 million at December 31, 2012, a decrease of $4.3 million. This overall decrease resulted from the use of cash to fund our operations.

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Operating Activities

Operating activities used cash of $4.5 million and $6.2 million for the six months ended June 30, 2013 and 2012, respectively. The use of cash was driven by net losses and changes in operating assets and liabilities. Our net loss increased $391,000 to $5.3 million for the six months ended June 30, 2013 compared to $4.9 million for the six months ended June 30, 2012. Net changes in operating assets and liabilities used cash of $2.1 million and $4.4 million during the six months ended June 30, 2013 and 2012, respectively. The decrease in the 2013 period resulted from the timing of payments received from collaborators, as well as a decrease in the amount of deferred revenues recognized during the period due to the April 2012 extension of the service period over which the original license fee related to the Firmenich Sweet Taste Program collaboration is being recognized. Non-cash expenses decreased $214,000 to $3.0 million for the six months ended June 30, 2013 from $3.2 million for the six months ended June 30, 2012, primarily due to a decrease in stock-based compensation expense.

Investing Activities

Investing activities provided cash of $1.9 million and $9.2 million for the six months ended June 30, 2013 and 2012, respectively. Cash provided by investing activities primarily reflects the maturities of available-for-sale securities, offset by purchases of available-for-sale securities, as part of the ongoing management of the investment portfolio. Purchases of property and equipment decreased $974,000 from $1.3 million for the six months ended June 30, 2012 to $345,000 for the six months ended June 30, 2013, due to a decline in purchases of scientific equipment.

Financing Activities

Financing activities provided cash of $587,000 and $456,000 for the six months ended June 30, 2013 and 2012, respectively. Cash provided by financing activities reflects net proceeds from the issuance or sale of common stock from our employee stock purchase program and the exercise of employee stock options.

As of June 30, 2013 future minimum payments due under our contractual obligations are as follows (in thousands):

	Payments Due by Period
	Total		Less than 1 year		1-3 years		3-5 years		After 5 years
Operating leases	$	10,994	$	2,902	$	6,015	$	2,077	$	—
License payments	70		70		—		—		—
Total	$	11,064	$	2,972	$	6,015	$	2,077	$	—

As of June 30, 2013, we had no long-term debt obligations.

Our license agreement with the University of California calls for annual maintenance fees, which commenced in 2006, or royalties or service revenues on sales of any products developed using technologies licensed under the agreement. Royalties are calculated as a percentage of covered sales and are included in cost of commercial revenues. The agreement specifies minimum annual royalty payments commencing in 2014 and continuing through the expiration of the last to expire patent licensed under the agreement. Royalties paid under the agreement for 2012 exceeded the level of future minimum annual royalty payments.

Our future capital uses and requirements depend on numerous forward-looking factors. These factors may include, but are not limited to, the following:

· the rate of progress and cost of research and development activities;

· our ability to establish and maintain product discovery, development and commercialization collaborations;

· the cost of implementation of our direct sales strategy;

· our ability to generate flavor ingredient sales under our direct sales strategy;

· the terms and timing of any collaborative, licensing and other arrangements that we may establish;

· the number and scope of our research activities;

· the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights;

· the effect of competing technological and market developments; and

· the extent to which we acquire or in-license new products, technologies or businesses.

We believe our available cash, cash equivalents, investments and existing sources of funding will be sufficient to satisfy our anticipated operating and capital requirements through at least the next 12 months.

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Until we can generate significant cash from our operations, we expect to continue to fund our operations with existing cash resources that were primarily generated from the proceeds of offerings of our equity securities and license payments, research and development payments and milestone payments under our product discovery and development collaborations. From time to time we may also consider raising additional cash from the sale of equity or other securities.

Commencing July 1, 2013, we are entitled to receive $24.0 million in non-refundable license fees and research and development payments from our collaborators over the remaining life of our current collaboration agreements. If all extension options are elected, we would be entitled to receive an additional $17.6 million, for a total of $41.6 million in non-refundable license fees and research and development payments. Assuming all milestones are achieved for all program goals for all collaborations and we receive all license fees and research and development funding, including any amounts due upon the election of extension options, we may be entitled to receive up to $71.9 million.

In the next six months (through December 31, 2013), we anticipate receiving $9.1 million in license fees and research and development funding. This does not include any additional payments we may receive related to the following events:

· the earning of royalties from the sale of products containing our flavor ingredients;

· the earning of any minimum periodic royalty payments;

· direct sales of flavor ingredients;

· the achievement of additional milestones;

· the earning of any cost reimbursements; and

· the signing of new collaborations or extensions of existing collaborations not currently contemplated under existing extension options.

We may not receive the payments if the collaborations are terminated, amended or not renewed, or if we do not achieve the milestones set forth in the collaboration agreements. In addition, the timing of the receipt of milestone payments in particular is uncertain, as we may achieve milestones significantly earlier or later than we currently expect. We cannot predict at this time the level of our collaborators’ royalty-generating sales, as these sales to date have been based on launches of new products without established sales histories, or the level of flavor ingredient sales under our direct sales strategy.

We continue to pursue additional collaborations which could result in additional revenues. We may not recognize revenues for license fees, research and development funding, milestones, minimum periodic royalties or royalties if the collaborations are terminated or amended, or if we do not achieve the milestones set forth in the collaboration agreements. Our expenses will vary based upon the forward-looking factors listed above.

Off-Balance Sheet Arrangements

As of June 30, 2013 and 2012, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as special purpose or structured finance entities, which would have been established for the purposes of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As such, we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in these relationships.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate these estimates, including those related to revenue recognition, long-lived assets, accrued liabilities, stock-based compensation and income taxes. These estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for judgments about the carrying values of assets and liabilities and the recognition of revenues and expenses. Actual results may differ from these estimates under different assumptions or conditions.

Except as set forth below, there have been no material changes to our critical accounting policies and estimates from the information provided in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, included in our Annual Report on Form 10-K for the year ended December 31, 2012.

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Stock-based Compensation Expense

We grant options to purchase our common stock to our employees and directors under our equity incentive plan. Eligible employees can also purchase shares of our common stock under our employee stock purchase plan at the lower of: (i) 85% of the fair market value on the first day of a two-year offering period; or (ii) 85% of the fair market value on the last date of each six-month purchase period within the two-year offering period. In addition, we grant options to purchase our common stock to non-employees under our equity incentive plan.

Stock-based compensation expenses for the six months ended June 30, 2013 and 2012 were $1.9 million and $2.2 million, respectively. At June 30, 2013, total unrecognized estimated compensation expenses related to non-vested stock options granted prior to that date was $7.4 million, which is expected to be recognized over a weighted average period of 2.2 years.

We estimate the value of stock-based awards on the date of grant using the Black-Scholes option pricing model. The weighted average estimated fair value of stock options granted during the six months ended June 30, 2013 was $1.36 per option. The determination of the fair value of stock-based payment awards on the date of grant using an option-pricing model is affected by our stock price as well as assumptions regarding a number of complex and subjective variables. These variables include, but are not limited to, our expected stock price volatility over the term of the awards, risk-free interest rate and the expected term of the awards.

For purposes of estimating the fair value of stock options granted during the six months ended June 30, 2013 using the Black-Scholes model, we have made a subjective estimate regarding our stock price volatility (weighted average of 70.1%). We used the historical volatility of our stock for the period our stock has been publicly traded, consistent with the guidance in the Compensation — Stock Compensation Topic of the FASB ASC. If our stock price volatility assumption were increased to 75.0%, the weighted average estimated fair value of stock options granted during the six months ended June 30, 2013 would increase by $0.07 per share, or 4.9%.

The expected term of options granted is derived from the average midpoint between vesting and the contractual term, as described in the Compensation — Stock Compensation Topic of the FASB’s ASC. We used this “simplified” method for determining term as we currently do not have sufficient relevant historical exercise data to provide a reasonable basis upon which to estimate expected term. For options granted during the six months ended June 30, 2013, we have calculated a weighted average expected term of 6.0 years. If the expected term of the options granted was increased to 7.0 years, the weighted average estimated fair value of stock options granted during the six months ended June 30, 2013 would increase by $0.08 per share, or 5.8%.

The risk-free interest rate for the expected term of the option is based on the average U.S. Treasury yield curve at the balance sheet date for the expected term (weighted average of 1.5% for the six months ended June 30, 2013) which, if increased to 5.0%, would increase the weighted average estimated fair value of stock options granted during the six months ended June 30, 2013 by $0.09 per share, or 6.3%.

For the six months ended June 30, 2013 and 2012, we have reduced stock-based compensation expenses recognized in the Statement of Operations to reflect for estimated forfeitures. The Compensation — Stock Compensation Topic of the FASB ASC requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Pre-vesting forfeitures were estimated to be approximately 6.1% and 6.3% for the six months ended June 30, 2013 and 2012, respectively, based on historical experience. To date, we have not required any material adjustments to our expected forfeitures.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our primary exposure to market risk is interest income sensitivity, which is affected by changes in the general level of United States interest rates. Due to the nature of our short-term investments, we believe that we are not subject to any material market risk exposure. We do not have any foreign currency or other derivative financial instruments.

ITEM 4. CONTROLS AND PROCEDURES

Prior to the filing of this quarterly report on Form 10-Q, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Senior Vice President and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a - 15(e) or 15d -15(e) of the Exchange Act) as of the end of the period covered by this quarterly report on Form 10-Q. Disclosure controls and procedures are designed to ensure that information required to be disclosed in our periodic reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Based upon that evaluation, our Chief Executive Officer and our Senior Vice President and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report on Form 10-Q.

An evaluation was also performed under the supervision and with the participation of our management, including our Chief Executive Officer and our Senior Vice President and Chief Financial Officer, of any change in our internal control over financial reporting that occurred during our last fiscal quarter and that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. That evaluation did not identify any change in our internal control over financial reporting that occurred during our latest fiscal quarter and that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Our management, including our Chief Executive Officer and our Senior Vice President and Chief Financial Officer, does not expect that our disclosure controls will prevent all errors or potential fraud. A control system, no matter how well conceived and operated, can provide only reasonable and not absolute assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their cost. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons or by collusion of two or more people. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, control may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

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PART II. OTHER INFORMATION

ITEM 1A. RISK FACTORS

The following sets forth risk factors associated with our business. The risk factors set forth below with an asterisk (*) next to the title contain changes to the description of the risk factors associated with our business previously disclosed in Item 1A. of our annual report on Form 10-K for the year ended December 31, 2012. Additional risks and uncertainties that we are unaware of may also become important factors that affect us. If any of the following risks occur, our business, financial condition or results of operations could be materially and adversely affected. In these circumstances, the market price of our common stock could decline.

Risks Related To Our Business

We are dependent on our current and any future product discovery and development collaborators for our research and development funding.

A key element of our current strategy is to commercialize our flavor ingredients through collaborative agreements. To date, substantially all of our research and development funding has been derived solely from research and development payments, license fees, milestone payments and cost reimbursement payments received under our collaborations. Substantially all of our research and development funding in the foreseeable future will result from these types of payments from these collaborations until such time, if ever, that we earn more significant royalties on future sales of consumer products incorporating our flavor ingredients or begin to generate meaningful revenues from our direct sales strategy.

Our current collaborators may amend or not renew their agreements with us or, if they do, they may not be on terms that are as favorable to us as our current agreements. If any or all of our current material agreements with our collaborators are amended, expire or are terminated, or if we are unable to, or elect not to, renew or enter into new collaborative agreements, our research and development funding could significantly decline or be substantially eliminated, which would have a material adverse effect on our business, financial condition and results of operations.

A substantial portion of our revenues is derived from only two collaborators. If our agreements with these two collaborators terminate earlier than anticipated for any reason, our revenues may materially decline.*

During 2012, 87% of our total revenues were derived from two collaborators, with PepsiCo comprising $17.7 million, or 56% of total revenues and Firmenich comprising $9.6 million, or 31% of total revenues.

Our current collaborative agreements with Firmenich, as amended and restated in April 2013, and PepsiCo related to our Sweet Taste Program are scheduled to expire in July 2016 and August 2014, respectively. If any of our collaborative agreements with Firmenich or PepsiCo were to terminate earlier than currently anticipated, or if Firmenich were to discontinue or reduce its actual commercialization efforts related to currently marketed Senomyx flavor ingredients, including S2383 and S6973, we may experience a decline in our revenues.

We are substantially dependent on our current and any future product discovery and development collaborators to develop and commercialize any flavor ingredients we may discover.

Under our current business model, we are substantially dependent on our current and any other possible future collaborators to commercialize any flavor ingredients that we successfully develop and to provide the sales, marketing and distribution capabilities required for the success of our business. We have limited or no control over the amount and timing of resources that our current or any future collaborators may devote to our programs or potential products. Our collaborators may decide not to devote the necessary resources to the commercialization of our flavor ingredients and may choose not to incorporate our flavor ingredients into any or all of their products within their exclusive or co-exclusive product fields on a timely basis or at all. Although our collaboration agreements vary, in some situations a collaborator may have the ability to return rights to one or more of our licensed flavor ingredients in some or all product categories or licensed territories and discontinue any associated minimum annual royalty obligations for those flavor ingredients, product categories or territories, as the case may be. A collaborator may elect to take any of these actions for any number of reasons, including as a result of unfavorable publicity regarding our flavor ingredients or our research methods, or if our flavor ingredients do not have the characteristics desired by the collaborator. These characteristics include, among other things, enhancement properties, stability under various manufacturing and use conditions, solubility, taste, cost and an adequate safety profile. If these collaborators fail to conduct their commercialization, sales and marketing or distribution activities successfully and in a timely manner, or if our existing collaborators terminate their collaboration agreements with us prior to the expiration of the agreements, it will delay our ability to commercialize our flavor ingredients, we will earn little or no royalty revenues from our flavor ingredients and we will not be able to achieve our objectives or build a sustainable or profitable business.

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We may not be able to commercialize the flavor ingredients in our portfolio that we currently control, which could negatively impact our results of operations and market share.*

We have several flavor ingredients in our portfolio that we have discovered and developed but that are not currently licensed to a third party collaborator for one or more product categories and/or geographies, including our S9632 flavor ingredient for which we have rights for use in non-alcoholic beverages and our S336 and S807 savory flavor ingredients for which we have recently regained rights in North America, Japan and in certain product categories in various other geographies outside of Asia. We currently intend to commercialize S9632 and potentially other flavor ingredients under our direct sales strategy; however, we also retain the flexibility to consider licensing the rights to any flavor ingredients that we control to a third party collaborator.

We have no prior experience marketing, distributing or selling flavor ingredients directly to customers. There can be no assurance that our direct sales strategy will be successful or that we will enter into any new business arrangements for any of our flavor ingredients that are not currently licensed to a third party collaborator. We may encounter difficulties or delays to implement our direct sales strategy or enter into any new business arrangements that we elect to pursue. Any of these events could also delay our anticipated timelines, prevent the successful commercialization of our flavor ingredients, negatively impact our financial results, and delay or prevent us from ever achieving or sustaining profitability.

Our business and operating results may be adversely affected by unfavorable economic and market conditions.

A significant portion of our current business model depends on our ability to maintain and enter into new collaborative research, development and commercialization agreements with leading food, beverage and ingredient companies. Our collaborative agreements typically require our collaborators to make a significant commitment of capital and other resources. In most instances these investments are discretionary on the part of our collaborators. The current weak global economic conditions may reduce the amount of discretionary investment that our current and prospective collaborators may be willing to make in our programs as well as the demand for our flavor ingredients in general. In some instances the result may be that companies elect to defer or delay entering into a collaborative agreement with us, or existing collaborators may amend, terminate or not renew an existing program when it expires. Therefore, weak economic conditions, or a reduction in research and development funding, even if economic conditions improve, would likely adversely impact our business, operating results and financial condition in a number of ways, including longer business development cycles, unfavorable financial or other commercial terms, and longer development timelines.

We may not be able to negotiate additional collaboration agreements having terms satisfactory to us or at all.

We may not be able to enter into additional collaborative agreements due to the exclusive nature of our current product discovery and development collaborations. Each of our current collaboration agreements provides for the use of flavor ingredients within one or more defined food, beverage and ingredient product fields on an exclusive or co-exclusive basis for the respective collaborator during the collaborative period specified in the agreement. In the case of exclusive agreements, or co-exclusive agreements where all fields and geographies are granted, we will not be able to enter into additional collaborations with any other food, beverage and ingredient company covering the same product field during the applicable collaborative period. In addition, our collaborators’ competitors may not wish to do business with us at all due to our relationship with our collaborators and under some agreements we have agreed to arrangements where we would not launch competing products or collaborate with a collaborator’s competitor for a limited period of time even after the conclusion of the applicable collaborative period. Consolidation in our target markets may also limit the number of potential collaborators. Further, if we do not achieve our research and development objectives under our existing collaboration agreements prior to the expiration of the collaborative period, our collaborators may elect not to renew these agreements on terms that are acceptable to us. If we are unable to enter into additional product discovery and development collaborations on satisfactory terms, our ability to sustain or expand our business may be significantly diminished.

Disagreements or disputes with a collaborator could adversely impact our business operations and prospects.

From time to time we have disagreements or disputes with our collaborators regarding various subject matters, such as the interpretation of contractual rights and obligations under our agreements, the design of development studies for our flavor ingredients and intellectual property matters. Because we depend on our collaborators to fund our research and development programs and commercialize our flavor ingredients, any disputes or disagreements with our collaborators could disrupt our business operations and adversely impact our ability to maintain existing collaborations or secure new collaborations.

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Whenever we become involved in a dispute or litigation with any collaborator, we might have to spend significant amounts of money, time and effort to defend our position and we may not be successful. Even if we are successful, any dispute could divert management attention and resources from other strategic and research priorities.

We may not be successful in developing flavor ingredients useful for formulation into products.

In order to develop flavor ingredients, we must have first identified the correct taste receptor for the taste of interest and develop high-throughput assays to test for compounds that affect the taste of interest. If we are not able to identify the correct taste receptor for the taste of interest, our assays may not successfully identify compounds that affect the taste of interest. For example, if we are not able to identify the protein or proteins that function as the salt taste receptor, we may not be able to develop an effective salt flavor modifier. In addition, we may not be successful in the development of a high-throughput assay to each taste receptor of interest to us. Even if we succeed in the identification of a taste receptor of interest to us and develop an appropriate high-throughput assay, we may not succeed in developing flavor ingredients with the appropriate attributes required for use in successful commercial products. Successful flavor ingredients require, among other things, appropriate biological activity, including the correct taste property for the product application, an acceptable safety profile, including lack of toxicity or allergenicity, and appropriate physical or chemical properties, including relative levels of solubility, stability, volatility and resistance to heat. Our development programs are intended to evaluate these characteristics of novel flavor ingredients. Therefore, until we complete our development of a given novel flavor ingredient we will not be able to determine whether that flavor ingredient will possess all of the appropriate attributes necessary for commercialization. Successful flavor ingredients must also be cost-efficient, which includes, among other things, the cost to manufacture a flavor ingredient at commercial scale as well as other costs associated with the reformulation of products that include our flavor ingredients. We have only limited experience in evaluating these costs and we may not be able to accurately predict whether our flavor ingredients will be cost-efficient for use in commercial applications. We may not be able to develop flavor ingredients that meet all of these criteria and possess the appropriate attributes necessary for commercialization. It is possible that flavor ingredients that initially appear to meet these criteria are later found to fail these criteria or other criteria that we later deem important. In that case, we may not commercialize such an ingredient when anticipated, or at all, or the potential commercial utility for such an ingredient may be more limited than we expected.

Because food and beverage pricing is very competitive, in cases where the use of our flavor ingredients adds to the cost of a food or beverage, those products may never be priced at levels that will allow acceptance by consumers.

Food and beverage pricing is very competitive and the market is very sensitive to product price changes. Moreover, these consumer sensitivities are further heightened during periods of economic uncertainty and downturn. Because the inclusion of our flavor ingredients may add to the manufacturing cost of these products, there is the risk that potential customers for our flavor ingredients may not be able to sell products that incorporate our flavor ingredients at prices that will allow them to gain market acceptance while, at the same time, remaining profitable. This may lead to potential customers delaying or suspending product launches, or, at a minimum, may lead to price pressure on us or our collaborators. If food and beverage customers delay commercialization of products that incorporate our flavor ingredients or we or our collaborators have to reduce the prices of our flavor ingredients in order to gain market acceptance, our commercial revenues may be adversely impacted.

If we or our collaborators are unable to obtain and maintain the Generally Recognized as Safe, or GRAS, determination or other regulatory approval required before certain of our flavor ingredients can be incorporated into products that are sold, we would be unable to commercialize our flavor ingredients and our business would be adversely affected.*

In the United States, the development, sale and incorporation of our flavor ingredients into products are subject to regulation by the Food and Drug Administration, or FDA, and in some instances other government bodies. Obtaining and maintaining a GRAS determination or other regulatory approval can be costly and take many years.

Depending on the amount or intended use of a particular flavor ingredient added to a product and the number of product categories in which the flavor ingredient will be incorporated, specific safety assessment protocols and regulatory processes must be satisfied before we or our collaborators can commercially market and sell products containing any flavor ingredients that we may discover. A key element of our strategy is to develop flavor ingredients that may be subject to review under the Flavor and Extract Manufacturers Association, or FEMA, GRAS process. In our experiences with the savory, sweet and bitter programs, safety studies, preparation and FEMA GRAS review has ranged from 12 to 18 months and cost up to approximately $1.3 million per flavor ingredient. This experience may not be representative of the timing and cost for current and future programs. This approach is less expensive than the alternative of filing a food additive petition with the FDA, approval of which can take up to four years. The FEMA GRAS process may take longer than 12 to 18 months and cost more than $1 million depending on the properties of the flavor ingredient, and if we elect to perform additional safety studies or if

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additional safety studies are requested by the FEMA Expert Panel or one of our collaborators or are necessary to explain unexpected safety study findings. There is a risk that one or more of our product candidates for which we seek FEMA GRAS determination may not qualify for a FEMA GRAS determination for specific categories or at all. This may occur for a variety of reasons, including the flavor ingredient’s intended use, the amount of the flavor ingredient intended to be added to foods and beverages, the number of product categories in which the flavor ingredient will be incorporated, whether the flavor ingredient imparts sweetness, the safety profile of the flavor ingredient and the FEMA Expert Panel’s interpretation of the safety data. For example, we do not believe that any natural high intensity sweetener that we discover would qualify for a FEMA GRAS determination for its use as a sweetener. Even if we obtain a GRAS determination with respect to a flavor ingredient, the FDA has the ability to challenge such determination or one or more of our collaborators may insist on additional studies, which could materially adversely affect our ability to market products on schedule or at all. In the event that a particular flavor ingredient does not qualify for FEMA GRAS determination or if one or more of our collaborators requires additional studies, we could be required to pursue a lengthy FDA approval process or dedicate our development efforts to alternative ingredients, which would further delay commercialization. In addition, laws, regulations or FDA practice governing the regulatory approval process, the availability of the GRAS determination process or the manufacture or labeling of such products, may change in a manner that could adversely affect our ability to commercialize products on schedule or at all and may also harm our ability to maintain our existing collaboration agreements or enter into new collaborations.

We must secure and maintain regulatory approvals of our flavor ingredients through various governmental bodies outside the United States. The applicable regulations are complex and subject to change, which may adversely impact our ability to commercialize our flavor ingredients internationally.

Sales of our flavor ingredients outside of the United States will be subject to foreign regulatory requirements, which are determined by multiple governing bodies, such as the Joint FAO/WHO Expert Committee on Food Additives, or JECFA, and the European Food Safety Authority, or EFSA, and in some instances individual countries, such as China, Indonesia and Japan. These foreign regulatory requirements are complex and constantly changing, sometimes quite unpredictably, due, in part, to changes in agendas of political, business and social activist groups as well as government priorities. We may be required to incur substantial costs to comply with current or future laws and regulations, or new interpretations of existing laws and regulations, and our operations, business or financial condition could be adversely affected by such future requirements or interpretations of existing requirements.

In most cases, whether or not a GRAS determination has been obtained, approval of a product by the applicable regulatory authorities for a foreign country must still be obtained prior to manufacturing or marketing the product in that country. A GRAS determination in the United States or in any other jurisdiction does not ensure approval in other jurisdictions because the requirements from jurisdiction to jurisdiction may vary widely and may change over time. For example, we are aware of ongoing activities that are intended to clarify the regulatory approval process for flavor ingredients within the European Union. Because of the inherent uncertainty associated with the regulatory approval process outside the United States, predicting the outcome or timing of review of any of our submissions to foreign regulatory authorities, present or in the future, is difficult. Accordingly, our estimates and forecasts for those submissions and potential approvals may not be accurate. The process of obtaining foreign approvals could result in significant delays, difficulties and costs for us and require additional safety studies and additional expenses. If we experience delays or if we fail to comply with these regulatory requirements or to obtain and maintain required approvals, our ability to generate revenue will be diminished.

We and our collaborators may not be successful in overcoming these regulatory hurdles, which could result in product launch delays, unanticipated expenses, termination of collaborations and flavor ingredients not being approved for incorporation into consumer products in one or more geographies. In addition, even after regulatory approval of our flavor ingredients, we may become aware of new information that suggests our flavor ingredients are unsuitable for consumer use, in which case our regulatory approvals may be revoked or we may elect to voluntarily cease the commercialization of those ingredients. These consequences would have a material adverse effect on our business financial condition and results of operations.

Even if we or our collaborators receive regulatory approval and incorporate our flavor ingredients into products, those products may never be commercially successful.

Even if we discover and develop flavor ingredients that obtain the necessary GRAS determination or other regulatory approval, our success depends to a significant degree upon the commercial success of food, beverage and ingredient products incorporating those flavor ingredients. If these products fail to achieve or subsequently maintain market acceptance or commercial viability, our business would be significantly harmed because our royalty revenue is dependent upon consumer sales of these products. In addition, we could be unable to maintain our existing collaborations or attract new product

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discovery and development collaborators. Many factors may affect the willingness of food and beverage companies to launch new or reformulated products incorporating our flavor ingredients and the market acceptance and commercial success of any potential products incorporating flavor ingredients, including:

· health concerns, whether actual or perceived, regarding our flavor ingredients or those of our competitors;

· unfavorable publicity regarding our flavor ingredients or our research methods;

· the timing of market entry as compared to competitive products;

· whether our collaborators devote sufficient financial and other resources to promote our flavor ingredients;

· the pricing of products that contain our flavor ingredients relative to other competing products;

· the costs and market risks of reformulating existing products;

· the rate of adoption of products by our collaborators and other companies in the flavor industry; and

· any product labeling that may be required by the FDA or other United States or foreign regulatory agencies for products incorporating our flavor ingredients.

We have a history of operating losses and we may not achieve or maintain profitability.*

We have not been profitable and have generated substantial operating losses since we were incorporated in September 1998. We incurred net losses of approximately $5.3 million for the six months ended June 30, 2013. As of June 30, 2013, we had an accumulated deficit of approximately $236 million. We expect to incur additional losses for at least the next year. The extent of our future losses will depend, in part, on the rate of increase in our operating expenses and the rate of growth, if any, in our revenues from our existing and any future product discovery and development collaborations as well as from our direct sales strategy and other sources that may become available to us in the future. To date, substantially all of our revenues have come from research and development funding, license fees, cost reimbursement and milestone payments under our product discovery and development collaborations. In order for us to generate further royalty revenues and become profitable, we must successfully retain our existing product discovery and development collaborations and our collaborators must further commercialize products incorporating one or more of our flavor ingredients, from which we can derive additional royalty revenues, or we must successfully implement our direct sales strategy or alternative strategies where we receive revenues from other sources. Our ability to generate commercial revenue is uncertain and will depend upon, among other things, our ability to meet particular research, development and commercialization objectives.

We expect that our results of operations will fluctuate from period to period, and this fluctuation could cause our stock price to decline.

Our operating results have fluctuated in the past and are likely to vary significantly in the future based upon a number of factors, many of which we have little or no control over. We operate in a highly dynamic industry and future results could be subject to significant fluctuations. These fluctuations could cause us to fail to meet or exceed our published guidance or financial expectations of securities analysts or investors, which could cause our stock price to decline rapidly and significantly. Revenue and expenses in future periods may be greater or less than revenue and expenses in the immediately preceding period or in the comparable period of the prior year. Therefore, period-to-period comparisons of our operating results are not necessarily a good indication of our future performance. Some of the factors that could cause our operating results to fluctuate include:

· termination, expiration or amendment of any of our product discovery and development collaboration agreements;

· our ability to discover and develop flavor ingredients or the ability of our product discovery and development collaborators to incorporate them into food, beverage and ingredient products;

· our receipt of milestone payments in any particular period;

· the ability and willingness of food and beverage companies to commercialize products incorporating our flavor ingredients on expected timelines, or at all;

· our ability to implement our direct sales strategy;

· our ability to enter into new product discovery and development collaborations and technology collaborations or to extend the terms of our existing collaboration agreements and our payment obligations, expected revenue and other terms of any of our agreements;

· our ability, or our collaborators’ ability, to successfully satisfy all pertinent regulatory requirements;

· the demand for our collaborators’ and other customers’ products containing our flavor ingredients; and

· general and industry specific economic conditions, including the current economic and credit crisis, which may affect our collaborators’ research and development expenditures and commercialization efforts.

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We may seek additional capital to fund our operations.

If we are unable to successfully commercialize our flavor ingredients, maintain our existing product discovery and development collaborations or enter into new collaborations, we will likely need to obtain additional capital, reduce our ongoing expenses and/or modify our strategy to continue our operations. In addition, our business and operations may change in a manner that would consume available resources at a greater rate than anticipated, or we may decide that for other reasons it is in our best interests to seek additional capital. In such an event, we may need to raise substantial additional capital to, among other things:

· fund research, discovery or development programs;

· advance product candidates into and through the safety evaluation and regulatory approval process;

· acquire rights to products or product candidates, technologies or businesses;

· support the commercialization of our flavor ingredients; and

· prosecute, maintain and enforce our intellectual property rights.

If we pursue additional capital to continue our operations, we cannot assure you that additional financing will be available on terms acceptable to us, or at all. If adequate funds are not available or are not available on acceptable terms, our ability to fund our operations, take advantage of opportunities, identify and develop flavor ingredients, develop technologies or otherwise respond to competitive pressures could be significantly limited. In addition, if financing is not available, we may need to alter our strategies, reduce our ongoing expenses or cease operations. In addition, issuances of debt or additional equity could impact the rights of the holders of our common stock, may dilute our stockholders’ ownership and may impose restrictions on our operations. These restrictions could include limitations on additional borrowing, specific restrictions on the use of our assets as well as prohibitions on our ability to create liens, pay dividends, redeem our stock or make investments.

If we elect to modify our business operations in order to reduce our expenses, our research, discovery and development programs could be negatively impacted.

If we modify our business operations to meaningfully reduce our expenses we may not be able to fund our current research, discovery and development programs at the levels we require in order to achieve our corporate goals or we may need to suspend or discontinue one or more programs altogether. A reduction in funding in the near term may be accomplished through a number of measures, including reduction in variable internal or external costs or by deferring certain expenses until a later date. Any meaningful funding reduction scenario will likely result in a delay in any affected programs, and may also negatively impact our existing collaborations and harm our ability to attract new collaborators for those and other programs. In addition, a suspension or discontinuation of a program may result in an indefinite and significant delay of any affected program, and we may incur significant inefficiencies if we later elect to resume any such program.

If we lose our key personnel or are unable to attract and retain qualified personnel, it could adversely affect our business.

Our success depends to a significant degree upon the continued contributions of our executive officers, management and scientific staff. We have entered into employment letter agreements with each of our executive officers; however, all of our employees are at-will employees, which means that either we or the employee may terminate their employment at any time. In addition, we currently have no key person insurance. We expect to recruit specific personnel to support our direct sales strategy. If we are not able to attract and retain the necessary personnel to accomplish all of our business objectives, we may experience constraints that will adversely affect our ability to meet the demands of our current or any future product discovery and development collaborators in a timely fashion, to support our independent discovery and development programs or to pursue our direct sales strategy. In addition, we may be delayed or unable to develop new product candidates, commercialize our existing product candidates or achieve our other business objectives as a result of any future loss of our other executive officers or key members of our management or scientific staff, which could cause our stock price to decline. Moreover, the loss of the services of one or more of our executive officers or key members of our management or scientific staff could negatively impact the relationships we have with our collaborators.

We may encounter difficulties managing our growth, which could adversely affect our business.

Our strategy includes entering into and working on simultaneous flavor ingredient discovery and development programs across multiple markets. We may choose to increase headcount in the future in order to meet our strategic objectives. If our growth continues, it will continue to place a strain on us, our management and our resources. Our ability to effectively manage our operations, growth and various projects requires us to continue to improve our operational, financial and management controls, reporting systems and procedures and to attract and retain sufficient numbers of talented employees. We may not be able to successfully implement these tasks on a larger scale and, accordingly, we may not achieve our

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research, development and commercialization goals. If we fail to improve our operational, financial and management information systems, or fail to effectively monitor or manage our new and future employees or our growth, our business would suffer significantly. In addition, no assurance can be made that we will be able to maintain adequate facilities to house our staff, conduct our research or achieve our business objectives.

If we acquire products, technologies or other businesses, we will incur a variety of costs, may have integration difficulties and may experience numerous other risks that could adversely affect our business.

If appropriate opportunities become available, we may consider acquiring businesses, technologies or products that we believe are a strategic fit with our business. We may also consider reacquiring rights to flavor ingredients that are currently licensed to one or more of our collaborators. We currently have no commitments or agreements with respect to any material acquisitions. We have limited, if any, experience in identifying acquisition targets, successfully acquiring them and integrating them into our current infrastructure. We may not be able to successfully integrate any businesses, products, technologies or personnel that we might acquire in the future without a significant expenditure of operating, financial and management resources, if at all. In addition, future acquisitions might be funded by issuances of debt or additional equity, which could impact your rights as a holder of our common stock and may dilute your ownership percentage. Any of the foregoing could have a significant adverse effect on our business, financial condition and results of operations.

Risks Related To Production and Supply

We rely on third parties to manufacture our flavor ingredients on a commercial scale.*

We do not have experience in manufacturing, nor do we have the resources or facilities to manufacture, flavor ingredients on a commercial scale. Therefore, the commercialization of our flavor ingredients depends in part on our or our collaborators’ ability to manufacture, or to contract with third-party manufacturers of our flavor ingredients, on a large scale, at a competitive cost, with the specified quality and in accordance with relevant food, beverage and ingredient regulatory requirements. Any such collaborators or third-party manufacturers may encounter manufacturing difficulties at any time that could result in delays in the commercialization of potential flavor ingredients. Except for our sweet flavor ingredients, we currently do not have any agreements with any third party for the commercial scale manufacturing of our flavor ingredients to support our direct sales strategy.

Our inability to find capable manufacturing capacity or to enter into agreements on acceptable terms with third party manufacturers could delay commercialization of any products we may develop and may harm our relationships with our existing and any future product discovery and development collaborators and our customers. Moreover, if we or our collaborators are required to change from one third-party manufacturer to another for any reason, the commercialization of our products may be delayed further. In addition, if any manufacturer of our flavor ingredients fail to comply with the FDA’s good manufacturing practice regulations or similar regulations in other countries, then we or our collaborators may be subject to adverse regulatory action including product recalls, warning letters and withdrawal of our products, or our collaborators’ or customers’ products, from the market, any of which may harm our reputation and our business.

Further, because our flavor ingredients are regulated as food products under the Food, Drug and Cosmetic, or FD&C, Act, we and the third parties with which we collaborate or contract to manufacture, process, pack, import or otherwise handle our products or our product ingredients, may be required to comply with certain registration, prior notice submission, recordkeeping and other regulatory requirements. Failure of any party in the chain of distribution to comply with any applicable requirements under the FD&C Act or the FDA’s implementing regulations, or similar regulations in other countries, may adversely affect the manufacture and/or distribution of our products in commerce.

We currently expect to rely on Firmenich as a sole supplier of our sweet flavor ingredients to support our direct sales strategy. If Firmenich is unable to supply us with our required amounts of our sweet flavor ingredients on a timely basis, our results of operations may be adversely affected.*

In April 2013, we entered into a supply agreement with Firmenich. Under the terms of this supply agreement, we have agreed to utilize Firmenich as our exclusive manufacturer of any sweet flavor ingredient that Firmenich has selected to develop under the terms of our collaboration agreement. Because Firmenich is a third party manufacturer, we have only limited control over the timing and level of its production volumes. If Firmenich fails to supply us with required amounts of our flavor ingredients under our agreement, we would not be able to meet our customers’ demands unless we were able to utilize alternative sources of supply, which may be more costly and may not even be available on acceptable terms. Accordingly, if Firmenich is unable to supply us with our required amounts of flavor ingredients it may have a material adverse effect on our results of operations.

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We expect to hold inventory and commit to future inventory purchases to support our direct sales strategy. If our inventory on-hand or committed amounts cannot be sold, our results of operations and/or financial position may be adversely affected.*

We do not currently hold any inventory of commercial quantities of any of our flavor ingredients. In connection with the launch of our direct sales strategy we expect it to be necessary or useful to hold commercial quantities of our flavor ingredients in inventory and we will likely need to commit to future purchases of our flavor ingredients in advance of customer orders. We have no prior experience in managing inventory for the commercialization of our flavor ingredients. In particular during the initial launch of our direct sales strategy we may have excess inventory on-hand, we may be forced to purchase excessive amounts of flavor ingredients in order to establish manufacturing relationship with third parties or to give potential customers greater confidence in the reliability of our supply, which may have a material adverse effect on our results of operations and/or financial position.

Risks Related To Our Industry

Our ability to compete in the flavor ingredient market may decline if we do not adequately protect our proprietary technologies.

Our success depends in part on our ability to obtain and maintain intellectual property that protects our technologies and flavor ingredients. Patent positions may be highly uncertain and may involve complex legal and factual questions, including the ability to establish patentability of sequences relating to taste receptors, proteins, chemical synthesis techniques, compounds and methods for using them to modulate taste for which we seek patent protection. No consistent standard regarding the allowability or enforceability of claims in many of our pending patent applications has emerged to date. As a result, we cannot predict the breadth of claims that will ultimately be allowed in our patent applications, if any, including those we have in-licensed or the extent to which we may enforce these claims against our competitors. The degree of future protection for our proprietary rights is therefore highly uncertain and we cannot assure you that:

· we were the first to file patent applications or to invent the subject matter claimed in patent applications relating to the technologies upon which we rely;

· others will not independently develop similar or alternative technologies or duplicate any of our technologies;

· others did not publicly disclose our claimed technology before we conceived the subject matter included in any of our patent applications;

· any of our patent applications will result in issued patents;

· any of our patent applications will not result in interferences or disputes with third parties regarding priority of invention or the validity of any issued patent;

· any patents that have issued or may be issued to us, our collaborators or our licensors will provide a basis for commercially viable products or will provide us with any competitive advantages or will not be challenged by third parties;

· we will develop additional proprietary technologies that are patentable;

· the patents of others will not have an adverse effect on our ability to do business; or

· new proprietary technologies from third parties, including existing licensors, will be available for licensing to us on reasonable commercial terms, if at all.

In addition, patent law outside the United States is uncertain and in many countries intellectual property laws are undergoing review and revision. The laws of some countries do not protect intellectual property rights to the same extent as domestic laws. It may be necessary or useful for us to participate in opposition proceedings to determine the validity of our competitors’ patents, litigation to enforce our or our licensed intellectual property against others or to defend the validity of any of our or our licensors’ future patents, which could result in substantial costs and would divert our efforts and attention from other aspects of our business. We cannot be certain of the outcome of any such proceedings or litigation.

Technologies licensed to us by others, or in-licensed technologies, are important to our business. In particular, we depend on high-throughput screening technologies that we licensed from Aurora Biosciences, technology related to certain taste receptor sequences that we license from the University of California and others and technology related to compound libraries that we license from third parties. In addition, we may in the future acquire rights to additional technologies by licensing such rights from existing licensors or from third parties. Such in-licenses may be costly. Also, we generally do not control the patent prosecution, maintenance or enforcement of in-licensed technologies. Accordingly, we are unable to exercise the same degree of control over this intellectual property as we do over our internally developed technologies. Moreover, some of our academic institution licensors, collaborators and scientific advisors have rights to publish data and information to which we have rights. If we cannot maintain the confidentiality of our technologies and other confidential information in connection with our collaborations, our ability to protect our proprietary information or obtain patent protection in the future may be impaired, which could have a significant adverse effect on our business, financial condition and results of operations.

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Many of the patent applications we and our licensors have filed have not yet been substantively examined and may not result in patents being issued.

Many of the patent applications filed by us and our licensors were filed recently with the United States Patent and Trademark Office and some have not been substantively examined and may not result in patents being issued. Some of these patent applications claim sequences that were identified from different publicly available sequence information sources such as the High-Throughput Genomic Sequences division of GenBank. It is difficult to predict whether any of our or our licensors’ applications will ultimately be found to be patentable or, if so, to predict the scope of any allowed claims. In addition, the disclosure in our or our licensors’ patent applications, particularly in respect of the utility of our claimed inventions, may not be sufficient to meet the statutory requirements for patentability in all cases. Furthermore, recent changes in rules promulgated by the European Patent Office may adversely affect the patentability of inventions claimed in some of our and our licensors’ patent applications. As a result, it is difficult to predict whether any of our or our licensors’ applications will be allowed, or, if so, to predict the scope of any allowed claims or the enforceability of the patents. Even if enforceable, others may be able to design around any patents or develop similar technologies that are not within the scope of such patents. Our and our licensors’ patent applications may not issue as patents that will provide us with any protection or competitive advantage.

Disputes concerning the infringement or misappropriation of our proprietary rights or the proprietary rights of others could be time consuming and extremely costly and could delay our research and development efforts.

Our commercial success, if any, will be significantly harmed if we infringe the patent rights of third parties or if we breach any license or other agreements that we have entered into with regard to our technology or business. Our success will also depend, in part, on our ability to prevent others from infringing our patent rights.

We are aware of other companies and academic institutions that have been performing research in the areas of taste modulation and flavor ingredients. In particular, other companies, academic institutions and inventor applicants have announced that they have conducted taste-receptor or ion channel research and have published data on taste receptor sequence information and taste receptors or filed patent applications or obtained patent protection on taste modulation or taste receptors and their uses, including Ajinomoto, California Institute of Technology, Cargill, Chromocell, Colorado State University, Columbia University, Dendreon, Duke University, the German Institute of Human Nutrition, Givaudan SA, International Flavors & Fragrances Inc., Johannes Gutenberg University, Kyushu University, Monell Chemical Senses Corp., Mount Sinai School of Medicine, the National Institutes of Health, Nestlé, Novartis, NutraSweet, Nutrinova GMBH, Pfizer, Inc., Sloan Kettering, Symrise, Tate & Lyle, The Scripps Research Institute, Unilever, the University of California, the University of Miami, the University of Tokyo, the University of Wisconsin, Virginia Commonwealth University and Wiessenbach. To the extent any of these companies, academic institutions or inventor applicants currently have, or obtain in the future, broad patent claims, such patents could block our ability to use various aspects of our discovery and development process and might prevent us from developing or commercializing newly discovered flavor ingredients or otherwise conducting our business. The University of California, for example, claims certain patent rights relating to the coexpression of T1R receptors that may not have been licensed to us. While our technology is focused on the use of human T1R receptors, we cannot assure you that it does not infringe such patent rights. In such event, if we are not able to amend our license with the University of California to include such patent rights and our technology is found to interfere with or infringe such patent rights, our business, financial condition and results of operations could suffer a significant adverse effect. In addition, it is possible that some of the flavor ingredients that are discovered using our technology may not be patentable or may be covered by intellectual property of third parties.

We are not currently a party to any litigation, interference, opposition, protest, reexamination, reissue or any other potentially adverse governmental, ex parte or inter-party proceeding with regard to our patent or trademark positions. However, the life sciences and other technology industries are characterized by extensive litigation regarding patents and other intellectual property rights. Many life sciences and other technology companies have employed intellectual property litigation as a way to gain a competitive advantage. We may become involved in litigation, interference proceedings, oppositions, reexamination, protest or other potentially adverse intellectual property proceedings as a result of alleged infringement by us of the rights of others or as a result of priority of invention disputes with third parties. Third parties may also challenge the validity of any of our issued patents. Similarly, we may initiate proceedings to enforce our patent rights and prevent others from infringing our or our licensed intellectual property rights. In any of these circumstances, we might have to spend significant amounts of money, time and effort defending our position and we may not be successful. In addition, any claims relating to the infringement of third-party proprietary rights or proprietary determinations, even if not meritorious, could result in costly litigation, lengthy governmental proceedings, divert management’s attention and resources, or require us to enter into royalty or license agreements that are not advantageous to us.

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Should any person have filed patent applications or obtained patents that claim inventions also claimed by us, we may have to participate in an interference proceeding declared by the relevant patent regulatory agency to determine priority of invention and, thus, the right to a patent for these inventions in the United States. Such a proceeding could result in substantial cost to us even if the outcome is favorable. Even if successful on priority grounds, an interference action may result in loss of claims based on patentability grounds raised in the interference action. Litigation, interference proceedings or other proceedings could divert management’s time and efforts. Even unsuccessful claims could result in significant legal fees and other expenses, diversion of management’s time and disruption in our business. Uncertainties resulting from initiation and continuation of any patent proceeding or related litigation could harm our ability to compete and could have a significant adverse effect on our business, financial condition and results of operations.

An adverse ruling arising out of any intellectual property dispute, including an adverse decision as to the priority of our inventions or invalidity of our patents, could undercut or invalidate our intellectual property position. An adverse ruling could also subject us to significant liability for damages, including possible treble damages, prevent us from using technologies or developing products, or require us to negotiate licenses to disputed rights from third parties. Although patent and intellectual property disputes in the technology area are often settled through licensing or similar arrangements, costs associated with these arrangements may be substantial and could include license fees and ongoing royalties. Furthermore, necessary licenses may not be available to us on satisfactory terms, if at all. Failure to obtain a license in such a case could have a significant adverse effect on our business, financial condition and results of operations.

If we are unable to protect our trade secrets and other proprietary information, we could lose any competitive advantage we may have, which could adversely affect our business.

We rely in part on trade secret protection for our confidential and proprietary information, knowhow and processes. Our policy is to execute proprietary information and invention agreements with our employees and consultants upon the commencement of an employment or consulting relationship. These agreements generally require that all confidential information developed by the individual or made known to the individual by us during the course of the individual’s relationship with us be kept confidential and not be disclosed to third parties. These agreements also generally provide that inventions conceived by the individual in the course of their employment shall be our exclusive property. Similarly, in the course of our collaborations or in the negotiation of potential collaborations we often disclose confidential and proprietary information under written agreements that obligate those third parties to keep our information confidential and to use our confidential information only for the purposes that we specify. There can be no assurance that we will be able to effectively enforce these agreements or that proprietary information is our exclusive property. There can be no assurance that the subject proprietary information will not be disclosed, that others will not independently develop substantially equivalent proprietary information and techniques or otherwise gain access to our trade secrets or that we can meaningfully protect our trade secrets. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect our competitive business position.

Many potential competitors, including those who have greater resources and experience than we do, may develop products or technologies that make ours obsolete or noncompetitive.

The life sciences and other technology industries are characterized by rapid technological change, and the area of sensory or taste receptor research is a rapidly evolving field. Our future success will depend on our ability to maintain a competitive position with respect to technological advances. Technological developments by others may result in our flavor ingredients and technologies becoming obsolete.

In particular, we face substantial competition from companies pursuing the commercialization of products and services relevant to taste using more traditional methods for the discovery of flavor ingredients, or for the reduction of salt, sugar, monosodium glutamate, or MSG, or bitter taste. These competitors include leading flavor companies, such as Firmenich, Givaudan SA, International Flavors & Fragrances Inc., Symrise and Takasago. These companies provide flavors and other products, such as oils, extracts and distillates, to consumer products companies for use in a wide variety of products including foods, beverages, confectionaries, dairy products and pharmaceuticals. Competitors currently developing or marketing high intensity sweeteners include Ajinomoto, BRAIN AG, or Biotechnology Research and Information Network AG, Cargill, GLG Life Tech, Natur Research Ingredients, Nutrasweet, Nutrinova GMBH, PureCircle Limited, Symrise and Tate & Lyle. Competitors currently developing or marketing menthol or cooling agents include International Flavors and Fragrances, Jindal Drugs, Mentha & Allied, Sharp Menthol, Symrise, Takasago and Renessenz LLC. We currently compete and will continue to compete in the future with these companies in collaborating with and selling flavor products and technologies to manufacturers of food, beverage and ingredient products. Many of these companies have substantially greater capital resources, research and development resources and experience, manufacturing capabilities, regulatory expertise, sales and marketing resources, established relationships with consumer products companies and production facilities.

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Savory flavor ingredients, particularly inosine monophosphate, or IMP, are commercially available, and we will compete with the companies that produce these flavor ingredients. IMP is widely available and is a generally accepted food additive by the food, beverage and ingredient industries. As a result, our existing and future collaborators may choose to incorporate IMP or similar savory flavor ingredients into their food, beverage and ingredient products instead of our savory flavor ingredients. We may compete with bitter masking or bitter blocking compounds, such as adenosine 5’ monophosphate, or AMP. We may also compete with known methods for reducing sodium, such as the use of potassium chloride in combination with flavors and masking agents. In addition, we may compete with existing cooling agents, such as menthol and WS-3, which are currently in use.

We may in the future face competition from life sciences and other technology companies and other commercial enterprises. These entities engage as we do in biotechnology, biology or chemistry research and could apply this technology to the discovery and development of flavor ingredients. We are aware of one other company, Chromocell, which is involved in research for the discovery and development of sweet flavor modifiers, bitter blockers and salt substitutes. We cannot guarantee that products developed as a result of our competitors’ existing or future collaborations will not compete with our flavor ingredients.

Universities and public and private research institutions are also potential competitors. While these organizations primarily have educational objectives, they may develop proprietary technologies related to the sense of taste or secure patent protection that we may need for the development of our technologies and products. We may attempt to license these proprietary technologies, but these licenses may not be available to us on acceptable terms, if at all.

Our competitors, either alone or with their collaborative partners, may succeed in developing technologies or discovering flavor ingredients that are more effective, safer, more affordable or more easily commercialized than ours, and our competitors may obtain intellectual property protection or commercialize products sooner than we do. Developments by others may render our product candidates or our technologies obsolete. In addition, our current product discovery and development collaborators are not prohibited from entering into research and development collaboration agreements with third parties in any product field. Our failure to compete effectively would have a significant adverse effect on our business, financial condition and results of operations.

Risks Related to Quality and Safety

Concerns with safety and quality could cause customers to avoid products that contain our flavor ingredients.

Adverse publicity about the safety of certain foods due to the actual or potential existence of certain artificial flavors or other ingredients has heightened the sensitivities of many consumers. These safety and quality issues, whether real or perceived, may discourage customers from buying products containing or perceived to contain the compounds which give rise to such concerns. We could be adversely affected if our customers or the ultimate consumers of our products lose confidence in the safety and quality of our flavor ingredients. Any negative perceptions about the safety and quality of our flavor ingredients could adversely affect our business and financial condition.

We may be sued for product liability and exposed to other product safety-related risks, which could adversely affect our business and harm our reputation.

Because our business strategy involves the development and sale of commercial products incorporating our flavor ingredients, we may be sued for product liability and we may also be the subject of product recalls, product seizures and related adverse publicity. Product liability claims and recalls of products that contain any of our flavor ingredients could result from such things as contamination, spoilage, product misbranding or product tampering, whether real or perceived.

From time to time we receive reports of observed effects after individuals taste solutions or products that include novel flavor ingredients that we are testing or developing, including reports such as irritation of the mouth, tingling of the tongue, lips or gums, and modulation or loss of taste sensation. Our practice is to track reports of any observed effects and, in particular, to evaluate whether any adverse effect may be related to our novel flavor ingredient or whether another cause is determinable. In some instances, these effects may be observed only at higher levels of use or exposure, in which case we may elect to proceed with development, and subsequent commercialization, of a novel flavor ingredient at use levels that we believe are appropriate for only a subset of all potential applications. Nevertheless, we may be held liable if any flavor ingredient we test, develop or commercialize, or any product our collaborators test, develop or commercialize that incorporates any of our flavor ingredients, causes injury or illness or is found otherwise unsuitable during product testing, manufacturing, marketing, sale or consumer use. In addition, the safety studies we must perform and the regulatory approvals we must obtain prior to incorporating our flavor ingredients into a commercial product will not protect us from any such liability.

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Any alleged illness or injury associated with any of our flavor ingredients, product defect, product liability judgment or product recall may negatively impact our financial results depending on the reaction of our collaborators, scope, competitive reaction, and consumer attitudes. Even if such an allegation or product liability claim lacks merit, cannot be substantiated, is unsuccessful or is not fully pursued, the negative publicity surrounding any assertion that our flavor ingredients or products that incorporate our flavor ingredients caused illness, injury or death could adversely affect our reputation with existing and potential collaborators and licensees and our corporate image and could cause a decline in our stock price.

Our product liability insurance may not be sufficient to cover our potential liabilities in the case of a product recall or other safety-related claims.

Our product liability insurance may not fully cover our potential liabilities associated with the sale of commercial products incorporating any of our flavor ingredients. Insurance coverage for such risks may be expensive and difficult to obtain, and we may be unable to obtain coverage in the future on acceptable terms, if at all. Our inability to obtain sufficient insurance coverage to protect against potential product liability claims could prevent or inhibit the commercialization of products developed by us or our product discovery and development collaborators. We may be obligated to indemnify our product discovery and development collaborators for product liability or other losses they incur as a result of our flavor ingredients. Any indemnification we receive from such collaborators for product liability that does not arise from our flavor ingredients may not be sufficient to satisfy our liability to injured parties. If we are sued for any injury caused by our flavor ingredients or products incorporating our flavor ingredients, our liability could exceed our total assets.

We use hazardous materials. Any claims relating to improper handling, storage or disposal of these materials could be time consuming and costly.

Our discovery and development process requires our employees to routinely handle hazardous chemical, radioactive and biological materials. Our operations also produce hazardous waste products. Federal, state and local laws and regulations govern the use, manufacture, storage, handling and disposal of these materials. As a result of the increase in size of our operations, we are now classified as a large quantity generator of hazardous waste. This classification may result in increased scrutiny of our operations by the Environmental Protection Agency. Compliance with applicable environmental laws and regulations may be expensive, and current or future environmental regulations may impair our discovery and development efforts.

In addition, we cannot entirely eliminate the risk of accidental contamination or discharge and any resultant injury from these materials. Our insurance policies have limited coverage for damages or cleanup costs related to hazardous waste disposal or contamination. We may be forced to curtail operations or be sued for any injury or contamination that results from our use or the use by others of these materials, and our liability may exceed our total assets.

Risks Related To Our Common Stock

The price of our common stock is volatile.

The market prices for securities of biotechnology companies historically have been highly volatile, and the market has from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. Since our initial public offering in June 2004, the price of our common stock has ranged from approximately $1 per share to approximately $23 per share. The market price of our common stock may fluctuate in response to many factors, including:

· developments concerning our collaborative agreements;

· delays in commercialization of our flavor ingredients;

· our ability to implement a direct sales strategy;

· results of safety evaluation of our flavor ingredients;

· developments related to the United States and international regulatory approval of our products;

· results of consumer acceptance testing of our flavor ingredients by our collaborators or other customers;

· announcements of technological innovations by us or others;

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· the discovery of a product defect or the commencement of a product recall;

· an allegation of illness or injury relating to our flavor ingredients, whether meritorious or not, or any product liability judgment;

· developments in patent or other proprietary rights;

· changes in our management, key personnel or members of our Board of Directors;

· future sales of our common stock by existing stockholders;

· comments by securities analysts;

· general market conditions;

· fluctuations in our operating results;

· government regulation;

· failure of any of our flavor ingredients, if approved, to achieve commercial success; and

· public concern as to the safety of our flavor ingredients or other unfavorable publicity regarding our flavor ingredients or our research methods.

Anti-takeover provisions in our charter documents and under Delaware law may make an acquisition of us more complicated and the removal and replacement of our directors and management more difficult.

Provisions of our amended and restated certificate of incorporation and bylaws, as well as provisions of Delaware law, could make it more difficult for a third party to acquire us, even if doing so would benefit our stockholders. These provisions may also make it difficult for stockholders to remove and replace our board of directors and management. These provisions:

· authorize the issuance of “blank check” preferred stock by our board of directors, without stockholder approval, which could increase the number of outstanding shares and prevent or delay a takeover attempt;

· limit who may call a special meeting of stockholders;

· prohibit stockholder action by written consent, thereby requiring all stockholder actions to be taken at a meeting of our stockholders; and

· establish advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted upon at stockholder meetings.

In addition, the requirements of Section 203 of the Delaware General Corporation Law may discourage, delay or prevent a third party from acquiring us.

Our shareholder rights plan may hinder or prevent change of control transactions.

Our shareholder rights plans may discourage transactions involving an actual or potential change in our ownership. In addition, our board of directors may issue shares of preferred stock without any further action by you. Such issuances may have the effect of delaying or preventing a change in our ownership. If changes in our ownership are discouraged, delayed or prevented, it would be more difficult for our current board of directors to be removed and replaced, even if you and other stockholders believe such actions are in the best interests of us and our stockholders.

We have never paid cash dividends on our capital stock and we do not anticipate paying dividends in the foreseeable future.

We have paid no cash dividends on any of our classes of capital stock to date, and we currently intend to retain our future earnings, if any, to fund the development and growth of our business. In addition, the terms of any future debt or credit facility may preclude us from paying any dividends. As a result, capital appreciation, if any, of our common stock will be your sole source of potential gain for the foreseeable future.

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ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

As previously reported, David B. Berger, our Senior Vice President, General Counsel and Corporate Secretary, informed us that he intended to cease his full-time employment with us effective August 2, 2013. On August 1, 2013, we entered into a letter agreement with Mr. Berger setting forth the terms of his continued part-time employment by us, which is not anticipated to extend beyond April 15, 2014. The letter agreement provides for cash compensation and reimbursement of business expenses during the period Mr. Berger is employed part-time by us, extension, subject to certain limitations, of Mr. Berger’s post-termination exercise period under his vested stock option grants, eligibility to receive a pro rata portion of his cash incentive bonus under our 2013 Executive Bonus Plan (determined using the same methodology applied to all of our eligible officers and payable at the same time as the bonuses paid, if any, to such officers), and an amendment to the terms of Mr. Berger’s change in control agreement with us to remove the cash severance and health care benefits previously provided under the agreement. This summary is qualified in its entirely by reference to the complete text of the letter agreement with Mr. Berger, which is filed as Exhibit 10.4 to this quarterly report on Form 10-Q.

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ITEM 6. EXHIBITS

Exhibit Number		Description of Document

3.1		Amended and Restated Certificate of Incorporation as currently in effect (filed as Exhibit 3.1 to Registration Statement File No. 333-113998).

3.2		Amended and Restated Bylaws as currently in effect (filed as Exhibit 3.2 to our Current Report on Form 8-K filed with the SEC on December 20, 2007).

3.3		Certificate of Designation of Series A Junior Participating Preferred Stock, as filed with the Secretary of State of Delaware on February 14, 2005 (filed as Exhibit 3.1 to our Current Report on Form 8-K filed with the SEC on February 15, 2005).

4.1		Form of Common Stock Certificate (filed as Exhibit 4.1 to Registration Statement File No. 333-113998).

4.2		Form of Rights Certificate (filed as Exhibit 4.1 to our Current Report on Form 8-K filed with the SEC on February 15, 2005).

4.3		Rights Agreement, dated February 14, 2005 by and between the Registrant and Mellon Investor Services LLP (filed as Exhibit 4.2 to our Current Report on Form 8-K filed with the SEC on February 15, 2005).

10.1*		Amended and Restated Collaborative Research, Development, Commercialization and License Agreement dated April 9, 2013 between Senomyx, Inc. and Firmenich SA.

10.2+		2013 Equity Incentive Plan

10.3+		Amendment No. 1 to Senomyx, Inc. 2004 Employee Stock Purchase Plan

10.4+		Letter Agreement, dated August 1, 2013, between Senomyx, Inc. and David B. Berger.

31.1		Certification of Kent Snyder, Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Antony Rogers, Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Kent Snyder, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Antony Rogers, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101		The following financial statements from the Senomyx, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2013, formatted in eXtensible Business Reporting Language (XBRL): (i) condensed balance sheets, (ii) condensed statements of operations, (iii) condensed statements of cash flows, and (iv) notes to condensed financial statements (detail tagged).

* Confidential treatment has been requested with respect to certain portions of this exhibit. Omitted portions have been filed separately with the Securities and Exchange Commission.

+ Indicates management contract or compensatory plan.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Senomyx, Inc.


Date: August 1, 2013	By:	/S/ KENT SNYDER
		Kent Snyder Chief Executive Officer and Chairman of the Board of Directors (on behalf of the registrant and as the registrant’s Principal Executive Officer)


	By:	/S/ ANTONY ROGERS
		Antony Rogers Senior Vice President and Chief Financial Officer (on behalf of the registrant and as the registrant’s Principal Financial and Accounting Officer)

Exhibit 10.1

***Text Omitted and Filed Separately

with the Securities and Exchange Commission.

Confidential Treatment Requested

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

and 240.24b-2.

Execution Copy

Confidential

AMENDED AND RESTATED COLLABORATIVE RESEARCH, DEVELOPMENT, COMMERCIALIZATION AND LICENSE AGREEMENT

BETWEEN

SENOMYX, INC.

AND

FIRMENICH SA

AMENDED AND RESTATED COLLABORATIVE RESEARCH, DEVELOPMENT, COMMERCIALIZATION AND LICENSE AGREEMENT

THIS AMENDED AND RESTATED AGREEMENT is entered into as of April 9, 2013 (“Amended and Restated Effective Date”) by and between SENOMYX, INC., a Delaware Corporation having offices at 4767 Nexus Centre Drive, San Diego, CA 92121, U.S.A. (“Senomyx”) and FIRMENICH SA, a Swiss Company, having its principal place of business at 1, route des Jeunes, 1211 Geneva 8, Switzerland (“Firmenich”).

BACKGROUND

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

Senomyx and Firmenich entered into that certain Collaborative Research, Development, Commercialization and License Agreement dated July 28, 2009, that certain First Amendment thereto dated October 30, 2009, and that certain Second Amendment dated October 22, 2010 (collectively, the “Original Agreement”) for a research and development program during the Collaborative Period to discover and/or develop Compounds that are Synthetic Compounds for use in Field I and Field II (the “Collaborative Program”). On November 25, 2010, Firmenich executed the Option set forth in Section 8.6 of the Original Agreement to extend the Collaborative Program to include Natural Compounds. In addition, Compounds S6973, S9632 and S52617 have been previously selected as Selected Compounds for the Intended Purpose of enhancing […***…] under the Agreement. The parties now mutually desire to amend and restate the Original Agreement with this Amended and Restated Agreement (hereinafter, the “Agreement”) and to extend the Collaborative Program for the duration of the Collaborative Period as contemplated in this Agreement.

Concurrently with the execution of this Agreement Senomyx and Firmenich are also entering into a Supply Agreement (the “Supply Agreement”) whereby Firmenich has agreed to manufacture and supply, and Senomyx has agreed to purchase, certain Selected Synthetic Compounds on the terms and conditions set forth in such Supply Agreement.

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

***Confidential Treatment Requested

THE AGREEMENT

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

2. Steering Committee . Within […***…] of the Effective Date, the parties will establish a joint steering committee, which will be made up of representatives from the parties (the “Steering Committee”). The Steering Committee will manage the Collaborative Program and during the Term of this Agreement will (i) provide strategic direction and performance criteria for the Collaborative Program; (ii) direct the efforts of the Collaborative Program and monitor progress and communicate status of the Collaborative Program; (iii) facilitate the cooperation between the parties; (iv) approve the achievement of milestones and other matters delegated to the Steering Committee hereunder, and (v) continue to operate and communicate following the Collaborative Period regarding the development and commercialization of Products. The Steering Committee will consist of two (2) representatives designated by Senomyx and two (2) representatives designated by Firmenich. Steering Committee members may delegate their voting powers to delegates from their respective companies. Each member of the Steering Committee will have one (1) vote. The Steering Committee will meet at least four (4) times per year during the Term of this Agreement, unless otherwise agreed, using mutually agreed upon meeting locations and formats including teleconferencing and videoconferencing. Each party shall bear its own expenses relating to the meetings and activities of the Steering Committee. Senomyx will prepare and deliver to the members of the Steering Committee minutes of such meetings for review and approval by both parties. Decisions of the Steering Committee will be made by unanimous vote, at a meeting where all four voting representatives are represented, or by unanimous written consent. All unresolved disputes will be settled in accordance with Section 17.4, or as otherwise mutually agreed in writing.

3. Collaborative Program .

3.1 Research. During the Collaborative Period, Senomyx will collaborate with Firmenich in the Collaborative Program (i) on an Exclusive basis with respect to Field I in the Territory (excluding any Selected Synthetic Compounds); and (ii) on a Co-Exclusive basis with respect to Field II in the Territory (excluding any Selected Synthetic Compounds). This Section 3.1 does not apply to Field III. With respect to each Selected Synthetic Compound, following the selection of a Selected Synthetic Compound Senomyx may collaborate on research and/or development with any party with respect to that Selected Synthetic Compound subject to the limitations set forth in Sections 8.8.1 and 8.8.4 below.

***Confidential Treatment Requested

3.1.1 The Collaborative Program will be conducted pursuant to the Research Plan, subject to any updates and revisions approved by the Steering Committee from time to time.

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

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

At the time of submitting a data package, Senomyx will also propose the […***…] of the applicable Compound. Upon selection of a Selected Compound by Firmenich pursuant to Section 3.1.4 below, the Steering Committee will agree upon in good faith […***…] based on the following considerations: (i) a […***…] shall be considered as part of the […***…]; (ii) any […***…] which have been shown to be […***…] of the Selected Compound shall also be considered to be part of the […***…]; and (iii) […***…] which have been shown to […***…] shall

***Confidential Treatment Requested

not be considered as part of the […***…]. Such determination by the Steering Committee shall be completed by the first regularly scheduled Steering Committee meeting following the selection of a Selected Compound.

[…***…] example

[…***…]

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

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

3.1.4 During the Collaborative Period, Firmenich may select Compound(s) for development under the Collaborative Program after evaluation of the data package by Firmenich, as provided for under Section 3.1.3. In order to effect the selection of a Synthetic Compound under this Section 3.1.4, Firmenich shall notify Senomyx of its selection of a Compound for the Intended Purpose within the period specified in Section 3.1.3. With respect to Natural Compounds, within the period specified in Section 3.1.3 Firmenich shall notify Senomyx […***…] associated with the […***…] a Natural Compound and the parties shall commence […***…] regarding the […***…]. If Firmenich provides such notice to Senomyx with respect to a Natural Compound, then Senomyx will […***…] and Firmenich shall have an additional […***…] to make a selection of the applicable Natural Compound, or such longer period as contemplated by Section 7.5.3 for the […***…] for such Natural Compound. For avoidance of doubt, the milestones associated with such Natural Compound under Section 7.3.2 shall not be due unless and until the selection of such Natural Compound following the […***…]. In the event that the Natural Compound is not subsequently selected by Firmenich within the period set forth in Section 7.5.3, Firmenich may then later notify Senomyx that […***…] associated with the […***…] such Natural Compound and, in that circumstance, […***…] referenced in Section 7.5.3 […***…]. Upon such a notice Firmenich shall […***…] and for […***…] prior to such notification. The foregoing shall not limit Firmenich’s right to select a Compound it previously declined to select or dropped for any reason (including, without limitation, due to safety testing), in either instance following the receipt of a data package, at any time up to the […***…] period set forth in Section 8.7. In addition, in the event that Firmenich selects a Compound under this Section 3.1.4 for the Intended Purpose of

***Confidential Treatment Requested

enhancing […***…], then Firmenich may also at any time […***…] thereafter set forth in Section 8.7 also select such Compound […***…], subject to Firmenich’s payment […***…]. Once a Synthetic Compound is selected by Firmenich under this Section 3.1.4 or under Section 8.7, Senomyx will […***…].

3.1.5 During the Collaborative Period, the parties will cooperate in good faith to support the other party’s performance of the activities set forth in the Research Plan. Upon expiration of the Collaborative Period, the parties’ research and development obligations pursuant to this Section 3.1 will expire. The licenses set forth under Section 8.1 will terminate automatically with respect to any Compound following the period during which such Compound may be selected by Firmenich as a Selected Compound pursuant to Section 3.1 or Section 8.7 if written notice of selection of such Compound is not provided by the end of such period.

3.1.6 Extension of the Collaborative Period.

3.1.6.1 From the Amended and Restated Effective Date until the earlier of (i) […***…] or (ii) the date on which Senomyx receives a notice of termination from Firmenich pursuant to Section 14.4.2, Senomyx shall not enter into […***…] for a […***…]. Thereafter, unless Senomyx and Firmenich have otherwise mutually agreed pursuant to a duly executed writing, the aforementioned […***…] by Senomyx shall not apply.

3.1.6.2 Notwithstanding the foregoing provisions of Section 3.1.6.1, Firmenich acknowledges and agrees that Senomyx may at any time during the Collaborative Period: (i) develop and commercialize Selected Synthetic Compounds in accordance with the terms of this Agreement, which may include negotiations with Third Parties to make, have made, use, sell, have sold, import and export Selected Synthetic Compounds, and (ii) continue to perform its obligations under the PepsiCo Agreement and negotiate with PepsiCo for a potential extension of such collaboration for the discovery and development of Compounds for use outside of Field I. Firmenich further acknowledges and agrees that the subject matter of Section 3.1.6.1 shall not relate to any potential or actual Change in Control of Senomyx and shall not preclude Senomyx from at any time entering into negotiations with any Third Party with respect to any potential or actual Change in Control of Senomyx.

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

***Confidential Treatment Requested

3.2.1 Product Development . Firmenich will be responsible for Product formulation work and […***…]. Within […***…] of the selection of a Selected Compound, Firmenich will prepare a plan for product development for Products incorporating such Selected Compound for review by the Steering Committee (the “Product Development Plan”), which will be incorporated into the minutes of the Steering Committee; however, Firmenich shall have sole discretion to determine the Product Development Plan. The Product Development Plan(s) will set forth the following: (i) specific types of products for potential inclusion of the Selected Compound(s); (ii) specific countries of potential interest for commercialization of Products; (iii) prioritization of Products and countries for development and commercialization; and (iv) a development plan timeline including plans for Product formulation, manufacturing and consumer acceptance testing. Firmenich will use its commercially reasonable and diligent efforts to perform the activities set forth in the Product Development Plan(s). For the avoidance of doubt, Firmenich will be responsible for formulating the product prototype(s) to be used in consumer panels and consumer acceptance testing of Product prototypes, including the […***…] with such activities, in accordance with the activities outlined in the Product Development Plan(s). Within […***…] of the Second Amendment Effective Date, Firmenich will update the Product Development Plan under Section 3.2.1 to include Products containing S6973 in Field III.

3.2.2 Product Commercialization of Products in Field I and Field II . This Section 3.2.2 (including all subsections) applies only to Products in Field I and Field II. Within […***…] from the date of compound selection for each Selected Compound, Firmenich shall submit a Strategic Marketing Plan to the Steering Committee for Products containing such Selected Compound, which will be incorporated into the minutes of the Steering Committee; however, […***…]. Firmenich will update such Strategic Marketing Plan on a […***…] basis and such updates shall be provided to the Steering Committee and incorporated into the minutes of the Steering Committee; provided, however, that following the Amended and Restated Effective Date, with respect to Synthetic Selected Compounds, in lieu of a Strategic Marketing Plan Firmenich shall only be required to provide a Commercialization Plan that will be limited to: (i) a description of […***…], the […***…] in such […***…] in the applicable Fields, and an […***…], in each case presented on a country-by-country basis (but in no event shall Firmenich be required to […***…]), and (ii) a […***…] forecast of […***…] of the applicable Synthetic Selected Compound, including […***…] of the Synthetic Selected Compound on […***…], presented collectively for […***…] of […***…] (a “Commercialization Plan”). Firmenich will update the Commercialization Plan on a […***…], and such updates shall be provided to the Steering Committee and incorporated into the minutes of the Steering Committee.

***Confidential Treatment Requested

After the date contemplated in Section 8.8.1 after which a given Selected Synthetic Compound may be used by Senomyx Target Customers, the Commercialization Plan for such Selected Synthetic Compound will be limited to the […***…] in the format described above, which shall be updated on a […***…]. The Strategic Marketing Plans and Commercialization Plans will […***…] and neither Firmenich nor any of its Affiliates […***…]. In addition, Firmenich will use reasonable commercial efforts to develop Product prototypes/formulations and present such samples to […***…] for the […***…] product categories as identified in the Strategic Marketing Plan or Commercialization Plan, as the case may be, within […***…] from the first Regulatory Approval Date for each Selected Compound. Firmenich will provide the Steering Committee with […***…] updates on such efforts. The parties further acknowledge and agree that wherever the phrase “first Regulatory Approval” is used anywhere in the Agreement with respect to any specific country or geography, that notwithstanding anything to the contrary in the Agreement such “first Regulatory Approval” will be deemed to occur […***…].

3.2.2.1 Product Commercialization of Products containing Selected Synthetic Compounds in Field I and Field II .

3.2.2.1.1 Within […***…] from each Regulatory Approval Date for each Selected Synthetic Compound […***…], Firmenich shall use reasonable commercial efforts to commence commercial sale of […***…]containing such Selected Synthetic Compound […***…].

3.2.2.1.2 Within […***…] from each Regulatory Approval Date for each Selected Synthetic Compound […***…], Firmenich shall use reasonable commercial efforts to commence commercial sale of […***…] containing such Selected Synthetic Compound that will be incorporated into an end product of Firmenich’s customer sold […***…].

3.2.2.1.3 For the avoidance of doubt, with respect to Selected Synthetic Compounds Firmenich will be responsible for the cost of manufacturing, packaging, promotion, advertising, sales and distribution for Firmenich’s own commercialization of Products containing Selected Synthetic Compounds.

3.2.2.1.4 Firmenich agrees to use commercially reasonable efforts to complete the scale-up of commercial quantities of a Selected Synthetic Compound using a commercially reasonable manufacturing route within […***…] from the first Regulatory Approval Date for such Selected Synthetic

***Confidential Treatment Requested

Compound in the United States; provided, however, that if despite using commercially reasonable efforts Firmenich anticipates that it will be […***…] within the specified period due to […***…] as recognized by the Steering Committee and documented in the minutes to a meeting of the Steering Committee, then the Steering Committee will agree upon a reasonable extension of such scale-up period for Firmenich’s performance. If Firmenich anticipates that for any other reason it will be […***…], then Firmenich shall notify Senomyx not later than […***…]from the first Regulatory Approval Date for such Selected Synthetic Compound in the United States and concurrently with such notice provide Senomyx with a revised completion deadline by which Firmenich […***…]. Within […***…] following receipt of such notice Senomyx shall notify Firmenich whether it will agree to Firmenich’s Revised Completion Deadline, or in the alternative Senomyx may exercise its rights […***…] under Article 7.2(d) of the Supply Agreement. In the case of […***…], however, Firmenich will provide Senomyx with a Revised Completion Deadline by no later than […***…]. If Senomyx exercises its rights […***…], then Firmenich’s […***…] shall not be deemed a breach of its obligations to complete the commercial scale-up of such Selected Synthetic Compound within the period specified under this Section 3.2.2.1.4 and the penalty set forth in Section 3.2.2.1.5 shall not apply. However, if Senomyx instead elects to agree to Firmenich’s […***…] for a specific Selected Synthetic Compound, then in the event of Firmenich’s […***…] the date set forth in Sections 8.8.1 and 8.8.2 on which Senomyx […***…]. In accordance with the efforts and resources Firmenich would use for a compound owned by it or to which it has rights, which is of similar market potential at a similar stage in development as the applicable Selected Synthetic Compound, Firmenich will fill the market demand for Products containing such Selected Synthetic Compound in the Fields under the terms set forth in this Agreement.

3.2.2.1.5 With respect to each Selected Synthetic Compound, if at any time prior to the date contemplated in Section 8.8.1 Firmenich elects to abandon, discontinue, or forgo development and commercialization of Products containing a Selected Synthetic Compound in any country, Firmenich’s licenses in such country under Section 8 with respect to such Selected Synthetic Compound will terminate and Firmenich will have no right to practice or use the Senomyx Technology in such country, and all rights, title and interest in and to the Senomyx Technology with respect to such Selected Synthetic Compound in such country will revert to and become the sole property of Senomyx.

***Confidential Treatment Requested

3.2.2.2 Product Commercialization of Products containing Selected Natural Compounds in Field I and Field II .

3.2.2.2.1 Within […***…] from each Regulatory Approval Date for each Selected Natural Compound in […***…], Firmenich shall use reasonable commercial efforts to commence commercial sale of […***…] containing such Selected Natural Compound […***…]. To the extent Firmenich does not commence commercial sale of […***…] containing such Selected Natural Compound within […***…] of the Regulatory Approval Date in […***…], then Senomyx may, at its sole discretion and upon […***…] advance written notice to Firmenich, terminate the rights granted to Firmenich in Section 8 with respect to such Natural Selected Compound or reduce the license granted to a non-exclusive license for the Territory or Fields as a whole or applicable portions, and the definitions of Territory and/or Field shall be deemed modified accordingly in respect of such Selected Natural Compound in such […***…]; provided, however, that if Firmenich’s efforts to commence commercial sales are due to a delay in the […***…] of a Natural Selected Compound, as recognized by the Steering Committee, then the Steering Committee may agree to extend such periods for Firmenich’s performance.

3.2.2.2.2 Within […***…] from each Regulatory Approval Date for each Selected Natural Compound […***…], Firmenich shall use reasonable commercial efforts to commence commercial sale of […***…] containing such Selected Natural Compound that will be incorporated into an end product of Firmenich’s customer sold […***…]. To the extent Firmenich does not commence commercial sale of […***…] containing such Selected Natural Compound within […***…], then Senomyx may, at its sole option and upon […***…] advance written notice to Firmenich, terminate the rights granted to Firmenich in Section 8 with respect to such Natural Selected Compound or reduce the license granted to a non-exclusive license for the Territory or Fields as a whole or applicable portions, and the definitions of Territory and/or Field shall be deemed modified accordingly in respect of such Selected Natural Compound in such Non-Major Country; provided, however, that if Firmenich’s efforts to commence commercial sales are due to a delay in the […***…] of a Selected Natural Compound, as recognized by the Steering Committee, then the Steering Committee may agree to extend such periods for Firmenich’s performance.

***Confidential Treatment Requested

3.2.2.2.3 For the avoidance of doubt, with respect to Selected Natural Compounds Firmenich will be responsible for the cost of manufacturing, packaging, promotion, advertising, sales and distribution for Firmenich’s own commercialization of Products containing such Selected Natural Compounds.

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

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

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

3.2.3 Product Commercialization of Products in Field III .

3.2.3.1 Through […***…] in the applicable Fields, Firmenich shall use reasonable commercial efforts to commence commercial sale of Products within Field III containing S6973 for use in Tea Beverages, Coffee Beverages and Milk Beverages (as those terms are defined above within the definition of Field III) (i) […***…]; and (ii) within […***…].

***Confidential Treatment Requested

3.2.3.2 Within […***…] from each Regulatory Approval Date for S6973 in Field III […***…], Firmenich shall use reasonable commercial efforts to commence commercial sale of […***…] within Field III containing S6973 that will be incorporated into Tea Beverages, Coffee Beverages or Milk Beverages of a Firmenich customer that are sold […***…].

3.2.3.3 For the avoidance of doubt, Firmenich will be responsible for the cost of manufacturing, packaging, promotion, advertising, sales and distribution of its own Products in Field III.

3.2.3.4 Firmenich will use best efforts to sell S6973 in Field III through […***…] in the applicable Fields. Prior to such date, Firmenich shall not, […***…] in all or any portion of Field III that would commence or remain in effect following […***…], even if only on a temporary basis. In addition, Firmenich agrees to […***…]. Following […***…] in the applicable Fields, Firmenich agrees to […***…].

3.3 Regulatory .

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

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

***Confidential Treatment Requested

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

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

(b) Notwithstanding anything to the contrary in this Agreement, in no event will the total aggregate out-of-pocket costs to Senomyx associated with the regulatory approval process […***…] for all Selected Compounds in respect of Synthetic Compound(s) […***…]. The total aggregate out-of-pocket costs to Senomyx, as described in the preceding sentence, shall not exceed […***…] for Natural Compound(s) which is in addition to the […***…] for the Synthetic Compound(s). Firmenich shall reimburse Senomyx for […***…] incurred in accordance with this Section 3.3.3 in excess of such amount.

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

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

***Confidential Treatment Requested

4. Collaboration with an Affiliate or Third Party .

4.1 Collaboration with an Affiliate or Third Party with Respect to Synthetic Compounds .

4.1.1 During the Collaborative Period Senomyx will not provide research and development services to its Affiliates or any Third Party for the discovery or commercialization of Synthetic Compounds (excluding any Compounds that have been selected as Selected Synthetic Compounds) that enhance the sweetness intensity of Target Sweeteners for application in Field I and Field II, provided that during the Collaborative Period Senomyx may at any time, and from time-to-time, provide research and development services for its own benefit or to the applicable Co-Exclusive Licensee (and its Affiliates) for the discovery and commercialization of Synthetic Compounds in each case, solely for Field II, including appropriate licenses to Senomyx Technology.

4.1.2 Except as otherwise specifically provided in this Agreement or the Supply Agreement, Firmenich acknowledges and agrees that this Agreement does not restrict or limit in any way Senomyx’s right to provide research and development services and/or grant rights to Senomyx Technology to its Affiliates or any Third Party with respect to any Selected Synthetic Compounds in the Fields either during or following the Collaborative Period.

4.1.3 For any Selected Synthetic Compound, until expiration of the […***…], and subject to Firmenich’s continuing compliance with the terms of this Agreement, Senomyx agrees not to grant any rights under Senomyx Technology to its Affiliates or any Third Party for use in the […***…], and that also have […***…], for […***…] only, subject to […***…]; provided, however, that Senomyx expressly retains the right (i) to grant any party, or, in the alternative to retain for itself and its Affiliates, a Co-Exclusive license under Senomyx Technology to make, have made, use, sell, offer for sale, have sold, import and export any […***…], solely for use in Field II in the Territory at any time, and (ii) following the Collaborative Period to perform […***…] in accordance with the terms of Section 8.8.4. It is further understood and agreed that the Co-Exclusive Licensee for different Synthetic Compounds may be different and that there may also be multiple Co-exclusive Licensees for a single Synthetic Compound, provided that there is no more than one Co-exclusive Licensee for that Synthetic Compound in any given country within the Territory.

***Confidential Treatment Requested

4.1.4 In addition, and without limiting the foregoing as set forth in this Section 4.1, Senomyx also expressly retains all rights under the Senomyx Technology to make, have made, use, sell, offer for sale, have sold, import and export any Selected Synthetic Compound and Products incorporating any Selected Synthetic Compound for use in any Fields, including the right to license such rights to multiple parties, subject however to the applicable restrictions of Section 8.2.3, 8.2.5, 8.7 and 8.8.

4.2 Collaboration with an Affiliate or Third Party with Respect to Natural Compounds . During the Collaborative Period, Senomyx will not provide research and development services to its Affiliates or any Third Party for the discovery or commercialization of Natural Compounds that enhance the sweetness intensity of Target Sweeteners for application in Field I and Field II, subject to the Co-Exclusive rights in Field II. After the Collaborative Period and for the remainder of the Term of the Agreement, provided that Firmenich has selected a Natural Compound pursuant to Section 3.1.4 or Section 8.7 and subject also to Firmenich’s continuing compliance with the terms of this Agreement, Senomyx agrees not to grant any rights under Senomyx Technology to its Affiliates or any Third Party for use in the […***…], and that also have […***…], for applications in Field I and Field II, subject to […***…]. It is further understood and agreed that the Co-Exclusive Licensee for different Natural Compounds may be different and that there may also be multiple Co-Exclusive Licensees for a single Natural Compound, provided that there is no more than one Co-Exclusive Licensee for that Natural Compound in any given country within the Territory.

For the avoidance of doubt, during the Term, Senomyx will have the right to enter into collaborative programs and/or other commercial agreements with its Affiliates and/or with Third Parties including, but not limited to: (i) subject to Section 8.5, collaborative programs to discover compounds that modulate sweetness for use outside the applicable Field I and Field II; (ii) collaborative programs to modulate modalities other than sweetness within the Fields, and (iii) make, have made, use, sell, offer for sale, have sold, import and export Selected Synthetic Compounds and Products incorporating any Selected Synthetic Compound to Third Parties, subject to its compliance with the terms of Sections 8.2.3, 8.2.5, 8.7 and 8.8 below. The foregoing shall not authorize Senomyx to grant any license under Senomyx Technology that would conflict with Senomyx’s obligations under Article 7 of the Supply Agreement.

4.3 Except as the terms of Sections 8.2.5 and 8.8 may apply with respect to S6973, Firmenich acknowledges and agrees that this Agreement does not restrict or limit in any way Senomyx’s right to provide research and development services and/or grant rights to Senomyx Technology to its Affiliates or any Third Party for use in Field III or to directly or indirectly develop and commercialize any Compounds for use in Field III either during or following the Collaborative Period.

***Confidential Treatment Requested

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

(i) […***…];

(ii) […***…];

(iii) […***…]; and

(iv) […***…].

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

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

6. Reporting . Each party will report to the other a written summary of results of research and development work it carries out, if any, under this Agreement at […***…]. Each party agrees to prepare and exchange written and electronic reports concerning any results and data that must be used by either party as supporting information for any regulatory filings. The exchange of such report may be reasonably supplemented, at the request of the party receiving a report, by correspondence and/or upon reasonable prior notice, visits to the other party’s facilities.

***Confidential Treatment Requested

7. Financial Terms .

7.1

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

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

(b) US $8,000,000 within thirty (30) days of the earlier of (i) the occurrence of first Regulatory Approval of S6973 in the United States and written notification of determination by Firmenich pursuant to Section 7.1.2 that S6973 is Commercially Viable; or (ii) the occurrence of both first Regulatory Approval of a Selected Compound in the United States and written notification of determination by Firmenich pursuant to Section 7.1.2 that such Selected Compound is Commercially Viable.

In consideration for the license grants to S6973 in Field III under the Second Amendment to the Original Agreement, Firmenich will pay to Senomyx US […***…] within 10 days of the Second Amendment Effective Date.

Such payments shall be non-refundable and non-creditable. Senomyx acknowledges that it has previously received all such payments as set forth in this Section 7.1.1 from Firmenich prior to the Amended and Restated Effective Date.

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

***Confidential Treatment Requested

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

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

7.1.3 In consideration for the extension of the Collaborative Period on the terms and conditions set forth in this Agreement including without limitation the […***…] set forth in Section 3.1.6 above, Firmenich shall pay to Senomyx a non-refundable, non-creditable amount of US $4,000,000, which shall be payable by Firmenich according to the following payment schedule:

· US $1,000,000 payable on or before […***…]; and

· US $3,000,000 payable on or before […***…].

***Confidential Treatment Requested

In addition, for each of the […***…] following the Amended and Restated Effective Date, Firmenich shall pay to Senomyx a non-refundable and non-creditable commercial milestone payment of […***…]. Such payment shall accrue upon written notification by Firmenich under […***…] and shall be payable to Senomyx within […***…] thereafter. In addition, upon the […***…], Firmenich shall pay to Senomyx a non-refundable and non-creditable one-time commercial milestone payment of […***…] within […***…] following such event. For avoidance of doubt, the parties acknowledge that such […***…] milestone shall be payable only once, even if […***…].

If between the Amended and Restated Effective Date and July 27, 2016 […***…], then by no later than July 27, 2016 Firmenich shall pay to Senomyx a non-refundable and non-creditable payment of US $1,000,000.

For the avoidance of doubt, obligations and payments under this Section 7.1.3 shall be in addition to any other obligations and payments contemplated under Section 7 of the Agreement including, without limitation, Sections 7.1, 7.2 and 7.3.

7.2 Research and Development Support .

7.2.1 Research Fees for First Two Years of Collaborative Period. For the first two years of the Collaborative Period, Firmenich will pay Senomyx annual research fees (“Research Fees”) of […***…] for the Collaborative Program including the activities performed pursuant to the Research Plan. These payments will be made in advance in equal quarterly installments in the amount of […***…]. The first payment of […***…] will be made within […***…] following the Effective Date. Effective upon exercise of the Option by Firmenich pursuant to Section 8.6 (November 25, 2010), the annual Research Fees for the Collaborative Program shall automatically increase upon receipt of such notice by […***…] such that the total annual Research Fees will be […***…]. These payments will be made in advance in equal quarterly installments in the amount of […***…].

In addition to the foregoing, Firmenich and Senomyx have agreed that at the first meeting of the Steering Committee following the Effective Date of this Agreement, the parties will discuss […***…]. Such discussion shall include a consideration of […***…] and other related details for the […***…], including […***…].

***Confidential Treatment Requested

7.2.2 Research Fees for Remainder of the Collaborative Period. For the third through seventh years of the Collaborative Period, Firmenich will pay Senomyx annual Research Fees as follows:

Collaborative Period		Total annual Research Fees
Year 3 (July 28, 2011-July 27, 2012)		[…***…]
Year 4 (July 28, 2012-July 27, 2013)		[…***…]
Year 5 (July 28, 2013-July 27, 2014)		[…***…]
Year 6 (July 28, 2014-July 27, 2015)		[…***…]
Year 7 (July 28, 2015-July 27, 2016)		[…***…]

These payments will be made in advance in equal quarterly installments.

7.2.3 Option for Natural Compounds. In the event the Option is exercised pursuant to Section 8.6, Firmenich will reimburse Senomyx for […***…], up to a maximum amount equal to […***…]. The parties recognize that Firmenich and/or Senomyx may have the in-house capabilities required to perform certain research or development activities associated with Natural Compounds. The Steering Committee will discuss the relative capabilities of the two parties and decide the most appropriate party to perform such activities.

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

7.3 Milestone Payments .

7.3.1 Synthetic Compounds. With respect to Synthetic Compounds, Firmenich will pay Senomyx the non-creditable, non-refundable milestone payments below within […***…] of the occurrence of the following milestone events under this Agreement based on the particular […***…] as follows, it being also understood and agreed that any milestone payments received by Senomyx under the terms of the Original Agreement prior to the Amended and Restated Effective Date shall also continue to be non-creditable and non-refundable under the terms of this Agreement:

***Confidential Treatment Requested

For […***…] with an […***…]

[……]*		Payment
[…***…]		[…***…]

For […***…] with an […***…] :

[……]*		Payment
[…***…]		[…***…]

For […***…] with an […***…]

[……]*		Payment
[…***…]		[…***…] (1)

[……]*		Payment
[…***…]		[…***…]

(1) The parties acknowledge that […***…] and the associated fee of […***…] has been paid.

For the […***…] with an […***…]

[……]*		Payment
The […***…]		[…***…]

[……]*		Payment
[…***…]		[…***…]

For the […***…] for an […***…] after the Amended and Restated Effective Date :

[……]*		Payment
The […***…]		[…***…]

For any […***…] for an […***…] after the Amended and Restated Effective Date and for which milestones are not otherwise specified above in this Section 7.3.1 :

[……]*		Payment
The […***…]		[…***…]

[……]*		Payment
[…***…]		[…***…]

***Confidential Treatment Requested

For each and any […***…] for any […***…] :

[……]*		Payment
First […***…]		[…***…]
Each subsequent […***…]		[…**…]

[……]*		Payment
First […***…]		[…***…]
Each subsequent […***…]		[…**…]

*[…***…].

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

With respect to […***…], in addition to the milestones set forth above, Firmenich will also pay the following non-creditable, non-refundable milestone payments within […***…] of the occurrence of the following milestone events under this Agreement:

Milestone Event		Payment
Achievement of […***…]		[…***…]
Achievement of […***…]		[…***…]
Achievement of […***…]		[…***…]
Achievement of […***…]		[…***…]
Achievement of […***…]		[…***…]

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

[……]*		Payment
First […***…]		[…***…]
Each subsequent […***…]		[…**…]

[……]*		Payment
First […***…]		[…***…]
Each subsequent […***…]		[…**…]

[……]*		Payment
First […***…]		[…***…]
Each subsequent […***…]		[…**…]

***Confidential Treatment Requested

*[…***…].

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

7.4 Minimum Annual Royalties .

7.4.1 Synthetic Compounds. On or before […***…], the provisions of this Section 7.4.1 shall apply and Firmenich will pay the minimum annual royalties described below to Senomyx for Synthetic Compounds. Minimum annual royalties under this Section 7.4.1 shall no longer be due for the period commencing […***…] and thereafter throughout the remainder of the Royalty Term. With respect to the minimum annual royalties set forth in Sections 7.4.1.1 and 7.4.1.2, the obligations to pay the applicable minimum annual royalties under such provision shall be measured based on the first […***…], and no additional minimum annual royalty obligation is triggered upon the happening of said event for any other Selected Synthetic Compound that subsequently achieves the same […***…]. For the avoidance of doubt, the final minimum annual royalty payment pursuant to Section 7.4.1 for the period ending […***…] shall be due on […***…] notwithstanding the references to Royalty Year and successive years in the charts below. Minimum annual royalties pursuant to this Section 7.4.1 for any partial Royalty Years shall be paid on a pro-rata basis and shall be non-refundable and non-creditable.

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

Royalty Year for first Selected Synthetic Compound		Minimum Annual Royalty Payment Due (for the applicable Royalty Year, as defined below)
[…***…] Royalty Year		[…***…]
[…***…] Royalty Year		[…***…]
[…***…] Royalty Year		[…***…]
[…***…] Royalty Year		[…***…]
[…***…] Royalty Year and successive years		[…***…]

***Confidential Treatment Requested

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

Royalty Year after […***…] for first Selected Synthetic Compound		Minimum Annual Royalty Payment Due (for the applicable Royalty Year, as defined below)
[…***…] Royalty Year		[…***…]
[…***…] Royalty Year		[…***…]
[…***…] Royalty Year		[…***…]
[…***…] Royalty Year		[…***…]
[…***…] Royalty Year, and successive years		[…***…]

7.4.1.3 In addition to the minimum annual royalties set forth under Section 7.4.1.1 and 7.4.1.2, during the Royalty Term for S6973, Firmenich will also pay the following minimum annual royalties for S6973 in Field III:

Royalty Year for S6973		Minimum Annual Royalty Payment Due (for the applicable Royalty Year)
[…*…] Royalty Year […*…]		[…***…]
[…***…] Royalty Year		[…***…]
[…***…] Royalty Year		[…***…]
[…*…] and each successive Royalty Year thereafter, except as provided in the […*…] Clause set forth below		[…***…]

[…***…] Clause . If, in addition to S6973, Senomyx receives […***…], then the minimum annual royalty for Field III shall be […***…].

For example:

· If […***…], then the minimum annual royalty under Section 7.4.3 for Net Sales of Products in Field III […***…] and the […***…] calendar year for which minimum annual royalties would be due […***…].

***Confidential Treatment Requested

7.4.2 Option for Natural Compounds. Within […***…] following Firmenich’s […***…] for each Natural Compound that Firmenich selects under Section 3.1.4, Firmenich and Senomyx shall […***…] minimum annual royalty […***…] the amounts due under Section 7.4.1) based on […***…] (as compared to the […***…] that are […***…]) for such […***…] based on information contained in the […***…] (which shall contain […***…]), with the first such […***…] minimum annual royalty to be due (i) with respect to the […***…], commencing for the […***…] Royalty Year, and […***…] each year thereafter in accordance with any […***…] in […***…]; and (ii) with respect to the […***…], commencing on the […***…] Royalty Year following such approval and […***…] each year thereafter in accordance with any […***…] in […***…]. The […***…] with respect to any such […***…] minimum annual royalty shall be reflected in the minutes of the […***…] and shall be […***…]. In the event that […***…] the […***…] minimum annual royalties due for any Selected Natural Compound under this Section 7.4.2, […***…] in accordance with the […***…] Agreement.

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

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

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

***Confidential Treatment Requested

7.5.1 Royalty for Products containing Selected Synthetic Compounds in Fields I and II .

7.5.1.1 For sales occurring before […***…], the terms set forth in this Section 7.5.1.1 will apply to royalties on Products containing Selected Synthetic Compounds in Field I and Field II. During the Royalty Term, Firmenich will pay to Senomyx a royalty equal to the applicable royalty rate for Produts containing Selected Synthetic Compounds (“Synthetic Compound Royalty Rate”) multiplied by Net Sales of Products containing Selected Synthetic Compounds in Field I and Field II. The Synthetic Compound Royalty Rate will be calculated at the end of each calendar quarter during the Royalty Term, and will be based on cumulative Net Sales of Products containing Selected Synthetic Compounds during the applicable Royalty Year, as follows:

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

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

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

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

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

***Confidential Treatment Requested

7.5.1.2 Effective […***…], this Section 7.5.1.2 will apply to royalties on Products containing any Selected Synthetic Compounds in Field I and Field II. During the Royalty Term, with respect to Net Sales of Products that contain any Selected Synthetic Compound in Field I and Field II, Firmenich will pay to Senomyx a royalty equal to the applicable Synthetic Compound Royalty Rate in the table below, multiplied by the Net Sales of Products containing Selected Synthetic Compound(s) in Field I and Field II during the applicable quarter.

Applicable Period During which Net Sales of Products Containing Any Selected Synthetic Compounds Occur		Synthetic Compound Royalty Rate
[…**…]		[…***…]
[…**…] through the remainder of the Royalty Term		[…***…], subject to the increase described below

*In the event that the date of […***…].

Commencing […***…], the Synthetic Compound Royalty Rate under this Section 7.5.1 will increase by […***…] for each […***…] at any time following the Amended and Restated Effective Date, up to a maximum fixed Synthetic Compound Royalty Rate of […***…]. By way of example, if […***…] the applicable Synthetic Compound Royalty Rate shall be […***…], which shall be applicable to all Products that contain any Selected Synthetic Compound following such date. If […***…], the applicable Synthetic Compound Royalty Rate shall then immediately increase to […***…], which shall be applicable to all Products that contain any Selected Synthetic Compound following such date.

7.5.2 Royalties for Products in Field III. Notwithstanding anything to the contrary contained in this Agreement, the Royalty Rate for Net Sales of Products in Field III shall be […***…]. Accordingly, during the Royalty Term, with respect to Net Sales of Products in Field III, Firmenich will pay to Senomyx a royalty equal to […***…]. The amount due each calendar quarter for Net Sales of Products in Field III will be equal to […***…]. In order to accurately calculate royalties pursuant to Section 7.5, and to confirm the accuracy of payments and

***Confidential Treatment Requested

obligations under Sections 7.3.1 and 7.4.1.3, Firmenich agrees to implement procedures and practices in order to track sales of Product intended for use in Field III separate from sales of Products intended for use in Field I and Field II which shall be reported to Senomyx under Section 7.5. Such procedures and practices will be presented to and reviewed by the Steering Committee […***…] and will be subject to audit and inspection in accordance with the provisions of Section 7.10.

7.5.3 Royalties for Products Containing Any Selected Natural Compounds . During the Royalty Term, Firmenich will pay to Senomyx a royalty equal to the applicable royalty rate for Products containing any Selected Natural Compounds (“Natural Compound Royalty Rate”) multiplied by Net Sales of Products containing Selected Natural Compound in Field I and Field II. The Natural Compound Royalty Rate for each Natural Compound will be determined separately. The amount due each calendar quarter for Net Sales of Products containing any Selected Natural Compounds will be equal to the applicable Natural Compound Royalty Rate multiplied by the cumulative Net Sales of Products containing any Selected Natural Compounds during the applicable quarter. The Natural Compound Royalty Rate will be calculated using a detailed financial model under the terms of a Natural Royalty Rate Agreement that will result in each party receiving […***…] (a “Natural Royalty Rate Agreement”); provided, however that the Natural Royalty Rate for any given calendar quarter shall not be less than […***…] (“Natural Compound Royalty Floor”). It is the intent of the parties that the financial model to determine the Natural Compound Royalty Rate will be structured in a manner consistent with the financial model used to determine the applicable royalty rate under the Second Agreement and with comparable components, except that the parties shall include actual amounts for the individual components if they can be reasonably measured and reported for the applicable period in accordance with IFRS. The Natural Royalty Rate Agreement shall also detail audit procedures to confirm the accuracy of the individual components. During the […***…] following Firmenich’s receipt of a data package for a given Natural Compound and for the […***…] thereafter in the circumstance that Firmenich delivers the notification under Section 3.1.4 that it will […***…] for a Natural Compound, which period may be extended by an additional […***…] upon mutual agreement of the parties (collectively, the “Natural Compound Negotiation Period”), the parties will negotiate in good faith the terms of a Natural Royalty Rate Agreement, including the associated detailed financial model and its specific components. During such Natural Compound Negotiation Period, the parties will act reasonably, diligently and in good faith to achieve an agreement that is acceptable to both parties,

***Confidential Treatment Requested

and such diligence shall be consistent with the aim of achieving a final Natural Royalty Rate Agreement for the given Natural Compound within such Natural Compound Negotiation Period and shall include responding promptly to proposals from the other party and attending meetings upon reasonable notice. Upon the parties entering into mutually acceptable Natural Royalty Rate Agreement within the Natural Compound Negotiation Period for a Natural Compound, such Natural Compound shall be deemed a Selected Compound under the terms of this Agreement. If the parties acting in accordance with the foregoing are unable to agree on such a Natural Royalty Rate Agreement within the Natural Compound Negotiation Period, then if requested by Firmenich prior to the expiration of such period, the terms of the Natural Royalty Rate Agreement, including the applicable Natural Compound Royalty Rate, shall be determined by an Expert in accordance with the Expert Determination Procedure attached hereto as Appendix E and the Natural Compound Negotiation Period shall be deemed extended until […***…] following the date that the Expert notifies Firmenich of its written determination of the Natural Royalty Rate Agreement. Firmenich shall notify Senomyx within […***…] days following the date that the Expert notifies Firmenich with its written determination of the Natural Royalty Rate Agreement whether it wishes to accept such terms, and if Firmeinch does accept such terms then the parties shall promptly execute the Natural Royalty Rate Agreement not later than […***…] days thereafter and the Natural Compound shall then be deemed a Selected Compound. If Firmenich (i) notifies Senomyx during the Natural Compound Negotiation Period that it does not wish to have the Expert determine the terms of the Natural Royalty Rate Agreement, or (ii) does not notify Senomyx during the Natural Compound Negotiation Period that it wishes to have the Expert determine the terms of the Natural Royalty Rate Agreement, or (iii) does not accept the terms set by the Expert as set forth above, then Senomyx shall have no further obligation under this Section 7.5.3 with respect to such Natural Compound, the Natural Compound Negotiation Period shall immediately terminate, and Firmenich may not thereafter select such Natural Compound for development notwithstanding any other terms of this Agreement to the contrary, and in the case of subsection (iii) Firmenich shall also reimburse Senomyx for all of its out-of-pocket costs in connection with the Expert Determination Procedures within […***…] days after Senomyx provides an invoice to Firmenich for such expenses.

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

***Confidential Treatment Requested

7.6 Payment Terms. The amounts due under Section 7.5 will be paid within […***…] after the end of each calendar quarter period in which such royalties are earned during the Royalty Term for each Product. With each such quarterly payment, Firmenich (or its respective Affiliate) will furnish to Senomyx a statement in sufficient detail to permit confirmation of the accuracy of the payment made, which sets forth […***…]. In addition, with respect to payments to Senomyx for sales of Selected Compound […***…], Firmenich (or its respective Affiliate) will furnish to Senomyx a royalty statement to permit confirmation of the accuracy of the royalty payment made, which includes […***…].

7.7 Currency of Payment . All payments to be made under this Agreement, including the amounts payable to Senomyx by Firmenich, will be paid in United States dollars by wire transfer or other mutually acceptable means to a bank account designated by Senomyx. With respect to each quarter, for countries other than the United States, whenever conversion of payments from any foreign currency are required, such conversion will be made […***…]. Translation of sales and all components of the royalty calculation recorded in local currencies to United States dollars will be performed in a manner consistent with Firmenich’s normal practices used to prepare its financial statements audited by an independent auditor for internal and external reporting purposes, which uses a widely accepted published exchange rate.

7.8 Taxes Withheld . Any income or other tax that Firmenich, or any of its Affiliates is required by a government agency to withhold and pay on behalf of Senomyx with respect to the royalties payable under this Agreement will be deducted from and offset against such royalties prior to remittance to Senomyx; provided, however, that in regard to any tax so deducted, Firmenich will give or cause to be given to Senomyx such assistance as may reasonably be necessary to enable Senomyx to claim exemption from or credit for the tax so deducted, and in each case will promptly furnish to Senomyx proper evidence of the taxes paid on Senomyx’s behalf.

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

***Confidential Treatment Requested

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

8. Grants .

8.1 Grant of Rights.

8.1.1 Field I. Subject to the terms and conditions of this Agreement, Senomyx hereby grants to Firmenich the following nontransferable (except as permitted under Sections 8.2.1 and 17.12), licenses under the Senomyx Technology:

(i) an Exclusive license to use Compound(s) (excluding any Compounds that have been selected as Selected Synthetic Compounds) for evaluation during the Collaborative Period in Field I in the Territory for the intended purpose of enhancing the sweet taste of a Target Sweetener;

(ii) a non-exclusive license to make, have made, use, sell, offer for sale, have sold, import and export Products incorporating a Selected Synthetic Compound for use in Field I in the Territory for the applicable Intended Purpose; and

(iii) an Exclusive license to make, have made, use, sell, offer for sale, have sold, import and export Products incorporating a Selected Natural Compound for use in Field I in the Territory for the applicable Intended Purpose .

8.1.2 Field II. Subject to the terms and conditions of this Agreement, Senomyx hereby grants to Firmenich the following nontransferable (except as permitted under Sections 8.2.1 and 17.12) licenses under the Senomyx Technology:

(i) a Co-Exclusive license to use Compound(s) (excluding any Compounds that have been selected as Selected Synthetic Compounds) for evaluation during the Collaborative Period in Field II in the Territory for the intended purpose of enhancing the sweet taste of a Target Sweetener;

***Confidential Treatment Requested

(ii) a non-exclusive license to make, have made, use, sell, offer for sale, have sold, import and export Products incorporating a Selected Synthetic Compound for use in Field II in the Territory for the applicable Intended Purpose; and

(iii) a Co-Exclusive license to make, have made, use, sell, offer for sale, have sold, import and export Products incorporating a Selected Natural Compound for use in Field II in the Territory for the applicable Intended Purpose.

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

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

In the event of the first occurrence of an event under subsection (A) under the definition of […***…] (as defined on Appendix A) during the Collaborative Period, Senomyx shall promptly notify Firmenich of such occurrence. In the event that […***…] occurs during the Collaborative Period, Firmenich shall

***Confidential Treatment Requested

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

8.1.4 [Intentionally Omitted]

8.1.5 Field III. Subject to the terms and conditions of this Agreement, Senomyx hereby grants to Firmenich a non-exclusive, nontransferable (except as permitted under Sections 8.2.1 and 17.12), license under the Senomyx Technology, to make, have made, use, sell, offer for sale, have sold, import and export Products incorporating S6973 for use in Field III in the Territory for the applicable Intended Purpose of enhancing the sweet taste of sucrose.

8.1.6 Regulatory Approval of […***…] . In the event that […***…] Senomyx receives written notice […***…], then Senomyx shall promptly notify Firmenich of any such written notice. At any time within […***…] following Firmenich’s receipt of such notice from Senomyx Firmenich may elect to […***…] by delivery to Senomyx of its election (a “Conversion Election”). Upon Senomyx’s receipt of a Conversion Election during such […***…] period, Firmenich’s […***…]. Upon Senomyx’s receipt of such Conversion Election by Firmenich, Senomyx may thereafter in its sole discretion and upon […***…] prior notice to Firmenich elect to […***…]. In such instance, for purposes of this Agreement the definition of […***…]. For avoidance of doubt, the parties acknowledge and agree that a Conversion Election […***…]. Notwithstanding any conflicting provisions in this Agreement to the contrary, upon Senomyx’s receipt of a Conversion Election Senomyx may at any time thereafter […***…].

***Confidential Treatment Requested

8.2 Limitations to Licenses.

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

8.2.2 […***…] Firmenich Target Customers. For the avoidance of doubt, during the applicable Royalty Term for a given Selected Compound or Product Firmenich and its Affiliates shall not knowingly sell or provide such Selected Compound(s) or Product(s) to any Third Party for use outside the relevant Fields or for use other than for the Intended Purpose of enhancing the sweet taste of the applicable Target Sweetener(s) for a given Selected Compound. In addition, following the Amended and Restated Effective Date and during the applicable Royalty Term for a given Selected Compound or Product Firmenich agrees […***…]. Firmenich and its Affiliates shall […***…] with its purchasers which include the […***…] upon Firmenich in this Section 8.2.2. If Firmenich (or any of its Affiliates) […***…] Selected Compound(s) or Product(s) outside of the relevant Fields licensed to Firmenich under this Section 8 or other than for the intended purpose of enhancing the sweet taste of the applicable Target Sweetener(s) for a given Selected Compound or […***…] by any purchaser, then Firmenich (and its Affiliates) will […***…]: (a) […***…]; and (b) […***…]; and (c) […***…] until such time that it receives […***…]. In the event that […***…] Firmenich becomes aware that […***…] Selected Compound(s) or Product(s) outside of the relevant Fields licensed to Firmenich under Section 8 or other than for the intended purpose of enhancing the sweet taste of the applicable Target Sweetener for the given Selected Compound, or is engaged in […***…], then Firmenich shall promptly notify Senomyx and immediately discontinue sales of Products to such purchasers until such time that Senomyx agrees to authorize future sales, in its reasonable determination.

8.2.3 […***…] Senomyx Target Customers . Following the Amended and Restated Effective Date, on a Selected Synthetic Compound by Selected Synthetic Compound basis, until the applicable date for such Selected Synthetic Compound under Section 8.8.1, 8.8.2 and 8.8.3, as applicable, Senomyx agrees to […***…] from: (i) […***…] until after the applicable date contemplated in Section 8.8.1; (ii) […***…] until after the

***Confidential Treatment Requested

applicable date contemplated in Section 8.8.2; and (iii) […***…] until after the applicable date contemplated in Section 8.8.3. for such Selected Synthetic Compound or Substantially Similar Modification to such Selected Synthetic Compound, after such dates for a given Selected Synthetic Compound or a Substantially Similar Modification to such Selected Synthetic Compound, as the case may be, […***…] with respect to such Selected Synthetic Compound or a Substantially Similar Modification to such Selected Synthetic Compound shall no longer apply. Senomyx and its Affiliates shall […***…]. It is expressly agreed that Senomyx shall not be deemed to be in breach of this Section 8.2.3 due to Senomyx’s […***…] prior to the Amended and Restated Effective Date for use or evaluation in […***…] following the Amended and Restated Effective Date. If Senomyx (or any of its Affiliates) […***…] as expressly permitted by Section 8.8.1, 8.8.2 or 8.8.3, as the case may be, then Senomyx (and its Affiliates) will […***…]: (a) […***…]; and (b) […***…]; and (c) […***…] until […***…] engaged. In the event that after receipt of such written assurances Senomyx becomes aware […***…] Selected Synthetic Compound(s) or Substantially Similar Modification to such Selected Synthetic Compound or Product(s) containing Selected Synthetic Compound(s) or Substantially Similar Modification to such Selected Synthetic Compound other than for the authorized and intended activity, then Senomyx shall promptly notify Firmenich and immediately discontinue sales of such Products to such purchasers […***…].

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

***Confidential Treatment Requested

8.2.5 Target Customers. Senomyx hereby agrees that during the applicable Royalty Term for a Selected Synthetic Compound, and subject to Firmenich’s continuing compliance with the terms of this Agreement, sales by Senomyx and its Affiliates of any Products containing such Selected Synthetic Compound, in the applicable Fields for the relevant Selected Synthetic Compound, will in all cases only be to Senomyx Target Customers; provided, however, this restriction shall not in any manner restrict Senomyx’s Co-Exclusive rights with respect to Products containing any Selected Synthetic Compound in Field II (as described in Section 4 above). Firmenich hereby agrees that during the applicable Royalty Term for a Selected Synthetic Compound, and subject to Senomyx’s continuing compliance with the terms of this Agreement, sales by Firmenich and its Affiliates of any Products containing such Selected Synthetic Compound in the Fields will in all cases be to Firmenich Target Customers. Firmenich hereby agrees that during the applicable Royalty Term for a Selected Synthetic Compound Firmenich and its Affiliates will not sell any Products containing such Selected Synthetic Compound in the applicable Fields directly to any Senomyx Target Customer. For the avoidance of doubt, upon expiration of the Royalty Term of each Selected Synthetic Compound the restrictions set forth in this Section 8.2.5 shall no longer apply to either party with respect to such Selected Synthetic Compound. In the event of a Change of Control of either party, this Section 8.2.5 shall apply equally to any its new Affiliates; provided, however, that either party shall have a transition period of not more than […***…] following the consummation of a Change of Control (the “Wind-Down Period”) to allow any new Affiliates as a result of such a Change of Control to have an orderly wind-down of any activities that may be in conflict with the provisions of this Section 8.2.5. During the Wind-Down Period, the party and its Affiliates will […***…], it being understood that effective upon the expiration of the Wind-Down Period any activities of the party subject to such a Change of Control, and its Affiliates, shall thereafter be in compliance with its terms. Specific exceptions to the obligations and commitments of either party set forth in this Section 8.2.5 may be discussed by the Steering Committee and recommended for approval by the parties by means of an amendment to this Agreement or by other duly executed writing. The provisions of this section 8.2.5 shall apply with equal force to any […***…] as a Selected Synthetic Compound.

8.3 Grant of Rights from Firmenich to Senomyx.

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

***Confidential Treatment Requested

8.3.1.1 Selected Synthetic Compounds . With respect to: (i) Senomyx Selected Synthetic Compound-Containing Formulations that […***…] based in whole or in part on any work performed through the date that is […***…], and (ii) Senomyx Selected Synthetic Compound-Containing Formulations that […***…] and that […***…], Firmenich hereby grants to Senomyx and its Affiliates a non exclusive, royalty-free, sublicenseable (except to a Senomyx Target Customer), nontransferable (except as permitted under Section 17.12) worldwide license under such Patent Rights and under such […***…] to make, have made, use, sell, offer for sale, have sold, import and export […***…] for all fields of use, including in the Fields.

In the event that Senomyx or its Affiliates desire a non-exclusive license to make, use or sell a Senomyx Selected Synthetic Compound-Containing Formulation in any field of use, including the Fields where such Senomyx Selected Synthetic Compound-Containing Formulation consists of […***…] based in whole or in part on […***…], and requests such a license from Firmenich, Firmenich shall negotiate in good faith with Senomyx (or its Affiliates) […***…] to Firmenich for such rights. Firmenich agrees that the […***…] Senomyx (and its Affiliates) shall be […***…], and in the event that Firmenich and Senomyx (or its Affiliates) enter into such a license and […***…] and such terms shall […***…]. Notwithstanding anything else in this document, any rights granted by Firmenich under this paragraph shall be non-sublicenseable unless otherwise decided by […***…]. In addition, Senomyx’s right to request such a license from Firmenich under the terms set forth in this paragraph shall […***…].

In the event that a […***…] desires a license to to make, have made, use, sell, offer for sale, have sold, import and export outside of […***…] or with respect to […***…] for Selected Synthetic Compounds other than […***…] and outside of […***…] with respect to […***…], a Senomyx Selected Synthetic Compound-Containing Formulation that consists of […***…] based in whole or in part on […***…]; and requests such a license from Firmenich, […***…] licensee commercially reasonable terms and conditions, including […***…] for such rights.

In no event do any of the above license grants under this Section 8.3.1.1 from […***…] to Senomyx concerning Senomyx Selected Compound Containing Formulations provide any license to make, use or sell a […***…]Controlled compound or technology […***…], to the extent that such compound or technology is specifically and separately protected by a […***…] patent(s) with: (i) […***…] or technology; (ii) a claim directed to […***…] or technology; or (iii) a […***…] or technology; and where in each of (i), (ii) and (iii) the

***Confidential Treatment Requested

claim does not cover, either […***…] where […***…] has protected by Patent Rights such Senomyx Synthetic Compound where the Patents Rights are based on any patent applicaton that is […***…] to protect a […***…] Controlled compound or technology. Additionally, to the extent that there is any express or implied license to […***…] Patent Rights, in no event do any of the above grants provide any license to Senomyx to make, use or sell a Product under any […***…] Patent Rights based on patent applications filed prior to […***…].

8.3.1.2 Selected Natural Compounds . With respect to: (i) Senomyx Selected Natural Compound-Containing Formulations that […***…], and (ii) Senomyx Selected Natural Compound-Containing Formulations that […***…] but that […***…], Firmenich hereby grants to Senomyx and its Affiliates a non exclusive, royalty-free, sublicenseable, nontransferable (except as permitted under Section 17.12) worldwide license under such Patent Rights and under such Know-How that […***…] to make, have made, use, sell, offer for sale, have sold, import and export Products containing any Selected Natural Compound […***…]. If this Agreement terminates or […***…], with respect to one or more Selected Natural Compound(s), […***…], then the licenses granted in the immediately preceding sentence shall be automatically expanded to include any and all Fields and/or territories for which […***…].

In the event that Senomyx or its Affiliates desire a license to a Senomyx Selected Natural Compound-Containing Formulation that consists of […***…] to make, use or sell Products containing any Selected Natural Compound […***…], and requests such a license from Firmenich, Firmenich shall negotiate in good faith with Senomyx (or its Affiliates) […***…] to Firmenich for such rights. Firmenich agrees that the […***…] Senomyx (and its Affiliates) shall be […***…], and in the event that Firmenich and Senomyx (or its Affiliates) enter into such a license and […***…] and such terms shall […***…]. If this Agreement terminates or […***…], with respect to one or more Selected Natural Compound(s), […***…], then Senomyx’s rights under the preceding sentence shall apply equally to the Fields and/or territories for which […***…]. Notwithstanding anything else in this document, any rights granted by Firmenich under this paragraph shall be non-sublicenseable unless otherwise decided by Firmenich, at its sole and absolute discretion.

***Confidential Treatment Requested

In the event that a […***…] desires a license to a Senomyx Selected Natural Compound-Containing Formulation that consists of […***…] to make, have made, use, sell, offer for sale, have sold, import and export Product containing any Selected Natural Compound […***…], and requests such a license from […***…] commercially reasonable terms and conditions, including the appropriate amount and form of consideration to be paid by such Third Party to Firmenich for such rights.

8.3.2 Senomyx Synthetic Compound(s) Manufacturing Methods. With respect to Senomyx Synthetic Compound Manufacturing Methods, Firmenich hereby grants to Senomyx and its Affiliates a […***…], nontransfereable (except as permitted under Section 17.12) worldwide license under Know-How that […***…] to make, have made, use, sell, offer for sale, have sold, import and export Products containing any Selected Synthetic Compound for all fields of use, including the Fields. In addition, with respect to each Selected Synthetic Compound Firmenich hereby grants to Senomyx and its Affiliates a […***…], nontransfereable (except as permitted under Section 17.12) worldwide license under […***…] Patent Rights with respect to subject matter that is directed to Senomyx Synthetic Compound Manufacturing Methods that are […***…], to make, have made, use, sell, offer for sale, have sold, import and export Products containing any Selected Synthetic Compounds for all fields of use, including the Fields.

8.3.2.1 In the event that Firmenich or any of its Affiliates files a patent application with subject matter that is directed to Senomyx Synthetic Compound Manufacturing Methods for a given Selected Synthetic Compound that are […***…], then Firmenich agrees to pursue a […***…] and in the event that a patent from such […***…] that was being used by Firmenich and its Affiliates, or their respective subcontractors, […***…] that is related to Senomyx Synthetic Compound Manufacturing Methods for such Selected Synthetic Compound and at […***…] request […***…] will, at no additional expense to […***…], provide reasonable cooperation and assistance to enable […***…] understanding and utilization of such disclosed Know-How for the […***…] Selected Synthetic Compound. […***…] agrees to reimburse […***…] for […***…] filed for each Selected Synthetic Compound […***…] for the applicable Selected Synthetic Compound.

8.3.2.2 In the event that Senomyx or any of its Affiliates files a patent application with subject matter that is directed to Senomyx Synthetic Compound Manufacturing Methods for a given Selected Synthetic Compound that are […***…], then Senomyx agrees to pursue a […***…] and in the event that a patent from such […***…] Know-How that was being used by Senomyx and its Affiliates, or their respective subcontractors, related to Senomyx Synthetic Compound

***Confidential Treatment Requested

Manufacturing Methods for such Selected Synthetic Compound […***…] (to the extent that such […***…] Know-How was not previously disclosed to […***…]) and at […***…] request […***…] will, at no additional expense to […***…], provide reasonable cooperation and assistance to enable […***…] understanding and utilization of such disclosed Know-How for the […***…] Selected Synthetic Compound. […***…] agrees to reimburse Senomyx for […***…] filed for each Selected Synthetic Compound […***…] for the applicable Selected Synthetic Compound.

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

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

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

***Confidential Treatment Requested

8.3.4 If Firmenich identifies any […***…] that it considers may be relevant or useful for the research purposes under this Agreement, Senomyx may request a license of the relevant […***…] and Firmenich may in its sole discretion grant a license of the […***…]. Where Firmenich consents to a license in this Section 8.3.4, Firmenich will grant a fully paid, non-exclusive, non-transferable license to use the relevant […***…] for research purposes solely related to Senomyx’s performance of its obligations pursuant to this Agreement. For the avoidance of doubt […***…].

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

Notwithstanding anything to the contrary contained in Section 8.4 of the Agreement, the parties hereby mutually agree that with respect to Products intended for use in […***…] any non-exclusive license retained by Firmenich under the last sentence of Section 8.4 shall automatically terminate […***…] by the Steering Committee.

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

***Confidential Treatment Requested

8.6 Grant of Option — Natural Compounds. The parties hereby confirm that the Option to expand the Collaborative Program to include Natural Compounds was previously exercised by Firmenich in accordance with the terms of Section 8.6 of the Original Agreement.

8.7 After the Collaborative Period . This Section 8.7 does not apply to […***…]. Upon expiration of the Collaborative Period, in the event that Firmenich has selected a Selected Compound(s) pursuant to Section 3.1.4, then Firmenich shall have the following rights. During […***…], Senomyx will not grant a license under Senomyx Technology to any Third Party or Affiliate to […***…] for use in […***…] (subject to Senomyx’s Co-Exclusive rights in […***…]) for the Intended Purpose of […***…]; provided, however that the foregoing shall not be construed to limit Senomyx’s rights that it has retained with respect to Selected Compounds as set forth in Section 4. In addition, at any time during […***…], Firmenich, upon written notice to Senomyx, will have the right to select a Compound for which […***…]; provided, however, that such period shall be […***…] for which it has received a data package during the Collaborative Period (i) during the applicable […***…] if the parties are then […***…], or (ii) if Firmenich has properly […***…], until the date on which […***…]. Upon such a […***…] in accordance with the preceding sentence, the applicable Compound(s) will be […***…] subject to the same terms and conditions as […***…].

8.8 First Mover Period for Selected Synthetic Compounds. The provisions in this Section 8.8 shall apply with equal force to Selected Compounds […***…], it being understood and agreed that the dates and periods applicable to […***…] the Selected Compound to which it is related. For example, for a Compound that is […***…] the period contemplated in 8.8.1.3 will be measured as […***…] following the date of the first Regulatory Approval […***…] in the United States, and […***…] the first Regulatory Approval […***…].

8.8.1 Evaluation of Selected Synthetic Compounds. This Section 8.8.1 is subject to the provisions of Section 8.8.4 below.

8.8.1.1 Use and Evaluation of S6973 . Senomyx will not supply any Products containing S6973 to any Third Party for any use in the Fields, unless otherwise specifically provided elsewhere in the Agreement, until the earlier of any of the following events following the Amended and Restated Effective Date: (i) the date on which Senomyx submits an application for Regulatory Approval […***…] in the United States, or(ii) the date on which Senomyx submits an application for Regulatory Approval in the United States […***…] (the earlier of (i) and (ii) shall be

***Confidential Treatment Requested

referred to as the “S6973 Availability Date”). In addition, following the Amended and Restated Effective Date and until on or after the S6973 Availability Date, Senomyx will not authorize any use of any Products containing S6973 in the Fields by any Senomyx Target Customer. Within […***…] following the S6973 Availability Date […***…].

8.8.1.2 Use and Evaluation of S9632 . Senomyx will not supply any Products containing S9632 to any Third Party for any use in Field I, unless otherwise specifically provided elsewhere in the Agreement, until on or after […***…]. In addition, following the Amended and Restated Effective Date and until on or after […***…], Senomyx will not authorize any use of any Products containing S9632 in Field I by any Senomyx Target Customer.

8.8.1.3 Use and Evaluation of S52617 . Senomyx will not supply any Products containing S52617 to any Third Party for any use in Field I, unless otherwise specifically provided elsewhere in the Agreement, until on or after […***…] months following the date of the first Regulatory Approval in the United States for S52617 (subject to Senomyx’s Co-Exclusive rights in Field II). In addition, Senomyx will not authorize or license any use of any Products containing S52617 by any Third Party in Field I or Field II unless otherwise specifically provided for elsewhere in the Agreement (subject to Senomyx’s Co-Exclusive rights in Field II) until at least […***…] months following the date of the first Regulatory Approval in the United States for S52617.

8.8.1.4 Use and Evaluation of Selected Synthetic Compounds other than S6973, S9632 and S52617 . With respect to each Selected Synthetic Compound other than S6973, S9632 and S52617, Senomyx will not supply any Products containing the applicable Selected Synthetic Compound to any Third Party for use in Field I or Field II until at least […***…] months following the date of the first Regulatory Approval in the United States for the applicable Selected Synthetic Compound (subject to Senomyx’s Co-Exclusive rights in Field II). In addition, with respect to each Selected Synthetic Compound other than S6973, S9632 and S52617, Senomyx will not authorize or license any use of any Products containing the applicable Selected Synthetic Compound by any Third Party in Field I or Field II unless otherwise specifically provided for elsewhere in the Agreement (subject to Senomyx’s Co-Exclusive rights in Field II) until at least […***…] months following the date of the first Regulatory Approval in the United States for the applicable Selected Synthetic Compound. Notwithstanding the foregoing, and for avoidance of any doubt, prior to expiration of such […***…] month period for a Selected Synthetic Compound, Senomyx may authorize the use of any Products containing the applicable Selected Synthetic Compound by a Co-Exclusive Licensee of the Selected Synthetic Compound, and may supply any such Product to a Co-Exclusive Licensee of such Selected Synthetic

***Confidential Treatment Requested

Compound, in addition to Firmenich, for use in Field II. The parties acknowledge and agree that Senomyx may assume the role of a Co-Exclusive Licensee of a Synthetic Compound or sell or supply Synthetic Compounds to a Co-Exclusive Licensee at any time during such […***…] month period.

8.8.2 Commercial Sales of Selected Synthetic Compounds. This Section 8.8.2 shall apply to Products containing any Selected Synthetic Compound and is subject to the provisions of Section 8.8.4 below.

8.8.2.1 Sales of S6973. With respect to S6973, Senomyx and its Affiliates will not sell, supply, or authorize any Third Party to sell, supply or use (other than in accordance with Section 8.8.1 above) any Products that contain S6973 in Field I, Field II or Field III until the earlier of either (i)the first day of the first calendar quarter following the date of the first Regulatory Approval […***…] in the United States, or (ii) the first day of the first calendar quarter following the date of the first Regulatory Approval in the United States […***…].

8.8.2.2 Sales of S9632. With respect to S9632, Senomyx and its Affiliates will not sell, supply, or authorize any Third Party to sell, supply or use (other than in accordance with Section 8.8.1 above) any Products that contain S9632 in Field I until on or after […***…].

8.8.2.3 Sales of Selected Synthetic Compounds Other than S6973 and S9632 . With respect to each Selected Synthetic Compound other than S6973 and S9632, Senomyx and its Affiliates will not sell, supply or authorize any Third Party to sell, supply or use (other than in accordance with Section 8.8.1 above) any Products containing the applicable Selected Synthetic Compound in Field I or II for until (i) in the case of S52617, […***…] months following the date of the first Regulatory Approval of such Selected Synthetic Compound in the United States, and (ii) in the case of any other such Selected Synthetic Compound (other than S6973, S9632 or S52617) […***…] months following the date of the first Regulatory Approval in the United States for the applicable Selected Synthetic Compound, subject in case of both (i) and (ii) to Senomyx’s Co-Exclusive rights in Field II; provided, however, that if during such […***…] (i) Senomyx is […***…] (other than […***…]) to […***…], or (ii) Senomyx has […***…] such Selected Synthetic Compound (other than […***…]) for […***…], then Senomyx shall not sell, supply or authorize any use (other than in accordance with Section 8.8.1 above) of any Products containing the applicable Selected Synthetic Compound in Field I until […***…] following the date of the first Regulatory Approval in the United States for the applicable Selected Synthetic Compound. Notwithstanding the foregoing, the parties acknowledge and agree that prior to the expiration of the applicable period for the Selected Synthetic Compound subject to this Section 8.8.2.3, Senomyx may assume the role of a Co-Exclusive Licensee of a Synthetic Compound or sell or supply Synthetic Compounds to a Co-Exclusive Licensee (and its Affiliates), in addition to Firmenich, in Field II.

***Confidential Treatment Requested

8.8.3 Limitations on Licensing. Except as permitted under Section 8.8.4 below, Senomyx shall not grant any license under the Senomyx Technology to any Third Party to make, have made, use, sell, have sold, import or export a Selected Synthetic Compound or any Product incorporating any Selected Synthetic Compound in the applicable Fields for the intended purpose of enhancing any Target Sweetener at any time […***…] in order to allow Firmenich the opportunity to potentially select such Selected Synthetic Compound for […***…] in accordance with the provisions of Section 3.1.4. In addition, on a Selected Synthetic Compound by Selected Synthetic Compound basis, during the periods specified in Section 8.8.1.1, 8.8.1.2, 8.8.1.3 and 8.8.1.4 for the applicable Selected Synthetic Compound (to the extent such period is longer than the period stated in the immediately preceding sentence), Senomyx shall not grant any license under the Senomyx Technology to any Third Party to make, have made, use, sell, have sold, import or export such Selected Synthetic Compound or any Product incorporating such Selected Synthetic Compound in Field I for the intended purpose of enhancing the applicable Target Sweetener, and any such license agreement between Senomyx and a Third Party shall also […***…] until the applicable date for such Selected Synthetic Compound specified in Sections 8.8.2.1, 8.8.2.2 and 8.8.2.3, as the case may be. The foregoing shall not authorize Senomyx to grant any license under Senomyx Technology that would conflict with Senomyx’s obligations under Article 7 of the Supply Agreement. In the event that following the periods set forth above in this Section 8.8.3 Senomyx does grant a license to any Third Party to make, have made, use, sell, have sold, import or export such Selected Synthetic Compound or any Product incorporating such Selected Synthetic Compound in Field I for the intended purpose of enhancing the applicable Target Sweetener, the applicable licensee must agree in writing to sell such Selected Synthetic Compound or any Product incorporating such Selected Synthetic Compound in Field I only to Senomyx Target Customers during the applicable Royalty Term.

8.8.4 Authorized Uses of Synthetic Compounds . The parties acknowledge and agree that the above restrictions under Sections 8.8.1., 8.8.2, and 8.8.3 shall not restrict Senomyx’s ability to at any time supply any Product containing a Selected Synthetic Compound to one or more Third Party that is not a Senomyx Target Customer during the applicable periods specified in Sections 8.8.1.1, 8.8.1.2, 8.8.1.3 and 8.8.1.4, to the extent necessary or useful for the following Senomyx research and development activities: (i) the […***…] Selected Synthetic Compound; (ii) the […***…] a Selected Synthetic Compound; (iii) the […***…] a Selected Synthetic Compound; (iv) the […***…] a Selected Synthetic Compound, or (v) […***…]. The parties may also agree to other activities reasonably related research and development

***Confidential Treatment Requested

of a Selected Synthetic Compounds upon a request by Senomyx, which Firmenich agrees to not unreasonably deny. In addition, the above restrictions under Sections 8.8.1, 8.8.2 and 8.8.3 shall not restrict Senomyx’s activities reasonably related to the commercialization by Senomyx of a given Selected Synthetic Compound or any Product containing such a Selected Synthetic Compound either directly or through Senomyx’s Affiliates or their respective Third Party contractors (other than any Senomyx Target Customer) during the applicable periods specified for the applicable Senomyx Selected Compound under Sections 8.8.1.1, 8.8.1.2, 8.8.1.3 or 8.8.1.4, and following the applicable period, to thereafter commercialize such Selected Synthetic Compound or any Product containing such a Selected Synthetic Compound either directly or through Senomyx’s Affiliates or their respective Third Party contractors, as permitted by Section 8.8.2 above. In addition, the above restrictions under Sections 8.8.1, 8.8.2, and 8.8.3 shall not restrict Senomyx’s ability to perform any activities under a research program with any Co-Exclusive Licensee, including a Senomyx Target Customer, for the discovery, development and commercialization of Synthetic Compounds for use in Field II, including Senomyx’s rights to grant a license to a Co-Exclusive Licensee to make, have made, use, sell, have sold, import or export a Selected Synthetic Compound or any Product incorporating any Selected Synthetic Compound in Field II.

Firmenich acknowledges that the Senomyx is currently a party to the PepsiCo Agreement pursuant to which Senomyx, among other things, is presently engaged in a Co-Exclusive program for the research and development of Compounds for use in Field II and for other fields outside of Field I and Field II. Firmenich acknowledges and agrees that the provisions of this Agreement are not intended to, and shall not, preclude or prevent Senomyx from the performance of its obligations and commitments under the PepsiCo Agreement.

9. Ownership of Intellectual Property .

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

9.2 Senomyx Sole Inventions . Senomyx will own all Inventions and other Know-How made solely by its employees and agents under this Agreement (the “Senomyx Sole Inventions”), and all claims within Patent Rights claiming such Inventions and Know-How other than Firmenich Improvements. Subject to Sections 9.5 and 9.6, Senomyx hereby irrevocably assigns to Firmenich all right, title and interest in and to any such Senomyx

Sole Inventions that consist of improvements to the Firmenich Technology licensed to Senomyx pursuant to Section 8.3.4, including, without limitation, […***…] (collectively, “Firmenich Improvements”), and all claims within Patent Rights claiming such Senomyx Sole Inventions, subject to any license granted to Senomyx pursuant to Section 8. In the event that Senomyx is legally unable to assign such rights to Firmenich, then Senomyx agrees either to waive the enforcement of such rights against Firmenich and any sublicensees and assignees, or to grant Firmenich an Exclusive, irrevocable, perpetual, worldwide, fully paid-up license, with right to sublicense through multiple tiers of sublicense, to such rights, subject to any license granted to Senomyx pursuant to Section 8.

9.3 Firmenich Sole Inventions . Firmenich will own all Inventions and other Know-How made solely by its employees and agents under this Agreement (“Firmenich Sole Inventions”), and all claims within Patent Rights claiming such Inventions and Know-How other than Senomyx Improvements. Subject to Sections 9.5 and 9.6, Firmenich hereby irrevocably assigns to Senomyx all right, title and interest in and to any such Firmenich Sole Inventions that consist of improvements to the Senomyx Technology licensed to Firmenich pursuant to Section 8.1, including, without limitation, […***…] (collectively, “Senomyx Improvements”), and all claims within Patent Rights claiming such Firmenich Sole Inventions, subject to any licenses granted to Firmenich pursuant to Section 8. In the event that Firmenich is legally unable to assign such rights to Senomyx, then Firmenich agrees either to waive the enforcement of such rights against Senomyx and any sublicensees and assignees, or to grant Senomyx an Exclusive, irrevocable, perpetual, worldwide, fully paid-up license, with right to sublicense through multiple tiers of sublicense, to such rights, subject to any license granted to Firmenich pursuant to Sections 8.

9.4 Joint Inventions . All Inventions and other Know-How made under this Agreement jointly by employees or agents of Senomyx and employees or agents of Firmenich (the “Joint Inventions”) and all claims within Patent Rights claiming such Joint Inventions will be owned jointly by Firmenich and Senomyx. Subject to Sections 9.5 and 9.6, Firmenich hereby irrevocably assigns to Senomyx all interest in and to any Joint Inventions that consist of Senomyx Improvements, and all claims within Patent Rights claiming such Joint Inventions, subject to the licenses granted to Firmenich pursuant to Section 8. In the event that Firmenich is legally unable to assign such rights to Senomyx, then Firmenich agrees either to waive the enforcement of such rights against Senomyx and any sublicensees and assignees, or to grant Senomyx an Exclusive, irrevocable, perpetual, worldwide, fully paid-up license, with right to sublicense through multiple tiers of sublicense, to such rights, subject to any license granted to Firmenich pursuant to Sections 8. Subject to Sections 9.5 and 9.6, Senomyx hereby irrevocably assigns to Firmenich all interest in and to any Joint Inventions that consist of Firmenich

***Confidential Treatment Requested

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

9.5 […***…]

9.5.1 […***…]. For the avoidance of doubt, all […***…] Controlled by […***…] prior to the Effective Date (the […***…]) and all claims within Patent Rights claiming such […***…] will be owned solely by Firmenich.

9.5.2 […***…]. Notwithstanding anything to the contrary contained in Sections 9.2, 9.3 or 9.4, all […***…] developed by […***…] under this Agreement which consist of improvements to […***…] or which are […***…] (collectively, the […***…]), and all claims within Patent Rights claiming such […***…], will be owned […***…].

9.5.3 […***…]. Notwithstanding anything to the contrary contained in Sections 9.2, 9.3, 9.4 or 9.5.2, all […***…] developed by […***…] under this Agreement and all claims within Patent Rights claiming such […***…] will be owned by […***…], subject to the license to Senomyx pursuant to […***…]. Notwithstanding anything to the contrary in this Agreement, […***…] will have no right to practice, or grant any license to practice […***…] of the Fields.

9.5.4 […***…]

9.5.4.1 […***…]. Prior to […***…], Firmenich will not […***…] on […***…] with respect to such Compound and will not […***…] to Senomyx. It is further agreed that even after the […***…], any patent application […***…] for such Selected Synthetic Compound may not also […***…]. In the event that […***…] Firmenich […***…] to Senomyx, then Firmenich hereby grants to Senomyx a non exclusive, royalty-free, sublicenseable, nontransferable (except as permitted under Section 17.12) worldwide license under Patent Rights and under Know-How that Firmenich […***…] to make, have made, use, sell, offer for sale, have sold, import and export […***…].

***Confidential Treatment Requested

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

9.6 Methods of […***…] .

9.6.1 Products . Notwithstanding anything to the contrary contained in Sections 9.2, 9.3 or 9.4, all Inventions and Know-How developed by Firmenich under this Agreement that consist of methods of […***…] and all claims within Patent Rights claiming such Inventions will be owned […***…].

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

9.6.3 Methods of […***…] .

9.6.3.1 Synthetic Compounds . Prior to […***…], Firmenich will not file patent applications with respect to methods of […***…], including any […***…] thereof, and will not […***…]. In the event that prior to […***…] Firmenich […***…], then […***…] hereby grants to […***…] a non exclusive, royalty-free, sublicenseable, nontransferable (except as permitted under Section 17.12) worldwide license under Patent Rights and under Know-How that […***…] to such methods […***…] to make, have made, use, sell, offer for sale, have sold, import and export products […***…].

9.6.3.2 Natural Compounds. Prior to […***…] will not file patent applications with respect to methods of […***…], including any […***…] thereof, and will not […***…]. In the event that prior to […***…] such information […***…], then […***…] hereby grants to […***…] a non exclusive, royalty-free, sublicenseable, nontransferable (except as permitted under Section 17.12) worldwide license under Patent Rights and under Know-How that […***…] to

***Confidential Treatment Requested

such methods of […***…] (i) to make, have made, use, sell, offer for sale, have sold, import and export products […***…]; and (ii) to make, have made, use, sell, offer for sale, have sold, import and export products […***…], and (iii) to make, have made, use, sell, offer for sale, have sold, import and export products […***…].

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

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

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

10. Treatment of Confidential Information; Publicity .

10.1 Confidentiality . Subject to the terms and conditions of this Agreement, each of Senomyx and Firmenich agrees that, during the Term and for a period of […***…] thereafter, it will keep confidential, and will cause its Affiliates to keep confidential, all of the other party’s Confidential Information, provided, however, that […***…]. Neither Senomyx nor Firmenich nor any of their respective Affiliates will use the other party’s Confidential Information, except as expressly permitted by this Agreement.

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

***Confidential Treatment Requested

10.3 Return of Confidential Material Upon Termination . Upon termination of this Agreement, each party, upon the other party’s request, will return or destroy all Confidential Information received from the other party including, without limitation, all copies and extracts of documents, within […***…] of the date of receipt of the request of such other party; provided, however, one copy of the Confidential Information may be retained in a secure location with limited access for ensuring legal compliance with any ongoing obligation of confidentiality.

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

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

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

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

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

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

A party may also disclose the other party’s Confidential Information of where required to do so by law, legal process, securities related regulations or by stock exchange rules; provided, however, that, in such event, the party required to disclose such information must give advance written notice of such disclosure to the other party to the extent reasonably possible and must cooperate with the other party’s efforts to seek, at the request and expense of the other party, all confidential treatment and protection for such disclosure as is permitted by applicable laws, regulations and rules; provided further that the relevant party may disclose the other party’s Confidential Information only to those persons to whom disclosure is so required. Senomyx shall […***…] in reference to this Agreement, […***…], or Firmenich’s […***…] in reference to this Agreement, […***…] of Firmenich, […***…] otherwise made public. The foregoing shall not apply to […***…] provided that (i) any […***…]shall be consistent with […***…] that were previously approved in advance […***…] publicly filed reports with the Securities and Exchange

***Confidential Treatment Requested

Commission, AND (ii) provided further that […***…] in advance of each […***…]. In the event that […***…] in which Senomyx […***…] in the context of this Agreement, […***…], or Firmenich’s […***…], other than as set forth in the immediately preceding sentence, then […***…] Senomyx shall […***…], which approval shall not be unreasonably withheld and be promptly made within […***…] thereafter. Disclosure of […***…] in any case under any of the circumstances set forth above, shall be consistent with publicly available information. Anything in this Section 10.4 to the contrary notwithstanding, the exceptions provided in (B) and (D) above shall not apply to information developed by Firmenich independently and/or jointly with Senomyx that constitutes a Senomyx Improvement or information developed by Senomyx independently and/or jointly with Firmenich that constitutes a Firmenich Improvement.

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

10.6 Permitted Use and Disclosures . Each party may use or disclose Confidential Information disclosed to it by the other party to the extent such information is included in the Firmenich Technology, Senomyx Technology or Joint Patent Rights, and to the extent such use or disclosure is reasonably necessary and permitted in the exercise of the rights granted hereunder in filing or prosecuting patent applications, prosecuting or defending litigation, complying with applicable governmental regulations, or court orders or otherwise submitting information to tax or other governmental authorities, conducting taste testing, submitting information for regulatory applications, or making a permitted sublicense or otherwise exercising rights expressly granted to the other party pursuant to the terms of this Agreement; provided, however, that if a party is required to make any such disclosure of the other party’s Confidential Information, other than pursuant to a confidentiality agreement, it will give reasonable advance notice of such disclosure to the

***Confidential Treatment Requested

other party where reasonably possible and, save to the extent inappropriate in the case of patent applications, will use its reasonable efforts to secure confidential treatment of such Confidential Information in consultation with the other party prior to such disclosure (whether through protective orders or otherwise). Any disclosure of Confidential Information shall be limited to the minimum necessary to comply with such requirements.

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

10.8 Confidential Research Information . Subject to the provisions of Sections 3.3.2 and 9 regarding ownership of certain regulatory data and intellectual property, the parties agree that all results and data generated from the research and development by a party under the Agreement will be owned exclusively by that party and considered Confidential Information of that party subject to the confidentiality requirements of this Section 10. Firmenich will not provide to a Third Party any materials provided to it by Senomyx and Senomyx will not provide to a Third Party any materials provided to it by Firmenich. However, Firmenich may […***…].

11. Intellectual Property Enforcement and Defense of Claims.

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

***Confidential Treatment Requested

11.2 Senomyx Technology and Jointly Owned Technology .

11.2.1 Synthetic Compounds . With respect to Senomyx Technology and Jointly Owned Technology, other than Senomyx Technology or Joint Technology that is related to Natural Compounds or Selected Natural Compounds which is subject to Section 11.2.2, Senomyx shall have the sole right, but not the obligation, to take action to remove such infringement using commercially appropriate steps, including without limitation, the filing of an infringement suit or other similar action at its own expense. Senomyx shall be entitled to bring such action under this Section 11.2.1 notwithstanding any action or negotiation commenced by Firmenich under Section 11.3.

11.2.2 Natural Compounds . With respect to Senomyx Technology and Jointly Owned Technology related to Natural Compounds or Selected Natural Compounds, Senomyx shall have the first right, but not the obligation, to take action to remove such infringement using commercially appropriate steps, including without limitation, the filing of an infringement suit or other similar action. In such event, with respect to […***…] under this Agreement with respect to such Selected Natural Compound in the country in which the infringement action is initiated, Firmenich shall have the right to join in such infringement suit or similar action at its own expense. In the event Senomyx fails to take commercially appropriate steps to remove any infringement of any such Senomyx Technology or Jointly Owned Technology within […***…] following notice of such infringement, or earlier notifies Firmenich of its intent not to take such steps, then […***…] to such Selected Natural Compound under this Agreement in the country in which the infringement action is initiated, Firmenich shall have the right to do so at its expense; provided, however, that if Senomyx has commenced negotiations with an alleged infringer for discontinuance of such infringement within such […***…], Senomyx shall have an additional […***…] to conclude its negotiations before Firmenich may bring suit for such infringement or take other similar action. In the event Firmenich brings such suit for infringement or takes other similar action, Senomyx shall have the right to join in such infringement suit or similar action at its own expense.

11.3 Firmenich Technology. With respect to Firmenich Technology, Firmenich shall have the sole right, but not the obligation, to take action to remove such infringement using commercially appropriate steps, including, without limitation, the filing of an infringement suit or other similar action at its own expense. For the avoidance of doubt, Firmenich shall be entitled to take action under this Section 11.3 notwithstanding any action or negotiation commenced by Senomyx under Section 11.2.

***Confidential Treatment Requested

11.3.1 Synthetic Compounds . With respect to Patent Rights owned by Firmenich pursuant to Section 9.5.3 or Section 9.5.4.1 claiming Senomyx Synthetic Compound-Containing Formulations or Senomyx Selected Compound-Containing Formulations and with respect to Patent Rights owned by Firmenich claiming Senomyx Synthetic Compound Manufacturing Methods, Firmenich will have the right to take action to stop infringement of the claims in such Patent Rights which claim Senomyx Synthetic Compound-Containing Formulations, Senomyx Selected Compound-Containing Formulations and/or Senomyx Sythetic Compound Manufacturing Methods only against Third Parties that were not licensees or customers of Senomyx with respect to the applicable Synthetic Compound or Selected Synthetic Compound that is covered by the claims in such Patent Rights at the time of the alleged infringing activity.

11.3.2 Natural Compounds . With respect to Patent Rights owned by Firmenich pursuant to Section 9.5.3 or Section 9.4.5.2 claiming […***…] and with respect to Patent Rights owned by Firmenich claiming […***…], where the infringement is […***…], Firmenich will have the right to take action to stop infringement of the claims in such Patent Rights which claim […***…] only against Third Parties that were […***…]of the applicable Natural Compound or Selected Natural Compound that is covered by the claims in such Patent Rights […***…].

11.4 Recovery .

11.4.1 Synthetic Compounds . With respect to suits under Section 11.2.1 Senomyx will retain any and all recoveries.

11.4.2 Natural Compounds . With respect to suits under Section 11.2.2 and Section 11.3, except as otherwise agreed to in writing by the parties, the recoveries realized as a result of such suits will be allocated in the following order: (a) […***…]; (b) Senomyx will be reimbursed an amount equivalent […***…]; and (c) Firmenich will receive […***…] with respect to such Natural Compound in the country in which the action is initiated, and otherwise Senomyx […***…].

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

***Confidential Treatment Requested

11.6 Defense of Infringement Claims by Firmenich . Firmenich shall have the sole right to control any defense of any claim by a Third Party alleging that Firmenich’s or its Affiliate’s activities pursuant to this Agreement infringe or may infringe the intellectual property rights of such Third Party, at Firmenich’s sole cost and expense and by counsel of its own choice, and Senomyx […***…]. To the extent that a claim involves Firmenich’s or its Affiliate’s manufacture, sale, use, export or import of a Product that contains any Selected Compound, the parties agree that […***…]. Firmenich shall not […***…]. Senomyx will cooperate with Firmenich, at Firmenich’s expense, in the defense of any suit, action or proceeding against any Firmenich Indemnitee alleging the infringement of the intellectual property rights of a Third Party by reason of any Firmenich Indemnitee’s use of any Senomyx Technology related to Compounds or Selected Compounds licensed under this Agreement. Firmenich must notify Senomyx promptly in writing of the commencement of any such suit, action, proceeding or claim of infringement. In no event will Senomyx be liable for the defense or indemnification of any suit, action or proceeding against any Firmenich Indemnitee alleging the infringement of the intellectual property rights of a Third Party by reason of a Firmenich Indemnitee’s use of any Senomyx Technology related to Compounds or Selected Compounds licensed under this Agreement.

11.7 Defense of Infringement Claims by Senomyx . Senomyx shall have the sole right to control any defense of any claim by a Third Party alleging that Senomyx’s or its Affiliate’s activities pursuant to this Agreement infringe or may infringe the intellectual property rights of such Third Party, at Senomyx’s sole cost and expense and by counsel of its own choice, and Firmenich […***…]. To the extent that a claim involves Senomyx’s or its Affiliate’s manufacture, sale, use, export or import of a Product that was (i) […***…], or (ii) incorporates any […***…] by […***…], the parties agree that […***…]. Senomyx shall not enter into any settlement or compromise of any such action under this Section 11.7 which would in any manner alter, diminish, or be in derogation of Firmenich’s rights under this Agreement without the prior written consent of Firmenich, which shall not be unreasonably withheld. Firmenich will cooperate with Senomyx, at Senomyx’s expense, in the defense of any suit, action or proceeding against any Senomyx Indemnitee alleging the infringement of the intellectual property rights of a Third Party by reason of any Senomyx Indemnitee’s use of any Firmenich Technology related to Compounds or Selected Compounds licensed under this Agreement. Senomyx must notify Firmenich promptly in writing of the commencement of any such suit, action, proceeding or claim of infringement. In no event will Firmenich be liable for the defense or indemnification of any suit, action or proceeding against any Senomyx Indemnitee alleging the infringement of the intellectual property rights of a Third Party by reason of a Senomyx Indemnitee’s use of any Firmenich Technology related to Compounds or Selected Compounds licensed under this Agreement.

***Confidential Treatment Requested

12. Patent Prosecution and Maintenance . Each party will bear the cost of filing and prosecuting the patents and patent applications associated with inventions owned or assigned to that party. Firmenich will […***…] for […***…] for the applicable Selected Compounds in the applicable country), […***…], of the reasonable out-of-pocket costs incurred […***…] for […***…] patents and patent applications for the Selected Compound(s). Firmenich’s obligation to […***…] will […***…], but in no instance beyond the Term. With respect to such patent applications after Firmenich has selected a Selected Compound and for the duration of Firmenich’s obligation to […***…], the parties will discuss and agree at least […***…] before the due date of international filings or at least […***…] before the due date of […***…], in […***…] to file patent applications claiming such Selected Compounds and Firmenich shall […***…]. Notwithstanding the foregoing, if during the period of […***…] decides it does not wish to have a patent application claiming a Selected Compound(s) either (i) filed or (ii) prosecuted in a particular country or Firmenich decides that it does not wish to have maintained a patent claiming a Selected Compound(s), […***…],[…***…] may still (i) file or (ii) prosecute such patent application, or may maintain such patent […***…]; provided, however, that if […***…] actually files or prosecutes such patent application or maintains such patent […***…], Firmenich will […***…] for such application or maintenance costs of such patent in such country, and […***…]. The rights granted to Firmenich […***…]. For each Selected Compound, but only for so long as […***…] for such Selected Compound, Senomyx agrees to […***…] relating to claims within the Senomyx Patent Rights claiming Selected Compounds or use thereof in the Fields, including without limitation, by […***…] thereto upon request. Firmenich shall hold all such information disclosed to it under this Section as Confidential Information under Section 10.

13 . Manufacturing .

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

13.2 Preferred Manufacturing Rights .

13.2.1 Concurrently with the execution of this Agreement, the parties are entering into the Supply Agreement whereby Firmenich has agreed to manufacture and supply, and Senomyx has agreed to purchase, certain Selected Synthetic Compounds on the terms and conditions described therein.

13.2.2 Firmenich agrees to negotiate in good faith with existing Senomyx collaborators that license any Selected Compounds from Senomyx to supply such

***Confidential Treatment Requested

Senomyx collaborators with their requirements of Selected Compounds on commercially reasonable terms for […***…] comparable to other customers purchasing […***…] such materials with comparable […***…] and other comparable […***…].

14. Term and Termination.

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

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

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

14.4 Termination by Firmenich .

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

14.4.2 If, at any time after […***…] shall have the right in its sole discretion to terminate this Agreement upon […***…] prior written notice to Senomyx. Notwithstanding anything in this Agreement to the contrary, in the event […***…] prior to the date of said termination pursuant to the immediately preceding sentence, Firmenich’s obligation to make a final non-refundable and non-creditable payment of US$ 1,000,000 under the penultimate paragraph of Section 7.1.3 of the Agreement shall be accelerated to the date of such termination and be payable within […***…] thereafter.

15. Effect of Termination.

15.1 Upon termination of this Agreement pursuant to Section 14.1, 14.2, 14.3 (solely where Firmenich is the breaching party) or 14.4, Firmenich will have no right to practice within or use of the Senomyx Technology, and all rights, title and interest in and to the Senomyx Technology will revert to and become the sole property of Senomyx, unless otherwise agreed upon in writing by the parties on or before the effective date of such termination.

***Confidential Treatment Requested

Upon termination of this Agreement pursuant to Section 14.1, 14.2, or 14.3 (solely where Senomyx is the breaching party), Senomyx will have no right to practice within or use of the Firmenich Technology, and all rights, title and interest in and to the Firmenich Technology will revert to and become the sole property of Firmenich, unless otherwise agreed upon in writing by the parties on or before the effective date of such termination.

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

15.2 Notwithstanding the foregoing Section 15.1, within a period of […***…] after the date of termination that takes effect prior to the end of the applicable Royalty Term for a Product, […***…], but no more, provided that […***…] are subject to the terms of this Agreement, including, but not limited to, […***…] under this Agreement. Such determination shall be made on […***…]. Firmenich may not […***…] after the date of termination.

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

15.4 Survival . The obligations and rights of the parties under Sections 3.3.2, 3.4, 7.6 — 7.10, 8.2.2, 8.2.3 (except in the case of a termination of this Agreement by Firmenich pursuant to Section 14.4), 8.3.1 (except as otherwise provided in 15.1), 8.3.2 (except for 8.3.2.2) (except as otherwise provided in 15.1), 8.3.3 (except as otherwise provided in 15.1), 9, 10, 11.2-11.7, 12 (last sentence only), 14, 15, 16, 17, and Appendix A and Appendix D, will survive termination or expiration of this Agreement.

15.5 In the event that this Agreement is terminated by Firmenich pursuant to Section 14.4 prior to […***…], Firmenich will pay a non-refundable and non-creditable amount equal to […***…].

16. Warranties and Indemnification.

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

***Confidential Treatment Requested

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

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

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

16.2

16.2.1 EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, SENOMYX MAKES NO WARRANTIES OF ANY KIND. IN PARTICULAR, (i) SENOMYX (INCLUDING ITS OFFICERS, EMPLOYEES AND AGENTS) EXPRESSLY DISCLAIMS ANY REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS OR IMPLIED, RELATING TO SENOMYX TECHNOLOGY; AND (ii) SENOMYX FURTHER DISCLAIMS ANY EXPRESS OR IMPLIED WARRANTY (a) OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF SENOMYX TECHNOLOGY OR SENOMYX PATENT RIGHTS; (b) THAT THE PRACTICE OF SENOMYX TECHNOLOGY OR ANYTHING MADE, USED, SOLD OR OTHERWISE DISPOSED OF UNDER ANY LICENSE GRANTED

UNDER THIS AGREEMENT WILL NOT INFRINGE A PATENT, COPYRIGHT, TRADEMARK OR OTHER RIGHT OF A THIRD PARTY; AND (c) REGARDING THE PATENTABILITY OF ANY SENOMYX TECHNOLOGY, INCLUDING, WITHOUT LIMITATION, SENOMYX TECHNOLOGY CLAIMED IN PATENT APPLICATIONS AS PART OF SENOMYX PATENT RIGHTS. IN ADDITION, NOTHING IN THIS AGREEMENT MAY BE DEEMED TO BE A REPRESENTATION OR WARRANTY BY SENOMYX OF THE ACCURACY, SAFETY, EFFICACY, OR USEFULNESS, FOR ANY PURPOSE, OF THE SENOMYX TECHNOLOGY.

16.2.2 EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, FIRMENICH MAKES NO WARRANTIES OF ANY KIND. IN PARTICULAR, (i) FIRMENICH (INCLUDING ITS OFFICERS, EMPLOYEES AND AGENTS) EXPRESSLY DISCLAIMS ANY REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS OR IMPLIED, RELATING TO FIRMENICH TECHNOLOGY; AND (ii) FIRMENICH FURTHER DISCLAIMS ANY EXPRESS OR IMPLIED WARRANTY (a) OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF FIRMENICH TECHNOLOGY OR FIRMENICH PATENT RIGHTS; (b) THAT THE PRACTICE OF FIRMENICH TECHNOLOGY OR ANYTHING MADE, USED, SOLD OR OTHERWISE DISPOSED OF UNDER ANY LICENSE GRANTED UNDER THIS AGREEMENT WILL NOT INFRINGE A PATENT, COPYRIGHT, TRADEMARK OR OTHER RIGHT OF A THIRD PARTY; AND (c) REGARDING THE PATENTABILITY OF ANY FIRMENICH TECHNOLOGY, INCLUDING, WITHOUT LIMITATION, FIRMENICH TECHNOLOGY CLAIMED IN PATENT APPLICATIONS AS PART OF FIRMENICH PATENT RIGHTS. IN ADDITION, NOTHING IN THIS AGREEMENT MAY BE DEEMED TO BE A REPRESENTATION OR WARRANTY BY FIRMENICH OF THE ACCURACY, SAFETY, EFFICACY, OR USEFULNESS, FOR ANY PURPOSE, OF THE FIRMENICH TECHNOLOGY.

16.3 Senomyx Indemnification. Senomyx shall indemnify Firmenich, its Affiliates and their respective directors, officers, employees and agents (each, a “Firmenich Indemnitee”), and defend and save each of them harmless, from and against any and all losses, damages, liabilities, costs and expenses (including without limitation, reasonable attorneys’ fees and expenses) (collectively, “Losses”) incurred by them to the extent resulting from or in connection with any and all suits, investigations, claims or demands brought by a Third Party (collectively, “Third Party Claims”) against any Firmenich Indemnitee to the extent arising from or occurring as a result of (a) any material breach by Senomyx of this Agreement; (b) a breach of any representation or warranties made by Senomyx herein; (c) any gross negligence or willful misconduct (but not patent infringement) on the part of

Senomyx or its Affiliates in performing any activity contemplated by this Agreement; or (d) any development, manufacturing, formulation, handling, storage, shipment, sale or other disposition of any Compound, Selected Compound or any Intermediate by or through Senomyx or its Affiliates or its permitted sublicensees (in each case other than by or on behalf of Firmenich or its Affiliates or permitted sublicensees and excluding (i) any Third Party Claims or Losses arising from any material breach by Firmenich of the Supply Agreement and (ii) any claim or allegation of infringement any Third Party intellectual property). Notwithstanding the foregoing, Senomyx shall have no obligation to indemnify a Firmenich Indemnitee to the extent, and only to the extent, that Firmenich has an obligation to indemnify any Senomyx Indemnitee pursuant to Section 16.4 for any such Losses.

16.4 Firmenich Indemnification. Firmenich shall indemnify Senomyx, its Affiliates and their respective directors, officers, employees and agents (each, a “Senomyx Indemnitee”), and defend and save each of them harmless, from and against any and all Losses to the extent arising from or in connection with any and all Third Party Claims against any Senomyx Indemnitee to the extent arising from or occurring as a result of (a) any material breach by Firmenich of this Agreement; (b) a breach of any representation or warranties made by Firmenich herein; (c) any gross negligence or willful misconduct (but not patent infringement) on the part of Firmenich or its Affiliates in performing any activity contemplated by this Agreement; (d) any development, manufacturing, formulation, handling, storage, shipment, sale or other disposition of any Compound, Selected Compound or any Intermediate by or through Firmenich or its Affiliates or its permitted sublicensees (in each case other than by or on behalf of Senomyx or its Affiliates or permitted sublicensees and excluding any claim or allegation of infringement any Third Party intellectual property. Notwithstanding the foregoing, Firmenich shall have no obligation to indemnify a Senomyx Indemnitee to the extent, and only to the extent, Senomyx has an obligation to indemnify any Firmenich Indemnitee pursuant to Section 16.3 for any such Losses.

16.5 Limitation of Liability . NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, NEITHER PARTY WILL SEEK OR BE RESPONSIBLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES IN ANY AMOUNT UNDER ANY THEORY OF LIABILITY INCLUDING TORT, CONTRACT, NEGLIGENCE OR OTHERWISE UNDER THIS AGREEMENT AND NEITHER PARTY WILL SEEK OR BE RESPONSIBLE FOR ANY PUNITIVE DAMAGES IN ANY AMOUNT (INCLUDING, WITHOUT LIMITATION, ANY AND ALL CLAIMS ARISING PURSUANT TO SECTION 14 OR THIS SECTION 16); provided however , that this Section 16.5 shall not be construed to limit either party’s indemnification obligations with respect to Third Party claims under Section 16.3, 16.4 or 16.6, as applicable, or to limit either party’s right to seek damages for breach of Section 10.

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

17. Miscellaneous.

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

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

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

17.4 Dispute Resolution .

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

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

17.4.3 Interlocutory Relief . Notwithstanding anything to the contrary in this Section 17.4, either party may seek immediate injunctive or other interim relief from any court of competent jurisdiction, including in Switzerland, with respect to any breach of Sections 9 or 10 hereof, or otherwise to enforce and protect the Patent Rights, copyrights, trademarks, or other intellectual property rights Controlled by such party. In addition, arbitration will not be used to resolve disputes concerning Patent Rights Controlled by either party. Subject to Section 17.4.1, disputes concerning Patent Rights, including, but not limited to, disputes concerning patent ownership, claim language, claim scope and issues of validity will be settled in a court of law. Any arbitration ruling that relies on an interpretation of Patent Rights will have no binding effect in a court of law on any Patent Rights related to this Agreement, unless such Patent Rights have been adjudicated in a court of law.

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

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

17.7 Entire Agreement; Amendment . This Agreement sets forth all of the covenants, promises, agreements, warranties, representations, conditions and understandings between the parties with respect to the Collaborative Program on and after the Amended and Restated Effective Date, and supersedes and terminates all prior agreements and understandings between the parties, with respect to the subject matter of this Agreement. For the avoidance of doubt, the […***…] between the parties shall continue to apply with respect to the activities of the parties prior to the Effective Date. There are no covenants, promises, agreements, warranties, representations, conditions or understandings, either oral or written, between the parties other than as set forth in this Agreement. No subsequent alteration, amendment, change or addition to this Agreement will be binding upon the parties unless reduced to writing and signed by the respective authorized officers of the parties. This Agreement will not be strictly construed against either party. Any conflict between the terms set forth in the text of this Agreement and the terms of any Appendix hereto will be resolved in favor of the text of this Agreement.

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

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

17.10 No Third Party Beneficiaries. No Third Party, including any employee of any party to this Agreement (except as specifically provided in this Agreement), will have or acquire any rights by reason of this Agreement. Nothing contained in this Agreement will be deemed to constitute the parties partners with each other or any Third Party.

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

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If to Senomyx, to:	Senomyx, Inc.
	4767 Nexus Centre Drive
	San Diego, CA 92121
	U.S.A.
	Facsimile number:
	(858) 404-0750
	Attention: General Counsel with a copy to the President

If to Firmenich, to:	Firmenich SA
	1, route des Jeunes,
	1211 Geneva 8
	Switzerland
	Facsimile number: +41.22.780.23.97
	Attention: General Counsel

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

17.12 Assignment . Notwithstanding any provision of this Agreement to the contrary, neither party may assign any of its rights or obligations under this Agreement in any country to any third party without the prior written consent of the non-assigning party, which consent will not be unreasonably withheld; provided, however, that either party may assign its rights and obligations under this Agreement without the consent of the other party (i) to a successor to substantially all of the assets of such party to which this Agreement relates, whether by merger, sale of stock, sale of assets or other transaction or (ii) to any Affiliate. […***…]. Notwithstanding the foregoing, any such assignment to an Affiliate will not relieve the assigning party of its responsibilities for performance of its obligations under this Agreement. This Agreement will survive any merger, consolidation or change of Control (as defined in the term “Affiliate” in Appendix A — Definitions) of either party with or into another party and, subject to the foregoing provisions, no consent for any such merger, consolidation, similar reorganization or change of Control will be required hereunder. Any assignment in contravention of the provisions of this Section 17.12 shall be null and void ab initio .

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

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17.14 Rights Upon Bankruptcy . All rights and licenses granted under or pursuant to this Agreement are, and shall otherwise be deemed to be, for purposes of Section 365(n) of Title 11 of the United States Code and other similar laws in any jurisdiction where a Party is situated (collectively, the “Bankruptcy Laws”), executor contracts and non-assignable personal licenses of rights to “intellectual property” as defined under the Bankruptcy Laws. If a case is commenced during the Term by or against a Party under Bankruptcy Laws then, unless and until this Agreement is rejected as provided in such Bankruptcy Laws, such Party (in any capacity, including debtor-in-possession) and its permitted successors and assigns (including, without limitation, a trustee) shall perform all of the obligations provided in this Agreement to be performed by such Party. If a case is commenced during the Term by or against a Party under the Bankruptcy Laws, and this Agreement is rejected as provided in the Bankruptcy Laws and the other Party, who is not commencing, or otherwise the subject of, a case under the Bankruptcy Laws (the “Non-Bankrupt Party”), elects to retain its rights hereunder as provided in the Bankruptcy Laws, then the Party subject to such case under the Bankruptcy Laws (in any capacity, including debtor-in-possession) and its permitted successors and assigns (including, without limitation, a trustee), shall provide to the Non-Bankrupt Party, to the extent the Non-Bankrupt Party is a licensee hereunder, […***…]. All rights, powers and remedies of the non-bankrupt Party as provided herein are in addition to and not in substitution for any and all other rights, powers and remedies now or hereafter existing at law or in equity (including, without limitation, the Bankruptcy Laws) in the event of the commencement of a case by or against a Party under the Bankruptcy Laws. Additionally, in the event of any insolvency of Senomyx or the entry by it into any formal insolvency administration under United States law, it is the intention of the Parties that this Agreement shall not terminate and shall continue pursuant to the principles governing insolvency proceedings under United States law. In particular, it is the intention and understanding of the Parties to this Agreement that the rights granted to the Parties under this Section 17.14 are essential to the Parties’ respective businesses and the Parties acknowledge that damages are not an adequate remedy.

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

FIRMENICH SA		FIRMENICH SA


By:	/s/ Aldo Uva	By:	/s/ Antione Gautier

Name:	Aldo Uva	Name:	Antione Gautier

Title:	President Flavor	Title:	Corporate VP R & D

Date:	April 9, 2013	Date:	April 9, 2013


SENOMYX, INC.


By:	/s/ Kent Snyder

Name:	Kent Snyder

Title:	CEO & Chairman


Date:	April 9, 2013

APPENDIX A - DEFINITIONS

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

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

“Amended and Restated Effective Date” has the meaning set forth in the first paragraph of this Agreement.

“Change in Control” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:

(a) any natural person, corporation, partnership or other entity (an “Entity” ) becomes the owner, directly or indirectly, of securities of either party to this Agreement representing more than […***…] of the combined voting power of such party’s then outstanding securities other than by virtue of a merger, consolidation or similar transaction;

(b) there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) a party to this Agreement and, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of such party immediately prior thereto do not own, directly or indirectly, either (A) outstanding voting securities representing more than […***…] or (B) more than […***…]; or

(c) there is consummated a sale, lease, license or other disposition of all or substantially all of the consolidated assets of a party to this Agreement and its subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of such party and its subsidiaries to an Entity, […***…].

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

“Co-Exclusive Licensee” means, on a Compound-by- Compound basis, the party that is the holder of the Co-Exclusive license to such Compound (including Affiliates).

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“Collaborative Period” means the period beginning on the Effective Date and ending July 27, 2016, unless terminated earlier in accordance with Section 14.

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

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

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

“Commercialization Plan” has the meaning set forth in Section 3.2.2.

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

[…***…] has the meaning set forth in Section 8.1.3.

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

[…***…] has the meaning set forth in Section 8.3.1.1.

“Confidential Information” of a party means all Inventions, Know-How or other information, including, without limitation, information and material (whether or not patentable) regarding technology, products, research, development, manufacturing, marketing, finances, personnel or other business information or objectives which is disclosed orally or in writing by the disclosing party to the other party. Information developed by Firmenich independently or jointly with Senomyx that is or should be assigned to Senomyx pursuant to Section 9 shall be deemed Confidential Information of Senomyx and information developed by Senomyx independently or jointly with Firmenich that is or should be assigned to Firmenich pursuant to Section 9 shall be deemed Confidential Information of Firmenich; and (ii) with respect to a party, other information developed jointly by Firmenich and Senomyx shall be deemed to be the other party’s Confidential Information for the purpose of the confidentiality obligations hereunder except in respect of use by such other party.

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

“Conversion Election” has the meaning set forth in Section 8.1.6.

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

“Discovered During the Collaborative Period” means, with respect to a Compound, that it was first identified by Senomyx as an enhancer of a Target Sweetener using a Senomyx screening assay prior to or during the Collaborative Period.

“Effective Date” means the date July 28, 2009.

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

“Entity” shall have the meaning set forth in the definition of “Change in Control” in this Appendix A.

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

“Field I” means any and all forms of foods and beverages for human consumption, excluding non-alcoholic beverages and Therapeutics.

“Field II” means non-alcoholic dry powdered beverages for human consumption, excluding Therapeutics.

“Field III” means, with respect to S6973 only, (i) and (ii) below.

(i) the following non-alcoholic, non-dry powdered beverages for human consumption, to the extent that S6973 has been actually authorized for use in such categories by FEMA:

· “Tea Beverages” means […***…].

· “Coffee Beverages” means […***…].

· “Milk Beverages” means: […***…].

(ii) over-the-counter pharmaceutical product(s), excluding Therapeutics.

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Notwithstanding the foregoing, Field III specifically excludes Field II and Therapeutics.

“Fields” with respect to all Compounds other than S6973 means Field I and Field II. With respect to S6973, Fields means Field I, Field II and Field III.

“Firmenich Competitor” means […***…].

“Firmenich Improvements” has the meaning set forth in Section 9.2.

“Firmenich Indemnitees” has the meaning set forth in Section 16.3.

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

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

[…***…] has the meaning set forth in Section 9.5.1.

“Firmenich Sole Inventions” has the meaning set forth in Section 9.3.

“Firmenich Target Customer(s)” means any customer other than Senomyx Target Customers, subject to […***…] for entities whose primary business is not the sale of flavors and fragrances […***…].

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

“First […***…] shall mean the first […***…], which shall be determined in good faith by the Steering Committee, that […***…] following the Amended and Restated Effective Date. There shall only be […***…] that is deemed the […***…].

“Gum” means all […***…].

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

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

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

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

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

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

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

“Losses” has the meaning set forth in Section 16.3.

“Major Country(ies)” means […***…].

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

“Manufacturing Method End Date” has the meaning set forth in Section 8.3.2.

“Modulator Selling Price” has the definition set forth in Appendix D, which is attached hereto and incorporated into the Agreement by reference.

[…***…] has the meaning set forth in Section 8.1.4.

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

“Natural Compound Negotiation Period has the meaning set forth in Section 7.5.3.

“Natural Compound Royalty Rate” has the meaning set forth in Section 7.5.3.

“Natural Royalty Rate Agreement” has the meaning set forth in Section 7.5.3.

“Natural Compound Royalty Floor” has the meaning set forth in Section 7.5.3.

“Neat Forms of Selected Compounds” means the stand-alone Selected Compound or any […***…] of a Selected Compound. In addition, it includes […***…] of a Selected Compound including, but not limited to, […***…].

***Confidential Treatment Requested

“Net Sales” with respect to a Product that is sold on or following January 1, 2013 will mean the Modulator Sales as determined in accordance with Appendix D and with respect to a Product that is sold by Firmenich prior to January 1, 2013, means the[…***…] by Firmenich and its Affiliates and/or permitted sublicensees on any sales or other transfer of the Product, less the following items:

i) […***…];

ii) […***…];

iii) […***…];

iv) […***…]; and

v) […***…].

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

“New […***…]” has the meaning set forth in Section 9.5.2.

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

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

“PepsiCo” shall mean PepsiCo, Inc. and its affiliates.

“PepsiCo Agreement” shall mean the Collaborative Research, Development, Commercialization and License Agreement between Senomyx and PepsiCo dated as of August 16, 2010, as amended from time to time.

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

“Product Development Plan” has the meaning set forth in Section 3.2.1.

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

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

***Confidential Treatment Requested

[…***…] Compound” shall mean any Compound that […***…] following the Amended and Restated Effective Date with the exception of […***…].

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

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

“Research Fees” has the meaning set forth in Section 7.2.1.

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

[…***…] has the meaning set forth in Section 3.2.2.1.4.

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

***Confidential Treatment Requested

“Royalty Year” means each twelve-(12)-month period commencing on the Commercialization Date for the first Selected Compound and each anniversary thereof. The Royalty Year shall be determined separately with respect to Selected Synthetic Compounds and Selected Natural Compounds.

“S6973 Availability Date” has the meaning set forth in Section 8.8.1.1.

“Second Amendment Effective Date” means October 22, 2010.

“Selected Compound(s)” means a Compound(s) that is selected for development pursuant to Section 3.1.4 or Section 8.7 (including any […***…] of such Compound(s)).

“Selected Natural Compound(s)” means a Selected Compound that is a Natural Compound.

“Selected Synthetic Compound(s)” means a Selected Compound that is a Synthetic Compound.

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

“Senomyx Improvements” has the meaning set forth in Section 9.3.

“Senomyx Indemnitees” has the meaning set forth in Section 16.4.

“Senomyx […***…] means any Senomyx […***…] where the […***…] is a Natural Compoud.

“Senomyx […***…] means any Senomyx […***…] where the […***…] is a Synthetic Compound.

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

[…***…] means any […***…] where the applicable Selected Compound is a Natural Compound.

[…***…] means any […***…] where the applicable Selected Compound is a Synthetic Compound.

***Confidential Treatment Requested

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

“Senomyx Sole Inventions” has the meaning set forth in Section 9.2.

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

“Senomyx Synthetic Compound Manufacturing Methods” means new methods of […***…] thereof, developed by either party independently or together with the other party to this Agreement.

“Senomyx Know-How” means any Know-How related to the […***…], which is not covered by the Senomyx Patent Rights, but is necessary or appropriate for purposes of the activities to be conducted under this Agreement, and which is Controlled by Senomyx as of the Effective Date or which becomes Controlled by Senomyx during the Term. Senomyx Know-How excludes Know-How under Jointly Owned Technology. In addition, Senomyx Know-How also excludes, with respect to each Selected Synthetic Compound, any Know-How related to (i) […***…] and (ii) […***…].

“Senomyx Patent Rights” means any Patent Rights relating to […***…] and, that are necessary or appropriate for purposes of the activities to be conducted under the Agreement, and which are Controlled by Senomyx as of the Effective Date or which become Controlled by Senomyx during the Term. Senomyx Patent Rights excludes Patent Rights under Jointly Owned Technology. In addition, Senomyx Patent Rights also excludes, with respect to each Selected Synthetic Compound, any Patent Rights related to (i) […***…] and (ii) […***…].

“Senomyx Target Customer(s)” means a customer that sells flavors or fragrances to third parties for finished products in the food, beverage, consumer, pharmaceutical or food service markets it being understood that […***…] in instances where such entities’ primary business is not selling flavors or fragrances and […***…].

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

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

(i) […***…];

(ii) […***…];

(iii) […***…];

(iv) […***…]; and

(v) […***…].

***Confidential Treatment Requested

“Similarity Index Test” means a determination of […***…]. The […***…] from time to time.

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

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

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

“Supply Agreement” has the meaning set forth in the Background recitals on page 1 of this Agreement.

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

“Synthetic Compound Royalty Rate” has the meaning set forth in Section 7.5.1.

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

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

“Territory” means worldwide.

“Therapeutics” means any […***…].

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

“Third Party Claims” has the meaning set forth in Section 16.3.

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

“Wind-Down Period” has the meaning set forth in Section 8.2.5.

***Confidential Treatment Requested

APPENDIX B — CALCULATION OF NET ROYALTIES

[…***…]

***Confidential Treatment Requested

APPENDIX C — RESEARCH PLAN

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

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

i. […***…]

ii. […***…]

iii. […***…]

iv. […***…]

v. […***…]

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

Research Plan — […***…].

Phase I: […***…].

Phase II: […***…].

Phase III: […***…].

***Confidential Treatment Requested

APPENDIX D

Modulator Sales will be calculated for each quarter during the Royalty Term based on the applicable Modulator Selling Price (MSP) multiplied by the Modulator Quantity Sold. An example is set forth at the end of this Appendix D.

[…***…]

***Confidential Treatment Requested

APPENDIX E

EXPERT DETERMINATION PROCEDURE

1. Any matter or dispute relating to the terms of the Profit Sharing Agreement for a given Natural Compound shall be referred to a person suitably qualified to determine that matter or dispute (an “Expert” ) who shall be nominated […***…] of a written request by Firmenich to initiate the Experts’ decision procedure set out below.

2. The parties shall within […***…] days of the appointment of the Expert meet with him or her in order to agree a program for the exchange of any relevant information and the procedures to be adopted for the negotiations.

3. In all cases the terms of appointment of the Expert by whomsoever appointed shall include:

3.1. a commitment by the parties to share equally the payment of the Expert’s fee;

3.2. a requirement on the Expert to act fairly as between the parties and according to the principles of natural justice;

3.3. a requirement on the Expert to hold professional indemnity insurance both then and for three (3) years following the date of his or her determination;

3.4. a commitment by the parties to supply on a timely basis to the Expert all such reasonable assistance, documents and information as he or she may require for the purpose of his or her determination; and

3.5. a commitment by the parties that all negotiations connected with the dispute shall be conducted in confidence and without prejudice to the rights of the parties in any future proceedings.

4. The Expert’s determination shall be reduced to writing and delivered to both Senomyx and Firmenich not later than […***…] days following the appointment of the Expert.

***Confidential Treatment Requested

Exhibit 10.2

SENOMYX, INC.

2013 EQUITY INCENTIVE PLAN

ADOPTED BY THE BOARD OF DIRECTORS: MARCH 28, 2013

APPROVED BY THE STOCKHOLDERS: JUNE 13, 2013

1. GENERAL.

(a) Successor to and Continuation of Prior Plan. The Plan is intended as the successor to and continuation of the Senomyx, Inc. 2004 Equity Incentive Plan, as amended (the “ Prior Plan ”). Following the Effective Date, no additional stock awards may be granted under the Prior Plan. Any unallocated shares remaining available for issuance pursuant to the exercise of options or issuance or settlement of stock awards (other than any net shares of Common Stock returned to the Prior Plan as a result of an Option exchange or repricing program) not previously granted under the Prior Plan as of 12:01 a.m. Pacific time on the Effective Date (the “ Prior Plan’s Available Reserve ”) will cease to be available under the Prior Plan at such time and will be added to the Share Reserve (as further described in Section 3(a) below) and be then immediately available for issuance pursuant to Stock Awards granted hereunder. In addition, from and after 12:01 a.m. Pacific time on the Effective Date, all outstanding stock awards granted under the Prior Plan will remain subject to the terms of the Prior Plan; provided, however , that any shares subject to outstanding stock awards granted under the Prior Plan that (i) expire or terminate for any reason prior to exercise or settlement; (ii) are forfeited, cancelled or otherwise returned to the Company because of the failure to meet a contingency or condition required to vest such shares; or (iii) are reacquired, withheld (or not issued) to satisfy a tax withholding obligation in connection with an award or to satisfy the purchase price or exercise price of a stock award (the “ Returning Shares ”) will immediately be added to the Share Reserve (as further described in Section 3(a) below) as and when such shares become Returning Shares, and become available for issuance pursuant to Awards granted hereunder. All Awards granted on or after 12:01 a.m. Pacific time on the Effective Date will be subject to the terms of the Plan.

(b) Eligible Award Recipients. Employees, Directors and Consultants are eligible to receive Awards under the Plan.

(c) Available Awards. The Plan provides for the grant of the following types of Awards: (i) Incentive Stock Options, (ii) Nonstatutory Stock Options, (iii) Stock Appreciation Rights, (iv) Restricted Stock Awards, (v) Restricted Stock Unit Awards, (vi) Performance Stock Awards, (vii) Performance Cash Awards, and (viii) Other Stock Awards.

(d) Purpose. The Plan, through the granting of Awards, is intended to help the Company secure and retain the services of eligible award recipients, provide incentives for such persons to exert maximum efforts for the success of the Company and any Affiliate and provide a means by which the eligible recipients may benefit from increases in value of the Common Stock.

2. ADMINISTRATION.

(a) Administration by Board. The Board will administer the Plan. The Board may delegate administration of the Plan to a Committee or Committees, as provided in Section 2(c).

(b) Powers of Board. The Board will have the power, subject to, and within the limitations of, the express provisions of the Plan:

(i) To determine (A) who will be granted Awards; (B) when and how each Award will be granted; (C) what type of Award will be granted; (D) the provisions of each Award (which need not be identical), including when a person will be permitted to exercise or otherwise receive cash or Common Stock under the Award; (E) the number of shares of Common Stock subject to, or the cash value of, an Award; and (F) the Fair Market Value applicable to a Stock Award.

(ii) To construe and interpret the Plan and Awards granted under it, and to establish, amend and revoke rules and regulations for administration of the Plan and Awards. The Board, in the exercise of these powers, may correct any defect, omission or inconsistency in the Plan or in any Award Agreement, in a manner and to the extent it will deem necessary or expedient to make the Plan or Award fully effective.

(iii) To settle all controversies regarding the Plan and Awards granted under it.

(iv) To accelerate, in whole or in part, the time at which an Award may be exercised or vest (or at which cash or shares of Common Stock may be issued).

(v) To suspend or terminate the Plan at any time. Except as otherwise provided in the Plan or an Award Agreement, suspension or termination of the Plan will not impair a Participant’s rights under the Participant’s then-outstanding Award without the Participant’s written consent except as provided in subsection (viii) below.

(vi) To amend the Plan in any respect the Board deems necessary or advisable, including, without limitation, by adopting amendments relating to Incentive Stock Options and certain nonqualified deferred compensation under Section 409A of the Code and/or to make the Plan or Awards granted under the Plan compliant with the requirements for Incentive Stock Options or exempt from or compliant with the requirements for nonqualified deferred compensation under Section 409A of the Code, subject to the limitations, if any, of applicable law. However, if required by applicable law or listing requirements, and except as provided in Section 10(a) relating to Capitalization Adjustments, the Company will seek stockholder approval of any amendment of the Plan that (A) materially increases the number of shares of Common Stock available for issuance under the Plan, (B) materially expands the class of individuals eligible to receive Awards under the Plan, (C) materially increases the benefits accruing to Participants under the Plan, (D) materially reduces the price at which shares of Common Stock may be issued or purchased under the Plan, (E) materially extends the term of the Plan, or (F) materially expands the types of Awards available for issuance under the Plan. Except as provided in the Plan (including Section 2(b)(viii)) or an Award Agreement, no amendment of the Plan will impair a Participant’s rights under an outstanding Award without the Participant’s written consent.

(vii) To submit any amendment to the Plan for stockholder approval, including, but not limited to, amendments to the Plan intended to satisfy the requirements of (A) Section 162(m) of the Code regarding the exclusion of performance-based compensation from the limit on corporate deductibility of compensation paid to Covered Employees, (B) Section 422 of the Code regarding incentive stock options or (C) Rule 16b-3.

(viii) To approve forms of Award Agreements for use under the Plan and to amend the terms of any one or more Awards, including, but not limited to, amendments to provide terms more favorable to the Participant than previously provided in the Award Agreement, subject to any specified limits in the Plan that are not subject to Board discretion; provided however, that a Participant’s rights under any Award will not be impaired by any such amendment unless (A) the Company requests the consent of the affected Participant, and (B) such Participant consents in writing. Notwithstanding the foregoing, (1) a Participant’s rights will not be deemed to have been impaired by any such amendment if the Board, in its sole discretion, determines that the amendment, taken as a whole, does not materially impair the Participant’s rights, and (2) subject to the limitations of applicable law, if any, the Board may amend the terms of any one or more Awards without the affected Participant’s consent (A) to maintain the qualified status of the Award as an Incentive Stock Option under Section 422 of the Code; (B) to change the terms of an Incentive Stock Option, if such change results in impairment of the Award solely because it impairs the qualified status of the Award as an Incentive Stock Option under Section 422 of the Code; (C) to clarify the manner of exemption from, or to bring the Award into compliance with, Section 409A of the Code; or (D) to comply with other applicable laws or listing requirements.

(ix) Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company and that are not in conflict with the provisions of the Plan or Awards.

(x) To adopt such procedures and sub-plans as are necessary or appropriate to permit participation in the Plan by Employees, Directors or Consultants who are foreign nationals or employed outside the United States (provided that Board approval will not be necessary for immaterial modifications to the Plan or any Award Agreement that are required for compliance with the laws of the relevant foreign jurisdiction).

(c) Delegation to Committee.

(i) General. The Board may delegate some or all of the administration of the Plan to a Committee or Committees. If administration of the Plan is delegated to a Committee, the Committee will have, in connection with the administration of the Plan, the powers theretofore possessed by the Board that have been delegated to the Committee, including the power to delegate to a subcommittee of the Committee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board will thereafter be to the Committee or subcommittee, as applicable). Any delegation of administrative powers will be reflected in resolutions, not inconsistent with the provisions of the Plan, adopted from time to time by the Board or Committee (as applicable). The Committee may, at any time, abolish the subcommittee and/or revest in the Committee any powers delegated to the subcommittee. The Board may retain the authority to concurrently administer the Plan with the Committee and may, at any time, revest in the Board some or all of the powers previously delegated.

(ii) Section 162(m) and Rule 16b-3 Compliance. The Committee may consist solely of two (2) or more Outside Directors, in accordance with Section 162(m) of the Code, or solely of two (2) or more Non-Employee Directors, in accordance with Rule 16b-3.

(d) Delegation to an Officer . The Board may delegate to one (1) or more Officers the authority to do one or both of the following (i) designate Employees who are not Officers to be recipients of Options and SARs (and, to the extent permitted by applicable law, other Stock Awards) and, to the extent permitted by applicable law, the terms of such Awards, and (ii) determine the number of shares of Common Stock to be subject to such Stock Awards granted to such Employees; provided, however , that the Board resolutions regarding such delegation will specify the total number of shares of Common Stock that may be subject to the Stock Awards granted by such Officer and that such Officer may not grant a Stock Award to himself or herself. Any such Stock Awards will be granted on the form of Award Agreement most recently approved for use by the Committee or the Board, unless otherwise provided in the resolutions approving the delegation authority. The Board may not delegate authority to an Officer who is acting solely in the capacity of an Officer (and not also as a Director) to determine the Fair Market Value pursuant to Section 14(w)(iii) below.

(e) Effect of Board’s Decision. All determinations, interpretations and constructions made by the Board in good faith will not be subject to review by any person and will be final, binding and conclusive on all persons.

(f) Cancellation and Re-Grant of Stock Awards . Neither the Board nor any Committee will have the authority to: (i) reduce the exercise, purchase or strike price of any outstanding Option or SAR under the Plan, or (ii) cancel any outstanding Option or SAR that has an exercise price or strike price greater than the current Fair Market Value of the Common Stock in exchange for cash or other Stock Awards under the Plan, unless the stockholders of the Company have approved such an action within twelve (12) months prior to such an event.

3. SHARES SUBJECT TO THE PLAN.

(a) Share Reserve.

(i) Subject to Section 10(a) relating to Capitalization Adjustments, the aggregate number of shares of Common Stock that may be issued pursuant to Stock Awards from and after the Effective Date will not exceed (A) [ ( )] shares, which number is equal to the number of shares subject to the Prior Plan’s Available Reserve on the Effective Date and (B) the Returning Shares, if any, which become available for grant under the Plan from time to time (such aggregate number of shares described in (A) and (B) above, the “ Share Reserve ”).

(ii) For clarity, the Share Reserve in this Section 3(a) is a limitation on the number of shares of Common Stock that may be issued pursuant to the Plan. Accordingly, this Section 3(a) does not limit the granting of Stock Awards except as provided in Section 8(a). Shares may be issued in connection with a merger or acquisition as permitted by NASDAQ Listing Rule 5635(c) or, if applicable, NYSE Listed Company Manual Section 303A.08, AMEX Company Guide Section 711 or other applicable rule, and such issuance will not reduce the number of shares available for issuance under the Plan.

(b) Reversion of Shares to the Share Reserve. If a Stock Award or any portion thereof (i) expires or otherwise terminates without all of the shares covered by such Stock Award having been issued or (ii) is settled in cash ( i.e. , the Participant receives cash rather than stock), such expiration, termination or settlement will not reduce (or otherwise offset) the number of shares of Common Stock that may be available for issuance under the Plan. If any shares of Common Stock issued pursuant to a Stock Award are forfeited back to or repurchased by the Company because of the failure to meet a contingency or condition required to vest such shares in the Participant, then the shares that are forfeited or repurchased will revert to and again become available for issuance under the Plan. Any shares reacquired by the Company in satisfaction of tax withholding obligations on a Stock Award or as consideration for the exercise or purchase price of a Stock Award will again become available for issuance under the Plan.

(c) Incentive Stock Option Limit. Subject to the Share Reserve and Section 10(a) relating to Capitalization Adjustments, the aggregate maximum number of shares of Common Stock that may be issued pursuant to the exercise of Incentive Stock Options will be twenty-five million (25,000,000) shares of Common Stock.

(d) Section 162(m) Limitations . Subject to the Share Reserve and Section 10(a) relating to Capitalization Adjustments, at such time as the Company may be subject to the applicable provisions of Section 162(m) of the Code, the following limitations shall apply.

(i) A maximum of two million (2,000,000) shares of Common Stock subject to Options, SARs and Other Stock Awards whose value is determined by reference to an increase over an exercise or strike price of at least one hundred percent (100%) of the Fair Market Value on the date any such Stock Award is granted may be granted to any Participant during any calendar year. Notwithstanding the foregoing, if any additional Options, SARs or Other Stock Awards whose value is determined by reference to an increase over an exercise or strike price of at least one hundred percent (100%) of the Fair Market Value on the date the Stock Award are granted to any Participant during any calendar year, compensation attributable to the exercise of such additional Stock Awards will not satisfy the requirements to be considered “qualified performance-based compensation” under Section 162(m) of the Code unless such additional Stock Award is approved by the Company’s stockholders.

(ii) A maximum of two million (2,000,000) shares of Common Stock subject to Performance Stock Awards may be granted to any one Participant during any one calendar year (whether the grant, vesting or exercise is contingent upon the attainment during the Performance Period of the Performance Goals).

(iii) A maximum of four million dollars ($4,000,000) may be granted as a Performance Cash Award to any one Participant during any one calendar year.

(e) Source of Shares. The stock issuable under the Plan will be shares of authorized but unissued or reacquired Common Stock, including shares repurchased by the Company on the open market or otherwise.

4. ELIGIBILITY.

(a) Eligibility for Specific Stock Awards . Incentive Stock Options may be granted only to employees of the Company or a “parent corporation” or “subsidiary corporation” thereof (as such terms are defined in Sections 424(e) and 424(f) of the Code). Stock Awards other than Incentive Stock Options may be granted to Employees, Directors and Consultants; provided, however, that Stock Awards may not be granted to Employees, Directors and Consultants who are providing Continuous Service only to any “parent” of the Company, as such term is defined in Rule 405, unless (i) the stock underlying such Stock Awards is treated as “service recipient stock” under Section 409A of the Code (for example, because the Stock Awards are granted pursuant to a corporate transaction such as a spin off transaction) or (ii) the Company, in consultation with its legal counsel, has determined that such Stock Awards are otherwise exempt from or alternatively comply with the distribution requirements of Section 409A of the Code.

(b) Ten Percent Stockholders. A Ten Percent Stockholder will not be granted an Incentive Stock Option unless the exercise price of such Option is at least one hundred ten percent (110%) of the Fair Market Value on the date of grant and the Option is not exercisable after the expiration of five (5) years from the date of grant.

5. PROVISIONS RELATING TO OPTIONS AND STOCK APPRECIATION RIGHTS.

Each Option or SAR will be in such form and will contain such terms and conditions as the Board deems appropriate. All Options will be separately designated Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates will be issued for shares of Common Stock purchased on exercise of each type of Option. If an Option is not specifically designated as an Incentive Stock Option, or if an Option is designated as an Incentive Stock Option but some portion or all of the Option fails to qualify as an Incentive Stock Option under the applicable rules, then the Option (or portion thereof) will be a Nonstatutory Stock Option. The provisions of separate Options or SARs need not be identical; provided, however , that each Award Agreement will conform to (through incorporation of provisions hereof by reference in the applicable Award Agreement or otherwise) the substance of each of the following provisions:

(a) Term. Subject to the provisions of Section 4(b) regarding Ten Percent Stockholders, no Option or SAR will be exercisable after the expiration of ten (10) years from the date of its grant or such shorter period specified in the Award Agreement.

(b) Exercise Price. Subject to the provisions of Section 4(b) regarding Ten Percent Stockholders, the exercise or strike price of each Option or SAR will be not less than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Option or SAR on the date the Award is granted. Notwithstanding the foregoing, an Option or SAR may be granted with an exercise or strike price lower than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Award if such Award is granted pursuant to an assumption of or substitution for another option or stock appreciation right pursuant to a Corporate Transaction and in a manner consistent with the provisions of Section 409A of the Code and, if applicable, Section 424(a) of the Code. Each SAR will be denominated in shares of Common Stock equivalents.

(c) Purchase Price for Options. The purchase price of Common Stock acquired pursuant to the exercise of an Option may be paid, to the extent permitted by applicable law and as determined by the Board in its sole discretion, by any combination of the methods of payment set forth below. The Board will have the authority to grant Options that do not permit all of the following methods of payment (or that otherwise restrict the ability to use certain methods) and to grant Options that require the consent of the Company to use a particular method of payment. The permitted methods of payment are as follows:

(i) by cash, check, bank draft or money order payable to the Company;

(ii) pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of the stock subject to the Option, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds;

(iii) by delivery to the Company (either by actual delivery or attestation) of shares of Common Stock;

(iv) if an Option is a Nonstatutory Stock Option, by a “net exercise” arrangement pursuant to which the Company will reduce the number of shares of Common Stock issuable upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price; provided, however , that the Company will accept a cash or other payment from the Participant to the extent of any remaining balance of the aggregate exercise price not satisfied by such reduction in the number of whole shares to be issued. Shares of Common Stock will no longer be subject to an Option and will not be exercisable thereafter to the extent that (A) shares issuable upon exercise are used to pay the exercise price pursuant to the “net exercise,” (B) shares are delivered to the Participant as a result of such exercise, and (C) shares are withheld to satisfy tax withholding obligations; or

(v) in any other form of legal consideration that may be acceptable to the Board and specified in the applicable Award Agreement.

(d) Exercise and Payment of a SAR. To exercise any outstanding SAR, the Participant must provide written notice of exercise to the Company in compliance with the provisions of the Award Agreement evidencing such SAR. The appreciation distribution payable on the exercise of a SAR will be not greater than an amount equal to the excess of (A) the aggregate Fair Market Value (on the date of the exercise of the SAR) of a number of shares of Common Stock equal to the number of Common Stock equivalents in which the Participant is vested under such SAR, and with respect to which the Participant is exercising the SAR on such date, over (B) the aggregate strike price of the number of Common Stock equivalents with respect to which the Participant is exercising the SAR on such date. The appreciation distribution may be paid in Common Stock, in cash, in any combination of the two or in any other form of consideration, as determined by the Board and contained in the Award Agreement evidencing such SAR.

(e) Transferability of Options and SARs. The Board may, in its sole discretion, impose such limitations on the transferability of Options and SARs as the Board will determine. In the absence of such a determination by the Board to the contrary, the following restrictions on the transferability of Options and SARs will apply:

(i) Restrictions on Transfer . An Option or SAR will not be transferable except by will or by the laws of descent and distribution (and pursuant to Sections 5(e)(ii) and 5(e)(iii) below), and will be exercisable during the lifetime of the Participant only by the Participant. The Board may permit transfer of the Option or SAR in a manner that is not prohibited by applicable tax and securities laws. Except as explicitly provided in the Plan, neither an Option nor a SAR may be transferred for consideration.

(ii) Domestic Relations Orders . Subject to the approval of the Board or a duly authorized Officer, an Option or SAR may be transferred pursuant to the terms of a domestic relations order, official marital settlement agreement or other divorce or separation instrument as permitted by Treasury Regulations Section 1.421-1(b)(2). If an Option is an Incentive Stock Option, such Option may be deemed to be a Nonstatutory Stock Option as a result of such transfer.

(iii) Beneficiary Designation . Subject to the approval of the Board or a duly authorized Officer, a Participant may, by delivering written notice to the Company, in a form approved by the Company (or the designated broker), designate a third party who, upon the death of the Participant, will thereafter be entitled to exercise the Option or SAR and receive the Common Stock or other consideration resulting from such exercise. In the absence of such a designation, upon the death of the Participant, the executor or administrator of the Participant’s estate will be entitled to exercise the Option or SAR and receive the Common Stock or other consideration resulting from such exercise. However, the Company may prohibit designation of a beneficiary at any time, including due to any conclusion by the Company that such designation would be inconsistent with the provisions of applicable laws.

(f) Vesting Generally. The total number of shares of Common Stock subject to an Option or SAR may vest and become exercisable in periodic installments that may or may not be equal. The Option or SAR may be subject to such other terms and conditions on the time or times when it may or may not be exercised (which may be based on the satisfaction of Performance Goals or other criteria) as the Board may deem appropriate. The vesting provisions of individual Options or SARs may vary. The provisions of this Section 5(f) are subject to any Option or SAR provisions governing the minimum number of shares of Common Stock as to which an Option or SAR may be exercised.

(g) Termination of Continuous Service. Except as otherwise provided in the applicable Award Agreement or other agreement between the Participant and the Company, if a Participant’s Continuous Service terminates (other than for Cause and other than upon the Participant’s death or Disability), the Participant may exercise the Participant’s Option or SAR (to the extent that the Participant was entitled to exercise such Award as of the date of

termination of Continuous Service) within the period of time ending on the earlier of (i) the date three (3) months following the termination of the Participant’s Continuous Service (or such longer or shorter period specified in the applicable Award Agreement), and (ii) the expiration of the term of the Option or SAR as set forth in the Award Agreement. If, after termination of Continuous Service, the Participant does not exercise his or her Option or SAR (as applicable) within the applicable time frame, the Option or SAR will terminate.

(h) Extension of Termination Date. Except as otherwise provided in the applicable Award Agreement or other agreement between the Participant and the Company, if the exercise of an Option or SAR following the termination of the Participant’s Continuous Service (other than for Cause and other than upon the Participant’s death or Disability) would be prohibited at any time solely because the issuance of shares of Common Stock would violate the registration requirements under the Securities Act, then the Option or SAR will terminate on the earlier of (i) the expiration of a total period of time (that need not be consecutive) equal to the applicable post-termination exercise period after the termination of the Participant’s Continuous Service during which the exercise of the Option or SAR would not be in violation of such registration requirements, or (ii) the expiration of the term of the Option or SAR as set forth in the applicable Award Agreement. In addition, unless otherwise provided in a Participant’s Award Agreement, if the sale of any Common Stock received upon exercise of an Option or SAR following the termination of the Participant’s Continuous Service (other than for Cause) would violate the Company’s insider trading policy, then the Option or SAR will terminate on the earlier of (i) the expiration of a period of time (that need not be consecutive) equal to the applicable post-termination exercise period after the termination of the Participant’s Continuous Service during which the sale of the Common Stock received upon exercise of the Option or SAR would not be in violation of the Company’s insider trading policy, or (ii) the expiration of the term of the Option or SAR as set forth in the applicable Award Agreement.

(i) Disability of Participant. Except as otherwise provided in the applicable Award Agreement or other agreement between the Participant and the Company, if a Participant’s Continuous Service terminates as a result of the Participant’s Disability, the Participant may exercise his or her Option or SAR (to the extent that the Participant was entitled to exercise such Option or SAR as of the date of termination of Continuous Service), but only within such period of time ending on the earlier of (i) the date twelve (12) months following such termination of Continuous Service (or such longer or shorter period specified in the Award Agreement), and (ii) the expiration of the term of the Option or SAR as set forth in the Award Agreement. If, after termination of Continuous Service, the Participant does not exercise his or her Option or SAR within the applicable time frame, the Option or SAR (as applicable) will terminate.

(j) Death of Participant. Except as otherwise provided in the applicable Award Agreement or other agreement between the Participant and the Company, if (i) a Participant’s Continuous Service terminates as a result of the Participant’s death, or (ii) the Participant dies within the period (if any) specified in the Award Agreement for exercisability after the termination of the Participant’s Continuous Service (for a reason other than death), then the Option or SAR may be exercised (to the extent the Participant was entitled to exercise such Option or SAR as of the date of death) by the Participant’s estate, by a person who acquired the right to exercise the Option or SAR by bequest or inheritance or by a person designated to exercise the Option or SAR upon the Participant’s death, but only within the period ending on

the earlier of (i) the date eighteen (18) months following the date of death (or such longer or shorter period specified in the Award Agreement), and (ii) the expiration of the term of such Option or SAR as set forth in the Award Agreement. If, after the Participant’s death, the Option or SAR is not exercised within the applicable time frame, the Option or SAR (as applicable) will terminate.

(k) Termination for Cause. Except as explicitly provided otherwise in a Participant’s Award Agreement or other individual written agreement between the Company or any Affiliate and the Participant, if a Participant’s Continuous Service is terminated for Cause, the Option or SAR will terminate immediately upon such Participant’s termination of Continuous Service, and the Participant will be prohibited from exercising the Participant’s Option or SAR from and after the time of such termination of Continuous Service.

(l) Non-Exempt Employees . If an Option or SAR is granted to an Employee who is a non-exempt employee for purposes of the Fair Labor Standards Act of 1938, as amended, the Option or SAR will not be first exercisable for any shares of Common Stock until at least six (6) months following the date of grant of the Option or SAR (although the Award may vest prior to such date). Consistent with the provisions of the Worker Economic Opportunity Act, (i) if such non-exempt employee dies or suffers a Disability, (ii) upon a Corporate Transaction in which such Option or SAR is not assumed, continued, or substituted, (iii) upon a Change in Control, or (iv) upon the Participant’s retirement (as such term may be defined in the Participant’s Award Agreement, in another agreement between the Participant and the Company, or, if no such definition, in accordance with the Company’s then current employment policies and guidelines), the vested portion of any Options and SARs may be exercised earlier than six (6) months following the date of grant. The foregoing provision is intended to operate so that any income derived by a non-exempt employee in connection with the exercise or vesting of an Option or SAR will be exempt from the employee’s regular rate of pay. To the extent permitted and/or required for compliance with the Worker Economic Opportunity Act to ensure that any income derived by a non-exempt employee in connection with the exercise, vesting or issuance of any shares under any other Stock Award will be exempt from the employee’s regular rate of pay, the provisions of this Section 5(l) will apply to all Stock Awards and are hereby incorporated by reference into such Stock Award Agreements.

6. PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS AND SARS.

(a) Restricted Stock Awards. Each Restricted Stock Award Agreement will be in such form and will contain such terms and conditions as the Board deems appropriate. To the extent consistent with the Company’s bylaws, at the Board’s election, shares of Common Stock underlying a Restricted Stock Award may be (i) held in book entry form subject to the Company’s instructions until any restrictions relating to the Restricted Stock Award lapse; or (ii) evidenced by a certificate, which certificate will be held in such form and manner as determined by the Board. The terms and conditions of Restricted Stock Award Agreements may change from time to time, and the terms and conditions of separate Restricted Stock Award Agreements need not be identical. Each Restricted Stock Award Agreement will conform to (through incorporation of the provisions hereof by reference in the agreement or otherwise) the substance of each of the following provisions:

(i) Consideration. A Restricted Stock Award may be awarded in consideration for (A) cash, check, bank draft or money order payable to the Company, (B) past services to the Company or an Affiliate, or (C) any other form of legal consideration (including future services) that may be acceptable to the Board, in its sole discretion, and permissible under applicable law.

(ii) Vesting. Shares of Common Stock awarded under the Restricted Stock Award Agreement may be subject to forfeiture to the Company in accordance with a vesting schedule to be determined by the Board.

(iii) Termination of Participant’s Continuous Service. If a Participant’s Continuous Service terminates, the Company may receive through a forfeiture condition or a repurchase right any or all of the shares of Common Stock held by the Participant as of the date of termination of Continuous Service under the terms of the Restricted Stock Award Agreement.

(iv) Transferability. Rights to acquire shares of Common Stock under the Restricted Stock Award Agreement will be transferable by the Participant only upon such terms and conditions as are set forth in the Restricted Stock Award Agreement, as the Board will determine in its sole discretion, so long as Common Stock awarded under the Restricted Stock Award Agreement remains subject to the terms of the Restricted Stock Award Agreement.

(v) Dividends. A Restricted Stock Award Agreement may provide that any dividends paid on Restricted Stock will be subject to the same vesting and forfeiture restrictions as apply to the shares subject to the Restricted Stock Award to which they relate.

(b) Restricted Stock Unit Awards. Each Restricted Stock Unit Award Agreement will be in such form and will contain such terms and conditions as the Board deems appropriate. The terms and conditions of Restricted Stock Unit Award Agreements may change from time to time, and the terms and conditions of separate Restricted Stock Unit Award Agreements need not be identical. Each Restricted Stock Unit Award Agreement will conform to (through incorporation of the provisions hereof by reference in the Agreement or otherwise) the substance of each of the following provisions:

(i) Consideration. At the time of grant of a Restricted Stock Unit Award, the Board will determine the consideration, if any, to be paid by the Participant upon delivery of each share of Common Stock subject to the Restricted Stock Unit Award. The consideration to be paid (if any) by the Participant for each share of Common Stock subject to a Restricted Stock Unit Award may be paid in any form of legal consideration that may be acceptable to the Board, in its sole discretion, and permissible under applicable law.

(ii) Vesting. At the time of the grant of a Restricted Stock Unit Award, the Board may impose such restrictions on or conditions to the vesting of the Restricted Stock Unit Award as it, in its sole discretion, deems appropriate.

(iii) Payment . A Restricted Stock Unit Award may be settled by the delivery of shares of Common Stock, their cash equivalent, any combination thereof or in any other form of consideration, as determined by the Board and contained in the Restricted Stock Unit Award Agreement.

(iv) Additional Restrictions. At the time of the grant of a Restricted Stock Unit Award, the Board, as it deems appropriate, may impose such restrictions or conditions that delay the delivery of the shares of Common Stock (or their cash equivalent) subject to a Restricted Stock Unit Award to a time after the vesting of such Restricted Stock Unit Award.

(v) Dividend Equivalents. Dividend equivalents may be credited in respect of shares of Common Stock covered by a Restricted Stock Unit Award, as determined by the Board and contained in the Restricted Stock Unit Award Agreement. At the sole discretion of the Board, such dividend equivalents may be converted into additional shares of Common Stock covered by the Restricted Stock Unit Award in such manner as determined by the Board. Any additional shares covered by the Restricted Stock Unit Award credited by reason of such dividend equivalents will be subject to all of the same terms and conditions of the underlying Restricted Stock Unit Award Agreement to which they relate.

(vi) Termination of Participant’s Continuous Service. Except as otherwise provided in the applicable Restricted Stock Unit Award Agreement, such portion of the Restricted Stock Unit Award that has not vested will be forfeited upon the Participant’s termination of Continuous Service.

(c) Performance Awards .

(i) Performance Stock Awards . A Performance Stock Award is a Stock Award (covering a number of shares not in excess of that set forth in Section 3(d)(ii)) that is payable (including that may be granted, vest or be exercised) contingent upon the attainment during a Performance Period of certain Performance Goals. A Performance Stock Award may, but need not, require the Participant’s completion of a specified period of Continuous Service. The length of any Performance Period, the Performance Goals to be achieved during the Performance Period, and the measure of whether and to what degree such Performance Goals have been attained will be conclusively determined by the Committee (or, if not required for compliance with Section 162(m) of the Code, the Board), in its sole discretion. In addition, to the extent permitted by applicable law and the applicable Award Agreement, the Board may determine that cash may be used in payment of Performance Stock Awards.

(ii) Performance Cash Awards . A Performance Cash Award is a cash award (for a dollar value not in excess of that set forth in Section 3(d)(iii)) that is payable contingent upon the attainment during a Performance Period of certain Performance Goals. A Performance Cash Award may also require the Participant’s completion of a specified period of Continuous Service. At the time of grant of a Performance Cash Award, the length of any Performance Period, the Performance Goals to be achieved during the Performance Period, and the measure of whether and to what degree such Performance Goals have been attained will be conclusively determined by the Committee (or, if not required for compliance with Section 162(m) of the Code, the Board), in its sole discretion. The Board may specify the form of payment of Performance Cash Awards, which may be cash or other property, or may provide for a Participant to have the option for his or her Performance Cash Award, or such portion thereof as the Board may specify, to be paid in whole or in part in cash or other property.

(iii) Board Discretion . The Board retains the discretion to reduce or eliminate the compensation or economic benefit due upon attainment of Performance Goals and to define the manner of calculating the Performance Criteria it selects to use for a Performance Period.

(iv) Section 162(m) Compliance . Unless otherwise permitted in compliance with Section 162(m) of the Code with respect to an Award intended to qualify as “performance-based compensation” thereunder, the Committee will establish the Performance Goals applicable to, and the formula for calculating the amount payable under, the Award no later than the earlier of (A) the date ninety (90) days after the commencement of the applicable Performance Period, and (B) the date on which twenty-five percent (25%) of the Performance Period has elapsed, and in any event at a time when the achievement of the applicable Performance Goals remains substantially uncertain. Prior to the payment of any compensation under an Award intended to qualify as “performance-based compensation” under Section 162(m) of the Code, the Committee will certify the extent to which any Performance Goals and any other material terms under such Award have been satisfied (other than in cases where the Performance Goals relate solely to the increase in the value of the Common Stock). Notwithstanding satisfaction or any completion of any Performance Goals, shares subject to Options, cash or other benefits granted, issued, retainable and/or vested under an Award on account of satisfaction of such Performance Goals may be reduced by the Committee on the basis of any further considerations as the Committee, in its sole discretion, will determine.

(d) Other Stock Awards . Other forms of Stock Awards valued in whole or in part by reference to, or otherwise based on, Common Stock, including the appreciation in value thereof (e.g., options or stock rights with an exercise price or strike price less than one hundred percent (100%) of the Fair Market Value of the Common Stock at the time of grant) may be granted either alone or in addition to Stock Awards granted under Section 5 and this Section 6. Subject to the provisions of the Plan, the Board will have sole and complete authority to determine the persons to whom and the time or times at which such Other Stock Awards will be granted, the number of shares of Common Stock (or the cash equivalent thereof) to be granted pursuant to such Other Stock Awards and all other terms and conditions of such Other Stock Awards.

7. NON-EMPLOYEE DIRECTORS’ NONSTATUTORY STOCK OPTION PROGRAM.

(a) Non-Employee Director Option Grants . Without any further action by the Board, automatic Option grants shall be made under the Plan in accordance with this Section 7 to Non-Employee Directors who meet the criteria specified in Section 7(b). All Options granted under this Section 7 shall be Nonstatutory Stock Options and shall be in such form as may be approved by the Board and evidenced in an Option Agreement, subject to the provisions of the Plan and this Section 7.

(b) Non-Discretionary Grants.

(i) Initial Grants. Without any further action of the Board, each person who after the Effective Date is elected or appointed for the first time to be a Non-Employee Director (other than the Chairman of the Board) shall, upon the date of such election or appointment, be automatically granted an Initial Grant to purchase thirty thousand (30,000) shares of Common

Stock on such terms and conditions set forth herein. Each person who after the Effective Date is elected or appointed for the first time to serve as the Chairman of the Board and who is, after such election, a Non-Employee Director, shall, upon the date of such election or appointment, be automatically granted an Initial Grant on the terms and conditions set forth herein to purchase forty-five thousand (45,000) shares of Common Stock to the extent such individual was not already serving on the Board or fifteen thousand (15,000) shares of Common Stock to the extent that such individual was already serving on the Board.

(ii) Annual Grants. Without any further action of the Board, on the date of each Annual Meeting, commencing with the Annual Meeting in 2014, each person who is then a Non-Employee Director and who is re-elected to serve on the Board at such Annual Meeting, shall be automatically granted, effective immediately following such re-election, an Annual Grant to purchase fifteen thousand (15,000) shares of Common Stock (except that a person who is re-elected to serve as Chairman of the Board and who is, after such election, a Non-Employee Director, shall instead be granted an Annual Grant covering twenty-one thousand (21,000) shares of Common Stock) on the terms and conditions set forth herein; provided , however , that if such person did not serve as a Non-Employee Director for the full period since the preceding Annual Meeting, then the number of shares subject to such Annual Grant shall be reduced to the number obtained by multiplying the number that would otherwise be subject to such Annual Grant by a fraction, the numerator of which is the number of full one-month periods between the date of such person’s initial appointment or election to the Board and the date of such Annual Meeting and the denominator of which is twelve (12).

(c) Option Provisions. Each Option granted under this Section 7 shall include (through incorporation by reference in the Option or otherwise) the substance of each of the provisions of Section 5, except that no Option granted under this Section 7 shall be exercisable after the expiration of ten (10) years after the date on which it was granted and the exercise price of each Option granted under this Section 7 shall be one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Option on the date the Option is granted.

8. COVENANTS OF THE COMPANY.

(a) Availability of Shares. The Company will keep available at all times the number of shares of Common Stock reasonably required to satisfy then-outstanding Stock Awards.

(b) Securities Law Compliance. The Company will seek to obtain from each regulatory commission or agency having jurisdiction over the Plan the authority required to grant Stock Awards and to issue and sell shares of Common Stock upon exercise of the Stock Awards; provided, however , that this undertaking will not require the Company to register under the Securities Act, the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any such Stock Award. If, after reasonable efforts and at a reasonable cost, the Company is unable to obtain from any such regulatory commission or agency the authority that counsel for the Company deems necessary for the lawful issuance and sale of Common Stock under the Plan, the Company will be relieved from any liability for failure to issue and sell Common Stock upon exercise of such Stock Awards unless and until such authority is obtained. A Participant will not be eligible for the grant of an Award or the subsequent issuance of cash or Common Stock pursuant to the Award if such grant or issuance would be in violation of any applicable securities law.

(c) No Obligation to Notify or Minimize Taxes. The Company will have no duty or obligation to any Participant to advise such holder as to the time or manner of exercising such Stock Award. Furthermore, the Company will have no duty or obligation to warn or otherwise advise such holder of a pending termination or expiration of an Award or a possible period in which the Award may not be exercised. The Company has no duty or obligation to minimize the tax consequences of an Award to the holder of such Award.

9. MISCELLANEOUS.

(a) Use of Proceeds from Sales of Common Stock. Proceeds from the sale of shares of Common Stock issued pursuant to Stock Awards will constitute general funds of the Company.

(b) Corporate Action Constituting Grant of Awards. Corporate action constituting a grant by the Company of an Award to any Participant will be deemed completed as of the date of such corporate action, unless otherwise determined by the Board, regardless of when the instrument, certificate, or letter evidencing the Award is communicated to, or actually received or accepted by, the Participant. In the event that the corporate records (e.g., Board consents, resolutions or minutes) documenting the corporate action constituting the grant contain terms (e.g., exercise price, vesting schedule or number of shares) that are inconsistent with those in the Award Agreement or related grant documents as a result of a clerical error in the papering of the Award Agreement or related grant documents, the corporate records will control and the Participant will have no legally binding right to the incorrect term in the Award Agreement or related grant documents.

(c) Stockholder Rights. No Participant will be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Common Stock subject to an Award unless and until (i) such Participant has satisfied all requirements for exercise of, or the issuance of shares of Common Stock under, the Award pursuant to its terms, and (ii) the issuance of the Common Stock subject to such Award has been entered into the books and records of the Company.

(d) No Employment or Other Service Rights. Nothing in the Plan, any Award Agreement or any other instrument executed thereunder or in connection with any Award granted pursuant thereto will confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Award was granted or will affect the right of the Company or an Affiliate to terminate (i) the employment of an Employee with or without notice and with or without Cause, (ii) the service of a Consultant pursuant to the terms of such Consultant’s agreement with the Company or an Affiliate, or (iii) the service of a Director pursuant to the bylaws of the Company or an Affiliate, and any applicable provisions of the corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be.

(e) Change in Time Commitment . In the event a Participant’s regular level of time commitment in the performance of the Participant’s services for the Company and any Affiliates is reduced (for example, and without limitation, if the Participant is an Employee of the Company and the Employee has a change in status from a full-time Employee to a part-time Employee) after the date of grant of any Award to the Participant, the Board or its designee has the right in its sole discretion to (x) make a corresponding reduction in the number of shares or cash amount subject to any portion of such Award that is scheduled to vest or become payable after the date of such change in time commitment, and (y) in lieu of or in combination with such a reduction, extend the vesting or payment schedule applicable to such Award. In the event of any such reduction, the Participant will have no right with respect to any portion of the Award that is so reduced or extended.

(f) Incentive Stock Option Limitations. To the extent that the aggregate Fair Market Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionholder during any calendar year (under all plans of the Company and any Affiliates) exceeds one hundred thousand dollars ($100,000) (or such other limit established in the Code) or otherwise does not comply with the rules governing Incentive Stock Options, the Options or portions thereof that exceed such limit (according to the order in which they were granted) or otherwise do not comply with such rules will be treated as Nonstatutory Stock Options, notwithstanding any contrary provision of the applicable Option Agreement(s).

(g) Investment Assurances. The Company may require a Participant, as a condition of exercising or acquiring Common Stock under any Award, (i) to give written assurances satisfactory to the Company as to the Participant’s knowledge and experience in financial and business matters and/or to employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable and experienced in financial and business matters and that the Participant is capable of evaluating, alone or together with the purchaser representative, the merits and risks of exercising the Award; and (ii) to give written assurances satisfactory to the Company stating that the Participant is acquiring Common Stock subject to the Award for the Participant’s own account and not with any present intention of selling or otherwise distributing the Common Stock. The foregoing requirements, and any assurances given pursuant to such requirements, will be inoperative if (A) the issuance of the shares upon the exercise or acquisition of Common Stock under the Stock Award has been registered under a then currently effective registration statement under the Securities Act, or (B) as to any particular requirement, a determination is made by counsel for the Company that such requirement need not be met in the circumstances under the then applicable securities laws. The Company may, upon advice of counsel to the Company, place legends on stock certificates issued under the Plan as such counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the Common Stock.

(h) Withholding Obligations. Unless prohibited by the terms of an Award Agreement, the Company may, in its sole discretion, satisfy any federal, state or local tax withholding obligation relating to an Award by any of the following means or by a combination of such means: (i) causing the Participant to tender a cash payment; (ii) withholding shares of Common Stock from the shares of Common Stock issued or otherwise issuable to the Participant in connection with the Stock Award; provided, however, that no shares of Common Stock are

withheld with a value exceeding the minimum amount of tax required to be withheld by law (or such lesser amount as may be necessary to avoid classification of the Stock Award as a liability for financial accounting purposes); (iii) withholding cash from an Award settled in cash; (iv) withholding payment from any amounts otherwise payable to the Participant; or (v) by such other method as may be set forth in the Award Agreement.

(i) Electronic Delivery . Any reference herein to a “written” agreement or document will include any agreement or document delivered electronically, filed publicly at www.sec.gov (or any successor website thereto) or posted on the Company’s intranet (or other shared electronic medium controlled by the Company to which the Participant has access).

(j) Deferrals. To the extent permitted by applicable law, the Board, in its sole discretion, may determine that the delivery of Common Stock or the payment of cash, upon the exercise, vesting or settlement of all or a portion of any Award may be deferred and may establish programs and procedures for deferral elections to be made by Participants. Deferrals by Participants will be made in accordance with Section 409A of the Code. Consistent with Section 409A of the Code, the Board may provide for distributions while a Participant is still an employee or otherwise providing services to the Company. The Board is authorized to make deferrals of Awards and determine when, and in what annual percentages, Participants may receive payments, including lump sum payments, following the Participant’s termination of Continuous Service, and implement such other terms and conditions consistent with the provisions of the Plan and in accordance with applicable law.

(k) Compliance with Section 409A of the Code. To the extent that the Board determines that any Award granted hereunder is subject to Section 409A of the Code, the Award Agreement evidencing such Award shall incorporate the terms and conditions necessary to avoid the consequences specified in Section 409A(a)(1) of the Code. To the extent applicable, the Plan and Award Agreements shall be interpreted in accordance with Section 409A of the Code. Notwithstanding anything to the contrary in this Plan (and unless the Award Agreement specifically provides otherwise), if the shares of Common Stock are publicly traded and a Participant holding an Award that constitutes “deferred compensation” under Section 409A of the Code is a “specified employee” for purposes of Section 409A of the Code, no distribution or payment of any amount shall be made upon a “separation from service” before a date that is six (6) months following the date of such Participant’s “separation from service” (as defined in Section 409A of the Code without regard to alternative definitions thereunder) or, if earlier, the date of the Participant’s death.

(l) Clawback/Recovery . All Awards granted under the Plan will be subject to recoupment in accordance with any clawback policy that the Company is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law. In addition, the Board may impose such other clawback, recovery or recoupment provisions in an Award Agreement as the Board determines necessary or appropriate, including but not limited to a reacquisition right in respect of previously acquired shares of Common Stock or other cash or property upon the occurrence of an event constituting Cause. No recovery of compensation under such a clawback policy will be an event giving rise to a right to resign for “good reason” or “constructive termination” (or similar term) under any agreement with the Company.

10. ADJUSTMENTS UPON CHANGES IN COMMON STOCK; OTHER CORPORATE EVENTS.

(a) Capitalization Adjustments . In the event of a Capitalization Adjustment, the Board will appropriately and proportionately adjust: (i) the class(es) and maximum number of securities subject to the Plan pursuant to Section 3(a), (ii) the class(es) and maximum number of securities that may be issued pursuant to the exercise of Incentive Stock Options pursuant to Section 3(c), (iii) the class(es) and maximum number of securities that may be awarded to any person pursuant to Sections 3(d), and (iv) the class(es) and number of securities and price per share of stock subject to outstanding Stock Awards. The Board will make such adjustments, and its determination will be final, binding and conclusive.

(b) Dissolution or Liquidation . Except as otherwise provided in the Stock Award Agreement, in the event of a dissolution or liquidation of the Company, all outstanding Stock Awards (other than Stock Awards consisting of vested and outstanding shares of Common Stock not subject to a forfeiture condition or the Company’s right of repurchase) will terminate immediately prior to the completion of such dissolution or liquidation, and the shares of Common Stock subject to the Company’s repurchase rights or subject to a forfeiture condition may be repurchased or reacquired by the Company notwithstanding the fact that the holder of such Stock Award is providing Continuous Service, provided, however , that the Board may, in its sole discretion, cause some or all Stock Awards to become fully vested, exercisable and/or no longer subject to repurchase or forfeiture (to the extent such Stock Awards have not previously expired or terminated) before the dissolution or liquidation is completed but contingent on its completion.

(c) Corporate Transaction. The following provisions will apply to Stock Awards in the event of a Corporate Transaction unless otherwise provided in the instrument evidencing the Stock Award or any other written agreement between the Company or any Affiliate and the Participant or unless otherwise expressly provided by the Board at the time of grant of a Stock Award.

(i) Stock Awards May Be Assumed. Except as otherwise stated in the Stock Award Agreement, in the event of a Corporate Transaction, any surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) may assume or continue any or all Stock Awards outstanding under the Plan or may substitute similar stock awards for Stock Awards outstanding under the Plan (including but not limited to, awards to acquire the same consideration paid to the stockholders of the Company pursuant to the Corporate Transaction), and any reacquisition or repurchase rights held by the Company in respect of Common Stock issued pursuant to Stock Awards may be assigned by the Company to the successor of the Company (or the successor’s parent company, if any), in connection with such Corporate Transaction. A surviving corporation or acquiring corporation (or its parent) may choose to assume or continue only a portion of a Stock Award or substitute a similar stock award for only a portion of a Stock Award, or may choose to assume or continue the Stock Awards held by some, but not all Participants. The terms of any assumption, continuation or substitution will be set by the Board.

(ii) Stock Awards Held by Current Participants. In the event of a Corporate Transaction in which the surviving corporation or acquiring corporation (or its parent company) does not assume or continue such outstanding Stock Awards or substitute similar stock awards for such outstanding Stock Awards, then with respect to Stock Awards that have not been assumed, continued or substituted and that are held by Participants whose Continuous Service has not terminated prior to the effective time of the Corporate Transaction (referred to as the “ Current Participants ”), the vesting of such Stock Awards (and, with respect to Options and SARs, the time when such Stock Awards may be exercised) will be accelerated in full to a date prior to the effective time of such Corporate Transaction (contingent upon the effectiveness of the Corporate Transaction) as the Board will determine (or, if the Board does not determine such a date, to the date that is five (5) days prior to the effective time of the Corporate Transaction), and such Stock Awards will terminate if not exercised (if applicable) at or prior to the effective time of the Corporate Transaction, and any reacquisition or repurchase rights held by the Company with respect to such Stock Awards will lapse (contingent upon the effectiveness of the Corporate Transaction).

(iii) Stock Awards Held by Persons other than Current Participants. In the event of a Corporate Transaction in which the surviving corporation or acquiring corporation (or its parent company) does not assume or continue such outstanding Stock Awards or substitute similar stock awards for such outstanding Stock Awards, then with respect to Stock Awards that have not been assumed, continued or substituted and that are held by persons other than Current Participants, the vesting of such Stock Awards (and, with respect to Options and SARs, the time when such Stock Awards may be exercised) will not be accelerated and such Stock Awards (other than a Stock Award consisting of vested and outstanding shares of Common Stock not subject to the Company’s right of repurchase) will terminate if not exercised (if applicable) prior to the effective time of the Corporate Transaction; provided, however , that any reacquisition or repurchase rights held by the Company with respect to such Stock Awards will not terminate and may continue to be exercised notwithstanding the Corporate Transaction.

(d) Payment for Stock Awards in Lieu of Exercise. Notwithstanding the foregoing, in the event a Stock Award will terminate if not exercised prior to the effective time of a Corporate Transaction, the Board may provide, in its sole discretion, that the holder of such Stock Award may not exercise such Stock Award but will receive a payment, in such form as may be determined by the Board, equal in value, at the effective time of the Corporate Transaction, to the excess, if any, of (A) the value of the property the Participant would have received upon the exercise of the Stock Award (including, at the discretion of the Board, any unvested portion of such Stock Award), over (B) any exercise price payable by such holder in connection with such exercise.

(e) Change in Control. A Stock Award may be subject to additional acceleration of vesting and exercisability upon or after a Change in Control as may be provided in the Stock Award Agreement for such Stock Award or as may be provided in any other written agreement between the Company or any Affiliate and the Participant, but in the absence of such provision, no such acceleration will occur.

11. PLAN TERM; EARLIER TERMINATION OR SUSPENSION OF THE PLAN.

(a) The Board may suspend or terminate the Plan at any time. No Incentive Stock Option will be granted after the tenth (10th) anniversary of the earlier of (i) the date the Plan is adopted by the Board, or (ii) the date the Plan is approved by the stockholders of the Company. No Awards may be granted under the Plan while the Plan is suspended or after it is terminated.

(b) No Impairment of Rights. Suspension or termination of the Plan will not impair rights and obligations under any Award granted while the Plan is in effect except with the written consent of the affected Participant or as otherwise permitted in the Plan.

12. EFFECTIVE DATE OF PLAN.

The Plan will become effective on the Effective Date.

13. CHOICE OF LAW.

The laws of the State of California will govern all questions concerning the construction, validity and interpretation of this Plan, without regard to that state’s conflict of laws rules.

14. DEFINITIONS. As used in the Plan, the following definitions will apply to the capitalized terms indicated below:

(a) “ Affiliate ” means, at the time of determination, any “parent” or “subsidiary” of the Company as such terms are defined in Rule 405. The Board will have the authority to determine the time or times at which “parent” or “subsidiary” status is determined within the foregoing definition.

(b) “ Award ” means a Stock Award or a Performance Cash Award.

(c) “ Award Agreement ” means a written agreement between the Company and a Participant evidencing the terms and conditions of an Award.

(d) “ Board ” means the Board of Directors of the Company.

(e) “ Capitalization Adjustment ” means any change that is made in, or other events that occur with respect to, the Common Stock subject to the Plan or subject to any Stock Award after the Effective Date without the receipt of consideration by the Company through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, large nonrecurring cash dividend, stock split, reverse stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or any similar equity restructuring transaction, as that term is used in Statement of Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto). Notwithstanding the foregoing, the conversion of any convertible securities of the Company will not be treated as a Capitalization Adjustment.

(f) “ Cause ” will have the meaning ascribed to such term in any written agreement between the Participant and the Company defining such term and, in the absence of such agreement, such term means, with respect to a Participant, the occurrence of any of the following events: (i) such Participant’s commission of any felony or any crime involving fraud, dishonesty or moral turpitude under the laws of the United States or any state thereof; (ii) such Participant’s attempted commission of, or participation in, a fraud or act of dishonesty against the Company; (iii) such Participant’s intentional, material violation of any contract or agreement between the Participant and the Company or of any statutory duty owed to the Company; (iv) such Participant’s unauthorized use or disclosure of the Company’s confidential information or trade secrets; or (v) such Participant’s gross misconduct. The determination that a termination of the Participant’s Continuous Service is either for Cause or without Cause will be made by the Company, in its sole discretion. Any determination by the Company that the Continuous Service of a Participant was terminated with or without Cause for the purposes of outstanding Awards held by such Participant will have no effect upon any determination of the rights or obligations of the Company or such Participant for any other purpose.

(g) “ Change in Control ” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:

(i) any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities other than by virtue of a merger, consolidation or similar transaction. Notwithstanding the foregoing, a Change in Control will not be deemed to occur (A) on account of the acquisition of securities of the Company directly from the Company, (B) on account of the acquisition of securities of the Company by an investor, any affiliate thereof or any other Exchange Act Person that acquires the Company’s securities in a transaction or series of related transactions the primary purpose of which is to obtain financing for the Company through the issuance of equity securities, or (C) solely because the level of Ownership held by any Exchange Act Person (the “ Subject Person ”) exceeds the designated percentage threshold of the outstanding voting securities as a result of a repurchase or other acquisition of voting securities by the Company reducing the number of shares outstanding, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of voting securities by the Company, and after such share acquisition, the Subject Person becomes the Owner of any additional voting securities that, assuming the repurchase or other acquisition had not occurred, increases the percentage of the then outstanding voting securities Owned by the Subject Person over the designated percentage threshold, then a Change in Control will be deemed to occur;

(ii) there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not Own, directly or indirectly, either (A) outstanding voting securities representing more than fifty percent (50%) of the combined outstanding voting power of the surviving Entity in such merger, consolidation or similar transaction or (B) more than fifty percent (50%) of the combined outstanding voting power of the parent of the surviving Entity in such merger, consolidation or similar transaction, in each case in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such transaction;

(iii) the stockholders of the Company approve or the Board approves a plan of complete dissolution or liquidation of the Company, or a complete dissolution or liquidation of the Company will otherwise occur, except for a liquidation into a parent corporation;

(iv) there is consummated a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries to an Entity, more than fifty percent (50%) of the combined voting power of the voting securities of which are Owned by stockholders of the Company in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such sale, lease, license or other disposition; or

(v) individuals who, on the date the Plan is adopted by the Board, are members of the Board (the “ Incumbent Board ”) cease for any reason to constitute at least a majority of the members of the Board; provided, however , that if the appointment or election (or nomination for election) of any new Board member was approved or recommended by a majority vote of the members of the Incumbent Board then still in office, such new member will, for purposes of this Plan, be considered as a member of the Incumbent Board.

Notwithstanding the foregoing definition or any other provision of the Plan, (A) the term Change in Control will not include a sale of assets, merger or other transaction effected exclusively for the purpose of changing the domicile of the Company, and (B) the definition of Change in Control (or any analogous term) in an individual written agreement between the Company or any Affiliate and the Participant will supersede the foregoing definition with respect to Awards subject to such agreement; provided, however , that if no definition of Change in Control or any analogous term is set forth in such an individual written agreement, the foregoing definition will apply.

(h) “ Code ” means the Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance thereunder.

(i) “ Committee ” means a committee of one (1) or more Directors to whom authority has been delegated by the Board in accordance with Section 2(c).

(j) “ Common Stock ” means the common stock of the Company.

(k) “ Company ” means Senomyx, Inc., a Delaware corporation.

(l) “ Consultant ” means any person, including an advisor, who is (i) engaged by the Company or an Affiliate to render consulting or advisory services and is compensated for such services, or (ii) serving as a member of the board of directors of an Affiliate and is compensated for such services. However, service solely as a Director, or payment of a fee for such service, will not cause a Director to be considered a “Consultant” for purposes of the Plan. Notwithstanding the foregoing, a person is treated as a Consultant under this Plan only if a Form S-8 Registration Statement under the Securities Act is available to register either the offer or the sale of the Company’s securities to such person.

(m) “ Continuous Service ” means that the Participant’s service with the Company or an Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. A change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee, Director or Consultant or a change in the Entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant’s service with the Company or an Affiliate, will not terminate a Participant’s Continuous Service; provided, however, that if the Entity for which a Participant is rendering services ceases to qualify as an Affiliate, as determined by the Board, in its sole discretion, such Participant’s Continuous Service will be considered to have terminated on the date such Entity ceases to qualify as an Affiliate. For example, a change in status from an Employee of the Company to a Consultant of an Affiliate or to a Director will not constitute an interruption of Continuous Service. To the extent permitted by law, the Board or the chief executive officer of the Company, in that party’s sole discretion, may determine whether Continuous Service will be considered interrupted in the case of (i) any leave of absence approved by the Board or chief executive officer, including sick leave, military leave or any other personal leave, or (ii) transfers between the Company, an Affiliate, or their successors. Notwithstanding the foregoing, a leave of absence will be treated as Continuous Service for purposes of vesting in a Stock Award only to such extent as may be provided in the Company’s leave of absence policy, in the written terms of any leave of absence agreement or policy applicable to the Participant, or as otherwise required by law.

(n) “ Corporate Transaction ” means the consummation, in a single transaction or in a series of related transactions, of any one or more of the following events:

(i) a sale or other disposition of all or substantially all, as determined by the Board, in its sole discretion, of the consolidated assets of the Company and its Subsidiaries;

(ii) a sale or other disposition of at least ninety percent (90%) of the outstanding securities of the Company;

(iii) a merger, consolidation or similar transaction following which the Company is not the surviving corporation; or

(iv) a merger, consolidation or similar transaction following which the Company is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation or similar transaction into other property, whether in the form of securities, cash or otherwise.

(o) “ Covered Employee ” will have the meaning provided in Section 162(m)(3) of the Code.

(p) “ Director ” means a member of the Board.

(q) “ Disability ” means, with respect to a Participant, the inability of such Participant to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than twelve (12) months, as provided in Sections 22(e)(3) and 409A(a)(2)(c)(i) of the Code, and will be determined by the Board on the basis of such medical evidence as the Board deems warranted under the circumstances.

(r) “ Effective Date ” means the effective date of this Plan document, which is January 1, 2014, provided that Plan is approved by the Company’s stockholders at the date of the annual meeting of stockholders of the Company held in calendar year 2013.

(s) “ Employee ” means any person employed by the Company or an Affiliate. However, service solely as a Director, or payment of a fee for such services, will not cause a Director to be considered an “Employee” for purposes of the Plan.

(t) “ Entity ” means a corporation, partnership, limited liability company or other entity.

(u) “ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

(v) “ Exchange Act Person ” means any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act), except that “Exchange Act Person” will not include (i) the Company or any Subsidiary of the Company, (ii) any employee benefit plan of the Company or any Subsidiary of the Company or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary of the Company, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, (iv) an Entity Owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their Ownership of stock of the Company; or (v) any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the Effective Date, is the Owner, directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities.

(w) “ Fair Market Value ” means, as of any date, the value of the Common Stock determined as follows:

(i) If the Common Stock is listed on any established stock exchange or traded on any established market, the Fair Market Value of a share of Common Stock will be, unless otherwise determined by the Board, the closing sales price for such stock as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Common Stock) on the date of determination, as reported in a source the Board deems reliable.

(ii) Unless otherwise provided by the Board, if there is no closing sales price for the Common Stock on the date of determination, then the Fair Market Value will be the closing selling price on the last preceding date for which such quotation exists.

(iii) In the absence of such markets for the Common Stock, the Fair Market Value will be determined by the Board in good faith and in a manner that complies with Sections 409A and 422 of the Code.

(x) “ Incentive Stock Option ” means an option granted pursuant to Section 5 that is intended to be, and that qualifies as, an “incentive stock option” within the meaning of Section 422 of the Code.

(y) “ Non-Employee Director ” means a Director who either (i) is not a current employee or officer of the Company or an Affiliate, does not receive compensation, either directly or indirectly, from the Company or an Affiliate for services rendered as a consultant or in any capacity other than as a Director (except for an amount as to which disclosure would not be required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act (“ Regulation S-K ”)), does not possess an interest in any other transaction for which disclosure would be required under Item 404(a) of Regulation S-K, and is not engaged in a business relationship for which disclosure would be required pursuant to Item 404(b) of Regulation S-K; or (ii) is otherwise considered a “non-employee director” for purposes of Rule 16b-3.

(z) “ Nonstatutory Stock Option ” means any option granted pursuant to Section 5 that does not qualify as an Incentive Stock Option.

(aa) “ Officer ” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act.

(bb) “ Option ” means an Incentive Stock Option or a Nonstatutory Stock Option to purchase shares of Common Stock granted pursuant to the Plan.

(cc) “ Option Agreement ” means a written agreement between the Company and an Optionholder evidencing the terms and conditions of an Option grant. Each Option Agreement will be subject to the terms and conditions of the Plan.

(dd) “ Optionholder ” means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Option.

(ee) “ Other Stock Award ” means an award based in whole or in part by reference to the Common Stock which is granted pursuant to the terms and conditions of Section 6(d).

(ff) “ Other Stock Award Agreement ” means a written agreement between the Company and a holder of an Other Stock Award evidencing the terms and conditions of an Other Stock Award grant. Each Other Stock Award Agreement will be subject to the terms and conditions of the Plan.

(gg) “ Outside Director ” means a Director who either (i) is not a current employee of the Company or an “affiliated corporation” (within the meaning of Treasury Regulations promulgated under Section 162(m) of the Code), is not a former employee of the Company or an “affiliated corporation” who receives compensation for prior services (other than benefits under a tax-qualified retirement plan) during the taxable year, has not been an officer of the Company or an “affiliated corporation,” and does not receive remuneration from the Company or an “affiliated corporation,” either directly or indirectly, in any capacity other than as a Director, or (ii) is otherwise considered an “outside director” for purposes of Section 162(m) of the Code.

(hh) “ Own, ” “ Owned, ” “ Owner, ” “ Ownership ” : A person or Entity will be deemed to “Own,” to have “Owned,” to be the “Owner” of, or to have acquired “Ownership” of securities if such person or Entity, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares voting power, which includes the power to vote or to direct the voting, with respect to such securities.

(ii) “ Participant ” means a person to whom an Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Stock Award.

(jj) “ Performance Cash Award ” means an award of cash granted pursuant to the terms and conditions of Section 6(c)(ii).

(kk) “ Performance Criteria ” means the one or more criteria that the Board will select for purposes of establishing the Performance Goals for a Performance Period. The Performance Criteria that will be used to establish such Performance Goals may be based on any one of, or combination of, the following as determined by the Board: (i) earnings (including earnings per share and net earnings); (ii) earnings before interest, taxes and depreciation; (iii) earnings before interest, taxes, depreciation and amortization; (iv) total stockholder return; (v) return on equity or average stockholder’s equity; (vi) return on assets, investment, or capital employed; (vii) stock price; (viii) margin (including gross margin); (ix) income (before or after taxes); (x) operating income; (xi) operating income after taxes; (xii) pre-tax profit; (xiii) operating cash flow; (xiv) sales or revenue targets; (xv) increases in revenue or product revenue or components thereof; (xvi) expenses and cost reduction goals; (xvii) improvement in or attainment of working capital levels; (xiii) economic value added (or an equivalent metric); (xix) market share; (xx) cash flow; (xxi) cash flow per share; (xxii) share price performance; (xxiii) debt reduction; (xxiv) implementation or completion of projects or processes; (xxv) customer satisfaction; (xxvi) stockholders’ equity; (xxvii) capital expenditures; (xxiii) debt levels; (xxix) operating profit or net operating profit; (xxx) workforce diversity; (xxxi) growth of net income or operating income; (xxxii) billings; and (xxxiii) to the extent that an Award is not intended to comply with Section 162(m) of the Code, other measures of performance selected by the Board.

(ll) “ Performance Goals ” means, for a Performance Period, the one or more goals established by the Board for the Performance Period based upon the Performance Criteria. Performance Goals may be based on a Company-wide basis, with respect to one or more business units, divisions, Affiliates, or business segments, and in either absolute terms or relative to the performance of one or more comparable companies or the performance of one or more relevant indices. Unless specified otherwise by the Board (i) in the Award Agreement at the time the Award is granted or (ii) in such other document setting forth the Performance Goals at the time the Performance Goals are established, the Board will appropriately make adjustments in the method of calculating the attainment of Performance Goals for a Performance Period as follows: (1) to exclude restructuring and/or other nonrecurring charges; (2) to exclude exchange rate effects, as applicable, for non-U.S. dollar denominated Performance Goals; (3) to exclude the effects of changes to generally accepted accounting principles; (4) to exclude the effects of any statutory adjustments to corporate tax rates; and (5) to exclude the effects of any “extraordinary items” as determined under generally accepted accounting principles.

(mm) “ Performance Period ” means the period of time selected by the Board over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant’s right to and the payment of a Stock Award or a Performance Cash Award. Performance Periods may be of varying and overlapping duration, at the sole discretion of the Board.

(nn) “ Performance Stock Award ” means a Stock Award granted under the terms and conditions of Section 6(c)(i).

(oo) “ Plan ” means this Senomyx, Inc. 2013 Equity Incentive Plan, as it may be amended from time to time.

(pp) “ Restricted Stock Award ” means an award of shares of Common Stock which is granted pursuant to the terms and conditions of Section 6(a).

(qq) “ Restricted Stock Award Agreement ” means a written agreement between the Company and a holder of a Restricted Stock Award evidencing the terms and conditions of a Restricted Stock Award grant. Each Restricted Stock Award Agreement will be subject to the terms and conditions of the Plan.

(rr) “ Restricted Stock Unit Award ” means a right to receive shares of Common Stock which is granted pursuant to the terms and conditions of Section 6(b).

(ss) “ Restricted Stock Unit Award Agreement ” means a written agreement between the Company and a holder of a Restricted Stock Unit Award evidencing the terms and conditions of a Restricted Stock Unit Award grant. Each Restricted Stock Unit Award Agreement will be subject to the terms and conditions of the Plan.

(tt) “ Rule 16b-3 ” means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in effect from time to time.

(uu) “ Rule 405 ” means Rule 405 promulgated under the Securities Act.

(vv) “ Rule 701 ” means Rule 701 promulgated under the Securities Act.

(ww) “ Securities Act ” means the Securities Act of 1933, as amended.

(xx) “ Stock Appreciation Right ” or “ SAR ” means a right to receive the appreciation on Common Stock that is granted pursuant to the terms and conditions of Section 5.

(yy) “ Stock Appreciation Right Agreement ” means a written agreement between the Company and a holder of a Stock Appreciation Right evidencing the terms and conditions of a Stock Appreciation Right grant. Each Stock Appreciation Right Agreement will be subject to the terms and conditions of the Plan.

(zz) “ Stock Award ” means any right to receive Common Stock granted under the Plan, including an Incentive Stock Option, a Nonstatutory Stock Option, a Restricted Stock Award, a Restricted Stock Unit Award, a Stock Appreciation Right, a Performance Stock Award or any Other Stock Award.

(aaa) “ Stock Award Agreement ” means a written agreement between the Company and a Participant evidencing the terms and conditions of a Stock Award grant. Each Stock Award Agreement will be subject to the terms and conditions of the Plan.

(bbb) “ Subsidiary ” means, with respect to the Company, (i) any corporation of which more than fifty percent (50%) of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, stock of any other class or classes of such corporation will have or might have voting power by reason of the happening of any contingency) is at the time, directly or indirectly, Owned by the Company, and (ii) any partnership, limited liability company or other entity in which the Company has a direct or indirect interest (whether in the form of voting or participation in profits or capital contribution) of more than fifty percent (50%).

(ccc) “ Ten Percent Stockholder ” means a person who Owns (or is deemed to Own pursuant to Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Affiliate.

(ddd) “ Transaction ” means a Corporate Transaction or a Change in Control.

Exhibit 10.3

AMENDMENT NO. 1

SENOMYX, INC.

2004 EMPLOYEE STOCK PURCHASE PLAN

This Amendment No. 1 (this “ Amendment ”) to the Senomyx, Inc. 2004 Employee Stock Purchase Plan, dated as of June 13, 2013 (the “ Effective Date ”), is made by Senomyx, Inc., a Delaware corporation (the “ Company ”).

WHEREAS, the Company maintains the Senomyx, Inc. 2004 Employee Stock Purchase Plan (adopted by the Board of Directors of the Company on April 30, 2004) (the “ Plan ”); and

WHEREAS , the Company desires to amend the Plan to increase the number of shares of common stock of the Company (“ Common Stock ”) available for issuance under the Plan with respect to offerings that commence after such share increase; and

WHEREAS , the Company desires to amend the Plan to provide that, effective as of the Effective Date, an additional three million (3,000,000) shares of Common Stock will be reserved and available for issuance under the Plan with respect to offerings that commence after such share increase; and

WHEREAS , Section 15(a) of the Plan authorizes the Board of Directors of the Company (the “ Board ”) to so amend the Plan .

NOW, THEREFORE, the Board hereby amends the Plan as follows:

1. Amendment to Section 2 . Section 2 is hereby amended by adding the following new definition as Section 2(a) of Section 2 and re-lettering the subsections for each succeeding definition thereafter.

(a) “ Amendment Date ” means the date on which Amendment No. 1 to the Plan is adopted and approved by the stockholders of the Company.

2. Amendment to Section 4 . Section 4 is hereby deleted in its entirety and replaced with the following sentences:

Subject to the provisions of Section 14(a) relating to adjustments upon changes in Common Stock, effective as of the Amendment Date, the shares of Common Stock that may be sold pursuant to Purchase Rights granted under the Plan shall not exceed in the aggregate three million fifty-two thousand four hundred ninety three (3,052,493) shares of Common Stock, which is equal to the sum of (A) three million (3,000,000) new shares of Common Stock (the “ New Shares ” ) and (B) fifty-two thousand four hundred ninety three (52,9430) shares currently available (the “ Share Reserve ”). The New Shares will be available only for Offerings that commence after the Amendment Date.

3. Ratification . All other provisions of the Plan remain unchanged and are hereby ratified by the Company and the Board.

4. Effective Date . This Amendment shall be effective as of the date set forth in the first sentence of this Amendment.

* * *

Exhibit 10.4

August 1, 2013

David B. Berger

7723 Prospect Place
La Jolla, CA 92037

Dear David:

This letter (the “Agreement”) sets forth the terms of your continuing part-time employment with Senomyx, Inc. (the “Company”) effective as of August 2, 2013.

1. Terms of Service. Effective August 2, 2013 you hereby resign from the positions of Senior Vice President and General Counsel. As of that date your continuing service will be on a part-time basis whereby you will devote up to ten (10) hours of service to the Company per month (as requested by the Company) and you also are expected to continue to serve as Corporate Secretary of the Company until a successor is appointed. Also, in your continuing role as the Company’s Corporate Secretary, we anticipate that you will attend regularly scheduled meetings of the Company’s Board of Directors and its Committees. You will use reasonable efforts to attend such meetings in person. In your part-time role, you will continue to report to me in my capacity as the Company’s Chief Executive Officer and Chairman of the Board. You acknowledge your continuing obligations under your Proprietary Information and Inventions Agreement during the period of your ongoing part-time employment with the Company.

2. Accrued Salary. On or prior to August 2, 2013, the Company will pay to you all accrued and unpaid salary and unused paid time off earned through that date, less applicable deductions and withholdings.

3. Continuous Service. You agree to serve as a part-time employee to the Company under the terms specified below.

(a) Service Period. Your service shall commence on August 2, 2013 and will continue until terminated as provided in Paragraph 3(f) below (the “Service Period” ). The parties hereto presently contemplate that the Service Period shall not extend beyond April 15, 2014.

(b) Additional Terms. The parties acknowledge that you will perform the services contemplated above at the location of your choice, but with advance notice you may also be available to attend meetings at Company’s principal place of business or at other places upon mutual agreement of between you and an authorized representative of the Company. You

also agree to perform a reasonable amount of informal consultation with the Company over the telephone or otherwise. The Company acknowledges that during the Service Period you may be a full-time employee of Tandem Diabetes Care, Inc. and if so that you will be subject to their respective policies, as they may be revised from time to time, including, among others, policies concerning part-time service, consulting, conflicts of interest, and intellectual property. The Company agrees that your employment with Tandem Diabetes Care, Inc. does not violate any of the Company’s policies or agreements that are applicable to you.

(c) Compensation; Expenses. As compensation for performing the services as contemplated during the Service Period you will be paid a bi-weekly amount of $1,153.85, less applicable deductions and withholdings, payable in accordance with the Company’s normal payroll policies and procedures. The Company will also reimburse you for business expenses reasonably incurred on behalf of the Company during the Service Period pursuant to its established expense reimbursement policy. You and the Company may mutually agree to modify the compensation arrangement for services at any time.

(d) Treatment of Outstanding Stock Options. Your issued and outstanding stock options under the Company’s Amended and Restated 2004 Equity Incentive Plan will continue to vest in accordance with their terms during the Service Period. Provided that you do not voluntarily terminate your part-time service to the Company as contemplated by this letter prior to December 31, 2013, then the exercise period for any vested and unexercised stock options shall be deemed extended until the later of (i) December 31, 2014, or (ii) nine (9) months following your termination of continuous service to the Company.

(e) No Solicitation. During the Service Period, you will not personally or through others recruit, solicit or induce any employee of the Company to terminate his or her employment with the Company; provided, however, that this provision shall not apply with respect to any employee of the Company who responds independently to a general advertisement or job posting not specifically directed to employees of the Company.

(f) At-Will Employment; Termination of Service Period. Your employment will be “at-will,” which means it may be terminated at any time by you or the Company with or without cause or advance notice. Any such termination shall be in writing. In fact, every aspect of your employment relationship with the Company is on an at-will basis. As part of your at-will employment, the Company expressly reserves its inherent authority to manage and control its business enterprise and to exercise its sole discretion to determine all issues pertaining to your employment. No one other than the Company’s Chief Executive Officer or his designee has the authority to alter this Agreement, to enter into a different agreement for your employment for a specified period, or to make any agreement contrary to this Agreement. Furthermore, any agreement that alters the at-will nature of employment must be in writing and must be signed by both the Company’s Chief Executive Officer or his designee and you. Termination or expiration of your Service Period shall not affect: (i) the Company’s obligation to pay for services previously performed by you or expenses reasonably incurred by you for which you are entitled to reimbursement; (ii) the Company’s obligations and your associated rights as contemplated by Sections 2, 3 and 4 of this letter; or (iii) your continuing obligations to the Company under your Proprietary Information and Inventions Agreement.

4. 2013 Incentive Cash Bonus. In addition to the compensation set forth above, the parties acknowledge and agree that you will be eligible for a pro-rata portion (7/12ths) of your cash incentive bonus under the Company’s 2013 Executive Bonus Plan (the “2013 Bonus Plan”), based on your target bonus of 40% of your base salary (as in effect during your full-time employment through August 2, 2013), regardless of your employment status as of the date of the determination of the bonus payout or the bonus payment date. The determination of the actual bonus, if any, remains subject to the final determination by the Compensation Committee of the Board (the “Committee”) of the Company’s corporate goal achievement as well as the Committee’s discretionary authority under the 2013 Bonus Plan; but in any event will be determined for you using the same methodology applied to all of the Company’s officers (other than the target bonus amount). We anticipate that this will occur during the first quarter of 2014 and your pro-rata bonus will be paid to you at the same time as bonuses, if any, are paid to the Company’s other officers.

5. Other Compensation Or Benefits. As a part-time employee regularly scheduled to work less than 30 hours per week, you will not be eligible to participate in the Company’s medical or dental benefit plans, the paid time off program, or receive holiday pay. Except as specifically provided in Section 4 above, you also will not be eligible for any cash bonus as compensation for your service during the 2014 calendar year. You may continue to be eligible to participate in the Company’s 401(k) plan pursuant to plan eligibility. If you have any questions regarding benefits, please see the Company’s Human Resources Department. The Company may modify compensation and benefits from time to time as it deems necessary.

6. Change of Control Benefits . The parties mutually agree and acknowledge that your Amended and Restated Change in Control Agreement dated as of December 31, 2008 is hereby amended by deleting Paragraphs 1(b) and 1(c) thereof. The deleted paragraphs shall have no further force or effect, and you shall have no rights to receive benefits under either of such paragraphs following August 2, 2013. The remaining provisions of your Amended and Restated Change in Control Agreement shall remain in full force and effect.

7. Return of Company Property. You agree that, within 30 days after the expiration or termination of your Service Period, you will return to the Company all Company documents and other Company property in your possession or control, including, but not limited to files, notes, memoranda, correspondence, agreements, notebooks, records, reports, tangible property and equipment; provided, however , that during the Service Period only, the Company will permit you to retain, receive, and/or use any documents, equipment and/or information reasonably necessary to perform the services contemplated hereunder.

8. Miscellaneous. This Agreement constitutes the complete, final and exclusive embodiment of the entire agreement between you and the Company with regard to its subject matter. This Agreement is entered into without reliance on any promise or representation, written or oral, other than those expressly contained herein, and it supersedes any other such promises, warranties or representations. This Agreement may not be modified or amended except in a writing signed by both you and the Company’s Chief Executive Officer or his designee. This Agreement will bind the heirs, personal representatives, successors and assigns of both you and the Company, and inure to the benefit of both you and the Company, their heirs,

successors and assigns. If any provision of this Agreement is determined to be invalid or unenforceable, in whole or in part, this determination will not affect any other provision of this Agreement and the provision in question will be modified so as to be rendered enforceable. This Agreement will be deemed to have been entered into and will be construed and enforced in accordance with the laws of the State of California as applied to contracts made and to be performed entirely within California. Any ambiguity in this Agreement shall not be construed against either party as the drafter. Any waiver of a breach of this Agreement shall be in writing and shall not be deemed to be a waiver of any successive breach. This Agreement may be executed in counterparts and facsimile signatures will suffice as original signatures.

If this Agreement is acceptable to you, please sign below and return the original to me.

Sincerely,

SENOMYX, INC.

By:	/S/ KENT SNYDER

Title:		Chief Executive Officer and Chairman of the Board of Directors


I HAVE READ, UNDERSTAND AND AGREE FULLY TO THE FOREGOING AGREEMENT:


/S/ DAVID B. BERGER
DAVID B. BERGER


DATE:			AUGUST 1, 2013

EXHIBIT 31.1

CERTIFICATION
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Kent Snyder, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the three months ended June 30, 2013 of Senomyx, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 1, 2013	/S/ KENT SNYDER
	Kent Snyder
	Chief Executive Officer and
	Chairman of the Board of Directors

EXHIBIT 31.2

CERTIFICATION
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Antony Rogers, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the three months ended June 30, 2013 of Senomyx, Inc.

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 1, 2013	/S/ ANTONY ROGERS
	Antony Rogers Senior Vice President and Chief Financial Officer

EXHIBIT 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Senomyx, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2013, as filed with the Securities and Exchange Commission on or about the date hereof (the “Report”), I, Kent Snyder, Chief Executive Officer and Chairman of the Board of Directors of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge, that:

(1) the Report to which this certification is attached as Exhibit 32.1 fully complies with the requirements of Section 13(a) and Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”); and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the end of the period covered by the Report and results of operations of the Company for the period covered by the Report.

	Date: August 1, 2013	/S/ KENT SNYDER
		Kent Snyder
		Chief Executive Officer and
		Chairman of the Board of Directors

This certification shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of Section 18 of the Exchange Act. Such certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

EXHIBIT 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Senomyx, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2013, as filed with the Securities and Exchange Commission on or about the date hereof (the “Report”), I, Antony Rogers, Senior Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge, that:

(1) the Report to which this certification is attached as Exhibit 32.2 fully complies with the requirements of Section 13(a) and Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”); and

	Date: August 1, 2013	/S/ ANTONY ROGERS
		Antony Rogers
		Senior Vice President and
		Chief Financial Officer