Exhibit
10.12


 


Execution
Copy


 


CERTAIN MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN
OMITTED FROM THIS DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.
THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.


 


ELAN PHARMA
INTERNATIONAL LIMITED


 


AND


 


ZOGENIX, INC.


	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LICENSE
  AGREEMENT

  	
   

  
	
   

  	
   

  	
   

  



 













 


Execution Copy


 


INDEX


 


	
  1.

  	
  Definitions and Interpretation . . . . . . . . . . . . . .
  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  . . . . . . . . . . . . .

  	
  1

  
	
   

  	
   

  	
   

  
	
  2.

  	
  The License. . . . . . . . . . . . . . . . . . . . . . . .
  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  . . . . . . . . . . . . . . . . . .

  	
  8

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Intellectual Property . . . . . . . . . . . . . . . . . . .
  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  . . . . . . . . . . . . . . . .

  	
  10

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Non-Competition . . . . . . . . . . . . . . . . . . . . . .
  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  . . . . . . . . . . . . . . .

  	
  17

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Product Development . . . . . . . . . . . . . . . . . . . .
  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  . . . . . . . . . . . . . .

  	
  17

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Regulatory Matters . . . . . . . . . . . . . . . . . . . .
  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  . . . . . . . . . . . . . . . 

  	
  18

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Registration, Marketing and the Promotion of the Product .
  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  . . . .

  	
  20

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Manufacture and Supply . . . . . . . . . . . . . . . . . .
  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  . . . . . . . . . . . . . 

  	
  21

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Manufacturing License . . . . . . . . . . . . . . . . . . .
  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  . . . . . . . . . . . . . . 

  	
  22

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Financial Provisions . . . . . . . . . . . . . . . . . . .
  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  . . . . . . . . . . . . . . . . .

  	
  23

  
	
   

  	
   

  	
   

  
	
  11.

  	
  Payments, Reports and Audits . . . . . . . . . . . . . . .
  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  . . . . . . . . . . . . .

  	
  24

  
	
   

  	
   

  	
   

  
	
  12.

  	
  Duration and Termination . . . . . . . . . . . . . . . . .
  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  . . . . . . . . . . . . . .

  	
  25

  
	
   

  	
   

  	
   

  
	
  13.

  	
  Consequences of Expiration or Termination . . . . . . . . .
  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  . . . . . . . .

  	
  28

  
	
   

  	
   

  	
   

  
	
  14.

  	
  Warranties, Indemnification and Liability . . . . . . . . .
  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  . . . . . . . . . .

  	
  30

  
	
   

  	
   

  	
   

  
	
  15.

  	
  Confidentiality . . . . . . . . . . . . . . . . . . . . . .
  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  . . . . . . . . . . . . . . . . . .

  	
  33

  
	
   

  	
   

  	
   

  
	
  16.

  	
  Miscellaneous Provisions . . . . . . . . . . . . . . . . .
  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  . . . . . . . . . . . . . .

  	
  36

  



 













 


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  Schedule 1

  	
  Technological Competitors . . . . . . . . . . . . . . . . .
  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  . . . . . . . 

  	
  36

  
	
   

  	
   

  	
   

  
	
  Schedule 2

  	
  key terms for commercial manufacture and supply agreement .
  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

  	
  37

  
	
   

  	
   

  	
   

  
	
  Schedule 3

  	
  manufacturing cost . . . . . . . . . . . . . . . . . . . .
  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  . . . . . . . . . . .

  	
  39

  



 










 


Execution Copy


 


THIS AGREEMENT is
dated November      , 2007


 


PARTIES:


 


(1)             ELAN PHARMA INTERNATIONAL LIMITED, a limited liability company
incorporated under the laws of Ireland, having its registered office at
Monksland, Athlone, Co Westmeath, Ireland (“Elan”); and


 


(2)             ZOGENIX, INC., a Delaware corporation,
having its principal place of business at 11682 El Camino Real, Ste. 320, San
Diego, California, USA 92130 (“Zogenix”).


 


BACKGROUND:


 


(A)            Elan
possesses certain proprietary oral controlled release technology as well as
proprietary know-how and confidential information used or useful in the
manufacture and use of pharmaceutical products.


 


(B)             Elan
has also developed a Product (as defined below) containing Compound (as defined
below) which utilizes certain Elan oral controlled release technology.


 


(C)             Zogenix
wishes to enter into this Agreement to obtain the right to utilize Elan
Intellectual Property (as defined below) to (i) import, use, offer for
sale, sell the Product in the Field (as defined below) in the Territory (as
defined below) and (ii) make and have made the Product in the Field in the
Territory, in each case in accordance with the terms and conditions set out
below.


 


TERMS:


 


The Parties agree as
follows:


 


1.              DEFINITIONS AND
INTERPRETATION


 


1.1.          Definitions.  In this Agreement:


 


“Affiliate” means any corporation or
entity controlling, controlled or under common control with Elan or Zogenix, as
the case may be.  For the purposes of
this Agreement, “control” means the direct or indirect ownership of more than
50% of the issued voting shares or other voting rights of the subject entity to
elect directors, or if not meeting the preceding criteria, any entity owned or
controlled by or owning or controlling at the maximum control or ownership
right permitted in the country where such entity exists.


 


“Agreement” means this license agreement
(which expression shall be deemed to include its Recitals and Schedules), as
amended or supplemented pursuant to the terms hereof.


 


“Bottled Product” shall mean Product
that is packed in bottles in a packaging configuration approved by the FDA
under a Regulatory Application that is ready for commercial distribution in the
Field in the Territory or, alternatively, Product that is packed in bulk form
in drums.


 


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“Business Days” means Monday to Friday
inclusive, excluding any days on which the clearing banks are generally closed
in Dublin, Ireland and/or New York, New York.


 


“cGMP” means then-current Good Manufacturing
Practice, as defined in the US Federal Food, Drug, and Cosmetic Act, and the
regulations promulgated thereunder, as may be amended from time to time.


 


“Claims” means all and any claims
(whether successful or otherwise), loss, liability, damages and expenses,
including reasonable attorneys’ fees and expenses and legal costs.


 


“CMC Section” means the chemistry,
manufacturing, and controls section of the Regulatory Application in the
Territory as defined in 21 C.F.R. Section 314.50 (1), as may be amended
from time to time.


 


“Commercial Manufacture and Supply Agreement”
means the agreement to be negotiated in good faith and entered into between
Zogenix and Elan Holdings regarding the commercial supply of Product for
Zogenix by Elan Holdings, as set forth in Clause 8.


 


“Commercially Reasonable Efforts” means
those efforts of a Party which are consistent with those utilised by such Party
for its own internally developed or in-licensed pharmaceutical products, taking
into account all factors that impact the manufacturing, development, regulatory
approval, marketing,  and sales of such
products, as applicable.


 


“Competitive Product” means any [***]
(other than the Product itself) whose [***] is [***] which has [***] and which
is [***].


 


“Compound” means the active drug
substance hydrocodone bitartrate and other pharmaceutically acceptable salts of
hydrocodone.


 


“Controlled Substances” has the same
meaning as in the US Controlled Substances Act (21 U.S.C. 801-904), as may be
amended from time to time.


 


“DMF” means the Drug Master File, as
defined in the 21 C.F.R., Section 314.420, which DMF contains the CMC
Section.


 


“EDDI” means Elan Drug Delivery, Inc.,
a Delaware corporation, having a place of business at 1300 Gould Drive,
Gainesville, Georgia, USA 30504.  As of
the Effective Date, EDDI is an Affiliate of Elan.


 


“Effective Date” means the date of this
Agreement as set forth in the header on page 1 herein.


 


“Elan Holdings” means Elan Holdings, Inc.,
a Massachusetts corporation having a place of business at 1300 Gould Drive,
Gainesville, Georgia USA 30504.  As of
the Effective Date, Elan Holdings is an Affiliate of Elan.


 


“Elan IND” means the Investigational New
Drug Application No. 65,111 that has been filed by Elan or an Affiliate
with the FDA.


 


“Elan Intellectual Property” means the
Elan Know-How and Elan Patents.


 


“Elan Know-How” means any and all rights
owned, licensed or controlled by Elan as of the Effective Date or during the
Term to any scientific, pharmaceutical or technical information, 


 






	
  ***

  	
   

  	
  Certain information on this page has been omitted and filed
  separately with the Commission. 
  Confidential treatment has been requested with respect to the omitted
  portions.

  



 


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data, discovery, invention (whether patentable or not), know-how,
show-how, substances, techniques, processes, systems, formulations, designs and
expertise which is not generally known to the public and is exclusively related
to (a) the Product or (b) the manufacturing processes used in making
the Product.  It is expressly
acknowledged by the Parties that Elan Know-How shall not include Zogenix
Patents or Zogenix Know-How.


 


“Elan Oral Controlled Release Patents”
means any and all rights under any and all Patents relating to oral controlled
release dosage forms, filed by, now existing, currently pending or hereafter
filed, licensed or controlled by Elan or its Affiliates in the Territory,
excluding (a) the Elan Patents and (b) any and all Patents the
ownership or control of which are acquired by Elan or its Affiliates after the
Effective Date (including by acquisition of the assets and/or shares in an
entity which owns, controls or licenses them), or are as at the time of such
acquisition owned, controlled or licensed by an entity which acquires control
of Elan, together with Patents arising from technology so acquired by Elan or
its Affiliates, or owned, licensed or controlled by such an acquiring entity as
of the date of such acquisition.


 


“Elan Patents” means any and all Patents
and any and all rights owned, licensed or controlled by Elan under


	
   

  	
   

  	
   

  
	
  (a)

  	
   

  	
  U.S. Patent No. 6,902,742,

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  U.S. Published Patent Application Number
  2006/024015,

  
	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  any U.S. Patents that claim priority to the
  Patents described in clauses (a) or (b) hereof and relate
  exclusively to the formulation, use, sale or offer for sale of the Product or
  the manufacturing processes used in making the Product, and

  
	
   

  	
   

  	
   

  
	
  (d)

  	
   

  	
  any U.S. Patents, other than Zogenix
  Patents, claiming subject matter that

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
  are directly related to the formulation,
  use, sale or offer for sale of the Product, or the manufacturing processes
  used in making the Product, and

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

  	
  were developed solely by or on behalf of
  Elan or Zogenix and/or jointly by Zogenix and Elan as a result of that Party
  (or its Affiliate) fulfilling obligations under this Agreement or Related
  Agreements.

  



 


For the avoidance of doubt, the Elan Patents do not include [***].


 


“Elan Trademark” means Elan’s trademark “SODAS®”
(U.S. Registration No. 2794607) or such other trade marks as Elan may from
time to time reasonably specify.


 


“EXW” (ex works) has the same meaning as
in the ICC Incoterms 2000, International Rules for the Interpretation of
Trade Terms, ICC Publication No. 560.


 


“Failure to
Supply”  means that for
reasons other than (i) Force Majeure, (ii) a default by Zogenix
(including but not limited to a failure to provide forecasts and orders in
accordance with the Commercial Manufacture and Supply Agreement), or (iii) events
or Third Party actions that are beyond Elan’s or its Affiliate’s control so
long as Elan or its Affiliate has used and is continuing to use Commercially
Reasonable Efforts to minimize such action (such as DEA quota changes or issues
relating to the manufacture or supply of API), Elan or its Affiliate
anticipates that it will fail to supply or fails to supply Zogenix’s properly
forecasted and ordered requirements for Bottled Product in accordance with the
terms set out in the 


 






***         Certain information on this page has
been omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.


 


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Commercial Manufacture and
Supply Agreement, such that Zogenix will become unable or is unable to satisfy
all customer orders for the Product (after exhaustion of the agreed level of
safety stock) and will remain unable to do so for at least [***] thereafter.


 


“FDA” means the United States Food and
Drug Administration or any other successor agency whose approval is necessary
to market the Product in the USA.


 


“Field” means any oral prescription only
medicine in humans for the treatment or relief of pain, pain syndromes or pain
associated with medical conditions or procedures.


 


“Force Majeure” means any cause or
condition beyond the reasonable control of the Party (or its Affiliate) obliged
to perform, including acts of God, acts of government (in particular with
respect to obtain quotas or the refusal to issue necessary import or export
licenses so long as the responsible Party (or its Affiliate) has used
Commercially Reasonable Efforts to obtain such quotas and licenses), fire,
flood, earthquake, war, riots or embargoes or strikes or other labour
difficulties affecting a Party or either Party’s ability to obtain supplies
howsoever arising.


 


“Governmental Authority” means all
governmental and regulatory bodies, agencies, departments or entities, whether
or not located in the Territory, which regulate, direct or control commercial
and other related activities in or with the Territory.


 


“IND” means Investigational New Drug
Application as set forth in the 21 C.F.R. Section 312.


 


“In Market” means the sale of the
Product in the Territory by Zogenix, a Zogenix Affiliate or where applicable,
by a permitted sub-licensee or subcontractor, to an unaffiliated Third Party,
such as a wholesaler, distributor, managed care organisation, hospital or
pharmacy which effects the final commercial sale to the end-user consumer of
the Product, and shall exclude (a) the transfer of the Product by one
Zogenix Affiliate to another Zogenix Affiliate or a permitted sub-licensee or
subcontractor, and (b) the transfer of the Product in connection with the
R&D Program or other clinical studies conducted by Zogenix, a Zogenix
Affiliate or permitted sublicensee.


 


“Manufacturing Cost” means those costs
set out in Schedule 3.


 


“NDA” means a New Drug Application filed
with the FDA in reference to the Product, including any supplements or
amendments thereto which may be filed in the Territory.


 


“NDA Approval” means the final approval
of an NDA by the FDA to market the Product in the Territory.


 


“Net Sales” means, subject to the
provisions of Clause 10.4, the aggregate gross In Market sales amounts billed
for the Product in accordance with Zogenix’s standard accounting principles
that is in accordance with US GAAP, less a maximum deduction of [***]% (subject
to any adjustments that may be discussed and mutually agreed to in writing by
the Parties pursuant to Clause 10.3) to cover the following:


 


	
  (i)

  	
   

  	
  trade, cash or quantity discounts, patient discount programs, rebates
  to wholesalers for inventory management programs or distribution agreements,
  allowances, adjustments and rejections;

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  rebates, recalls (other than where the Product is replaced without
  charge) and returns;

  



 






***         Certain information on this page has
been omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.


 


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Copy


 


	
  (iii)

  	
   

  	
  price reductions or rebates imposed by Governmental Authorities;

  
	
   

  	
   

  	
   

  
	
  (iv)

  	
   

  	
  transportation, importation, shipping, insurance and other handling
  expenses directly chargeable to the royalty-bearing sale of the Product, but
  only to the extent that such expenses are separately delineated in the
  applicable invoices; and

  
	
   

  	
   

  	
   

  
	
  (v)

  	
   

  	
  chargebacks granted to drug wholesalers or their customers in cases
  where there are not direct shipments to such customers by Zogenix, a Zogenix
  Affiliate or its permitted sublicense.

  



 


“Net
Selling Price”  or  “NSP”
shall mean the total Net Sales for a given strength of the Product divided by
the number of units of such Product sold for the given period.


 


“Notional
NSP” shall mean the estimated NSP of a given
strength of the Product at the applicable time, which shall be provided by
Zogenix to Elan within ninety (90) days prior to commencement of each calendar
year (or, for the launch year, within ninety (90) days prior to the estimated
date of first commercial sale in the territory).


 


“Orange Book” means the FDA’s Approved Drug Product List with Therapeutic Equivalence
Evaluations, which lists all products, and the patents that cover the products,
that have been approved by the FDA for safety and effectiveness, and explains
the therapeutic equivalence code for multi-source products.


 


“Party” or “Parties”
means Elan and Zogenix, individually or collectively, as referred to herein.


 


“Patent(s)”
means all U.S. patents and patent applications, including all provisionals,
continuations, RCEs, continuations-in-part, divisionals and any patents issuing
thereon, and re-issues or re-examinations of such patents and extensions and
term adjustments of any patents, including extension of patents under the U.S.
Patent Term Restoration Act.


 


“Phase II Trial”
means a human clinical trial of a Product, the principal purpose of which is a
determination of safety and efficacy in the target patient population or a
similar clinical study prescribed by the Governmental Authorities, from time to
time, pursuant to applicable law or otherwise, including the trials referred to
in 21 C.F.R. §312.21(b), as amended from time to time.


 


“Phase IIb Trial”
means a well-controlled, closely monitored, human clinical trial conducted to
evaluate the dose-dependent effectiveness of a Product for a particular
indication or indications in patients with the disease or condition under study
and to determine the common short-term side effects and risks associated with
the Product as more fully defined in 21 CFR Section 312.12(b), as amended
from time to time.


 


“Phase III Trial”
means a human clinical trial of a Product on a sufficient number of subjects
that is designated to establish that such Product is safe and efficacious for
its intended use, and to determine warnings, precautions, and adverse reactions
that are associated with such Product in the dosage range to be prescribed,
which trial is intended to support Regulatory Approval, including tests and
studies that are required by the FDA, as described in 21 C.F.R. 312.21(c), as
amended from time to time.


 


“Product” means the oral controlled
release capsule or tablet formulation(s) incorporating Elan Intellectual
Property and/or the technology of the Elan Oral Controlled Release Patents and
Compound where Compound is the sole active ingredient in the formulation.


 


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“Product Data” means data relating to
the Product generated by Zogenix or Elan in support of a Regulatory
Application.


 


“Product Specifications” means the
specifications for the Product as set forth in the NDA and such additional
specifications for the Product as may be agreed by the Parties (or their
Affiliates) in writing.


 


“Prosecute” means in relation to Elan
Patents and Zogenix Patents:


 


(i) to secure the grant of any patent application within such
Patents;


 


(ii) to file and prosecute patent applications on patentable
inventions and discoveries relating to the subject matter of the Patents;


 


(iii) to defend all such Patents against Third Party oppositions,
re-examinations, re-issues and similar or related actions; and


 


(iv) to maintain in force any issued letters patent relating to
the same


 


and “Prosecution” has a corresponding
meaning.


 


“R&D Program” means the research and
development program related to the Product set out in the Services Agreement.


 


“Regulatory Application” means any
regulatory application or any other application for Regulatory Approval, which
Zogenix will file in the Territory, including any supplements or amendments
thereto.


 


“Regulatory Approval” means the final
approval to market the Product in the Territory, including any approval which
is required to launch the Product in the normal course of business.


 


“Related Agreements” shall mean the
Services Agreement and the Commercial Manufacture and Supply Agreement.


 


“Services Agreement” shall mean the
services agreement that is negotiated and entered into between Elan or an Elan
Affiliate and Zogenix, as the same may be amended by agreement of the parties
thereto from time to time, setting forth the R&D Program and such other
provisions related to Product development and regulatory work and the
pre-clinical and clinical supply of Product by Elan or an Elan Affiliate for Zogenix.


 


“Technological Competitor” means a
person or entity listed in Schedule 1, and, except as set forth in Schedule 1,
any divisions, subsidiaries and successors thereof, and their respective
Affiliates (as noted in Schedule 1) and such other person or corporate entity
that, after the Effective Date and other than as a de minimis activity,
develops oral drug delivery technology displaying a sustained release profile
and/or manufacture products that display a sustained release profile that Elan
may request be added to Schedule 1 from time to time, [***].


 


“Term” means the Initial Term and the
Extended Term of this Agreement, as such terms are defined in Clause 12.


 






***         Certain information on this page has been omitted
and filed separately with the Commission. 
Confidential treatment has been requested with respect to the omitted
portions.


 


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“Territory” means the United States of
America and its possessions and territories, including Puerto Rico.


 


“Third Party” means any individual or
entity which is neither a Party or an Affiliate of a Party.


 


“US GAAP” means the set of generally
accepted accounting principles that are used in the Territory.


 


“Valid Claim” means any claim of an
issued or unexpired Patent included within Elan Patents which has not been
revoked or held unenforceable, unpatentable or invalid by a decision of a court
or government agency of competent jurisdiction, that is unappealable or
unappealed within the time allowed for appeal, or which has not expressly been
admitted by Elan or its Affiliates to be invalid or unenforceable.


 


“VAT” or “Value Added
Tax” means (i) any tax imposed in compliance with the Sixth
Directive of the Council of the European Communities (77/388/EEC) and (ii) any
other tax of a similar fiscal nature, whether imposed in a member state of the
European Union or anywhere else in the Territory.


 


“Zogenix Intellectual Property” means
the Zogenix Know-How and the Zogenix Patents.


 


“Zogenix Know-How” means any and all
rights owned, licensed or controlled by Zogenix 
as of the Effective Date or during the Term to any scientific,
pharmaceutical or technical information, data, discovery, invention (whether
patentable or not), know-how, show-how, substances, techniques, processes,
systems, formulations, designs and expertise which is not generally known to
the public and is not exclusively related to (a) the Product, (b) the
manufacturing processes used in making the Product or (c) Elan Oral
Controlled Release Patents.  It is
expressly acknowledged by the Parties that the Zogenix Know-How shall not
include any Elan Patents, any Elan Know-How or any other license or other
rights granted to Zogenix by Elan or its Affiliates under this Agreement or any
Related Agreement.


 


“Zogenix Patents” means any Patents
owned, licensed or controlled by Zogenix as of the Effective Date or during the
Term claiming subject matter that is related to the sale or offer for sale of
the Compound within the Field or methods of use of the Compound within the
Field or packaging of the Product.  For
the avoidance of doubt, Zogenix Patents do not include the Elan Patents or
other patent rights granted to Zogenix by Elan or its Affiliates under this
Agreement or any Related Agreement.  As
of the Effective Date, there are no Zogenix Patents.


 


“$” and “US$”
mean United States Dollars.


 


1.2.          Further
Definitions.  In
addition, the following definitions have the meanings in the Clauses
corresponding thereto, as set forth below:


 


	
  Definition

  	
   

  	
  Clause

  
	
  “Confidential Information”

  	
   

  	
  15.1

  
	
  “Contained Within a Ring Fence”

  	
   

  	
  16.3.2.1

  
	
  “Designated Manufacturer”

  	
   

  	
  9.1

  
	
  “Disclosing Party”

  	
   

  	
  15.13

  
	
  “Due Date”

  	
   

  	
  11.7

  
	
  “Elan License”

  	
   

  	
  2.1

  
	
  “Elan Trademark License”

  	
   

  	
  3.6.2.2

  
	
  “Extended Term”

  	
   

  	
  12.2

  
	
  “Infringement Claim”

  	
   

  	
  3.4.1

  



 


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  “Initial Term”

  	
   

  	
  12.1

  
	
  “License Fee”

  	
   

  	
  10.1.1

  
	
  “License Milestone Payments”

  	
   

  	
  10.1

  
	
  “Manufacturing License”

  	
   

  	
  9.1

  
	
  “Notice”

  	
   

  	
  16.14.1

  
	
  “Notified Party”

  	
   

  	
  3.5.1

  
	
  “Notifying Party”

  	
   

  	
  3.5.1

  
	
  “Statement”

  	
   

  	
  11.1

  
	
  “Third Party License”

  	
   

  	
  3.5.1

  



 


1.3.          Interpretation.  In this Agreement:


 


	
  1.3.1

  	
   

  	
  the singular includes the plural and vice
  versa, and unless the context or subject otherwise requires, references to
  words in one gender include references to the other genders and references to
  natural persons include corporate bodies, partnerships and vice versa;

  
	
   

  	
   

  	
   

  
	
  1.3.2

  	
   

  	
  unless the context otherwise requires,
  reference to a recital, article, paragraph, provision, clause or schedule is
  to a recital, article, paragraph, provision, clause or schedule of or to this
  Agreement;

  
	
   

  	
   

  	
   

  
	
  1.3.3

  	
   

  	
  the headings in this Agreement are inserted
  for convenience only and do not affect its construction; and

  
	
   

  	
   

  	
   

  
	
  1.3.4

  	
   

  	
  the expressions “include”, “includes”,
  “including”, “in particular” and similar expressions shall be construed
  without limitation.

  



 


2.              THE LICENSE


 


2.1.          Elan License to
Zogenix.  Subject to
the terms of this Agreement, Elan hereby grants to Zogenix for the Term an
exclusive license (the “Elan License”)
to the Elan Intellectual Property to import, use, offer for sale and sell the
Product in the Field in the Territory. 
The Elan License does not include the right to perform any formulation,
process development or manufacturing activities in relation to the Product,
although the Parties confirm that Zogenix has been granted certain
manufacturing license rights in this Agreement as set forth in Clause 9 which
are subject to the terms and conditions set out therein.


 


2.2.          Sub-licensing.  Zogenix shall be entitled to grant sub-licenses
in respect of its rights to the Elan Intellectual Property granted pursuant to
Clause 2.1, subject to the following conditions:


 


	
  2.2.1

  	
   

  	
  With respect
  to Technological Competitors, Zogenix must obtain Elan’s prior written
  consent, which may be withheld at Elan’s sole discretion. If consent is
  granted by Elan, Zogenix shall, amongst other matters, make Elan whole for
  any tax consequence associated with such sub-license;

  
	
   

  	
   

  	
   

  
	
  2.2.2

  	
   

  	
  With respect
  to all other entities, Zogenix must satisfy the following conditions:

  



 


	
  2.2.2.1

  	
   

  	
  Zogenix
  shall promptly provide Elan with written notice of each sub-license hereunder
  and shall provide Elan with a complete copy of the written agreement  entered into with any such sub-licensee
  (save for the financial or other confidential business terms which may be
  redacted);

  



 


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  2.2.2.2

  	
   

  	
  Zogenix shall make Elan
  whole for any tax consequence associated with each such sub-license;

  
	
   

  	
   

  	
   

  
	
  2.2.2.3

  	
   

  	
  Zogenix shall be liable to
  Elan for the acts and omissions of the sub-licensee;

  
	
   

  	
   

  	
   

  
	
  2.2.2.4

  	
   

  	
  Zogenix shall enter into a
  written agreement with each sub-licensee which:

  
	
   

  	
   

  	
   

  
	
  2.2.2.5

  	
   

  	
  is consistent with the
  terms of this Agreement insofar as they are applicable, mutatis mutandis, but
  excluding the right to grant a sublicense;

  
	
   

  	
   

  	
   

  
	
  2.2.2.6

  	
   

  	
  contains terms that are no
  less restrictive than those contained in this Agreement on audit, inspection,
  and confidentiality; and contains terms to ensure that the sublicense
  agreement terminates when this Agreement terminates or expires.

  
	
   

  	
   

  	
   

  
	
  2.2.2.7

  	
   

  	
  Zogenix shall also ensure
  that Elan Confidential Information is only disclosed to permitted
  sub-licensees to the extent that such sublicensee needs it to fulfil
  obligations and exercise rights under their sublicense agreement. Under no
  circumstances shall any permitted sub-licensee or any other Third Party be
  allowed access to CMC data without the prior written consent of Elan and Elan
  shall be entitled to require that there be a direct contractual relationship
  between the sub-licensee and Elan in such circumstances.

  



 


	
  2.3.

  	
   

  	
  Elan Covenant.
  Elan covenants for itself and its Affiliates not to assert any claim of
  Patent infringement (including direct infringement, contributory infringement
  and inducing infringement) in the Territory against Zogenix, any Affiliate of
  Zogenix or any permitted sublicensee under [***] as a result of Zogenix, any
  Affiliate of Zogenix, or any permitted sublicensee exercising the rights
  granted under this Agreement or any Related Agreement for so long as
  (i) Zogenix and its Affiliates, sublicensees and subcontractors are not
  in material breach of this Agreement or any Related Agreements and/or
  (ii) this Agreement has not been terminated.

  
	
   

  	
   

  	
   

  
	
  2.4.

  	
   

  	
  In addition, Elan covenants for itself and
  its Affiliates not to enter into an agreement granting rights to a Third
  Party that would enable said Third Party to assert [***] against Zogenix, any
  Affiliate of Zogenix, or any permitted sublicense as a result of Zogenix, any
  Affiliate of Zogenix or any permitted sublicensee exercising the rights
  granted under this Agreement or any Related Agreement for so long as
  (i) Zogenix and its Affiliates, sublicensees and subcontractors are not
  in material breach of this Agreement or any Related Agreements and/or
  (ii) this Agreement has not been terminated.

  
	
   

  	
   

  	
   

  
	
  2.5.

  	
   

  	
  Zogenix License to Elan.
  Subject to the terms of this Agreement, Zogenix hereby grants to Elan and its
  Affiliates for the Term a non-exclusive license to the Zogenix Intellectual
  Property solely to the extent necessary to perform Elan or Elan Affiliates’
  obligations under this Agreement or the Related Agreements.

  



 






	
  ***

  	
   

  	
  Certain information on this page has been omitted and filed
  separately with the Commission. 
  Confidential treatment has been requested with respect to the omitted
  portions.

  



 


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3.              INTELLECTUAL
PROPERTY


 


3.1.          Ownership of
Intellectual Property. Elan is and shall remain
the owner of the Elan Intellectual Property and Elan Oral Controlled Release
Patents.  Zogenix is and shall remain the
owner of the Zogenix Intellectual Property.


 


3.2.          Patent
Prosecution and Maintenance.


 


	
  3.2.1

  	
   

  	
  Elan, at its sole discretion and expense,
  will Prosecute and determine the strategy of Prosecution of the Elan Patents.
  Elan shall keep Zogenix promptly informed regarding the Prosecution of Elan
  Patents, including sufficient notice and opportunity to permit Zogenix to
  exercise its rights under Section 3.2.2, and shall provide Zogenix the opportunity
  to provide comments to any updated filings for the Elan Patents for Elan’s
  reasonable consideration . Zogenix shall treat such information as the
  Confidential Information of Elan in accordance with Clause 15.

  
	
   

  	
   

  	
   

  
	
  3.2.2

  	
   

  	
  In the event that Elan does not wish to
  Prosecute Elan Patents, Elan shall notify Zogenix prior to ceasing
  Prosecution to enable Zogenix to take action and avoid withdrawal,
  cancellation, expiration or abandonment of any such Elan Patent, and Zogenix
  shall then have the right to assume such further action at its own expense.

  
	
   

  	
   

  	
   

  
	
  3.2.3

  	
   

  	
  Each Party shall provide the other Party
  with reasonable support in the Prosecution of their respective Patents within
  the Elan Patents and the Zogenix Patents, as applicable, and shall execute and
  deliver all documents and instruments that are necessary to support such
  Prosecution by the other Party, including in accordance with Clause 3.2.2. In
  addition, Zogenix shall provide to Elan all information and/or data related
  to the Compound or Product Data in its possession that is necessary to
  support the Prosecution of the Elan Patents.

  
	
   

  	
   

  	
   

  
	
  3.2.4

  	
   

  	
  Each Party shall promptly notify the other
  Party of any developments by the first Party, its Affiliates, permitted
  sub-licensee(s) or any relevant Third Party subcontractors of
  scientific, pharmaceutical or technical information, data, discovery,
  invention (whether patentable or not), know-how, show-how, substances,
  techniques, processes, systems, formulations, designs and expertise which is
  related to, as to Elan, Elan Intellectual Property and as to Zogenix, Zogenix
  Intellectual Property.

  
	
   

  	
   

  	
   

  
	
  3.2.5

  	
   

  	
  The Parties acknowledge that Zogenix, as
  the holder of the NDA, may refer to applicable Elan Patents in the listing
  for the Product in the Orange Book. At Zogenix’s request, Elan shall support
  Zogenix in listing the applicable Elan Patents, such support not to be
  unreasonably withheld, conditioned or delayed. In the event that Elan Patents
  are listed in the Orange Book, Zogenix shall use Commercially Reasonable Efforts
  to ensure that Elan shall be listed as the assignee of the Elan Patents and
  both Zogenix and Elan shall be identified as the point of contact for any
  Paragraph IV notifications.

  



 


3.3.          Enforcement.


 


	
  3.3.1

  	
   

  	
  Elan and Zogenix shall promptly inform each
  other in writing of any actual, threatened or alleged infringement of the
  Elan Patents or misappropriation of the Elan Know-How by a Third Party of
  which it becomes aware and shall provide the other Party with any available
  evidence of such infringement or misappropriation.  Neither Elan nor Zogenix shall contact a
  Third Party alleging actual or unauthorized use of Elan Patents or
  misappropriation of Elan Know-How without the written consent of the other
  Party.

  



 


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  3.3.2

  	
   

  	
  With respect to infringement of the Elan
  Patents by a Competitive Product of a Third Party, the Parties agree as
  follows:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.3.2.1

  	
   

  	
  Subject to Clause 3.3.3, Elan shall have
  the first right to enforce Elan Patents or Elan Know-How against Third
  Parties. Elan shall keep Zogenix reasonably informed of and shall not settle
  any administrative proceedings or litigation relating to Elan Patents or Elan
  Know-How (the “Proceedings”) in a manner which
  would materially adversely affect the rights licensed to Zogenix under this
  Agreement without the prior consent of Zogenix, not to be unreasonably
  withheld, conditioned or delayed.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Zogenix shall reasonably cooperate with
  Elan to enforce such rights, including initiation or maintenance as a party
  to the Proceedings to enforce such rights.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (i)  If the settlement or damages
  awarded as a result of the Proceedings exceed each Party’s costs and
  expenses, including legal fees, associated with the Proceedings, the Parties
  agree that after payment of each Party’s costs and expenses associated with
  such Proceedings, Elan shall apportion all amounts determined to be
  compensation for lost sales or profits of the Product in the amounts of [***]%
  to Zogenix and [***]% to Elan.  All other
  amounts associated with enforcing Elan Patents related to a Competitive
  Product shall be paid [***]% to Elan and [***]% to Zogenix.  The compensation for lost sales or profits
  paid to Zogenix hereunder shall not be included in any calculation of Net Sales
  and Elan shall not be due a royalty thereon.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (ii) If Elan is unsuccessful in the
  Proceedings or if a settlement or damages awarded as a result of the
  Proceedings are insufficient to cover each Party’s costs and expenses,
  including legal fees, associated with the Proceedings, such costs and
  expenses, including legal fees, shall be allocated between the Parties [***]%
  to Zogenix and [***]% to Elan.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.3.2.2

  	
   

  	
  In circumstances where Elan decides not to
  enforce or does not wish to continue to enforce Elan Know-How or the Elan
  Patents against a Competitive Product as set forth in Clauses 3.3.2.1 or
  3.3.3, Zogenix shall be granted step in rights to enforce.  In such circumstances:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (i) Elan shall reasonably cooperate
  with Zogenix to enforce such rights, including consideration of initiation or
  maintenance as a party to the Proceedings to enforce such rights,

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (ii) Zogenix shall have sole control
  of the Proceedings and related strategy, 

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (iii) Zogenix shall be responsible for
  paying [***]% of the costs of any such Proceedings, including Elan’s
  reasonable expenses and attorney’s fees incurred as a result of Elan’s
  cooperation as set forth in this Clause 3.3.2.2 (or, if Zogenix exercises
  step in rights in an active Proceedings,

  



 






	
  ***

  	
  Certain information on this page has been omitted and filed
  separately with the Commission. 
  Confidential treatment has been requested with respect to the omitted
  portions.

  



 


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  Zogenix shall assume [***]%
  of the costs as of the date that such right is asserted by Zogenix, and any
  of Elan’s reasonable future expenses and attorney’s fees incurred as a result
  of Elan’s cooperation as set forth in this Clause 3.3.2.2), and 

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  (iv) Zogenix may only negotiate or
  settle the dispute by sublicensing Elan Patents in accordance with Clause 2.2
  or otherwise with Elan’s prior written consent.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.3.3

  	
   

  	
  Notwithstanding the terms and conditions as
  set forth in Clause 3.3.2.1, if a Paragraph IV Certification (as defined in
  CFR Title 21) is filed referencing the Product, Elan shall (provided that
  Elan believes it has a good faith basis to proceed with such suit) commence
  action within forty-five (45) days of the notice of Paragraph IV
  Certification and Zogenix shall reimburse Elan for [***] litigation and
  related costs, including attorneys fees. In circumstances where Elan decides
  not to commence such an action, Zogenix shall be granted step in rights
  according to the terms of Clause 3.3.2.2 herein.  In such circumstances where Elan decides
  not to commence such an action, it shall provide Zogenix with sufficient
  notice and time for Zogenix to exercise its step-in rights according to the
  terms of Clause 3.3.2.2 and commence action within forty-five (45) days of
  the notice of Paragraph IV Certification.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.3.4

  	
   

  	
  For the avoidance of doubt, Zogenix has no
  step in rights relating to any infringement actions where the subject of the
  action is not a Competitive Product. 
  In turn, Zogenix shall have no liability for any costs or expenses
  associated with such infringement action, nor shall Zogenix receive any
  amounts recovered from such infringement action or settlement of such
  infringement action, with the exception that if the damages awarded to Elan
  by a court or administrative authority presiding over such infringement
  action exceed Elan’s costs and expenses, including Elan’s attorney fees, and
  the damages are apportioned in a manner such that a portion of the damages
  are lost sales or profits of the Product in the Territory, Elan shall
  distribute that portion of the lost sales damages between Elan and Zogenix in
  the amounts of [***]% to Zogenix and [***]% to Elan.

  
	
   

  	
   

  	
   

  	
   

  
	
  3.4.

  	
  Defence of and Liability
  for Infringement Claims.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.4.1

  	
   

  	
  Each Party
  shall promptly notify the other Party in writing of any Claim made,
  threatened or brought against either of them alleging infringement or other
  unauthorised use of the intellectual property of a Third Party arising from
  the development, manufacture, importation, use, offer for sale, sale or other
  commercialization of the Product in the Territory (“Infringement
  Claim”).

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.4.2

  	
   

  	
  Subject to
  Clause 3.4.3, Zogenix shall indemnify and hold harmless Elan, its Affiliates
  and their respective officers, directors, employees and agents against all
  Infringement Claims where the subject matter of the Infringement Claim:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  3.4.2.1

  	
   

  	
  would fall outside the scope of any Valid
  Claim, or

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  3.4.2.2

  	
   

  	
  is a result of a breach by Zogenix of its
  representations and warranties set forth in Clauses 14.2 or 14.3.

  



 


 






	
  ***

  	
  Certain information on this page has been omitted and filed
  separately with the Commission. 
  Confidential treatment has been requested with respect to the omitted
  portions.

  



 


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  3.4.3

  	
   

  	
  Elan shall
  indemnify and hold harmless Zogenix, its Affiliates and their respective
  officers, directors, employees and agents against all Infringement Claims
  brought against Zogenix by a Third Party where the subject matter
  of such Infringement Claim is a valid claim of an [***] as a result of
  Zogenix, its Affiliates and their respective officers, directors, employees
  and agents exercising the rights granted under this Agreement or any Related
  Agreement for  so long as (i) Zogenix,
  its Affiliates and their respective officers, directors, employees and agents
  are not in material breach of this Agreement or any Related Agreements and/or
  (ii) this Agreement has not been terminated.  For the avoidance of doubt, Elan shall be [***]% liable for such Infringement
  Claim as described
  herein in this Clause 3.4.3.

  
	
   

  	
   

  	
   

  
	
  3.4.4

  	
   

  	
  Subject to Clauses 3.4.5 and 3.4.6, Elan
  shall indemnify and hold harmless Zogenix, its Affiliates and their
  respective officers, directors, employees and agents against all Infringement
  Claims where the subject matter of the Infringement Claim:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.4.4.1

  	
   

  	
  is directly related to the Product and
  falls within the scope of a Valid Claim,

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.4.4.2

  	
   

  	
  is directly related to the manufacture or a
  process of manufacturing of the Product by or on behalf of Elan or an Elan
  Affiliate, or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.4.4.3

  	
   

  	
  is a result of a breach by Elan of its
  representations and warranties set forth in Clauses 14.1 or 14.3.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.4.5

  	
   

  	
  For the avoidance of doubt, the Parties
  agree that Zogenix shall indemnify and hold harmless Elan against all Claims
  that arise in connection with any Infringement Claim where the subject matter
  of such Infringement Claim is not included in Clauses 3.4.4.1 through 3.4.4.3
  or Clause 3.4.3 herein.

  
	
   

  	
   

  	
   

  
	
  3.4.6

  	
   

  	
  Subject to Clause 3.4.6, Elan’s aggregate
  cumulative liability pursuant to Clause 3.4.4 in respect of those
  Infringement Claims for which Elan is liable under Clauses 3.4.4.1 through
  3.4.4.3 shall not exceed certain limitations as follows:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.4.6.1

  	
   

  	
  [***]% of any lump sum payment due to a
  Third Party as a result of a court order or settlement in respect of the
  Infringement Claim (including a claim for damages);

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.4.6.2

  	
   

  	
  [***]% of any license fees due to a Third
  Party under any license entered into as a result of a court order or
  settlement in respect of the Infringement Claim where the subject matter of
  the Infringement Claim is included in Clause 3.4.4.1; and

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.4.6.3

  	
   

  	
  [***]% of any license fees due to a Third
  Party under any license entered into as a result of a court order or
  settlement in respect of the Infringement Claim where the subject matter of
  the Infringement Claim is included in Clause 3.4.4.2.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.4.7

  	
   

  	
  Zogenix will be entitled to recover amounts
  due by Elan to Zogenix under Clause 3.4.5 solely as a credit against the
  royalties payable by Zogenix to Elan under the provisions of Clause 10.3,
  provided however that the maximum credit which may be claimed by Zogenix in
  any one such year will be [***]% of the royalty otherwise payable to Elan.

  
						



 






	
  ***

  	
   

  	
  Certain information on this page has been omitted and filed
  separately with the Commission. 
  Confidential treatment has been requested with respect to the omitted
  portions.

  



 


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  3.4.7.1

  	
   

  	
  Any deficit remaining in Zogenix’s recovery
  of amounts due by Elan to Zogenix following recovery by Zogenix within the
  limitations set forth in this Clause 3.4.6 may be carried over from year to
  year and any deficit remaining thereafter shall be borne by Zogenix and Elan
  shall have no liability to Zogenix in relation thereto.

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
  3.4.7.2

  	
   

  	
  For the avoidance of doubt, Zogenix shall
  indemnify and hold harmless Elan against all Infringement Claims where such
  Infringement Claims are included in Clauses 3.4.4.1 and 3.4.4.2 to the extent
  they are in excess of the limits set forth in this Clause 3.4.6.

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
  3.4.8

  	
   

  	
  Save as specifically provided otherwise in
  this Clause 3.4, the provisions of Clause 14.8 shall apply to the conduct of
  any Infringement Claim. Further, Elan and Zogenix shall consult with respect
  to any actions Elan or Zogenix proposes to take in order to mitigate any loss
  or liability with respect to any Infringement Claim, such actions may include
  Zogenix ceasing to sell the Product, Elan ceasing to manufacture and supply
  Zogenix with Product, the Parties agreeing to modify the Product, or either
  or both of the Parties entering into a licensing or settlement negotiation
  with the Third Party as set forth in Clause 3.5.

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
  3.4.8.1

  	
   

  	
  In the event that the Parties are unable to
  agree on a course of action under this Clause 3.4.7, Zogenix shall indemnify
  and hold Elan harmless against all Infringement Claims to the extent that
  they relate to the period after the date on which the Parties are unable to
  agree under this Clause 3.4.7.

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
  3.5.

  	
  Third Party Licenses and Settlements.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.5.1

  	
   

  	
  Notice.
  If during the Term either Party reasonably believes that the making,
  importation, use, offer for sale or sale of the Product in the Field in the
  Territory would infringe the intellectual property rights of a Third Party,
  and that such infringement arises from or relates to the subject matter
  described in Clauses 3.4.4.1 or 3.4.4.2 that Party (“the
  Notifying Party”) shall so inform the other Party (“Notified Party”), which notification shall include
  documents supporting the Notifying Party’s position. If the Notifying Party
  believes a license from such Third Party is necessary or advisable to
  exercise its rights and obligations under this Agreement, including to sell
  the Product and/or mitigate any potential liability therefore (a “Third Party License”), the notice shall include reference
  to such Third Party License.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.5.2

  	
   

  	
  Counter-Notice.
  Notified Party shall have thirty (30) days to review the notice issued
  pursuant to 3.5.1 from the Notifying Party and to agree or disagree with the
  Notifying Party’s belief by counter-notice. If the Notified Party disagrees
  with the Notifying Party’s belief, then the Notified Party shall provide the
  Notifying Party with documents or other information supporting the Notified
  Party’s position. The Notifying Party shall have thirty (30) days from the
  date of receipt to review the documents or other information from the
  Notified Party. Failure by the Notified Party to respond to the Notifying
  Party’s notice, or by the Notifying Party to respond to the Notified Party’s
  counter-notice, shall be taken for the purposes of the decision as to whether
  to obtain a license under this Clause 3.5.2 (but for the avoidance of doubt,
  not for any other purpose whatsoever) as acceptance of the position of the
  other Party. The Parties agree that the time periods as set forth in this
  Clause 3.5.2 may be reasonably extended by the mutual written agreement of
  the Parties.

  
											



 


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  3.5.3

  	
   

  	
  Use of Documents.  All documents exchanged by the Parties
  shall be maintained in confidence and shall not be used for any other purpose
  than the resolution of the scope of a Third Party’s intellectual property
  rights as it pertains to the sale of a Product as set forth in this
  Agreement.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.5.4

  	
   

  	
  Resolution.
  If the Notified Party disagrees with the Notifying Party’s position pursuant
  to the terms as set forth in Clause 3.5.2 herein and if the Notifying Party
  maintains its original position after such review period, then the matter
  shall be referred first to the officers of Elan and Zogenix having responsibility
  for the subject matter of the dispute, or their designees. Such officers, or
  their designees, as the case may be, shall negotiate in good faith to resolve
  such dispute in a mutually satisfactory manner. If such efforts do not result
  in a mutually satisfactory resolution of the dispute within thirty (30) days
  of such referral, the matter shall be referred to the chief executive officer
  of each Party, or their respective designees.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.5.5

  	
   

  	
  Final Resolution.
  If the Parties’ chief executive officers or their designees do not resolve
  the dispute within thirty (30) days of the matter being referred to them (or
  such longer time periods as may be mutually agreed in writing by the Parties)
  under Clause 3.5.4, an independent mutually acceptable Third Party law firm
  with suitable expertise in the field of intellectual property in
  pharmaceuticals (the “Firm”) shall
  be appointed to determine whether, in its opinion, the making, importation,
  use, offer for sale or sale of the Products in the Field and in the Territory
  would infringe such Third Party intellectual property as included in Clauses
  3.4.4.1 or 3.4.4.2 in the Field and in the Territory. Once appointed, the
  Firm shall not be used by either Party (or their respective Affiliates) for
  matters pertaining to the Elan Intellectual Property, the Elan Oral
  Controlled Release Patents or the Zogenix Intellectual Property, other than
  subsequent disputes under this Clause 3.5. The costs of the Firm shall be
  borne by the Party with whom the Firm disagrees

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.5.6

  	
   

  	
  Disputes Not To Be
  Reopened. The procedure in Clauses 3.5.1 to 3.5.5
  shall not be used more than once in relation to any particular Third Party
  intellectual property identified in a Third Party License of Clause 3.5.1 ,
  absent new and relevant facts.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.5.7

  	
   

  	
  Negotiation.
  If the Parties or the Firm determine that a Third Party License under Clause
  3.5.1 should be obtained as a Final Resolution of Clause 3.5.5, Elan shall
  have the initial right to negotiate such license and shall not negotiate a
  license or settlement which exceeds an ongoing royalty of [***]%
  of Net Sales of the Product or a lump sum settlement payment of more than [***] dollars (US$[***]) related
  to the Product without Zogenix’s prior written consent. In the event that
  Elan is unsuccessful in obtaining such a license within [***]
  ([***]) days of its first meeting with
  such Third Party, then Zogenix shall have the right to negotiate such
  license, provided that Zogenix may offer or grant to a Third Party in
  negotiations or as part of any settlement arising from such a negotiation a
  sublicense to the Elan License granted to Zogenix under this Agreement in
  accordance with Clause 2.2 but shall not otherwise be entitled to offer or
  grant any right whatsoever to Elan Patents in such circumstances without
  Elan’s prior written consent.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.5.8

  	
   

  	
  Unrelated Licenses.
  Nothing in this Clause 3.5 shall be construed as affecting Zogenix’s rights
  to obtain licenses wholly unrelated to the incorporation of the Elan
  Intellectual Property in the Product, at its own expense.

  
	
   

  	
   

  	
   

  	
   

  
	
  3.6.

  	
   

  	
  Trademarks.

  
					



 






	
  ***

  	
   

  	
  Certain information on this page has been omitted and filed
  separately with the Commission. Confidential treatment has been requested
  with respect to the omitted portions.

  



 


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  3.6.1

  	
   

  	
  Product Trademark.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.6.1.1

  	
  Zogenix shall market the
  Product in the Territory under a trademark or trademarks which Zogenix shall
  determine in its sole discretion (“Zogenix Trademark”).

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.6.1.2

  	
  Zogenix shall, at its sole
  discretion and expense, file and prosecute applications to register and
  maintain registrations of such trademarks in the Territory. Zogenix shall not
  file or prosecute applications to register or maintain registrations where such
  trademark (A) might materially prejudice the distinctiveness, validity,
  or the goodwill of the Elan Trademark or (B) cause confusion or
  deception with a registered mark of Elan.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.6.1.3

  	
  Zogenix will be entitled
  to conduct all enforcement proceedings relating to such trademarks and shall
  at its sole discretion decide what action, if any, to take in respect of any
  infringement or alleged infringement of such trademarks or passing-off or any
  other claim or counter-claim brought or threatened in respect of the use or
  registration of such trademarks. Any such proceedings shall be conducted at
  Zogenix’s expense and for its own benefit.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.6.1.4

  	
  Except as set forth in
  Clause 13.2.4.4, Elan shall have the right to reference any Zogenix Trademark
  for purposes of promoting Elan’s role in the development and manufacturing of
  the Product or as promotional material of Elan Intellectual Property. In no
  event, shall Elan use (a) the Zogenix Trademark in any way that might
  materially prejudice its distinctiveness or validity or the goodwill of
  Zogenix therein or (b) cause confusion or deception with the Zogenix
  Trademark.

  
	
   

  	
   

  	
   

  
	
  3.6.2

  	
   

  	
  Elan Trademark.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.6.2.1

  	
  Zogenix shall prominently
  display the Elan Trademark on the packaging and labelling of the Product and
  on promotional materials in relation to the Product to acknowledge that the
  Elan Intellectual Property has been applied in developing and manufacturing
  the Product.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.6.2.2

  	
  Elan grants to Zogenix for
  the Term a paid-up, non-exclusive license within the Territory to use the
  Elan Trademark (“Elan Trademark License”),
  solely for the purpose of fulfilling Zogenix’s obligations under this Clause
  3.6.2.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.6.2.3

  	
  Zogenix shall ensure that
  each reference to and use of the Elan Trademark by Zogenix is in a manner
  from time to time approved by Elan and accompanied by an acknowledgement, in
  a form approved by Elan, that the same is a trademark (or registered
  trademark) of Elan.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.6.2.4

  	
  Zogenix shall not use the
  Elan Trademark in any way which might materially prejudice its
  distinctiveness or validity or the goodwill of Elan therein.

  



 


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  3.6.2.5

  	
  Zogenix shall not use in
  the Territory any trademarks or trade names so resembling the Elan Trademark
  as to be likely to cause confusion or deception.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  3.6.2.6

  	
  Elan shall, at its sole
  discretion and expense, file and prosecute applications to register and
  maintain registrations of the Elan Trademark in the Territory.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  3.6.2.7

  	
  Elan will be entitled to
  conduct all enforcement proceedings relating to the Elan Trademark and shall
  at its sole discretion decide what action, if any, to take in respect of any
  infringement or alleged infringement of the Elan Trademark or passing-off or
  any other claim or counter-claim brought or threatened in respect of the use
  or registration of the Elan Trademark. Any such proceedings shall be
  conducted at Elan’s expense and for its own benefit.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  3.6.2.8

  	
  Any action, request or
  requirement by the FDA or other U.S. governmental agency or body contrary to
  the provisions of Clause 3.6.2.1 shall relieve Zogenix of any and all
  obligations under this Clause 3.6.2.

  



 


4.              NON-COMPETITION


 


4.1.          Zogenix Obligation.  Zogenix shall not, and shall ensure that its
Affiliates and permitted sub-licensees do not license (except by way of
settlement Proceedings in accordance with Section 3.3.2.2), market or sell
any oral prescription only controlled release capsule or tablet formulation
(other than the Product) whose sole active ingredient is the Compound in the
Territory for use in the Field during the Term.


 


4.2.          Elan Obligation.  Elan shall not, and shall ensure that its
Affiliates do not license (except by way of settlement Proceedings in
accordance with Section 3.3.2.1), manufacture for commercial sale in the
Territory, market or sell any oral prescription only controlled release capsule
or tablet formulation (other than the Product) whose sole active ingredient is
the Compound in the Territory for use in the Field during the Term.  Provided that for the purpose of this Clause
4.2, “Affiliates” shall not include any entity which acquires or is acquired by
Elan or its Affiliates after the Effective Date, or the subsidiaries of such entity.


 


5.              PRODUCT
DEVELOPMENT


 


5.1.          Services
Agreement.  The
Parties agree that they, or their respective Affiliates, will negotiate in good
faith a Services Agreement that contains an R&D Program setting out the
development and regulatory services and pre-clinical and clinical supplies of
Product required by Zogenix from Elan’s Affiliate, EDDI, to commercialize the
Product. The Parties shall execute said agreement on or before December 31,
2007, or such later date as mutually agreed.


 


5.2.          The Parties also
agree that all services and supplies provided by Elan or its Affiliates to
Zogenix for development work under the Services Agreement (or any development
work conducted by Elan for Zogenix prior to the signing of the Services
Agreement) shall be conducted under work plans which includes a mutually agreed
budget and that Elan and its


 


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Affiliates shall be entitled (i) to charge
Zogenix for such services and supplies at [***]
rate ([***] US$[***]/hour) and (ii) to be fully reimbursed by Zogenix for
all out-of-pocket expenses (including the cost of Compound) and for any agreed
Third Party costs incurred by Elan or its Affiliate.


 


6.              REGULATORY
MATTERS


 


6.1.          Elan.  Elan (or an Elan Affiliate) shall own, and
shall be responsible at its own expense, for filing for and maintaining:


 


	
  6.1.1

  	
  the DMF for the Product; and

  
	
   

  	
   

  
	
  6.1.2

  	
  all necessary manufacturing approvals to
  enable Elan (or its Affiliate) to manufacture and supply clinical supplies of
  Product pursuant to the Services Agreement and Bottled Product pursuant to
  the Commercial Manufacture and Supply Agreement;

  
	
   

  	
   

  
	
  6.1.3

  	
  all appropriate quotas from the US Drug
  Enforcement Agency to enable Elan to source and use the Compound to
  manufacture and supply clinical supplies of Product pursuant to the Services
  Agreement and Bottled Product pursuant to the Commercial Manufacture and
  Supply Agreement ; and

  
	
   

  	
   

  
	
  6.1.4

  	
  any necessary export or import licenses in
  relation to clinical supplies of Product manufactured and supplied by Elan
  pursuant to the Services Agreement and Bottled Product pursuant to the
  Commercial Manufacture and Supply Agreement (if Elan chooses to manufacture
  the Product outside the Territory).

  



 


6.2.          Zogenix.  Except as provided in Clause 6.1, Zogenix
shall own and shall be responsible for filing for and maintaining all necessary
Regulatory Approvals (including the NDA), but not including any necessary
export or import licenses in relation to the Product which shall be the sole
responsibility of Elan.  For the
avoidance of doubt, any data, filings or other information provided by Elan to
Zogenix, a Zogenix Affiliate or permitted sub-licensee to support any
regulatory filings shall be treated as Confidential Information belonging to
Elan and its Affiliates in accordance with Clause 15.


 


6.3.          Co-operation.  Elan and Zogenix will provide all reasonable
co-operation with respect to the other’s regulatory filings in the Territory.


 


6.4.                              Keep
Advised.  Zogenix
shall keep Elan promptly and fully advised of Zogenix’s regulatory activities
in respect of the Product.  Without
prejudice to the generality of the foregoing, Zogenix shall notify Elan in
writing upon:


 


	
  6.4.1

  	
  the completion of the first Phase II Trial,
  Phase IIb Trial or Phase III Trial of the Product by or on behalf of Zogenix;

  
	
   

  	
   

  
	
  6.4.2

  	
  the date of submission and date of
  acceptance for filing (if different) of any Regulatory Application in the
  Territory; and

  
	
   

  	
   

  
	
  6.4.3

  	
  the date of issue of a Regulatory Approval.

  



 






***         Certain information on this page has been omitted and
filed separately with the Commission. 
Confidential treatment has been requested with respect to the omitted
portions.


 


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6.5.          Right of Reference to DMF.  Elan (or its Affiliate) shall authorise
Governmental Authorities to incorporate Elan’s DMF by reference into any IND
for the Product or Regulatory Application as applicable,and shall use
Commercially Reasonable Efforts to update and maintain such DMF.


 


6.6.          Access.  Upon Elan’s prior written notice, Zogenix
shall permit Elan to have access to and use of all Regulatory Applications,
Regulatory Approvals, all supplements and related filings related thereto and
all clinical trial data relating to the Product and to take photocopies of same
as may be required by Elan (i) to fulfill reporting requirements or as
otherwise may reasonably be required by Elan in connection with this Agreement
and/or (ii) to support the registration, marketing and/or manufacture of
the Product for sale outside the Territory. Zogenix shall also permit Elan to
have access to and use of the Elan IND, all other INDs that may be filed in
relation to the Product during the Term, and all pre-clinical data (including
all carcinogenicity data created by or on behalf of Zogenix during the Term)
relating to the Product for use in the development and commercialization of
other products both within and outside the Territory.  For the avoidance of doubt, Elan’s exclusive
right to use clinical trial data relating to the Product generated by or on
behalf of Zogenix is as set forth in the first sentence of this Clause 6.6 and
in Clauses 3.2.3 and 15.11 and any data, filings or other information provided
by Zogenix to Elan under this Clause 6.6 shall be treated as Confidential
Information belonging to Zogenix in accordance with Clause 15.


 


6.7.          Elan IND.  Elan (or an Affiliate) shall transfer the
Elan IND to Zogenix on or before 31 January 2008 by providing the FDA with
written notification of such Elan IND transfer. 
Zogenix hereby acknowledges that (i) it shall not acquire any
rights or interest in the Elan IND until 31 January 2008 or, if earlier,
the date that Elan provides its written notification of transfer of the Elan
IND to the FDA; (ii) Elan (or an Affiliate) is entitled to remove all
sections of the existing Elan IND that contain CMC Section data prior to
the date Elan (or an Affiliate) submits its written transfer notification to
the FDA; and (iii) the DMF containing such CMC Section data shall
have been filed with the FDA on or prior to the date of transfer of such Elan
IND hereunder.


 


6.7.1        Zogenix further agrees that:


 


	
  6.7.1.1

  	
  Elan shall continue to own
  all rights in the materials contained in the Elan IND as of the date of
  transfer (except as provided in Clause 6.7.2) and shall be entitled to use
  such materials for any other purpose;

  
	
   

  	
   

  
	
  6.7.1.2

  	
  Zogenix shall not use the
  Elan IND for any purpose other than to develop or commercialize Product in
  the Field in the Territory during the Term; and

  
	
   

  	
   

  
	
  6.7.1.3

  	
  neither Zogenix nor any
  other non-Elan entity to whom the Elan IND may be transferred during the
  Term, shall seek any information from the FDA or any other Governmental
  Authority relating to the CMC Section data removed from the IND by Elan
  prior to the transfer.

  



 


6.7.2        Elan further agrees that it shall file any
amendment to the Elan IND that may be requested by Zogenix prior to the
transfer that facilitates development efforts of Product by Zogenix.  For the avoidance of doubt, any such
information submitted by Elan to the FDA on behalf of Zogenix in this context
shall continue to be owned by Zogenix, although Elan shall have access to
utilize such filings in accordance with Clause 6.6.


 


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7.              REGISTRATION,
MARKETING AND THE PROMOTION OF THE PRODUCT


 


7.1.          Diligent Efforts.  Zogenix shall use Commercially Reasonable
Efforts:


 


	
  7.1.1

  	
  to conduct toxicity, pre-clinical and
  clinical studies necessary for Regulatory Approval of the Product in the
  Territory;

  
	
   

  	
   

  
	
  7.1.2

  	
  submit all relevant regulatory filings
  relating to the Product in the Territory (other than the DMF);

  
	
   

  	
   

  
	
  7.1.3

  	
  to market and promote the Product
  throughout the Territory.

  



 


7.2.          Promotional Campaign.  Zogenix shall control and be responsible for
the content and format of each promotional campaign to be submitted to the
relevant Governmental Authority, but shall inform Elan thereof and, upon
reasonable request by Elan, provide to Elan a copy of such submissions;


 


7.3.          Packaging, Labels and
Promotional Materials.  Zogenix shall submit to Elan (for Elan’s
information and to enable Elan to review any Elan Trademarks, references to
Elan Intellectual Property, the CMC Section or data or any information and
descriptors related to same), copies of all trade packaging and labels and
other printed materials which Zogenix proposes at any time to use in relation
to the sale of the Product.  For the
avoidance of doubt, nothing in this Clause 7.3 affects any other obligation of
Zogenix, and Zogenix shall indemnify and hold harmless Elan against all Claims
which may arise relating to the activities described in this Clause 7.3.


 


7.4.          Changes.  Zogenix shall be entitled to change such
trade packaging and labels and other printed materials in compliance with
applicable laws and regulations.  Such
changes shall be at Zogenix’s sole expense and for the avoidance of doubt shall
not constitute allowable deductions from Net Sales, unless such change is as a
result of a change in the Elan Trademark in which case Elan shall reimburse
Zogenix for its expenses in effecting such change.


 


7.5.          Required Markings.  The package insert and all trade packaging
for the Product in the Field and in the Territory shall:


 


	
  7.5.1

  	
  to the extent permitted by law, include the
  Elan Trademark and due acknowledgement that the Product is developed and
  manufactured by Elan (or an Elan Affiliate); and

  
	
   

  	
   

  
	
  7.5.2

  	
  to the extent permitted by law, have marked
  all patent number(s), including that of the formulation patent, in respect of
  the Elan Patents on all Products, or otherwise reasonably communicate to the
  trade the existence of any Elan Patents within the Territory in such a manner
  as to ensure compliance with, and enforceability under, applicable laws. Upon
  the reasonable request of Zogenix, Elan shall provide a list of such Patent
  numbers for marking on Products in accordance with this Clause 7.5.2.

  
	
   

  	
   

  
	
  7.5.3

  	
  Zogenix shall use its Commercially
  Reasonable Efforts to comply with 7.5.1 and 7.5.2 with respect to all other
  marketing materials for the Product in the Field and in the Territory.

  



 


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7.6.                              Launch.  Zogenix shall effect the commercial launch of
the Product in the Territory within [***] ([***]) days of the Regulatory
Approval, provided sufficient quantities of commercial Product are available
pursuant to the Commercial Manufacture and Supply Agreement.


 


7.7.                              Reports
and Meetings.


 


7.7.1                             Reports.  During the Term, Zogenix shall submit to Elan
the following reports:


 


7.7.1.1             within
30 days of the end of each calendar quarter prior to the launch of the Product
in the Territory, a report summarizing the regulatory status of the Product in
the Territory during such calendar quarter;


 


7.7.1.2             within
90 days after the filing of the first Regulatory Application for the Product
and within 30 days of the end of each calendar quarter thereafter until
Regulatory Approval, a report summarizing the primary promotional activities to
be carried out by Zogenix for the period up to the first launch of the Product
in the Territory and for a period of 1 year thereafter; and


 


7.7.1.3             within
30 days of the end of each calendar quarter subsequent to the launch of the
Product in the Territory, a report summarizing Zogenix’s objectives for and
performance of the Product in the Territory.


 


7.7.2          Meetings.  During the Term, the Parties (or their respective
Affiliates) shall meet as often as reasonably requested by the other to discuss
the status of all development, regulatory and commercialization
activities.  Such meetings shall take
place no less than once per calendar quarter prior to the filing of the first
Regulatory Application and thereafter not more than once per calendar
quarter.  Such meetings may be held by
telephone or videoconference.  If held in
person, each Party shall be responsible for its own costs in respect of travel
and accommodation expenses in attending such meetings.


 


7.7.3          For
([***]) days from the Effective Date of this Agreement, Zogenix shall have the
exclusive right to negotiate a license to develop and commercialize Product
outside the Territory.  After this time
period, Elan shall be entitled to develop, obtain regulatory approval and
market the Product outside the Territory, with the right to access and utilize
Regulatory Applications, Regulatory Approvals and all supplements and related
filings related thereto and all data relating to the Product as set forth in
Clause 6.6 of this Agreement.


 


8.                                      MANUFACTURE AND SUPPLY


 


8.1.                              Commercial
Manufacture and Supply Agreement.  The Parties agree that they, or an Affiliate,
will negotiate in good faith a Commercial Manufacture and Supply Agreement for
the commercial supply of Product in the Territory.  The Parties (or their Affiliate) shall
execute said agreement on or before the submission of the first NDA, provided
that they do not otherwise mutually agree to extend this time period in
writing.  The Parties further agree that
the Commercial Manufacture and Supply Agreement shall incorporate the terms set
out in Clause 9 and Schedule 2 of this Agreement, together with other customary
terms for commercial supply of pharmaceutical products containing Controlled
Substances.


 






***                              Certain information on this
page has been omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.


 


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9.                                      MANUFACTURING LICENSE


 


9.1.                              Right
to Manufacturing License.  Subject to the terms of this Agreement and
the terms of the Commercial Manufacture and Supply Agreement, Elan hereby
grants to Zogenix a non-exclusive license under the Elan Intellectual Property
to make or have made the Product in the Field in the Territory (the  “Manufacturing License”),
which Zogenix shall not be entitled to utilize except where there is a Failure
to Supply.  Subject to the prior written
consent of Elan which shall not be unreasonably withheld, conditioned or
delayed, Zogenix shall have the right to grant a sublicense of the
Manufacturing License to an Affiliate or Third Party, provided that the
proposed sub-licensee is not a Technological Competitor and provided further
that Zogenix takes steps in all instances to ensure that Technological
Competitors do not gain access, directly or indirectly, to Elan Confidential
Information.  Additionally, in the event
that Zogenix, or as the case may be, the sub-licensee of the Manufacturing
License entrusted with the manufacture of the Product (either, the “Designated Manufacturer”) becomes a Technological
Competitor, or becomes an Affiliate of or merges with a Technological
Competitor, the Designated Manufacturer shall be entitled to exercise
manufacturing rights hereunder (or under the sub-license of the Manufacturing
License, as applicable) for so long as such rights are Contained Within a Ring
Fence.


 


9.2.                              Resumption.  Where Elan (or its Affiliate) remedies the
cause of the Failure to Supply and is once again able to fulfil its obligations
to supply the Product, Elan (or its Affiliate) shall so notify Zogenix and
Zogenix shall cease manufacturing the Product and shall resume purchasing the
Product exclusively from Elan pursuant to the terms of the Commercial
Manufacture and Supply Agreement; provided
that [***].


 


9.3.                              Responsibility.  In manufacturing the Product pursuant to any
Manufacturing License, Zogenix and its Affiliates shall be responsible for all
costs, quotas, licenses, process and equipment validation required by
applicable law or regulations and shall take all steps reasonably necessary for
any relevant manufacturing facility for the Product to pass inspection by the
Governmental Authority.


 


9.4.                              Technology
Transfer.  In the event
of a Failure to Supply commercial Product or where Elan goes into liquidation
or receivership and Zogenix does not terminate this Agreement and wishes to
effectuate a technology transfer, Elan shall:


 


9.4.1          provide Zogenix
with any technical data incorporated in the Elan Know-How, including access to
the CMC Section to give effect to the provisions of clause 9.1 and Elan
shall promptly provide to Zogenix the documentation constituting the required
material support, more particularly practical performance advice, shop
practice, specifications as to materials to be used and control methods; and


 


9.4.2          assist Zogenix
for a period of no longer than ([***]) months with the working up and use of
the technology and with the training of Zogenix personnel which may be
reasonably necessary in relation to the exercise of the Manufacturing License,
including receiving Zogenix representatives in its or its Affiliates’ premises
for limited periods as may be agreed upon by the Parties.


 


9.4.3          Zogenix shall
reimburse Elan for any actual and reasonable costs incurred in connection with
any transfer of technology pursuant to this Clause 9.4 within [***] ([***])
days of delivery of reasonably detailed invoices.  For the avoidance of doubt, although this
Clause 9.4 permits Zogenix to effect a technology transfer if 


 






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Elan goes into liquidation or receivership
and Zogenix decides not terminate this Agreement, it does not entitle Zogenix
to utilize such technology transfer or the Manufacturing License that has been
granted herein under Clause 9.1 except where there has been a Failure to Supply
and Elan shall be entitled to resume supplying the Product in such
circumstances in accordance with Clause 9.2 of this Agreement.


 


10.                               FINANCIAL PROVISIONS


 


10.1.        License Fee and
Milestone Payments.  In consideration of the grant of the Elan
License, Zogenix shall pay to Elan the following non-refundable amounts (for
the purpose of clarity, the amounts as set forth in this Clause 10.1 shall be
payable to Elan one time with respect to each specified milestone event):


 


10.1.1                       a
license fee of five hundred thousand dollars (US$500,000.00) upon execution of
this Agreement by both Parties (the “License Fee”);


 


10.1.2                       a
milestone payment of [***] dollars (US$[***]) upon [***];


 


10.1.3                       a
milestone payment of [***]dollars (US$[***]) upon [***];


 


10.1.4                       a
milestone payment of [***] dollars (US$[***]) upon [***];


 


10.1.5                       a
milestone payment of [***] dollars (US$[***]) upon [***];


 


(the payments described in this Clause 10.1.2
through 10.1.5 being “License Milestone Payments”).


 


In all cases, the sum of the milestone
payments in Clauses 10.1.1, 10.1.2, and 10.1.4 shall have been paid or shall be
paid upon [***].


 


10.2.        Not Subject to
Future Performance Obligations.  The License Fee and the License Milestone
Payments shall not, once due and payable, be subject to future performance
obligations of Elan to Zogenix and shall not be applicable against future
services provided by Elan to Zogenix.


 


The terms of Clause 10.1 relating to the
License Fee and License Milestone Payments are independent and distinct from
the other terms of this Agreement.


 


10.3.        Royalty
on Sales.  In further
consideration of the grant of the Elan License, Zogenix shall pay to Elan (i) a
royalty of [***] percent ([***]%) of Net Sales for the Initial Term and (ii) a
royalty of [***] percent ([***]%) of Net Sales for the Extended Term.  If requested by Zogenix during the Term, the
Parties shall discuss in good faith the necessity of increasing the [***]%
maximum limitation on deductions set forth in the Net Sales definition to take
into account changes in government reimbursement and discounts customary in the
Territory from and after the Effective Date.


 


10.3.1        Bundling.  In the event that Zogenix (or Zogenix Affiliate
or permitted sub-licensee) shall sell the Product together with other products
of Zogenix (or any Zogenix Affiliate) or other products of any such permitted
sub-licensee or permitted subcontractor, as the case may be, to Third Parties
(by the method commonly known in the pharmaceutical industry as “bundling”) and
the price attributable to 


 






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the Product is less than the average price of
“arms length” sales to similar customers for the reporting period in which
sales occur (such sales to be excluded from the calculation of the average
price of “arms length” sales), the sales price for any such sales used in
calculating Net Sales shall be the average price of “arms length” sales by
Zogenix or a Zogenix Affiliate or a permitted sub-licensee or a permitted
subcontractor to similar customers during the reporting period in which such
sales occur.


 


10.3.2        Method of
Calculation of Fees.  The Parties acknowledge and agree that the
methods for calculating the royalties and fees under this Agreement are for the
purposes of the convenience of the Parties, are freely chosen and not coerced.


 


11.                                PAYMENTS, REPORTS AND AUDITS


 


11.1.                        Records.  Zogenix shall keep true and accurate records of
gross sales of the Product, the items deducted from the gross amount in
calculating the Net Sales, the Net Sales and the royalties payable to Elan
under Clause 10.3.  Zogenix shall deliver to Elan a written
statement (the “Statement”) thereof within [***] days following the end of each calendar quarter, (or any part thereof
in the first or last calendar quarter of this Agreement) for such calendar
quarter.  The Statement shall outline the
calculation of the Net Sales from gross revenues during
that calendar quarter, the applicable percentage rate, and a computation of the
sums due to Elan.  In addition to Zogenix providing Elan the Statement, Zogenix shall use
its Commercially Reasonable Efforts to deliver to Elan a non-binding written
sales estimate within [***] ([***])
days in advance of the start of each calendar year beginning with the calendar year
in which Zogenix anticipates the commercial launch of the Product, setting
forth its estimate of Product sales for such calendar year, which estimate
shall be updated by Zogenix within [***] ([***])
days of [***] of
each year thereafter.  The Parties’
financial officers shall agree upon the format of the Statement and the annual
sales estimate.


 


11.2.                        VAT
and Sales Taxes.  All payments to Elan are
exclusive of any applicable value added, excise, sales or any other similar or
substitute tax (“VAT”), for which Zogenix will be additionally liable if
applicable; provided that Elan will issue an appropriate VAT invoice to support
any such charge.  No later than thirty
(30) days in advance of the anticipated commercial launch of the Product,
Zogenix shall furnish Elan with valid blanket state resale exemption
certificate.


 


11.3.                        Taxes.  If Zogenix is required by law to pay or
withhold any income or other taxes on behalf of Elan with respect to any monies
payable to Elan under this Agreement:


 


11.3.1                       Zogenix
shall deduct them from the amount of such monies due;


 


11.3.2                       any
such tax required to be paid or withheld shall be an expense of and borne
solely by Elan;


 


11.3.3        Zogenix shall
promptly provide Elan with a certificate or other documentary evidence to
enable Elan to support a claim for a refund or a foreign tax credit.


 


11.4.        Double Tax
Co-operation.  Elan
and Zogenix agree to co-operate in all respects necessary to take advantage of
any double taxation agreements or similar agreements as may, from time to time,
be available in order to enable Zogenix to make such payments to Elan without
any deduction or withholding.


 






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11.5.                        Timing.  Payments to Elan shall be made as follows:


 


11.5.1        the License Fee
shall be paid within ([***]) Business Days of the [***];


 


11.5.2        each of the
License Milestone Payments shall be paid within [***] days of the achievement
of the relevant event to which they relate; and


 


11.5.3        payment of
royalties [***].


 


11.6.        Manner of Payment.  All payments due hereunder shall be made in
US$ to the designated bank account of Elan in accordance with such timely
written instructions as Elan shall from time to time provide.


 


11.7.                        Interest.  Without prejudice to Elan’s other remedies
hereunder, Zogenix shall pay interest to Elan on sums not paid to Elan on the
date on which payment should have been made pursuant to the applicable
provisions of this Agreement (“Due Date”) over
the period from the Due Date until the date of actual payment (both before and
after judgement) at [***] [***] on the Due Date (or next to occur Business Day,
if such date is not a Business Day) plus [***] percent ([***]%).  Interest shall be payable both before and
after judgment.


 


11.8.                        Audit.  For the [***] period following the close of
each calendar year of the Agreement, Elan and Zogenix will, in the event that
the other Party reasonably requests such access, provide each other’s
independent certified accountants (reasonably acceptable to the other Party)
with access, during regular business hours and subject to the confidentiality
provisions as contained in this Agreement, to such Party’s books and records
relating to the Product, solely for the purpose of verifying the accuracy and
reasonable composition of the calculations under this Agreement for the
calendar year then ended.


 


11.9.                        Correction
of Discrepancies.  In the event of a discovery of a discrepancy,
a correcting payment shall be made forthwith by Zogenix to Elan or Elan to
Zogenix, as the case may be, together with interest at the rate specified in
Clause 11.7.  If the discrepancy exceeds
[***]% of the amount due or charged by a Party for any period, then
additionally the cost of such accountants shall be borne by the audited Party.


 


12.                               DURATION AND TERMINATION


 


12.1.                        Initial
Term.  This
Agreement shall be deemed to have come into force on the Effective Date and,
subject to the rights of termination outlined in this Clause 12 and the
provisions of applicable laws, will expire:


 


12.1.1                       on
the 15th anniversary of the date of the first In Market sale of the Product in
the Territory; or


 


12.1.2                       upon
the expiry of the last Valid Claim in the Territory—


 


whichever date is later to occur (the “Initial Term”).


 


12.2.                        Continuation.  At the end of the Initial Term, the Agreement
shall continue automatically for rolling three (3) year periods thereafter
(collectively referred to as the “Extended Term”),
unless the Agreement has been terminated by either of the Parties by serving
twelve (12) 


 






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months’ written notice on the other Party
immediately prior to the end of the Initial Term or any such additional three (3) year
period.


 


12.3.        Breach /
Insolvency.  In
addition to the rights of termination provided for elsewhere in this Agreement,
either Party will be entitled forthwith to terminate this Agreement by written
notice to the other Party if:


 


12.3.1        that other Party
commits a material breach of any of the provisions of this Agreement, and fails
to cure the same within sixty (60) days after receipt of a written notice from
a Party hereto giving full particulars of the breach and requiring it to be remedied;
provided, that if the breaching Party has proposed a course of action to cure
the breach and is acting in good faith to cure same but has not cured the
breach by the 60th day, such period shall be extended by such period as is
reasonably necessary to permit the breach to be cured, provided that such
period shall not be extended by more than 90 days, unless otherwise agreed in
writing by the Parties.  Notwithstanding
the foregoing, if the alleged breaching Party disputes by written notice to the
non-breaching Party such material breach in good faith within sixty (60) days
of receipt of the notice described above, the non-breaching Party shall not
have the right to terminate unless it has been determined in accordance with
Clause 12.6.1 that the Agreement was materially breached and the breaching
Party fails to thereafter cure such material breach within sixty (60) days of
the decision of the arbitrator. The right to terminate shall be in addition to
and not in substitution for any other available remedy at law or in equity;


 


12.3.2        that other Party
goes into liquidation under the laws of any applicable jurisdiction (except for
the purposes of amalgamation or reconstruction and in such manner that the
company resulting therefrom effectively agrees to be bound by or assume the
obligations imposed on that other Party under this Agreement);


 


12.3.3        a receiver,
administrator, examiner, trustee or similar officer is appointed over all or
substantially all of assets of that other Party under the laws of any applicable
jurisdiction; or


 


12.3.4        any proceedings
are filed or commenced by that other Party under bankruptcy, insolvency or
debtor relief laws, or anything analogous to any of the foregoing under the
laws of any applicable jurisdiction occurs in relation to that other Party.


 


12.4.                        Additional
Elan Termination Rights.  In further addition to the rights and
termination provided for elsewhere in this Agreement, Elan shall be entitled to
terminate this Agreement and all Related Agreements in the event that:


 


12.4.1        Zogenix notifies
Elan that it does not wish to commercialise the Product in the Territory in
advance of the commercialization of the Product in the Territory; or


 


12.4.2        Zogenix fails to [***];
or


 


12.4.3        Zogenix fails to
[***]; or


 


12.4.4        Zogenix fails to
[***]; or


 


12.4.5        Zogenix fails to
generate Net Sales of the Product of at least [***] dollars (US$[***]) per
quarter in [***] consecutive calendar quarters beginning [***] 


 






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([***]) months after the date of first
commercial launch until the end of Term, provided sufficient quantities of
commercial Product have been made available pursuant to the Commercial
Manufacture and Supply Agreement.


 


12.4.6        Zogenix, its
Affiliates, permitted sub-licensees or subcontractors knowingly challenges the
validity and/or ownership of any of the Elan Patents and/or the scope of any
claims therein in a formal proceeding, mediation or binding arbitration.


 


12.5.                        Additional
Zogenix Termination Rights.  In furtherance of and in addition to the
rights and termination provided elsewhere in this Agreement:


 


12.5.1        Zogenix shall be
entitled to terminate this Agreement and all Related Agreements where:  the sale of the Product is prohibited by the
Regulatory Authorities in the Territory; or


 


12.5.1.1                                 despite
having used Commercially Reasonable Efforts, Zogenix is unable to obtain
Regulatory Approval for the Product in the Territory.


 


12.5.2        Zogenix shall
also be entitled to terminate this Agreement and all Related Agreements in
their entirety at any time without cause upon (i) six (6) months
written notice to Elan prior to the date of the NDA Approval and (ii) twelve
(12) months written notice to Elan on or after the date of the NDA Approval.


 


12.6.                        Dispute
Resolution.


 


12.6.1        Arbitration.
Except for disputes, controversies or claims relating to intellectual property
rights or the scope of the license granted hereunder, any dispute, controversy
or claim arising under, out of or in connection with this Agreement, including
any subsequent amendments, or the validity, enforceability, construction,
performance or breach thereof, shall be finally settled under the Rules for
Commercial Dispute Resolution Procedures (“Rules”) of the American Arbitration
Association (“AAA”) then in force on the date of commencement of the
arbitration by three (3) arbitrators appointed in accordance with those
Rules, provided that the arbitrators appointed have at least ten (10) years
arbitration experience in the pharmaceutical industry. The award rendered shall
be final and binding on the Parties. Judgment upon the award may be entered in
any court having jurisdiction.  The
Parties agree that they will not request, and the arbitrators shall have no
authority to award, punitive or exemplary damages against either Party. The costs
of any arbitration, including administrative fees and fees of the arbitrators,
shall be shared equally by the Parties, unless otherwise specified by the
arbitrators. Each Party shall bear the cost of its own attorneys’ and expert
fees; provided that the arbitrators may in their discretion award to the
prevailing Party the costs and expenses incurred by the prevailing Party in
connection with the arbitration proceeding.


 


12.6.2        Pre-Arbitration
Dispute Resolution. No dispute under this
Agreement shall be referred to arbitration under Clause 12.6.1 until the
following procedures in this Clause 12.6.2 have been satisfied. The chief
executive officers of Elan and Zogenix shall meet as soon as practicable, and
as reasonably requested by either Party, to review any dispute with respect to
the interpretation of any provision of this Agreement or with respect to the
performance of either Party under this Agreement. If the dispute is not
resolved by the chief executive officers by written mutual agreement within
thirty (30) calendar days after meeting to discuss the dispute, either Party
may at any time thereafter provide the other Party written notice specifying
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Party of its decision to institute
arbitration proceedings under Clause 12.6.1. Such arbitration shall be
initiated within thirty (30) calendar days of either Party providing written
notice to the other Party of its intent to institute arbitration proceedings, unless
mutually agreed by the Parties to extend such time.


 


12.6.3        Provisional
Remedy. Nothing in this Agreement shall limit the right of
either Party to seek to obtain in any court of competent jurisdiction any
equitable or interim relief or provisional remedy, including injunctive relief.
Seeking or obtaining such equitable or interim relief or provisional remedy in
a court shall not be deemed a waiver of this Agreement to arbitrate. For
clarity, any such equitable remedies shall be cumulative and not exclusive and
are in addition to any other remedies that either Party may have under this
Agreement or applicable law.


 


12.6.4        Disputes Related
to Intellectual Property Rights and License Grants.  Except as provided in Clause 3.5 in reference
to Third Party Licenses, any and all disputes, controversies or claims relating
to intellectual property rights or the scope of the licenses granted hereunder
shall be subject to the exclusive venue and jurisdiction of the state and
federal courts of competent jurisdiction as set forth in Clause 16.16 herein.
The Parties hereby consent to the exclusive venue and jurisdiction of such
courts for such disputes, controversies or claims.


 


13.                               CONSEQUENCES OF EXPIRATION OR TERMINATION


 


13.1.                        General
Consequence.  Upon
expiration of this Agreement or exercise of those rights of termination
specified in Clause 12, this Agreement shall, subject to Clauses 13.2 and 13.3,
automatically terminate forthwith and be of no further legal force or effect.


 


13.2.                        Specific
Consequences.  Upon
the expiration or the termination of the Agreement by either Party, the
following shall be the consequences:


 


13.2.1        any sums that
were due from Zogenix to Elan under the provisions of this Agreement prior to
its termination or expiry shall be paid in full within [***] ([***]) days of
termination of this Agreement and Elan shall not be liable to repay to Zogenix
any amount of money paid or payable by Zogenix to Elan up to the date of the
termination of this Agreement (other than pursuant to Zogenix’s rights of audit
under Clause 11.8);


 


13.2.2        the following
Clauses shall survive any expiration or termination of this Agreement: the
definitions as set forth in Clause 1 to the extent that such definitions are
contained within a surviving clause, Clauses 3.1, 3.2.3, 3.3 (to the extent it
relates to infringements that occur during the Term), 3.4 (solely as it relates
to Product sold during the Term), 6.6, 12.6, 14.4 through 14.13 and the
entirety of Clauses 11, 13, 15 and 16 and any other provision of this Agreement
which, by its nature, is intended to continue after termination, shall survive
termination;


 


13.2.3        any sub-licenses
granted under Clause 2.2 or 9.1 shall automatically terminate except as
otherwise provided in Clause 13.2.5.2;


 


13.2.4        if termination is
effected by Elan under Clauses 12.3 or 12.4 or by Zogenix under Clause 12.5:


 






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13.2.4.1           Elan
shall be entitled to research, develop and commercialise the Product for its
own benefit in the Territory;


 


13.2.4.2           Elan
shall be entitled to file for Regulatory Approval for the Product in the
Territory;


 


13.2.4.3           Zogenix
shall transfer or procure the transfer to Elan (or such other entity as Elan
may specify) all relevant INDs (including the Elan IND), Regulatory
Applications and Regulatory Approvals at no cost to Elan, insofar as such
transfer is permitted by applicable laws, and permit Elan to access and/or
reference such of its data (including but not limited to Product Data) as is
necessary to enable Elan to market the Product in the Territory;


 


13.2.4.4           Elan
shall be granted an irrevocable, perpetual, royalty-free, exclusive license to
use the Zogenix Intellectual Property (other than pursuant to a Third Party
License which is addressed in Clause 13.2.4.5 hereunder) and the trademark
Zogenix has used during the Term to commercialize the Product in the Territory
in connection with any subsequent commercialization of the Product in the
Territory;


 


13.2.4.5           Zogenix
shall assign Elan (to the extent contractually permitted by such Third Party
Licenses) any Third Party Licenses granted to Zogenix in relation to the
Product and Elan will be responsible for any payments thereunder in respect of
activities related to the Product by Elan following termination or expiration;
and


 


13.2.4.6           Elan
shall either:


 


13.2.4.7           give
notice to Zogenix that it wishes Zogenix to cease to commercialise the Product
in the Territory, in which event Zogenix shall do so except for meeting any
uncancellable orders which cannot be transferred to Elan and Elan shall
purchase Zogenix’s saleable inventory of the Product at cost; or


 


13.2.4.8           permit
Zogenix for a period not exceeding [***] ([***]) months to exhaust its stocks
of the 

Product –


 


subject always to
the relevant provisions of this Agreement including as to the use of trademarks
and financial provisions.


 


13.2.5                       if
termination is effected by Zogenix under Clause 12.3.1, at Zogenix’s option:


 


13.2.5.1           all
rights and licenses under this Agreement, including the Elan License and the
Manufacturing License, shall terminate in their entirety and be of no further
effect; or


 


13.2.5.2           if
the notice of termination so specifies, this Agreement shall continue in full
force and effect, save that (a) the royalty payable under Clause 10.3 by
Zogenix to Elan during the Initial Term shall be [***]% of Net Sales for any
Product sold by Zogenix after termination is effected by Zogenix under Clause
12.3.1 and (b) the royalty payable under Clause 10.3 by Zogenix to Elan
during the Extended Term for any Product 


 






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sold by Zogenix
after termination is effected by Zogenix under Clause 12.3.1 shall be [***]% of
Net Sales, and, for the avoidance of doubt and without limiting the foregoing,
the Elan License, the Manufacturing License, Zogenix’s obligations under Clause
7, and any sub-license duly granted under Clauses 2.2 or 9.1 shall continue in
full force and effect.


 


13.3.                        Ancillary
Rights.  If Elan
should require a license from Zogenix in order to research, develop and/or
commercialize the Product under Clause 13.2.4.1, Zogenix shall grant a
non-exclusive license to Elan (subject to any Third Party royalties due or
rights and/or obligations contained in any applicable Third Party agreement
related to any Product that may be subsequently sold by Elan utilizing this
license which shall be Elan’s responsibility) for any other rights or data
owned or controlled by Zogenix or its Affiliates which may be necessary for
Elan to research, develop and commercialize the Product in the Territory.


 


14.                               WARRANTIES, INDEMNIFICATION AND LIABILITY


 


14.1.                        Elan
Warranties.  Elan
represents and warrants to Zogenix as of the Effective Date:


 


14.1.1        Elan has the
right to enter into this Agreement and grant the Elan License and the
Manufacturing License;


 


14.1.2        There are no
agreements between Elan and any Third Party that conflict with this Agreement,
the Elan License or the Manufacturing License;


 


14.1.3        No consent,
approval, authorization or order of any court or governmental agency or body or
Third Party is required for the execution and delivery by Elan of this
Agreement or grant of the Elan License or the Manufacturing License;


 


14.1.4        Elan is the sole
owner of Elan Intellectual Property, free and clear of any liens, claims or
encumbrances and is not in breach of any agreement with Third Parties relating
to Elan Intellectual Property;


 


14.1.5        U.S. Patent No. 6,902,742
is in full force and effect, contains Valid Claims having a scope that covers
the Product, is not the subject of any litigation, ex parte, or inter partes
administrative proceedings, including any reexamination, re-issue or opposition
proceeding, all maintenance fees that were due before the Effective Date of
this Agreement have been paid, and there are no outstanding actions before the
US Patent and Trademark Office;


 


14.1.6        The application
of U.S. Published Patent Application Number 2006/024015 has not been abandoned
and is pending;


 


14.1.7        Neither Elan nor,
to Elan’s knowledge, any of its Affiliates, has received written notice from a
Third Party indicating that the use of Elan Intellectual Property infringes any
Third Party patent rights, or offering a licence thereto, which would adversely
effect the rights licensed to Zogenix hereunder and/or the commercializing of
the Product in the Field in the Territory;


 


14.1.8        Neither Elan nor
any of its Affiliates has provided notice to Third Parties alleging
interference, infringement, misappropriation or other conflict with or of the
Elan Intellectual Property;


 


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  14.1.9

  	
  To Elan’s
  knowledge with no special search, no Third Party has interfered with,
  infringed upon, misappropriated, or otherwise come into conflict with any of
  the Elan Intellectual Property;

  
	
   

  	
   

  	
   

  
	
   

  	
  14.1.10

  	
  In Elan’s opinion with no
  special search, no license from a Third Party is required
  to practice the rights granted to Zogenix by Elan under this Agreement;

  
	
   

  	
   

  	
   

  
	
   

  	
  14.1.11

  	
  Other than the Elan Patents, there are no
  additional Patents issued to or filed by Elan or its Affiliates that are
  required to allow Zogenix to practice the rights granted to it by Elan under
  this Agreement;

  
	
   

  	
   

  	
   

  
	
   

  	
  14.1.12

  	
  The Elan IND (i) has not been
  abandoned, (ii) is in good standing and (iii) all required notices,
  supplemental applications and annual or other reports with respect to the
  Elan IND have been filed with the FDA.

  
	
   

  	
   

  	
   

  
	
  14.2.

  	
  Zogenix Warranties.
  Zogenix represents and warrants to Elan as of the Effective Date, as follows:

  
	
   

  	
   

  	
   

  
	
   

  	
  14.2.1

  	
  Zogenix has the right to enter into this
  Agreement.

  
	
   

  	
   

  	
   

  
	
   

  	
  14.2.2

  	
  There are no agreements between Zogenix and
  any of its Affiliates or any Third Party that conflict with this Agreement.

  
	
   

  	
   

  	
   

  
	
   

  	
  14.2.3

  	
  No consent, approval, authorization or
  order of any court or governmental agency or body or Third Party is required
  for the execution and delivery by Zogenix of this Agreement or Zogenix’s
  acceptance of the Elan License or the Manufacturing License.

  
	
   

  	
   

  	
   

  
	
   

  	
  14.2.4

  	
  Zogenix has performed the valuation
  required of Zogenix under the rules promulgated under the
  Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the
  rules promulgated thereunder (16 C.F.R. 801.1 et seq.) and concluded
  that the fair market value of the licenses Zogenix is acquiring hereunder is
  less than $59.8 million.

  
	
   

  	
   

  	
   

  
	
   

  	
  14.2.5

  	
  Neither Zogenix nor any of its Affiliates
  own, control or have licensed any Patents having claims that cover the
  Product.

  
	
   

  	
   

  	
   

  
	
  14.3.

  	
  Mutual Warranties.
  Each Party represents and warrants that:

  
	
   

  	
   

  	
   

  
	
   

  	
  14.3.1

  	
  It is aware of and has received disclosure
  by the other Party regarding the content of this Agreement, its Appendix and
  Schedules;

  
	
   

  	
   

  	
   

  
	
   

  	
  14.3.2

  	
  It requires no further disclosures from the
  other Party in order to execute this Agreement voluntarily, knowingly and
  intelligently;

  
	
   

  	
   

  	
   

  
	
   

  	
  14.3.3

  	
  It has been advised by a counsel of its choice
  or has been provided sufficient time to obtain advice from counsel regarding
  the content of this Agreement;

  
	
   

  	
   

  	
   

  
	
   

  	
  14.3.4

  	
  It acknowledges that in entering in to this
  Agreement, it has not relied upon the other Party’s representations without
  the advice of its counsel prior to the execution of this Agreement.

  
	
   

  	
   

  	
   

  
	
  14.4.

  	
  Mutual Indemnification.
  Each of the Parties shall defend, indemnify and hold harmless the other Party
  against all Claims by a Third Party to the extent that they arise out of any
  material breach by the first Party of any of its representations, warranties
  or obligations under this

  



 


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  Agreement or from the first Party’s fraud
  or wilful misconduct (including such Party’s officers, directors, employees
  or agents).

  
	
   

  	
   

  
	
  14.5.

  	
  Infringement Claims.
  The Parties acknowledge that they have adequate knowledge or expertise, or
  has hired such experts, or has had adequate time to hire such experts, to
  conduct due diligence with respect to intellectual property by a Third Party.
  Clause 3.4 contains the Parties’ full agreement as regards liability for
  Infringement Claims, save to the extent that Clause 3.4 incorporates other
  provisions of this Agreement by specific cross-reference.

  
	
   

  	
   

  	
   

  
	
  14.6.

  	
  Indemnification (Medical
  Claims). Zogenix shall indemnify Elan against all Claims
  made or brought against Elan by a Third Party seeking damages for personal
  injury (including death) and/or for the cost of medical treatment, caused by
  or attributed to the use of Product administered or sold by Zogenix, its
  Affiliates, a permitted sub-licensee or a permitted subcontractor in the
  Territory, but without prejudice to any right of indemnification Zogenix may
  have against Elan or an Elan Affiliate under the Services Agreement or
  Commercial Manufacture and Supply Agreement; provided however, Zogenix shall
  not so indemnify Elan or its Affiliates to the extent that Zogenix is
  entitled to be indemnified by Elan or an Elan Affiliate.

  
	
   

  	
   

  	
   

  
	
  14.7.

  	
  Sub-licensees.
  With reference to Clause 2.2, Zogenix shall indemnify and hold harmless Elan
  to the extent that any Claims arise out of any acts or omissions of any
  permitted sub-licensee of Zogenix.

  
	
   

  	
   

  	
   

  
	
  14.8.

  	
  Conduct of Claims.
  The Party seeking an indemnity shall:

  
	
   

  	
   

  	
   

  
	
   

  	
  14.8.1

  	
  fully and promptly notify the other Party
  of any claim or proceedings, or threatened claim or proceedings;

  
	
   

  	
   

  	
   

  
	
   

  	
  14.8.2

  	
  permit the indemnifying Party to take full
  control of such claim or proceedings, with counsel of the indemnifying
  Party’s choice, provided that the indemnifying Party shall reasonably and
  regularly consult with the indemnified Party in relation to the progress and
  status of such claim or proceedings;

  
	
   

  	
   

  	
   

  
	
   

  	
  14.8.3

  	
  fully co-operate in the investigation and
  defense of such claim or proceedings at the indemnifying Party’s expense; and

  
	
   

  	
   

  	
   

  
	
   

  	
  14.8.4

  	
  take all reasonable steps to mitigate any
  loss or liability in respect of any such claim or proceedings.

  
	
   

  	
   

  	
   

  
	
   

  	
  The indemnifying Party may settle a Claim
  on terms which provide only for monetary relief and do not include any
  admission of liability. Save as aforesaid, neither the indemnifying Party nor
  the Party to be indemnified shall acknowledge the validity of, compromise or
  otherwise settle any Claim without the prior written consent of the other,
  which shall not be unreasonably withheld, conditioned or delayed.

  
	
   

  	
   

  	
   

  
	
  14.9.

  	
  Exclusion of Implied
  Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS
  AGREEMENT, ZOGENIX ACKNOWLEDGES THAT THE ELAN LICENSE AND THE MANUFACTURING
  LICENSE ARE GRANTED AND THAT THE ELAN IND SHALL BE TRANSFERRED ON AN “AS IS”
  BASIS, WITHOUT REPRESENTATION OR WARRANTY WHETHER EXPRESS OR IMPLIED
  INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR
  INFRINGEMENT OF THIRD PARTY RIGHTS, AND ALL SUCH WARRANTIES ARE EXPRESSLY
  DISCLAIMED TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAWS.

  



 


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  14.10.

  	
  Exclusion of Consequential
  Loss. Without prejudice to the obligation of either
  party to indemnify the other in respect of Claims by a third party,
  notwithstanding anything to the contrary in this Agreement, Elan and Zogenix
  shall not be liable to the other by reason of any representation or warranty,
  condition or other term or any duty of common law, or under the express terms
  of this agreement, for any indirect, consequential, special, incidental or
  punitive loss or damage (whether for loss of current or future profits, loss
  of enterprise value or otherwise) and whether occasioned by the negligence of
  the respective parties, their employees or agents or otherwise.

  
	
   

  	
   

  	
   

  
	
  14.11.

  	
  Extension of
  Indemnification. Where this Agreement
  provides for the indemnification of a Party or for the limitation of a
  Party’s liability, such indemnification and/or limitation (as the case may
  be) shall also apply for the benefit of such Party’s Affiliates and the
  employees, officers, directors and agents of any of them, acting in such
  capacity.

  
	
   

  	
   

  	
   

  
	
  14.12.

  	
  Inherent Risk.
  It is hereby acknowledged that there are inherent uncertainties involved in
  the development and registration of pharmaceutical products and such
  uncertainties form part of the business risk involved in undertaking the form
  of commercial collaboration outlined in this Agreement. Accordingly, Elan and
  Zogenix shall have no liability to each other as a result of the failure of
  the Product to obtain Regulatory Approval, and, except as set forth in the
  Related Agreements, Elan will have no liability to Zogenix as a result of any
  failure or delay of the Product to achieve the Product Specifications or one
  or more of the milestones set out in the R&D Program and/or to obtain the
  Regulatory Approval in the Territory.

  
	
   

  	
   

  	
   

  
	
  14.13.

  	
  Insurance.
  Zogenix shall maintain comprehensive general liability insurance in respect
  of all activities conducted by it with respect to the Product appropriate for
  a company of its size engaged in similar commercial activities, including
  product liability insurance on the Product. From the Effective Date of this
  Agreement but prior to commencement of any clinical trial programs for the
  Product, Zogenix shall maintain such general liability insurance in an amount
  of not less than US$[***]. Upon commencement of any clinical trial programs
  for the Product, Zogenix shall maintain such general liability insurance in
  an amount of not less than US$[***] per occurrence and in the aggregate.
  Prior to or upon commencing marketing Product, Zogenix shall maintain such
  general liability insurance in an amount of not less than US$[***] for the
  duration of this Agreement and for such period thereafter as necessary to
  cover the insured risks.

  
	
   

  	
   

  	
   

  
	
   

  	
  Zogenix shall provide Elan with a
  certificate from the insurance company verifying the above and shall notify
  Elan in writing at least thirty (30) days prior to the expiration or
  termination of such coverage.

  
	
   

  	
   

  	
   

  
	
  15.

  	
  CONFIDENTIALITY

  
	
   

  	
   

  	
   

  
	
  15.1.

  	
  Confidential Information:
  The Parties agree that it will be necessary, from time to time, to disclose
  to each other confidential and proprietary information, including inventions,
  trade secrets, specifications, designs, data, know-how and other proprietary
  information relating to the Product, processes, services and business of the
  disclosing Party or its Affiliates.

  
	
   

  	
   

  	
   

  
	
   

  	
  The foregoing shall be referred to
  collectively as “Confidential Information”.

  
	
   

  	
   

  	
   

  
	
  15.2.

  	
  Exclusion.
  Confidential Information shall not include:

  



 






	
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  15.2.1

  	
  information which is properly in the public
  domain provided that information shall not be deemed to be in the public
  domain merely because it is embraced by more general information which is
  publicly known;

  
	
   

  	
   

  	
   

  
	
   

  	
  15.2.2

  	
  information which is disclosed to the
  receiving Party or its Affiliates by a Third Party who may lawfully do so and
  is not under an obligation of confidentiality to the disclosing Party;

  
	
   

  	
   

  	
   

  
	
   

  	
  15.2.3

  	
  information which is known prior to such
  disclosure or independently developed by a Party without the aid,
  application, reference to or use of the Confidential Information of the
  disclosing Party, as evidenced by such Party’s records;

  
	
   

  	
   

  	
   

  
	
   

  	
  15.2.4

  	
  information which the disclosing Party has
  specifically agreed in writing that the receiving Party may disclose; or

  
	
   

  	
   

  	
   

  
	
   

  	
  15.2.5

  	
  information that becomes available to a
  receiving Party on a non-confidential basis, whether directly or indirectly,
  from a source other than the other Party hereto, which source did not acquire
  this information on a confidential basis.

  
	
   

  	
   

  	
   

  
	
  15.3.

  	
  Use of Confidential
  Information. Any Confidential Information disclosed by
  the disclosing Party shall be used by the receiving Party exclusively for the
  purposes of fulfilling the receiving Party’s obligations under this Agreement
  or a Related Agreement and for no other purpose save for those set out in
  Clause 6.6, and any consent that Elan may require from Zogenix to effectuate
  any purpose set out in Clause 6.6 shall not be unreasonably withheld,
  conditioned or delayed.

  
	
   

  	
   

  	
   

  
	
  15.4.

  	
  Non-Disclosure.
  Except as otherwise specifically provided in this Agreement and subject to
  Clauses 15.12 and 15.13, each Party shall disclose Confidential Information
  of the other Party only to those employees, representatives and agents
  requiring knowledge thereof in connection with fulfilling the Party’s
  obligations under this Agreement or a Related Agreement, and not to any other
  Third Party.

  
	
   

  	
   

  	
   

  
	
  15.5.

  	
  Obligation to Inform.
  Each Party further agrees to inform all such employees, representatives and
  agents of the terms and provisions of this Agreement relating to Confidential
  Information and their duties hereunder and to obtain or have obtained their
  agreement to keep the Confidential Information in confidence under terms and
  conditions at least as restrictive as those contained herein as a condition
  of receiving Confidential Information.

  
	
   

  	
   

  	
   

  
	
  15.6.

  	
  Care.
  Each Party shall exercise the same standard of care as it would itself
  exercise in relation to its own confidential information (but in no event
  less than a reasonable standard of care) to protect and preserve the
  proprietary and confidential nature of the Confidential Information disclosed
  to it by the other Party.

  
	
   

  	
   

  	
   

  
	
  15.7.

  	
  Return of Information.
  Upon termination or expiration of this Agreement, each Party shall promptly,
  upon request of the other Party, return or destroy (as requested by the
  disclosing Party) all documents and any copies thereof containing
  Confidential Information belonging to, or disclosed by, such other Party,
  save that it may retain one copy of the same solely for the purposes of
  ensuring compliance with this Clause 15.

  
	
   

  	
   

  	
   

  
	
  15.8.

  	
  Attribution; Extension of
  Confidentiality. Any breach of this
  Clause 15 by any person informed by one of the Parties is considered a breach
  by the Party itself.

  



 


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  15.9.

  	
  Term.
  The provisions relating to confidentiality in this Clause 15 shall remain in
  effect during the Term and for a period of [***]
  ([***]) years following the expiration or earlier termination of this
  Agreement.

  
	
   

  	
   

  	
   

  
	
  15.10.

  	
  Acknowledgment.
  The Parties agree that the obligations of this Clause 15 are necessary and
  reasonable in order to protect the Parties’ respective businesses. The
  Parties further agree that monetary damages may be inadequate to compensate a
  Party for any breach by the other Party of its covenants and agreements with
  respect to confidentiality, and that each Party shall be entitled to seek
  injunctive or other equitable relief against the threatened or continued
  breach of those provisions, in addition to with any other remedy which may be
  available.

  
	
   

  	
   

  	
   

  
	
  15.11.

  	
  Product Data.
  For the purpose of demonstrating to Third Parties the benefits of the Elan
  Patents, Elan shall be entitled, without the prior written consent of
  Zogenix, to disclose to Third Parties the numerical values underlying the
  Product Data provided that Elan does not disclose Zogenix’s name or the name
  of the Compound.

  
	
   

  	
   

  	
   

  
	
  15.12.

  	
  Announcements.
  No announcement or public statement concerning the existence, subject matter
  or any term of this Agreement, or its performance, shall be made by or on
  behalf of any Party without the prior written approval of the other, such
  approval not to be unreasonably withheld, conditioned or delayed. The Parties
  agree to discuss the issue of a joint press release announcing the execution
  of this Agreement. If the Parties decide not to issue a joint press release
  regarding this event, then each Party shall be entitled to issue its own
  press release, but the wording of each such release shall be agreed to by the
  other Party in good faith in writing before publication. Following the
  publication of said initial press release(s), each Party shall be free to
  disclose, without the other Parties’ prior written consent, the existence of
  this Agreement, the identity of the other Party and the terms of the
  Agreement that have already been publicly disclosed in the initial press
  release(s) but in no circumstance may either Party disclose any other
  information regarding the existence, subject matter, or any term of this
  Agreement (such as confidential information or commercially sensitive
  information on financial terms) or its performance, without the prior written
  approval of the other, such approval not to be unreasonably withheld,
  conditioned or delayed.

  
	
   

  	
   

  	
   

  
	
  15.13.

  	
  Required Disclosures.
  A Party (the “Disclosing Party”) will be
  entitled to make an announcement or public statement concerning the
  existence, subject matter or any term of this Agreement, or its performance,
  or to disclose Confidential Information that the Disclosing Party is required
  to make or disclose pursuant to:

  
	
   

  	
   

  	
   

  
	
   

  	
  15.13.1

  	
  the filing of a Regulatory Application for
  the Product by Zogenix or the filing of a DMF by Elan; or

  
	
   

  	
   

  	
   

  
	
   

  	
  15.13.2

  	
  a valid order of a court or Governmental
  Authority; or

  
	
   

  	
   

  	
   

  
	
   

  	
  15.13.3

  	
  any other requirement of law or any
  securities or stock exchange;

  
	
   

  	
   

  	
   

  
	
   

  	
  provided that if the Disclosing Party
  becomes legally required to make such announcement, public statement or
  disclosure hereunder, the Disclosing Party shall give the other Party prompt
  notice of such fact to enable the other Party to seek a protective order or
  other appropriate remedy concerning any such announcement, public statement
  or disclosure, including confidential treatment and/or appropriate
  redactions.

  
	
   

  	
   

  	
   

  
	
   

  	
  The Disclosing Party shall fully co-operate
  with the other Party in connection with that other Party’s efforts to obtain
  any such order or other remedy. If any such order or other remedy

  



 






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  does not fully preclude announcement,
  public statement or disclosure, the Disclosing Party shall make such
  announcement, public statement or disclosure only to the extent that the same
  is legally required.

  
	
   

  	
   

  	
   

  
	
  16.

  	
  MISCELLANEOUS
  PROVISIONS

  
	
   

  	
   

  	
   

  
	
  16.1.

  	
  Force Majeure.
  Neither Party shall be liable for failure or delay in the performance of any
  of its obligations under this Agreement if such failure or delay results from
  Force Majeure, but any such failure or delay shall be remedied by such Party
  as soon as practicable.

  
	
   

  	
   

  	
   

  
	
  16.2.

  	
  Subcontracting.

  
	
   

  	
   

  	
   

  
	
   

  	
  16.2.1

  	
  Each Party shall be entitled without the
  consent of the other:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  16.2.1.1

  	
  to subcontract or delegate
  the whole or any part of its duties hereunder to its Affiliate(s) and
  Zogenix acknowledges that it is currently intended that certain development
  and commercial manufacturing activities under this Agreement and under
  Related Agreements will be conducted on behalf of Elan by Elan’s Affiliates,
  EDDI and Elan Holdings.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  16.2.1.2

  	
  To subcontract or delegate
  the whole or part of its duties hereunder to a Third Party, provided that in
  subcontracting or delegating any of its duties its duties and
  responsibilities under this Agreement Zogenix:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  16.2.1.3

  	
  shall not use or employ a
  Technological Competitor without the prior written consent of Elan;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  16.2.1.4

  	
  shall enter into written
  agreements with all such Third Parties which are consistent with and do not
  conflict with the terms of this Agreement and which prohibit the right to
  further subcontract;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  16.2.1.5

  	
  shall ensure that Elan
  Confidential Information is only used by such Third Parties in accordance
  with this Agreement and shall further ensure that under no circumstances
  shall such Third Parties be allowed access to the CMC data without the prior
  written consent of Elan and Elan shall be entitled to require that there be a
  direct contractual relationship between the Third Party and Elan in such
  circumstances;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  16.2.1.6

  	
  shall make Elan whole for
  any tax consequence associated with such subcontract or delegation; and

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  16.2.1.7

  	
  shall remain liable to
  Elan for the acts and omissions of any such Third Party.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  16.2.1.8

  	
  Elan hereby acknowledges
  that it is currently intended that Zogenix will delegate to contract research
  organizations, contract sales organizations and other Third Parties in the
  performance of its duties hereunder and under the Services Agreement and
  Zogenix hereby acknowledges that in doing so it will comply with the
  requirements set out in Clause 16.2.1.2.

  



 


	
  16.3.

  	
  Assignment.

  



 


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  16.3.1

  	
  Each Party shall be entitled without the
  consent of the other to assign this Agreement to its Affiliate, provided that
  such assignment has no material adverse tax implications for the other Party.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.3.2

  	
  Zogenix may assign this Agreement to a
  Technological Competitor with Elan’s prior written consent, which may not be
  unreasonably withheld, conditioned or delayed. In circumstances where such
  consent is obtained:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  16.3.2.1

  	
  Zogenix and the assignee
  shall ensure that this Agreement, all Related Agreements and any existing and
  future work conducted thereunder is Contained Within a Ring Fence. “Contained Within a Ring Fence” means that (i) the
  assignee’s employees who perform activities and obligations under this
  Agreement or the Related Agreements must be identified by name and location
  by the assignee and must sign a confidentiality agreement, to be provided by
  Elan [***], prohibiting the
  disclosure of any Elan Intellectual Property and/or related Elan Confidential
  Information to the assignee’s employees who do not work on activities
  directly related to this Agreement or the Related Agreements (except and to
  the extent required of internal auditors, the legal department and other
  non-operational centralized services), (ii) to the extent permitted by
  applicable laws and regulations, any of the assignee’s employees who may be
  transferred to work on the activities and have access to and knowledge of
  Elan Intellectual Property and/or related Confidential Information may not
  subsequently be transferred to work on the assignee’s other technologies
  which compete with the subject matter of the Elan Patents for a period of [***]
  as from the date on which they cease to work on such activities under this
  Agreement or the Related Agreements without the prior consent of Elan, and
  (iii) Elan shall be entitled to reasonable site inspections and audits
  by Elan or its designee on terms to be agreed in advance between Elan and the
  assignee to ensure strict compliance with these terms and conditions; and

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  16.3.2.2

  	
  Zogenix and the
  Technological Competitor shall also comply with the conditions and
  obligations set out in Clause 16.2.1.2.2 through 16.2.1.2.5.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.3.3

  	
  Zogenix may assign this Agreement to a
  Third Party who is not a Technological Competitor without Elan’s prior
  written consent, subject to the conditions set out below:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  16.3.3.1

  	
  Zogenix must make Elan
  whole for any tax consequence associated with any such assignment;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  16.3.3.2

  	
  On or before the date of
  assignment, Elan shall receive all monies due and owing from Zogenix as of
  the assignment date;

  



 






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  16.3.3.3

  	
  Zogenix must identify all
  Elan Confidential Information in its possession, and either return to Elan or
  forward to its assignee, as directed by Elan; and

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  16.3.3.4

  	
  Each Party must cooperate
  as required with the other Party and Zogenix’s assignee both before and after
  the assignment to ensure the smooth transition between Zogenix and assignee
  on all regulatory and operational matters relating to this Agreement and, if
  applicable, all Related Agreements.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.3.4

  	
  Elan may assign this Agreement along with
  each of the Related Agreements without Zogenix’s consent to any Third Party
  which (a) succeeds to the ownership of the Elan Patents in their entirety
  and (b) agrees to fulfil all of Elan’s responsibilities under this
  Agreement and each of the Related Agreements.

  
	
   

  	
   

  	
   

  	
   

  
	
  16.4.

  	
  Change of Control.
  Zogenix shall give prior written notice to Elan if Zogenix becomes a
  Technological Competitor or becomes an Affiliate of a Technological
  Competitor during the Term of this Agreement. Following such an event,
  Zogenix shall at all times be required to keep this Agreement, all Related
  Agreements and all associated activities Contained Within a Ring Fence.

  
	
   

  	
   

  	
   

  	
   

  
	
  16.5.

  	
  No Third Party
  Beneficiaries. Each Party is entering
  into this Agreement on its own behalf and not on behalf of any other person
  or entity.

  
	
   

  	
   

  	
   

  	
   

  
	
  16.6.

  	
  Parties Bound.
  This Agreement shall be binding upon the successors (including entities with
  which the Parties may merge) and permitted assigns of the Parties as of the
  effective date of such succession or assignment, and the name of a Party
  appearing herein shall be deemed to include the names of such Party’s
  successors and permitted assigns to the extent necessary to carry out the
  intent of this Agreement. Nothing in this Agreement, express or implied, is
  intended to, or shall confer upon, any Third Party, any legal or equitable
  right, benefit or remedy of any nature whatsoever.

  
	
   

  	
   

  	
   

  	
   

  
	
  16.7.

  	
  Relationship of the
  Parties. Nothing contained in this Agreement is intended
  or is to be construed to constitute either of the Parties hereto as partners
  or members of a joint venture or either Party as an employee of the other
  Party. No Party hereto shall have any express or implied right or authority
  to assume or create any obligations on behalf of or in the name of the other
  Party or to bind the other Party to any contract, agreement or undertaking
  with any Third Party.

  
	
   

  	
   

  	
   

  	
   

  
	
  16.8.

  	
  Entire Agreement.
  This Agreement, including the agreements between the Parties (or their
  Affiliates) referenced herein, constitutes the entire agreement and
  understanding between the Parties with respect to its subject matter, and
  except as expressly provided, supersedes all prior representations, writings,
  negotiations or understandings with respect to that subject matter.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Nothing in this Clause 16.8 shall exclude
  any liability which any Party would otherwise have to the other Party or any
  right which either of them may have to rescind this Agreement in respect of
  any statements made fraudulently by the other prior to the execution of this
  Agreement or any rights which either of them may have in respect of
  fraudulent concealment by the other.

  
	
   

  	
   

  	
   

  	
   

  
	
  16.9.

  	
  Severability.
  If any provision in this Agreement is deemed to be, or becomes invalid,
  illegal, void or unenforceable under applicable laws, such provision will be
  deemed amended to conform to applicable laws so as to be valid and
  enforceable, or if it cannot be so amended without materially altering the
  intention of the Parties, it will be deleted, but the validity,

  



 


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  legality and enforceability of the
  remaining provisions of this Agreement shall not be impaired or affected in
  any way.

  
	
   

  	
   

  	
   

  	
   

  
	
  16.10.

  	
  Further Assurance.
  Each Party shall do and execute, or arrange for the doing and executing of,
  each necessary act, document and thing reasonably within its power to
  implement this Agreement.

  
	
   

  	
   

  	
   

  	
   

  
	
  16.11.

  	
  Counterparts.
  This Agreement may be executed in any number of counterparts, each of which
  when so executed shall be deemed to be an original and all of which when
  taken together shall constitute this Agreement.

  
	
   

  	
   

  	
   

  	
   

  
	
  16.12.

  	
  Waivers.
  A failure to exercise or delay in exercising a right or remedy provided by
  this Agreement or by law does not constitute a waiver of the right or remedy
  or a waiver of other rights or remedies. No single or partial exercise of a
  right or remedy provided by this Agreement or by law prevents further exercise
  of the right or remedy or the exercise of another right or remedy. No waiver
  of any right under this Agreement shall be deemed effective unless contained
  in a written document signed by the Party charged with such waiver.

  
	
   

  	
   

  	
   

  	
   

  
	
  16.13.

  	
  Amendment.
  No amendment, modification or addition to this Agreement shall be effective
  unless it is made in writing and signed by each of the Parties.

  
	
   

  	
   

  	
   

  	
   

  
	
  16.14.

  	
  Notices.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.14.1

  	
  A notice under or in connection with this
  Agreement (a “Notice”):

  



 


	
   

  	
   

  	
  16.14.1.1

  	
  shall be in writing; and

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  16.14.1.2

  	
  may be delivered personally or sent by
  internationally recognized overnight courier or by fax to the Party due to
  receive the Notice at its address set out below:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.14.2

  	
  The address referred to in Clause 16.14.1.2
  is:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)

  	
  in the case of Elan:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Address:

  	
  Elan Pharma International Limited

  
	
   

  	
   

  	
   

  	
   

  	
  c/o 102 St. James Court

  
	
   

  	
   

  	
   

  	
   

  	
  Flatts

  
	
   

  	
   

  	
   

  	
   

  	
  Smith FL04

  
	
   

  	
   

  	
   

  	
   

  	
  Bermuda

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Fax:

  	
  +(441) 292
  2224

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Marked for the attention of:       Kevin
  Insley

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)

  	
  in the case of Zogenix:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Address:

  	
  11682 El Camino Real, Ste. 320

  
	
   

  	
   

  	
   

  	
   

  	
  San Diego,
  California, 92130

  
	
   

  	
   

  	
   

  	
   

  	
  USA

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Fax:

  	
  +1
  (858) 259-1166

  
						



 


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  Marked for the attention of: 
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  or to such other address(es) and fax numbers as may from time to time
  be notified by either Party to the other hereunder.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.14.3

  	
  Notice is deemed given:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  16.14.3.1

  	
  if delivered personally,
  when the person delivering the notice obtains the signature of a person at
  the address referred to in Clause 16.14.1.2;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  16.14.3.2

  	
  if sent by overnight
  courier, except air mail, two Business Days after posting it;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  16.14.3.3

  	
  if sent by fax, when
  confirmation of its transmission has been recorded by the sender’s fax
  machine.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.15.

  	
  Set-off.
  Each of the Parties will be entitled but not obliged to set-off against any
  amount of money payable to it by the other Party under this Agreement, any
  amount of money payable by it to the other Party under this Agreement.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.16.

  	
  Governing Law and
  Jurisdiction: This Agreement shall be governed by and
  construed in accordance with the laws of the State of New York, without
  regard to its conflict of laws rules, and shall be subject to the exclusive
  jurisdiction of the State and Federal Courts located in New York, New York.

  
								



 


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Execution Copy


 


SCHEDULE 1          TECHNOLOGICAL
COMPETITORS


 


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Execution Copy


 




	
  SCHEDULE 2

  	
   

  	
  KEY TERMS FOR COMMERCIAL
  MANUFACTURE AND SUPPLY AGREEMENT

  






 




	
  1.

  	
  Subject
  to Clause 9 of the Agreement, Elan (or an Elan Affiliate) to have the sole
  and exclusive right to manufacture, have manufactured, supply or have
  supplied commercial Product to Zogenix, its Affiliates and permitted
  sub-licensees in the Territory. Elan (or Affiliate) to use Commercially
  Reasonable Efforts to meet such supply requirements.

  
	
  2.

  	
  Elan
  (or Affiliate) shall own and be responsible for (i) filing DMFs that
  Elan or Affiliate may wish to file in respect of Elan Intellectual Property
  and the application of Elan Intellectual Property as regards the Product
  and/or the manufacture of Product, and (ii) all necessary manufacturing
  approvals for the commercial manufacture of the Product. Zogenix to be
  responsible for filing for and maintaining all other necessary Regulatory
  Approvals (e.g., NDA) and other approvals needed to import, offer for sell or
  sell commercial Product in the Territory.

  
	
  3.

  	
  Elan
  (or Affiliate) to supply Zogenix with Bottled Product that is manufactured in
  accordance with and conforms to Product Specifications and other mutually
  agreed specifications and to all applicable laws and regulations for supply
  and manufacturing commercial pharmaceutical products containing Controlled
  Substances, including cGMP. Bottled Product to be provided EXW. Product
  packaging to conform to written standards that are to be agreed by the
  Parties.

  
	
  4.

  	
  Detailed
  forecasting, ordering and delivery provisions to be negotiated in good faith
  between the Parties, having regard inter alia to reasonable adjustments in
  respect of delivery problems arising from external causes, and to be fully
  set out in Commercial Manufacture and Supply Agreement.

  
	
  5.

  	
  The
  Parties to establish a supply committee to deal with matters arising between
  the Parties over supply issues. The committee to discuss developments
  relating to forecasting, commercial and regulatory issues, scheduling and
  supply and other topics.

  
	
  6.

  	
  The
  price per unit of Bottled Product shall be [***]% of NSP.
  Such price shall be paid in advance through applying a Notional NSP, together
  with a true up mechanism and in no circumstances shall Elan (or its
  Affiliate) be required to supply commercial Product for less than [***].

  
	
  7.

  	
  Zogenix
  to have right to review and approve proposed changes in advance of their
  implementation specific to the Product manufacturing, testing, or controls
  documentation which require prior Regulatory Authority approval as well as
  any other changes that may be specified as requiring Zogenix approval in a
  quality agreement that shall be agreed between the Parties at the same time
  that the Commercial Manufacture and Supply Agreement is negotiated.

  
	
  8.

  	
  Zogenix
  to be responsible for the costs associated with the process transfer of
  Product from Elan’s development facility to its primary manufacturing
  facility in anticipation of the commercial scale-up of the Product, including
  the costs associated with process transfer, validation and maintenance.

  
	
  9.

  	
   

  	
  If
  after receipt of the first NDA Approval and if requested by Zogenix, Elan (or
  Affiliate) shall [***].

  
	
  10.

  	
  Zogenix
  shall maintain agreed upon levels of safety stock through agreed order and
  forecast procedures. If requested by Zogenix, Elan and Zogenix shall discuss
  the ability of Elan (or its Affiliate) to hold safety stock, at Zogenix’s
  cost and expense.

  
	
  11.

  	
  Release
  and rejection provisions (e.g., defects and latent defects) reasonably
  acceptable to the Parties, with Elan (or Affiliate) to have a specified time
  (e.g., [***]) to rectify issues attributable to the negligent
  acts or omissions of Elan (or Affiliate). Zogenix to be refunded where such
  Product cannot be reworked or replaced within specified time.

  
	
  12.

  	
  All
  remedies for failures, delays or
  defects in supply including defects in the Product to be negotiated in good
  faith by between the Parties and specifically set out in the Manufacturing
  and Supply Agreement, to the exclusion of any other remedy.

  
			






 






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  13.

  	
  Zogenix
  to be responsible for coordinating any Product recall in the Field and in the
  Territory and for ensuring that recalls are conducted in a commercially
  reasonable manner. Costs of recall shall be borne by [***] unless [***].

  
	
  14.

  	
  Elan (or Affiliate) to be responsible for
  manufacturing Product to meet Product Specifications and in compliance with
  cGMP and other applicable law. Zogenix to be responsible for marketing and
  promotion, and for recalls and indemnification otherwise arising.

  
	
  15.

  	
  Representations, warranties and indemnification
  provisions shall correspond to the Parties’ responsibilities under the
  Commercial Manufacture and Supply Agreement.

  
	
  16.

  	
  Term
  of the Commercial Manufacture and Supply Agreement will be the Term of the
  License Agreement.

  






 






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Execution
Copy


 


SCHEDULE 3          MANUFACTURING
COST


 


“Manufacturing Cost” is [***].


 


Such allocations shall be in
a manner consistent with US GAAP and consistent with expenses and overhead
allocated to other products manufactured by Elan or its Affiliates.


 


Where some part(s) of
the manufacture or packaging are conducted by unaffiliated Third Party(ies),
Manufacturing Cost shall be [***].


 






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[Signature
Page to License Agreement]


 


 


	
  SIGNED

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Kevin Insley

  	
   

  	
   

  
	
  Duly authorised for and on behalf of:

  	
   

  
	
  ELAN PHARMA INTERNATIONAL LIMITED

  	
   

  
	
  Name:

  	
  Kevin Insley

  	
   

  	
   

  
	
  Title:

  	
  Authorised Signatory

  	
   

  	
   

  
	
  Date:

  	
  November 27, 2007

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  SIGNED

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Roger L. Hawley

  	
   

  	
   

  
	
  Duly authorised for and on behalf of:

  	
   

  
	
  ZOGENIX, INC.

  	
   

  
	
  Name:

  	
  Roger L. Hawley

  	
   

  	
   

  
	
  Title:

  	
  CEO

  	
   

  	
   

  
	
  Date:

  	
  Nov. 27, 2007