<PAGE>

                                                                   Exhibit 10.12

          Confidential Materials omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.

                               LICENSING AGREEMENT

     This Licensing Agreement (hereinafter, "Agreement"), dated as of October
12, 2007 ("Effective Date"), between XenoPort, Inc., a Delaware corporation
having a place of business at 3410 Central Expressway, Santa Clara, CA 95051
("XenoPort"), and Xanodyne Pharmaceuticals, Inc., a Delaware corporation having
a place of business at One Riverfront Place, Suite 900, Newport, KY 41071
("Xanodyne").

                                   BACKGROUND

     A. XenoPort has developed a Transported Prodrug(TM) of tranexamic acid (as
further defined below, the "Compound"), for the treatment of excessive bleeding,
including menorrhagia and potentially other indications. XenoPort owns or
controls certain patents, know-how and other intellectual property relating to
the Compound and the Intermediate (as defined below) used to manufacture the
Compound.

     B. Xanodyne is currently developing a formulation of tranexamic acid (as
further defined below, the "Xanodyne Product"), for the treatment of
menorrhagia. Xanodyne owns or controls certain patents, know-how and other
intellectual property relating to such Xanodyne Product.

     C. Xanodyne desires to further develop and commercialize the Compound and
products containing the Compound (as further defined below, "XenoPort Products")
in the Territory (as defined below), and XenoPort desires to have the Compound
and XenoPort Products developed and commercialized in the Territory by Xanodyne,
in accordance with this Agreement.

     D. Xanodyne desires to obtain from XenoPort certain distribution and
license rights for the Compound and XenoPort Products in the Territory, and
XenoPort is willing to grant to Xanodyne such rights on the terms and conditions
set forth in this Agreement.

     NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereby
agree as follows:

                                   ARTICLE 1
                                   DEFINITIONS

     1.1 "Adverse Drug Experience" or "ADE" shall mean any adverse experience as
defined in 21 C.F.R. Section 312.32(a) for investigational drugs or 21 C.F.R.
Section 314.80(a) for approved drugs, as applicable.

<PAGE>

     1.2 "Affiliate" of a Party shall mean any person, corporation or other
entity that, directly or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with such Party, as the
case may be, for so long as such control exists. As used in this Section 1.2,
"control" shall mean: (a) to possess, directly or indirectly, the power to
direct the management and policies of such person, corporation or other entity,
whether through ownership of voting securities or by contract relating to voting
rights or corporate governance; or (b) direct or indirect beneficial ownership
of at least fifty percent (50%) (or such lesser percentage that is the maximum
allowed to be owned by a foreign corporation in a particular jurisdiction) of
the voting share capital in such person, corporation or other entity.

     1.3 "Annual Net Sales" shall mean the total Net Sales of the applicable
Product(s) sold in the Territory by or under the authority of Xanodyne or its
Affiliate in a particular calendar year. For such purposes, units of Product
shall be considered sold when such Product is shipped to the customer, or the
revenue from such sale is recognized by the Selling Party (as defined in Section
1.20 below) for financial purposes, whichever occurs first.

     1.4 "Commercially Reasonable Efforts" shall mean the level of efforts and
resources required to carry out a particular task or obligation, consistent with
the efforts generally used by pharmaceutical companies with respect to their own
high priority pharmaceutical products of similar commercial potential and at a
similar stage in development or product life for which Marketing Approval is
being sought, or for which Marketing Approval has been obtained, as the case may
be. Without limiting the foregoing, "Commercially Reasonable Efforts" with
respect to the Menorrhagia Indication shall mean such level of efforts and
resources required to carry out a particular task or obligation, and consistent
with the preceding sentence, as if the XenoPort Products were the only high
priority pharmaceutical products at the same stage of development or product
life, as the case may be, being developed and commercialized by or under the
authority of Xanodyne for the Menorrhagia Indication.

     1.5 "Compound" shall mean that certain compound referred to internally at
XenoPort as XP21510 ("XP21510") and/or any other compound within the genus of
[**], the structures of which are set forth in Exhibit 1.5.

     1.6 "Control" (including any variations such as "Controlled" or
"Controlling"), in the context of intellectual property rights, shall mean that
a Party owns or possesses rights to intellectual property sufficient to grant
the applicable license under this Agreement, without violating the terms of any
agreement with any Third Party.

     1.7 "Cost of Goods" shall mean the fully burdened costs incurred and
substantiated by XenoPort to manufacture or have manufactured the Compound
calculated in accordance with GAAP and XenoPort's then prevailing standard
procedures for calculating cost of goods. Cost of Goods shall not include any
margins or other markup. As used in this Section 1.7, "manufacture" includes all
of the activities required to manufacture or have manufactured the Compound
pursuant to good manufacturing practices and to deliver the same to the [**]
specified in Section 9.2.5 below, and shall include the net cost or credit of
any value-added taxes or duties actually paid or utilized on account of the
Compound and the costs of quantities of Compound destroyed in quality control
testing (as such costs are calculated above).


                                       2

<PAGE>

     1.8 "Data" shall mean both the XenoPort Data and Xanodyne Data defined as
follows:

          1.8.1 "XenoPort Data" shall mean: (a) all research data (including,
but not limited to, the synthetic process, physical properties and like
information), pharmacology data, preclinical data and/or clinical data for the
Compound, and/or XenoPort Products; and/or (b) all regulatory documentation,
information and submissions pertaining to, or made in association with, an IND,
Marketing Approval Application, Marketing Approval or the like for the Compound
or any XenoPort Product; in each case, that are Controlled by XenoPort or its
Affiliates as of the Effective Date and/or during the term of this Agreement.

          1.8.2 "Xanodyne Data" shall mean: (a) all research data, pharmacology
data, preclinical data and/or clinical data for the Compound and/or XenoPort
Products; and/or (b) all regulatory documentation, information and submissions
pertaining to, or made in association with, an IND, Marketing Approval
Application, Marketing Approval or the like for the Compound or any XenoPort
Product; in each case, that are Controlled by Xanodyne as of the Effective Date
and/or during the term of this Agreement. As used herein, "Xanodyne Data" shall
also include (i) all research data, pharmacology data, preclinical data and/or
clinical data for a Xanodyne Product generated by, or on behalf of, Xanodyne or
its Affiliates; and (ii) all regulatory documentation, information and
submissions pertaining to, or made in association with, an IND, MAA, Marketing
Approval or the like for a Xanodyne Product; in each case that are Controlled by
Xanodyne or its Affiliates as of the Effective Date and/or during the term of
this Agreement and which are relied upon by Xanodyne in association with any
IND, MAA or other approval for the Compound or a XenoPort Product in the
Territory. Notwithstanding the foregoing, Xanodyne Data shall exclude the Tools.

     1.9 "Excessive Bleeding Indications" shall mean any indication related to
the prevention or treatment of excessive bleeding, including, but not limited
to, [**], but specifically excluding [**].

     1.10 "FDA" shall mean the United States Food and Drug Administration, or
any successor entity thereto performing similar functions.

     1.11 "Filing" of an NDA shall be deemed to occur upon the earlier of: (a)
receipt of written notice of acceptance from the FDA of such NDA for substantive
review; or (b) once sixty (60) days has passed from the date of written notice
of receipt of the NDA by the FDA, provided that no notice of "refusal to file"
is received within such sixty (60) day period.

     1.12 "GAAP" shall mean United States generally accepted accounting
principles as in effect from time to time, consistently applied by a Party
across its entire business.

     1.13 "IND" shall mean any Investigational New Drug Application (including
any amendments thereto) filed with the FDA pursuant to 21 C.F.R. Section 312
before the commencement of clinical trials involving a Product, or any
comparable filing with any Regulatory Authority in any other jurisdiction.


                                       3

<PAGE>

     1.14 "Indications" shall mean the Menorrhagia Indication, Excessive
Bleeding Indications, and any and all Other Indications.

     1.15 "Intermediate" shall mean that certain compound employed by XenoPort
as of the Effective Date in the manufacture of XP21510 and/or any other compound
within the genus of compounds, the structures of which are set forth on Exhibit
1.15.

     1.16 "Marketing Approval" shall mean all final approvals, licenses,
registrations or authorizations of a Regulatory Authority in a country,
necessary for the manufacture, use, storage, import, marketing and sale of a
Product in such country. For countries where governmental approval of pricing
and/or reimbursement is required for marketing in such country, Marketing
Approval shall not be deemed to occur until such pricing or reimbursement
approval is obtained. For clarity, an "Approvable" designation granted by FDA
does not constitute Marketing Approval for a Product in the Territory.

     1.17 "Marketing Approval Application" (or "MAA") shall mean an NDA in the
United States, or a comparable application that has been submitted to a
Regulatory Authority in another jurisdiction.

     1.18 "Menorrhagia Indication" shall mean an indication involving the
management, prevention or treatment of menorrhagia, hyper-menorrhea or
excessive, abnormally heavy or prolonged menstrual bleeding, or any similar such
indication as may be approved by a Regulatory Authority in the Territory.

     1.19 "New Drug Application" (or "NDA") shall mean a New Drug Application
(or its equivalent) submitted to the FDA.

     1.20 "Net Sales" shall mean the gross invoice price for the applicable
Product sold by or under the authority of Xanodyne or its Affiliates (each, a
"Selling Party"), less reasonable and customary deductions allowed to a Third
Party customer by the Selling Party, to the extent actually taken by such Third
Party customer, on such sales for:

               (a) trade, quantity and cash discounts and allowances;

               (b) credits, rebates (including those rebates under the Medical
Prescription Drug Rebate and Improved Access to Medicines requirements of the
Omnibus Budget Reconciliation Act of 1990 and comparable federal and state
requirements, as of the Effective Date or hereafter in effect) and charge backs
or equivalents thereof (including those to managed care entities and national,
state, and local government agencies) and allowances to the customer on account
of rejection or returns of such Product (including wholesaler and retailer
returns), or on account of retroactive price reductions affecting such Product
or errors related to incorrect billing;

               (c) freight, postage and duties, and any other transportation
expenses related to the Product, including handling and insurance thereon,
separately identified on the invoice or other documentation maintained in the
ordinary course of business;


                                       4

<PAGE>

               (d) sales and excise taxes, other consumption taxes, customs
duties and compulsory payments to governmental authorities and any other
governmental charges imposed upon the importation, use or sale of such Product
to the customer and separately identified on the invoice or other documentation
maintained in the ordinary course of business; and

               (e) commissions paid to Third Party wholesalers, or other similar
Third Party distributors, in each case, who do not engage in the marketing or
promotion of such Product.

     Sales between Xanodyne and its Affiliates for resale shall be excluded from
the computation of Net Sales, but the subsequent resale of Products shall be
included within the computation of Net Sales. If a Product is sold or
transferred for consideration other than cash, or in a transaction not at arm's
length, the Net Sales from such sale or transfer shall be deemed the then fair
market value of such Product.

     In the event that [**], the Net Sales [**] shall be [**] during the
applicable reporting period by [**]. If sales [**] during the applicable
reporting period, the [**] in which sales [**] shall be used. In the event that
[**], then Net Sales for purposes of determining royalty payments shall be [**]
shall not be unreasonably withheld or delayed.

     1.21 "Other Indication" shall mean any indication other than the
Menorrhagia Indication and Excessive Bleeding Indications.

     1.22 "Party" shall mean XenoPort or Xanodyne, individually, and "Parties"
shall mean XenoPort and Xanodyne, collectively.

     1.23 "Patent(s)" shall mean any patents and patent applications, together
with all additions, divisions, continuations, continuations-in-part,
substitutions, reissues, re-examinations, extensions, registrations, patent term
extensions, supplemental protection certificates and renewals of any of the
foregoing.

     1.24 "Phase 2" shall mean a human clinical trial conducted on patients with
the disease being studied for the principal purpose of achieving a preliminary
determination of efficacy and establishing appropriate dosage ranges for use in
Phase 3 trials of a Product, as further described in 21 C.F.R. Section
312.21(b).

     1.25 "Phase 3" shall mean a human clinical trial, the principal purpose of
which is to establish safety and efficacy in patients with the disease or
condition being studied, as further described in 21 C.F.R. Section 312.21(c),
which is designed and intended to be of a size and statistical power sufficient
to serve as a pivotal study to support the filing of an NDA for the indication
being studied.

     1.26 "Product" shall mean, individually, either the Xanodyne Product or any
XenoPort Product, and, collectively, the Xanodyne Product and the XenoPort
Products.


                                       5

<PAGE>

     1.27 "Product Trademark(s)" shall mean the product specific trademark(s),
symbol(s), logo(s) and/or trade dress identified for use with the XenoPort
Product(s) in accordance with Section 11.1.

     1.28 "Regulatory Authority" shall mean the FDA, or a regulatory body with
similar regulatory authority in any other jurisdiction outside the Territory.

     1.29 "Territory" shall mean the United States of America, its territories
and possessions and the District of Columbia.

     1.30 "Third Party" shall mean any person, corporation, joint venture or
other entity, other than Xanodyne, XenoPort and their respective Affiliates.

     1.31 "Tools" shall mean: (a) physician and/or patient tools, [**] used to
identify patients with menorrhagia and assess patient's response to therapy for
menorrhagia owned or controlled by Xanodyne; and/or (b) sales and marketing
information, materials and like items for use in the promotion of a Product
owned or controlled by Xanodyne.

     1.32 "Valid Claim" means a claim of an issued Patent owned or Controlled by
a Party, including the XenoPort Patents and the Xanodyne Patents, that: (a) has
not been revoked or held unenforceable or invalid by a decision of a court or
governmental agency of competent jurisdiction from which no appeal can be, or
has been, taken; and (b) has not been admitted to be invalid or unenforceable
through reissue, re-examination, disclaimer or otherwise.

     1.33 "Xanodyne Know-How" shall mean any and all scientific, medical,
technical, regulatory and other information (excluding any Tools) relating to
the Compound, any Xanodyne Product and/or any XenoPort Products and Xanodyne
Data, that are Controlled by Xanodyne as of the Effective Date and/or during the
term of this Agreement, that are needed by, or reasonably useful to, XenoPort in
order to develop and/or commercialize the Compound and/or XenoPort Products for
marketing, promotion and/or sale outside the Territory and that are relied upon
or utilized by Xanodyne or its Affiliates in order to develop and/or
commercialize the Compound or any XenoPort Product.

     1.34 "Xanodyne Patents" shall mean the Patents owned or Controlled by
Xanodyne or its Affiliates that are listed on Exhibit 1.34, together with all
additions, divisions, continuations, substitutions, re-issues, re-examinations,
extensions, registrations, patent term extensions, supplemental protection
certificates and renewals of any such Patents.

     1.35 "Xanodyne Product" shall mean the formulation of tranexamic acid
developed by, or under the authority of, Xanodyne, as further described on
Exhibit 1.35, and/or any modified form of such formulation developed by, or
under the authority of, Xanodyne during the term of this Agreement, including
any such formulation where the manufacture, use, sale or import is covered by
any Xanodyne Patents.

     1.36 "XenoPort Know-How" shall mean: (a) all scientific, medical,
technical, regulatory and/or other information relating to: (i) the
Intermediate, but only to the extent necessary or


                                       6

<PAGE>

reasonably useful to make the Compound; and (ii) the Compound and/or XenoPort
Products; in each case, that were generated or utilized by XenoPort or its
Affiliates in developing or producing the Intermediate and/or the Compound; (b)
XenoPort Data; and (c) Compound Improvements; and with respect to each of
paragraphs (a), (b) and (c), that are Controlled by XenoPort as of the Effective
Date and/or during the term of this Agreement, and that are needed by or
otherwise reasonably useful to Xanodyne in order to exercise its rights and
perform its obligations with respect to the Compound and/or XenoPort Products
under this Agreement.

     1.37 "XenoPort Patents" shall mean the XenoPort Compound Patents and the
XenoPort Intermediate Patents.

          1.37.1 "XenoPort Compound Patent(s)" shall mean the Patents owned or
Controlled by XenoPort or its Affiliates as listed on Exhibit 1.37.1, together
with all additions, divisions, continuations, substitutions, re-issues,
re-examinations, extensions, registrations, patent term extensions, supplemental
protection certificates and renewals of any such Patents.

          1.37.2 "XenoPort Intermediate Patent(s)" shall mean the Patents owned
or Controlled by XenoPort or its Affiliates as listed on Exhibit 1.37.2,
together with all additions, divisions, continuations, substitutions, re-issues,
re-examinations, extensions, registrations, patent term extensions, supplemental
protection certificates and renewals of any such Patents.

     1.38 "XenoPort Product" shall mean any pharmaceutical product containing
the Compound, alone or in combination with one or more other active
pharmaceutical ingredients, in any dosage form or formulation.

     1.39 "XenoPort Product Approval Date" shall mean the date on which
Marketing Approval for the First XenoPort Product in the Territory is obtained.

     1.40 Additional Definitions. Each of the following terms shall have the
meaning described in the corresponding section of this Agreement below.

<TABLE>
<CAPTION>
TERM                             SECTION DEFINED               TERM               SECTION DEFINED
----                             ---------------   ----------------------------   ---------------
<S>                              <C>               <C>                            <C>
Agreement                        Introduction      [**]                           9.2.4
Commercial Milestones            6.2.2(b)          Joint Commercialization
                                                   Committee / JCC                3.2.1
Commercialization Plan           5.1.2             Joint Development Committee
                                                   / JDC                          3.1.1
Committee                        3.3.1             Joint Patent                   10.1.1
Compound Improvements            10.1.2(b)         Liabilities                    16.1
Compound Improvement Patents     10.2.1            Loss of Exclusivity            6.2.2(a)(ii)
Confidential Information         12.1              Negotiation Period             5.4.2
Cooperating Party                12.5              Option Notice                  5.4.1
Co-Promotion Agreement           5.4.2             Pharmaco-Vigilance Agreement   4.7.1
Co-Promotion Field               5.4               Product Infringement Actions   10.4.1
Co-Promotion Partner             5.4.1(b)(ii)      Product Materials              14.2.6
</TABLE>


                                       7

<PAGE>

<TABLE>
<CAPTION>
TERM                             SECTION DEFINED               TERM               SECTION DEFINED
----                             ---------------   ----------------------------   ---------------
<S>                              <C>               <C>                            <C>
Damages                          10.4.4(c)         Prosecution and Maintenance    10.2.1
Development Plan                 4.1.1             Requesting Party               12.5
Dispute                          17.1              Royalty Transition Date        6.3.1(a)(ii)
Effective Date                   Introduction      Selling Party                  1.20
Election Notice                  5.4.2             [**]                           3.5
[**]                             3.5               [**]                           10.4.4(a)
First Xanodyne Product           6.2.2(a)(i)       Supply Transition Date         9.1
First XenoPort Product           6.2.2(a)(i)       Supply Transition Plan         9.1
Generic Product                  6.4.2(c)          Third Party Claim              16.1
ICH                              4.7.1             Third Party Royalties          6.4.1
[**]                             6.4.2(a)          Wind-down Period               14.2.1(b)
Improvements                     10.1.2(d)         Withdrawal Notice              3.3.2
Improvement Patents              10.1.2(d)         Xanodyne                       Introduction
Increased Royalty Commencement   6.3.1(a)(ii)      Xanodyne Indemnitees           16.2
Date
Indemnitee                       16.3              Xanodyne Product Approval      6.3.1(a)(i)
                                                   Date
Indemnitor                       16.3              Xanodyne Product               4.1.1
                                                   Development Plan
Infringement                     10.3.1            XenoPort                       Introduction
Infringement Actions             10.4.1            XenoPort Indemnitees           16.1
Intermediate Infringement        10.4.1            XenoPort Product               4.1.1
Actions                                            Development Plan
JAMS                             17.3.1            XenoPort Supply Costs          9.2.2(b)
[**]                             9.2.4             XP21510                        1.5
</TABLE>

                                    ARTICLE 2
                                GRANT OF LICENSE

     2.1 License. Subject to the terms and conditions of this Agreement,
XenoPort hereby grants to Xanodyne during the term of this Agreement:

          2.1.1 an exclusive license under the XenoPort Compound Patents,
XenoPort Know-How and Compound Improvement Patents to develop, use, import,
offer for sale, sell, market, distribute and promote the Compound, alone or as
incorporated into a XenoPort Product, for all Indications in the Territory; and

          2.1.2 a non-exclusive license under the XenoPort Compound Patents, the
XenoPort Know-How and Compound Improvement Patents: (a) to develop or have
developed the Compound, alone or as incorporated into a XenoPort Product,
outside the Territory; and/or (b) to manufacture or have manufactured the
Compound and/or the XenoPort Products within or outside the Territory solely:
(i) for development of the Compound, alone or as incorporated into a XenoPort
Product, in or outside the Territory; and (ii) for use, import, offer for sale,
and sale of the Compound, alone or as incorporated into a XenoPort Product, in
the Territory; provided however that, in each case, the grant of such license to
develop or have developed the Compound, alone or as incorporated into a XenoPort
Product, outside the Territory shall exclude the right to conduct any clinical
trials; and


                                       8

<PAGE>

          2.1.3 a non-exclusive license under the XenoPort Intermediate Patents:
(a) to make, have made or use the Intermediate; and (b) to practice any method,
process or procedure to make, have made or use the Intermediate, within or
outside the Territory (i.e., worldwide), in each case solely for the purpose of
manufacturing or having manufactured the Compound for use, import, offer for
sale and sale of the Compound, alone or as incorporated into a XenoPort Product,
in the Territory.

          2.1.4 The rights and licenses in Section 2.1.1 shall be exclusive even
as to XenoPort, except with respect to: (a) the development (excluding
performing and having performed clinical trials), manufacture, import, and use
as necessary for such development, manufacture and import, of the Compound
and/or XenoPort Products; (b) all scientific, medical, technical, regulatory
and/or other information relating to the Intermediate comprising XenoPort
Know-How; and (c) XenoPort's rights to co-promote the XenoPort Products in
accordance with any Co-Promotion Agreement executed by the Parties pursuant to
Section 5.4. The rights and licenses in Sections 2.1.2 and 2.1.3 shall be
non-exclusive and Xanodyne's exercise of such right and license shall be subject
to the Parties' agreement with respect to supply by XenoPort to Xanodyne of the
Compound prior to the Supply Transition Date pursuant to Article 9 below.

     2.2 Affiliates; Sublicenses. Xanodyne shall have the right to exercise the
license granted under Section 2.1 through its Affiliates solely for so long as
such entity remains an Affiliate of Xanodyne, and Xanodyne shall remain
responsible for the compliance of such Affiliate with the applicable terms of
this Agreement. Xanodyne shall not otherwise have the right to grant sublicenses
under its rights under Section 2.1 without the prior written consent of
XenoPort, [**] provided that, notwithstanding the foregoing, [**] in accordance
with [**] provided further that, it is understood [**], to the extent
applicable. For the purposes of this Agreement, a "sublicense" shall mean an
agreement or arrangement between Xanodyne and an Affiliate or a Third Party to
whom Xanodyne grants a right to market, distribute and/or promote the Compound
or any XenoPort Product in the Territory.

     2.3 Activities Outside the Territory. Xanodyne agrees that neither it, nor
any of its Affiliates, will: (a) file for Marketing Approval with respect to,
market, distribute, promote or sell the Compound or any XenoPort Product
anywhere in the world, except in the Territory, and, within the Territory, only
in accordance with and under this Agreement; and (b) import to, or export from,
the Territory the Compound and/or XenoPort Products except for the purposes of
conducting development activities and/or manufacturing Compound and/or XenoPort
Products, in each case, only in accordance with this Agreement. Xanodyne agrees
that neither it, nor any of its Affiliates, will use or otherwise exploit
XenoPort Patents and/or XenoPort Know-How, except as licensed in this Agreement.

     2.4 No Other Rights. Except for the rights and licenses expressly granted
in this Agreement, XenoPort retains all rights under its intellectual property,
and no additional rights shall be deemed granted to Xanodyne by implication,
estoppel or otherwise. For clarity, the licenses and rights granted in this
Agreement shall not be construed to convey any licenses or rights under the
XenoPort Patents with respect to any active pharmaceutical ingredient other than
Compound(s).


                                       9

<PAGE>

                                    ARTICLE 3
                                   GOVERNANCE

     3.1 Joint Development Committee.

          3.1.1 Establishment. [**] XenoPort and Xanodyne shall establish a
development committee ("Joint Development Committee" or "JDC") to monitor the
progress of the development activities against the Development Plan for the
Products for all Indications in the Territory and, to the extent Xanodyne is
permitted to conduct development activities outside the Territory in accordance
with Section 2.1, outside the Territory.

          3.1.2 Duties. The JDC shall:

               (a) Review and approve the Development Plan in accordance with
Section 4.1;

               (b) Subject to, and within the parameters of, the Development
Plan;

                    (i) Monitor the progress of the development activities
against the Development Plan (including, review of the conduct of clinical
trials conducted pursuant to the Development Plan); and

                    (ii) Approve certain regulatory matters as provided in
Section 4.4.2 below;

               (c) Facilitate the exchange of Data and other information and/or
materials between the Parties to the extent relating to the XenoPort Products;
and

               (d) Perform such other duties as are specifically assigned to the
JDC in this Agreement or otherwise agreed in writing by the Parties.

     3.2 Joint Commercialization Committee.

          3.2.1 Establishment. [**] XenoPort and Xanodyne shall establish a
joint commercialization committee ("Joint Commercialization Committee" or "JCC")
to monitor the progress of the commercialization, marketing and promotion
activities against the Commercialization Plan.

          3.2.2 Duties. The JCC shall:

               (a) Review the Commercialization Plan developed in accordance
with Section 5.1.2;

               (b) Subject to, and within the parameters of, the
Commercialization Plan, monitor the commercialization, marketing and promotion
activities against the Commercialization Plan; and


                                       10

<PAGE>

               (c) Perform such other duties as are specifically assigned to the
JCC in this Agreement or otherwise agreed in writing by the Parties.

     3.3 Committee Membership.

          3.3.1 Committee Membership. The JDC and JCC (each, a "Committee")
shall each be composed of an equal number of representatives from each of
Xanodyne and XenoPort, selected by such Party. Unless the Parties otherwise
agree, the exact number of representatives for each of Xanodyne and XenoPort
shall be three (3) representatives, and at least one (1) from each Party shall
be [**]. Either Party may replace its respective Committee representatives at
any time with prior written notice to the other Party; provided that the
criteria for composition of each Committee set forth in the preceding sentence
continues to be satisfied following any such replacement of a Party's
representative on any such Committee. Each Committee will be chaired by a
Xanodyne representative [**] and Xanodyne may, from time to time and in its sole
discretion, change the representative who serves as the chairperson of any
Committee with prior written notice to XenoPort.

          3.3.2 Withdrawal from Committees. Notwithstanding Sections 3.1, 3.2
and 3.3.1 above, it is understood that XenoPort's participation in any Committee
is not an obligation of, or a deliverable to be provided by, XenoPort under this
Agreement and that such participation is a right of XenoPort that XenoPort may
exercise or waive, in its discretion. At any time during the term of the
Agreement and for any reason, XenoPort shall have the right to withdraw from
participation in one (1) or more Committees upon written notice to Xanodyne,
which notice shall be effective immediately upon receipt ("Withdrawal Notice").
Following the issuance of a Withdrawal Notice and subject to this Section 3.3.2,
XenoPort's representatives to the applicable Committee(s) shall not participate
in any meetings of such Committee(s), nor shall XenoPort have any right to vote
on decisions within the authority of such Committee(s). If, at any time,
following the issuance of a Withdrawal Notice, XenoPort wishes to resume
participation in such Committee(s), XenoPort shall notify Xanodyne in writing
and, thereafter, XenoPort's representatives to such Committee(s) shall be
entitled to attend any subsequent meeting of such Committee(s) and to
participate in the activities of, and decision-making by, such Committee(s) as
provided in this Article 3 as if a Withdrawal Notice had not been issued by
XenoPort pursuant to this Section 3.3.2. Following XenoPort's issuance of a
Withdrawal Notice pursuant to this Section 3.3.2, unless and until XenoPort
resumes participation in the applicable Committee(s) in accordance with this
Section 3.3.2: (a) all meetings of such Committee(s) shall be held at Xanodyne's
facilities; (b) Xanodyne shall have the right to make the final decision on all
matters within the scope of authority of such Committee(s); and (c) XenoPort
shall have the right to continue to receive the minutes of such Committee
meetings, but shall not have the right to approve the minutes for any such
Committee meeting held after XenoPort's issuance of a Withdrawal Notice. For
clarity, XenoPort's election to withdraw from participation in any or all
Committees shall not constitute a breach of this Agreement by XenoPort.

     3.4 Committee Meetings. The JDC and, from and after such time as is
appropriate, the JCC, shall meet at least twice each calendar year, or more or
less often as otherwise agreed to by the Parties. All Committee meetings may be
conducted by telephone, video-conference or in person (subject to the
requirement below) as reasonably determined by the chairperson of the applicable


                                       11

<PAGE>

Committee; provided, however, that each Committee shall meet in person at least
once each calendar year, unless the Parties mutually agree to meet by
alternative means. Unless otherwise agreed by the Parties, all in-person
Committee meetings shall be held on an alternating basis between XenoPort's
facilities and Xanodyne's facilities. Each Party shall bear its own personnel
and travel costs and expenses relating to Committee meetings. With the consent
of the Parties (not to be unreasonably withheld or delayed), other employee
representatives of the Parties may attend any Committee meeting as non-voting
observers. Minutes of each Committee meeting will be prepared by the chairperson
and distributed to the members of the applicable Committee for review and
comment within twenty (20) days after each meeting of the applicable Committee,
and will be approved as the first order of business at the immediately
succeeding meeting of such Committee.

     3.5 Decision-Making. Decisions of each Committee shall be made by [**].
Subject to Section 3.3.2, in the event the JDC or the JCC fails to reach [**]
with respect to a particular matter within its authority, then the [**] shall
have the right to [**] on any such matter before the JDC or JCC, except that the
[**] with respect to the following matters: [**]. If the JDC fails to reach [**]
with respect to any of the matters described [**] above, [**] have such matter
[**]. [**] shall meet [**] to resolve such matter. If, [**] to resolve such
matter [**], the Parties shall resolve the matter in accordance with the
provisions of Section 17.3.

     3.6 Scope of Governance. Notwithstanding the creation of the JDC and JCC,
each Party shall retain the rights, powers and discretion granted to it
hereunder, and no Committee shall be delegated or vested with rights, powers or
discretion unless such delegation or vesting is expressly provided herein, or
the Parties expressly so agree in writing. No Committee shall have the power to
amend or modify this Agreement, and no decision of any Committee shall be in
contravention of any terms and conditions of this Agreement. It is understood
and agreed that issues to be formally decided by the JDC and, if applicable, the
JCC are only those specific issues that are expressly provided in this Agreement
to be decided by the JDC and JCC, as applicable.


                                       12

<PAGE>

                                    ARTICLE 4
                                   DEVELOPMENT

     4.1 Development Plan.

          4.1.1 Initial Development Plans. An initial development plan for the
Compound and XenoPort Products is attached to this Agreement as Exhibit 4.1
("XenoPort Product Development Plan") and sets forth the development activities
to be conducted in the Territory and, to the extent permitted in accordance with
Section 2.1, the development activities to be conducted outside the Territory
for the Compound and XenoPort Products. Within [**] following the Effective
Date, Xanodyne shall provide to XenoPort an initial development plan for the
Xanodyne Product, which shall set forth the development activities to be
conducted for the Xanodyne Product ("Xanodyne Product Development Plan"). Upon
receipt by XenoPort, the Xanodyne Product Development Plan shall be deemed to be
incorporated into this Agreement and, upon request by either party, Exhibit 4.1
shall be updated to include the initial Xanodyne Product Development Plan. For
the purposes of this Agreement, the XenoPort Product Development Plan and the
Xanodyne Product Development Plan shall be referred to collectively as the
"Development Plan".

          4.1.2 JDC Approval of Development Plan. Within [**] following the
Effective Date, Xanodyne will prepare and provide to the JDC an expanded
Development Plan, which shall be consistent with the initial XenoPort Product
Development Plan and Xanodyne Product Development Plan and shall include details
relating to those items described in sub-paragraphs (i) to (viii) of the last
sentence of this Section 4.1.2 to the extent such information is applicable and
available to Xanodyne as of such date. Within [**] following the Effective Date,
the JDC shall review the details of such expanded Development Plan and approve
the details of such Development Plan to the extent applicable to the Compound
and/or XenoPort Products only. For the purpose of clarity, Xanodyne agrees that
the scope of the Development Plan shall include, or shall be updated promptly to
include, the following details, as and when such information becomes applicable
and available to Xanodyne during the development of the Compound and Products:
[**].

          4.1.3 Changes to the Development Plan. The JDC shall review the
Development Plan on an ongoing basis, and in no event less frequently than [**]
each calendar year. The JDC may propose revisions to the then-current
Development Plan to the extent related to the development activities for
XenoPort Products; provided, however, the aspects of the Development Plan
relating to [**]. Any changes to the Development Plan related to the development
activities for the [**]; provided, however, that, [**] on such proposed changes,
[**]. For the sake of clarity, [**].


                                       13

<PAGE>

     4.2 Development Activities in the Territory.

          4.2.1 Responsibility. Xanodyne shall, at its expense, be responsible
for all preclinical, clinical and other development activities required to
obtain Marketing Approval for the Products in the Territory. Xanodyne shall
carry out all activities in accordance with the provisions of this Agreement,
and Xanodyne shall use Commercially Reasonable Efforts (i) to carry out all such
activities in accordance with the then-current Development Plan and (ii) to
achieve the goals of the then-current Development Plan with respect to the
Compound and the XenoPort Products in accordance with the timelines specified
therein. Xanodyne shall keep XenoPort reasonably informed as to the progress of
its development and regulatory activities relating to the Compound and each
XenoPort Product in the Territory, by way of updates to the JDC at its meetings,
and as otherwise reasonably requested by XenoPort.

          4.2.2 Conduct of Activities. Xanodyne shall conduct the activities
under the Development Plan in compliance in all material respects with all
applicable laws, rules and regulations and in accordance with good scientific
and clinical practices, applicable under the laws and regulations within the
portion of the Territory in which such activities are conducted.

     4.3 Development Activities Outside the Territory. Except for those
development activities conducted by Xanodyne or its Affiliates outside the
Territory in accordance with this Agreement, XenoPort, or its Affiliates and/or
other licensee(s), shall be responsible for all development and regulatory
activities for the Compound and XenoPort Products outside the Territory.
XenoPort agrees to keep Xanodyne reasonably informed as to the progress of its
and/or (to the extent it is able to do so) its other licensees' clinical
development and regulatory activities relating to the Compound and XenoPort
Products outside the Territory by way of updates to the JDC at its meetings and
as otherwise reasonably requested by Xanodyne. Except to the extent development
activities are permitted to be conducted by Xanodyne or its Affiliates outside
the Territory in accordance with this Agreement, it is understood and agreed
that all development efforts for the Compound and XenoPort Products outside the
Territory shall be at the sole cost and expense of XenoPort, its Affiliates or
its other licensee(s).

     4.4 Regulatory Matters.

          4.4.1 Responsibility for Regulatory Filings. Xanodyne shall be
responsible, at its expense, for filing, obtaining and maintaining approvals for
the development and commercialization of the Products for all Indications in the
Territory, including any such IND, NDA or Marketing Approval by the FDA, as well
as pricing or reimbursement approvals in the Territory. All such activity shall
be reviewed by the JDC, [**]. All such filings will be in the name of Xanodyne.

          4.4.2 Role of the JDC. The JDC shall review the overall strategy and
positioning of all material submissions and filings for the Compound and
XenoPort Products with the FDA prior to their submission or filing. In
connection with such review, Xanodyne shall promptly provide to the JDC all such
submissions or filings, and such other information regarding a proposed filing
as XenoPort may reasonably request.


                                       14

<PAGE>

          4.4.3 Regulatory Cooperation. The Parties shall cooperate with respect
to regulatory matters as set forth in this Section 4.4.3. Xanodyne shall be
responsible for liaising with and managing all interactions with Regulatory
Authorities in the Territory with respect to the Compound and Products. Xanodyne
shall provide XenoPort with: (a) reasonable advanced notice of substantive
meetings with the FDA that are either scheduled with, or initiated by or under
the authority of, Xanodyne with respect to the Compound or any XenoPort Product;
and (b) an opportunity to have up to [**] XenoPort representatives participate
in all substantive meetings with the FDA with respect to the Compound or any
XenoPort Product; it being understood that XenoPort's participation in any FDA
meeting is subject to the acceptance by the FDA. In any case, Xanodyne shall
keep XenoPort informed as to all material interactions with the FDA with respect
to the Compound and Products. Xanodyne will promptly provide XenoPort, upon
reasonable request, copies of any documents, reports and communications from or
to the FDA relating to the Compound or any Product or any activities under this
Agreement.

     4.5 Exchange of Data and Know-How.

          4.5.1 By XenoPort. [**] the Effective Date, XenoPort will make
available or provide, as applicable, to Xanodyne, all XenoPort Know-How relating
to the Compound in the Territory that is necessary or reasonably useful for
Xanodyne to develop and/or commercialize the Compound and XenoPort Products in
the Territory, including all Data from any preclinical studies of the Compound,
any pre-formulation Data, any formulation Data, and any synthetic process
development Data that have been generated or obtained by XenoPort as of the
Effective Date.

          4.5.2 By Either Party. During the term of this Agreement, each Party
shall make available or provide, as applicable, to the other Party all such
Party's Know-How (i.e., in case of XenoPort, all XenoPort Know-How, and in the
case of Xanodyne, all Xanodyne Know-How) that: (a) such Party considers to be
necessary or reasonably useful for the other Party to develop and/or
commercialize the Compound and XenoPort Products in accordance with this
Agreement (in the case of Xanodyne) or for marketing, promotion and/or sale
outside of the Territory (in the case of XenoPort); or (b) is reasonably
requested by the other Party; in each case, as promptly as possible. The Party
providing such Know-How shall provide the same in electronic form to the extent
the same exists in electronic form, and shall provide copies as reasonably
requested and an opportunity for the other Party or its designee to inspect (and
copy) all other materials comprising such Know-How (including for example,
original patient report forms and other original source data). The Parties will
cooperate and reasonably agree upon formats and procedures to facilitate the
orderly and efficient exchange of the XenoPort Know-How and the Xanodyne
Know-How pursuant to this Section 4.5.

          4.5.3 Use of Data and Know-How. Xanodyne may not use any XenoPort Data
or other XenoPort Know-How: (i) outside the Territory except as may be
necessary, as permitted by and in accordance with Sections 2.1 and 9.3, to
manufacture the Intermediate, Compound or any XenoPort Product or develop
(excluding performing or having performed clinical trials) the Compound or any
XenoPort Product; nor (ii) for any products other than the XenoPort Product.

          4.5.4 Other Licensees. XenoPort shall [**] to the extent that [**]. It
is understood that [**] by XenoPort. However, XenoPort agrees that it [**]. For
the purposes of this


                                       15

<PAGE>

Section 4.5.4, "data" shall be deemed to refer to data of the type described in
paragraphs (a) and (b) of the definition of "Xanodyne Data" in Section 1.8.2
above, and "know-how" shall be deemed to refer to information of the type
described in the definition of "Xanodyne Know-How" in Section 1.33 above.

     4.6 Sharing of Regulatory Filings. Without limiting Section 4.5 above, each
Party shall permit the other Party to access, and shall provide the other Party
with sufficient rights to reference and use in association with exercising its
rights and performing its obligations with respect to the Compound and/or
XenoPort Products under this Agreement (including the right of XenoPort to
commercialize, alone or through its Affiliates and/or licensees, the Compound
and XenoPort Products outside the Territory) all of such Party's and its
Affiliates' Data, regulatory filings and regulatory communications associated
with the submissions of INDs, MAAs or other approvals for the Compound and/or
XenoPort Products in the Territory. XenoPort shall permit Xanodyne to access,
and shall provide Xanodyne with sufficient rights to reference and use in
association with Xanodyne's exercise of its rights and performance of its
obligations with respect to the Compound and/or XenoPort Products in the
Territory, Data, regulatory filings and regulatory communications, associated
with the submissions of INDs, MAAs or approvals for the Compound and/or XenoPort
Products outside the Territory to the extent XenoPort has the right to do so.
Each Party shall pay the costs and expenses associated with its exercise of the
rights granted in this Section 4.6.

     4.7 Reporting; Adverse Drug Reactions.

          4.7.1 Pharmaco-Vigilance Agreement. [**] the Parties shall enter into
a pharmaco-vigilance agreement on terms no less stringent than those required by
the applicable guidelines of the International Conference on Harmonisation of
Technical Requirements for Registration of Pharmaceuticals for Human Use (or, to
the extent such organization ceases to exist, any successor or equivalent
organization performing similar functions) ("ICH"), including: (i) providing
detailed procedures regarding the maintenance of core safety information and the
exchange of safety data relating to the Compound and XenoPort Products within
appropriate timeframes and in an appropriate format to enable Xanodyne and
XenoPort (or its designee) to meet both expedited and periodic regulatory
reporting requirements; and (ii) allowing Xanodyne and XenoPort (or its
designee) to comply with the reporting requirements of all applicable Regulatory
Authorities on a worldwide basis for the reporting of safety data in accordance
with standards stipulated in the applicable ICH guidelines, and all applicable
regulatory and legal requirements regarding the management of safety data (the
"Pharmaco-Vigilance Agreement").

          4.7.2 Adverse Event Reporting. As between the Parties: (i) Xanodyne
shall be responsible for the timely reporting of all ADEs, product quality,
product complaints and safety data relating to the Compound and Products to the
appropriate Regulatory Authorities in the Territory; and (ii) XenoPort (or its
designee) shall be responsible for reporting all ADEs, product quality, product
complaints and safety data relating to the Compound and XenoPort Products to the
appropriate Regulatory Authorities outside the Territory; all in accordance with
the appropriate laws and regulations of the relevant countries and Regulatory
Authorities. Until the execution of the Pharmaco-Vigilance Agreement, each Party
shall keep the other Party informed on a regular basis with listings about any
ADEs and/or any pregnancies of which such Party is aware or is informed


                                       16

<PAGE>

regarding the use of the Compound or XenoPort Products. Xanodyne shall ensure
that its Affiliates comply with such reporting obligations in the Territory, and
XenoPort shall ensure that either it or its Affiliates and/or other licensees
comply with such reporting obligations outside the Territory.

                                    ARTICLE 5
                                COMMERCIALIZATION

     5.1 Commercialization of Products in the Territory.

          5.1.1 Xanodyne's Responsibility. Subject to the terms and conditions
set forth in this Agreement, Xanodyne shall be responsible, at its expense, for
commercialization, distribution, marketing and promotion of Products in the
Territory.

          5.1.2 Commercialization Plan. Following the first Filing of an MAA for
the first Xanodyne Product in the Territory, and in any event at least [**]
prior to the anticipated first commercial sale of such Xanodyne Product in the
Territory, and thereafter not less frequently than [**], Xanodyne shall prepare
a plan setting forth the strategic plan for the marketing, promotion,
distribution and commercialization of the Products for the Menorrhagia
Indication and, to the extent Xanodyne has elected to pursue in the Territory,
any Excessive Bleeding Indication and/or any Other Indications in the Territory
("Commercialization Plan"); provided that each Commercialization Plan shall be
in reasonable scope and detail and shall include sales forecasts for each
Product in the Territory. The Commercialization Plan shall be presented by
Xanodyne to the JCC[**]. The JCC shall review the Commercialization Plan
periodically and in no event less frequently than [**]. [**] Xanodyne shall keep
XenoPort reasonably informed as to the progress of its launch and
commercialization activities relating to each Product in the Territory, by way
of updates to the JCC at its meeting and as otherwise reasonably requested by
XenoPort, but no more often than [**] other than at JCC meetings.

          5.1.3 Conduct of Activities. Unless the Parties execute a Co-Promotion
Agreement pursuant to Section 5.4 below, Xanodyne shall carry out, at its
expense, all marketing, promotion and commercialization of the XenoPort Products
in the Territory consistent with the then-current Commercialization Plan and the
provisions of this Agreement.

     5.2 Commercialization Activities Outside the Territory. XenoPort, or its
Affiliates and/or other licensee(s), shall be responsible for launching and
commercializing the XenoPort Products outside the Territory. XenoPort shall keep
Xanodyne reasonably informed as to the progress of its, and/or (to the extent it
is able to do so) its other licensees', launch and commercialization activities
relating to the XenoPort Products outside the Territory, by way of updates to
the JCC at its meeting and as otherwise reasonably requested by Xanodyne, but no
more often than [**] other than at JCC meetings. It is understood and agreed
that any and all commercialization efforts for the Compound and XenoPort
Products outside the Territory shall be at the sole discretion and expense of
XenoPort, its Affiliates or its other licensees.

     5.3 Re-importation. Subject to XenoPort's obligations under Article 9,
XenoPort agrees that it shall not, itself or through its Affiliates or Third
Parties, develop, commercialize, offer for


                                       17

<PAGE>

sale, sell, market, distribute, or promote for use in the Territory a product
that contains the Compound. Subject to XenoPort's obligations under Article 9,
XenoPort and/or its Affiliates shall not sell any XenoPort Products to a
purchaser outside the Territory if it has knowledge that such purchaser or its
transferees are reasonably likely to import such XenoPort Products into the
Territory. Similarly, Xanodyne and/or its Affiliates shall not sell any Compound
or XenoPort Products to a purchaser if it has knowledge that such purchaser or
its transferees are reasonably likely to import such Compound or XenoPort
Products outside the Territory. It is understood, however, that the foregoing
shall not be deemed to prevent or restrict either Party and its Affiliates (and,
if applicable, its licensees) from importing Compound and/or XenoPort Products
for use for development activities (excluding clinical trials) in the other
Party's territory and/or for the purpose of manufacturing or having manufactured
the Compound and/or XenoPort Products in the other Party's territory, in each
case, in accordance with this Agreement.

     5.4 Co-Promotion Option. This Section 5.4 sets out the terms and conditions
of XenoPort's option to co-promote the Products in the Territory: (a) for each
Indication other than the Menorrhagia Indication; and/or (b) to primary care
physicians (each, a "Co-Promotion Field").

          5.4.1 Option Notice.

               (a) Notice of MAA Filing for an Indication other than the
Menorrhagia Indication. Xanodyne shall notify XenoPort within [**], and no less
than [**], prior to the first Filing of an MAA for a XenoPort Product for each
Indication other than the Menorrhagia Indication in the Territory. Together with
such notice, Xanodyne shall provide to XenoPort: (i) a copy of the Data package
with respect to such Indication to be provided by Xanodyne to the FDA in support
of such MAA; and (ii) [**] in the Territory.

               (b) Primary Care Physicians.

                    (i) Without limiting Xanodyne's obligations under Section
5.4.1(a) above, if at any time during the term of this Agreement, Xanodyne
desires to enter into a co-marketing or co-promotion arrangement with respect to
the marketing and promotion of any XenoPort Product to primary care physicians
in the Territory [**], Xanodyne shall so notify XenoPort in writing [**] with
any Third Party with respect thereto. Together with such notice, Xanodyne shall
provide to XenoPort [**] in the Territory.

                    (ii) Notwithstanding Section 5.4.1(b)(i) above, Xanodyne
shall not be obligated to deliver notice to XenoPort under Section 5.4.1(b)(i)
in the circumstances described in this Section 5.4.1(b)(ii). If, prior to [**],
Xanodyne has entered into a co-marketing or co-promotion arrangement with a
Third Party with respect to the co-marketing and co-promotion to primary care
physicians of any Xanodyne Product approved for the Menorrhagia Indication
("Co-Promotion Partner"), Xanodyne may initiate discussions, negotiate and/or
offer to such Co-Promotion Partner the right to co-market and co-promote any
XenoPort Product approved for the Menorrhagia Indication on terms [**]. If such
Co-Promotion Partner agrees in writing with Xanodyne to co-market and co-promote
such XenoPort Product on such terms, Xanodyne shall not be obligated to issue to
XenoPort any notice under Section 5.4.1(b)(i) with respect to such XenoPort
Product and XenoPort shall not have an option to co-market and co-promote such
XenoPort Product to primary


                                       18

<PAGE>

care physicians for so long as the agreement (or any renewal thereof) between
Xanodyne and its Co-Promotion Partner is in effect with respect to such XenoPort
Product.

     Any notice issued by Xanodyne under Sections 5.4.1(a) or 5.4.1(b)(i) shall
be an "Option Notice" for the purposes of this Agreement.

          5.4.2 Election to Negotiate. XenoPort shall have [**] after receiving
an Option Notice pursuant to Sections 5.4.1(a) or 5.4.1(b)(i) above, as
applicable, to notify Xanodyne in writing that XenoPort is interested in
co-promoting the applicable XenoPort Product(s) and Xanodyne Products in the
Territory for the applicable Co-Promotion Field (an "Election Notice"). Together
with any such Election Notice, XenoPort shall provide to Xanodyne a report of
XenoPort's co-promotion capabilities in the Territory with respect to the
applicable Co-Promotion Field in reasonably sufficient detail to demonstrate
that XenoPort has, or will have, reasonably sufficient commercialization
capabilities to co-promote such XenoPort Product(s) and, if applicable, Xanodyne
Products in the Territory in the applicable Co-Promotion Field. Promptly upon
receipt of an Election Notice, and in no event more than [**] following the date
of such Election Notice, [**], Xanodyne shall provide XenoPort with a term sheet
outlining the economic and other relevant terms of such co-promotion, and the
Parties shall negotiate in good faith towards mutually acceptable terms and
conditions on which XenoPort may co-promote such XenoPort Product(s) and, if
applicable, Xanodyne Products in the Territory in the applicable Co-Promotion
Field. During such negotiations, Xanodyne shall promptly provide to XenoPort
such additional information regarding the commercialization of such XenoPort
Product(s) and, if applicable, Xanodyne Products in the Territory in the
applicable Co-Promotion Field as is reasonable and customary in due diligence
reviews for prospective co-marketing and/or co-promotion arrangements. If the
Parties agree on such terms, the Parties shall prepare and execute a definitive
agreement setting forth the agreed terms (a "Co-Promotion Agreement"). If
XenoPort fails to issue an Election Notice within [**] after receiving an Option
Notice for a particular Co-Promotion Field or, if Xanodyne provided to XenoPort
a term sheet within the [**] period specified above and the Parties have not
entered into a Co-Promotion Agreement within [**] after the date of such
Election Notice ("Negotiation Period"), then Xanodyne shall be free to
commercialize such XenoPort Product(s) in the Territory in the applicable
Co-Promotion Field alone, or to initiate negotiations with a Third Party with
respect to rights to co-market and co-promote such XenoPort Product(s) in the
Territory in such Co-Promotion Field.

          5.4.3 Additional Matters.

               (a) It is understood that XenoPort's rights under this Section
5.4 to elect to co-promote the XenoPort Products and, if applicable, Xanodyne
Products in the Territory in each Co-Promotion Field are cumulative and that the
obligations imposed on Xanodyne in this Section 5.4 shall continue to apply for
a particular Co-Promotion Field, even if XenoPort has exercised its option
hereunder with respect to any other Co-Promotion Field.

               (b) Notwithstanding Section 5.4.3(a) above, if prior to the
issuance of any Election Notice with respect to a particular Co-Promotion Field
pursuant to Section 5.4.2 above, the Parties have already executed a
Co-Promotion Agreement with respect to any other Co-Promotion


                                       19

<PAGE>

Field, the Parties may mutually agree not to execute an additional Co-Promotion
Agreement but rather to amend such existing Co-Promotion Agreement to include
economic and other appropriate terms with respect to the co-promotion of the
XenoPort Products and, if applicable, Xanodyne Products in the Territory for
such additional Co-Promotion Field.

               (c) It is further understood that nothing in this Section 5.4
shall be deemed to modify, amend or extend the license and other rights granted
to Xanodyne under Article 2 to develop or commercialize the Compound and
XenoPort Products.

                                    ARTICLE 6
                             PAYMENTS AND ROYALTIES

     6.1 Initial License Fee. Xanodyne shall pay to XenoPort an initial license
fee of Twelve Million Dollars ($12,000,000) in two installments, as follows:

          6.1.1 Six Million Dollars ($6,000,000) within ten (10) days following
the Effective Date; and

          6.1.2 Six Million Dollars ($6,000,000) on or before the twelve (12)
month anniversary of the Effective Date.

     The initial license fee set forth in this Section 6.1 shall be paid in
accordance with the payment provisions of Article 7 and shall not be refundable
or creditable against any future milestone payments, royalties or other payments
by Xanodyne to XenoPort under this Agreement.

     6.2 Milestones.

          6.2.1 Milestone Payments. In addition, Xanodyne shall pay to XenoPort
the milestone payments set forth below following the first achievement by
Xanodyne or any of its Affiliates in the Territory of the corresponding
milestone below, in accordance with this Section 6.2 and the payment provisions
in Article 7:

<TABLE>
<CAPTION>
MILESTONE EVENT                                                                    MILESTONE PAYMENT
---------------                                                                    -----------------
<S>                                                                                <C>
1.   [**] by [**] the [**] in the Territory:                                             $[**]

2.   [**] with [**]:                                                                     $[**]

3.   [**] in the Territory for the [**]:                                                 $[**]

4.   [**] in the Territory for the [**]:                                                 $[**]

5.   [**] in the Territory:                                                              $[**]

6.   [**] for the [**] in the Territory:                                                 $[**]
</TABLE>


                                       20

<PAGE>

<TABLE>
<CAPTION>
MILESTONE EVENT                                                                    MILESTONE PAYMENT
---------------                                                                    -----------------
<S>                                                                                <C>
7.   [**] in the Territory:                                                              $[**]

8.   Additional Milestones for [**] in the Territory [**] in the Territory:              $[**]

     (a)  [**] in the Territory [**] in the Territory:                                   $[**]

     (b)  The [**] in the Territory provided that [**] in the Territory as of            $[**]
          such date:

9.   A one time payment for the first time Annual Net Sales of the XenoPort              $[**]
     Products or Products, as applicable and as further described in Section
     6.2.2(b) below, exceed [**] Dollars [**] after receipt of Marketing
     Approval for the First XenoPort Product in the Territory:

10.  A one time payment for the first time Annual Net Sales of the XenoPort              $[**]
     Products or Products, as applicable and as further described in Section
     6.2.2(b) below, exceed [**]Dollars[**] after receipt of Marketing Approval
     for the First XenoPort Product in the Territory:

11.  A one time payment for the first time Annual Net Sales of the XenoPort              $[**]
     Products or Products, as applicable and as further described in Section
     6.2.2(b) below, exceed [**]Dollars[**] after receipt of Marketing Approval
     for the First XenoPort Product in the Territory:

12.  A one time payment for the first time Annual Net Sales of the XenoPort              $[**]
     Products or Products, as applicable and as further described in Section
     6.2.2(b) below, exceed [**]Dollars [**] after receipt of Marketing Approval
     for the First XenoPort Product in the Territory:
</TABLE>

          6.2.2 Certain Terms.

               (a) Definitions. For the purposes of this Article 6:

                    (i) The "First XenoPort Product" and "First Xanodyne
Product" shall mean the first XenoPort Product or first Xanodyne Product, as
applicable, to achieve such milestone; and

                    (ii) "Loss of Exclusivity" shall mean expiration of the
period for which the applicable Product has marketing exclusivity pursuant to 21
C.F.R Section 314.108.


                                       21

<PAGE>

               (b) Calculation of Commercial Milestones. The Milestones
specified as 9 through 12 in Section 6.2.1 above are referred to in this
Agreement as the "Commercial Milestones". For the purposes of determining
whether any of the Commercial Milestones are achieved in the calendar year in
which the XenoPort Product Approval Date occurs or the first full calendar year
thereafter, only the Annual Net Sales of the XenoPort Products shall be used to
determine whether any of the Commercial Milestones are achieved. In the second
full calendar year after the XenoPort Product Approval Date and each calendar
year thereafter, Annual Net Sales of both the Xanodyne Products and the XenoPort
Products shall be used to determine whether any of the Commercial Milestones are
achieved.

          6.2.3 Skipped Milestone Payment. If, upon the first achievement of
[**], the amounts corresponding to [**], then such milestone(s) [**]. Similarly,
if, upon the first achievement of [**], the amounts corresponding to [**], then
such previous milestone(s) [**].

          6.2.4 Reports and Payments. Except [**], Xanodyne shall notify
XenoPort in writing [**] after the achievement of each milestone set forth in
Section 6.2.1 by Xanodyne or any of its Affiliates, and each such notice shall
be accompanied by the appropriate milestone payment. With respect to [**],
XenoPort shall [**] and the corresponding milestone payment [**] that such
milestone has been achieved. Any milestone payable by Xanodyne pursuant to this
Section 6.2 shall be made no more than once with respect to the achievement of
each milestone set forth in Section 6.2.1 and in no event shall the aggregate
amount to be paid by Xanodyne under this Section 6.2 exceed One Hundred Thirty
Five Million Dollars ($135,000,000). For the avoidance of doubt, each milestone
payment set forth in this Section 6.2 shall not be refundable and shall not be
creditable against future milestone payments, royalties or other payments to
XenoPort under this Agreement.

     6.3 Royalty Payments. Subject to the terms and conditions of this
Agreement, in further consideration of the license and rights granted by
XenoPort to Xanodyne under this Agreement, Xanodyne shall pay to XenoPort
royalties on the Net Sales of Products in the Territory as set forth in this
Section 6.3.

          6.3.1 Prior to [**] of the Increased Royalty Commencement Date.

               (a) Royalty Rates for Xanodyne Products.

                    (i) Upon receipt of Marketing Approval for the First
Xanodyne Product in the Territory (the "Xanodyne Product Approval Date") and
prior to the Increased Royalty Commencement Date (as defined in Section
6.3.1(a)(ii) below), Xanodyne shall pay to XenoPort royalties at the rates set
out below on Net Sales of Xanodyne Products in the Territory:


                                       22

<PAGE>

<TABLE>
<CAPTION>
                         ANNUAL NET SALES OF XANODYNE PRODUCTS                            ROYALTY RATE
                         -------------------------------------                            ------------
<S>                                                                                       <C>
Portion of Annual Net Sales of Xanodyne Products up to and including [**] Dollars [**]        [**]%
Portion of Annual Net Sales of Xanodyne Products in excess of [**] Dollars [**] up to         [**]%
and including [**] Dollars [**]
Portion of Annual Net Sales of Xanodyne Products in excess of [**] Dollars [**]               [**]%
</TABLE>

               Example: If Xanodyne has Annual Net Sales of Xanodyne Products in
               the Territory equal to

               [**], the royalty due to XenoPort would be calculated as follows

               [**]% of [**]

               [**]% of [**] = [**]

               [**]% of [**] = [**]

               The total royalty due XenoPort would be [**] (which is the sum of
               [**] and [**] and [**]

                    (ii) Commencing on [**] (the "Royalty Transition Date"; the
date which is the earlier of the XenoPort Product Approval Date or the Royalty
Transition Date shall be referred to as the "Increased Royalty Commencement
Date"), Xanodyne shall pay to XenoPort royalties on the Net Sales of Xanodyne
Products in the Territory as follows:

                         (A) Beginning on the Increased Royalty Commencement
Date and [**], the royalty rates set forth in the table in Section 6.3.1(a)(i)
above shall each be increased by [**] from the original rate; i.e., the
applicable rates during such [**] period shall be [**], respectively, for the
corresponding tiers of Annual Net Sales of Xanodyne Products; and

                         (B) Beginning on [**] of the Increased Royalty
Commencement Date, the royalty rates set forth in the table in Section
6.3.1(a)(i) above shall each be increased by [**] from the original rate; i.e.,
the applicable rates during such [**] period shall be [**], respectively, for
the corresponding tiers of Annual Net Sales of Xanodyne Products.

                    (b) Royalty Rates for XenoPort Products. To the extent
applicable, commencing on the XenoPort Product Approval Date, and ending on [**]
of the Increased Royalty Commencement Date, Xanodyne shall pay to XenoPort
royalties at the rates set out below on Net Sales of XenoPort Products in the
Territory:


                                       23

<PAGE>

<TABLE>
<CAPTION>
                         ANNUAL NET SALES OF XENOPORT PRODUCTS                            ROYALTY RATE
                         -------------------------------------                            ------------
<S>                                                                                       <C>
Portion of Annual Net Sales of XenoPort Products up to and including [**] Dollars [**]        [**]%
Portion of Annual Net Sales of XenoPort Products in excess of [**] Dollars [**] up to         [**]%
and including [**] Dollars [**]
Portion of Annual Net Sales of XenoPort Products in excess of [**] Dollars [**] up to         [**]%
and including [**] Dollars [**]
Portion of Annual Net Sales of XenoPort Products in excess of [**] Dollars [**] up to         [**]%
and including [**] Dollars [**]
Portion of Annual Net Sales of XenoPort Products in excess of [**] Dollars [**]               [**]%
</TABLE>

                    (c) Royalty Term.

                         (i) Subject to Section 6.3.1(c)(iii) below, Xanodyne's
obligation to pay royalties under Section 6.3.1(a) shall continue on a Xanodyne
Product-by-Xanodyne Product basis until [**].

                         (ii) To the extent applicable and subject to Section
6.3.1(c)(iii) below, Xanodyne's obligation to pay royalties under Section
6.3.1(b) shall continue on a XenoPort Product-by-XenoPort Product basis until
[**].

                         (iii) Xanodyne's obligations to pay royalties under
this Section 6.3.1 shall terminate on [**] of the Increased Royalty Commencement
Date, and thereafter no royalty payments shall be due with respect to Products
in the Territory under this Section 6.3.1; it being understood that royalties on
such Products may continue to be payable in accordance with Section 6.3.2 on and
from [**] of the Increased Royalty Commencement Date.

          6.3.2 On and From [**] of the Increased Royalty Commencement Date.

               (a) Royalty Rates. On and from [**][**] of the Increased Royalty
Commencement Date, Xanodyne shall pay to XenoPort royalties at the rates set
forth below on Net Sales of Xanodyne Products or Products (i.e., Xanodyne
Products and XenoPort Products), as applicable, in the Territory:


                                       24

<PAGE>

<TABLE>
<CAPTION>
                             ANNUAL NET SALES OF PRODUCTS                                 ROYALTY RATE
                             ----------------------------                                 ------------
<S>                                                                                       <C>
Portion of Annual Net Sales of Products up to and including [**] Dollars [**]                 [**]%
Portion of Annual Net Sales of Products in excess of [**] Dollars [**] up to and              [**]%
including [**] Dollars [**]
Portion of Annual Net Sales of Products in excess of [**] Dollars [**] up to and              [**]%
including [**] Dollars [**]
Portion of Annual Net Sales of Products in excess of [**] Dollars [**] up to and              [**]%
including [**] Dollars [**]
Portion of Annual Net Sales of Products in excess of [**] Dollars [**]                        [**]%
</TABLE>

               Example: If Xanodyne has Annual Net Sale of Products in the
               Territory equal to [**], the royalty due to XenoPort would be
               calculated as follows:

               [**] of [**] = [**]

               [**]% of [**] = [**]

               [**]% of [**] = [**]

               [**]% of [**] = [**]

               [**]% of [**] = [**]

               The total royalty due XenoPort would be [**](which is the sum of
               [**] and [**] and [**] and [**] and [**]

               (b) Royalty Term. Xanodyne's obligation to pay royalties under
Section 6.3.2(a) shall commence on [**] of the Increased Royalty Commencement
Date, and shall continue on a Product-by-Product basis until [**].

          6.3.3 Reports and Payments. Commencing upon the first commercial sale
of the first Product by or under the authority of Xanodyne or its Affiliates in
the Territory, within [**] after the end of each calendar quarter, Xanodyne
shall deliver to XenoPort a report setting out in reasonable detail the
information necessary to calculate the royalty payments due under this Section
6.3 with respect to Net Sales of the applicable Products made during such
calendar quarter, including:

               (a) units of the Products sold by or under the authority of
Xanodyne or its Affiliates in the Territory during the relevant calendar
quarter;


                                       25

<PAGE>

               (b) gross sales of the Products by or under the authority of
Xanodyne or its Affiliates in the Territory in the relevant calendar quarter;

               (c) Net Sales of the Products in the Territory in the relevant
calendar quarter;

               (d) all relevant deductions or credits due to Xanodyne in
accordance with the terms of this Agreement; and

               (e) the applicable royalty rates used to calculate the royalties
payable to XenoPort for such calendar quarter.

     Any amounts due under Section 6.3.1 or Section 6.3.2, as applicable, for
such calendar quarter shall accompany such statement.

     6.4 Certain Reductions to Royalties.

          6.4.1 Third Party Royalties. In the event Xanodyne or any of its
Affiliates is required to pay to a Third Party royalties or any other amounts
under agreements for Patents not licensed under this Agreement or other
intellectual property rights not licensed under this Agreement that cover the
composition of matter or therapeutic use of the Compound, or that cover all
feasible methods to manufacture the Compound ("Third Party Royalties"), then
Xanodyne may deduct [**] of the Third Party Royalties from the amounts owed to
XenoPort pursuant to Section 6.3.1(b) or 6.3.2 above, as applicable, with
respect to Net Sales of XenoPort Products; provided the amounts paid to XenoPort
will not be so reduced to less than [**] of the royalties otherwise due pursuant
to Section 6.3.1(b) or 6.3.2, as applicable, with respect to Net Sales of
XenoPort Products.

          6.4.2 Generic Competition.

               (a) XenoPort Products. On a XenoPort Product-by-XenoPort Product
basis if: (i) [**]; (ii) one or more Generic Product(s) is/are being marketed
for an approved Indication of such XenoPort Product in the Territory; and (iii)
[**] in the aggregate, in the Territory in any calendar quarter determined by
[**] and Xanodyne reasonably determines that it is not likely to recover such
lost market share; then the royalties payable pursuant to Section 6.3.1(b) or
6.3.2, as applicable, with respect to such XenoPort Product sold in the
Territory for such quarter shall thereafter be reduced by [**]. In addition, if
(1) the [**] period specified in Section 6.3.2(b)(iii) has expired; (2)
paragraphs (i) and (ii) in the preceding sentence are satisfied and (3) [**], in
the aggregate, in the Territory in any calendar quarter determined by [**], and
Xanodyne reasonably determines that it is not likely to recover such lost market
share; then [**] with respect to such XenoPort Product sold in the Territory for
such quarter.

               (b) Xanodyne Products. On a Xanodyne Product-by- Xanodyne Product
basis if: (i) [**]; (ii) one or more Generic Product(s) is/are being marketed
for an approved Indication of such Xanodyne Product in the Territory; and (iii)
[**] in the aggregate, in the Territory in any calendar quarter determined by
[**] and Xanodyne reasonably determines that it is not likely


                                       26

<PAGE>

to recover such lost market share; then [**] with respect to such Xanodyne
Product sold in the Territory for such quarter.

               (c) "Generic Product" shall mean a [**] in all respects [**];
(ii) that [**]; (iii) [**] in the Territory by an entity other than Xanodyne or
its Affiliates; and (iv) [**].

          6.4.3 Royalty Floor. Except as expressly provided in paragraphs (a)
and (b) below, in no event shall the royalties payable by Xanodyne with respect
to Net Sales of XenoPort Products after receipt of Marketing Approval for the
First XenoPort Product in the Territory be reduced to [**] of the royalty rates
set forth in Section 6.3.1(b) or 6.3.2 above, as applicable; provided that: (a)
solely for the purposes of any deductions that Xanodyne is entitled to make in
accordance with Section 10.3.3(b) below, in no event shall the royalties payable
by Xanodyne with respect to Net Sales of XenoPort Products be reduced to [**] of
the royalty rates set forth in Section 6.3.1(b) or 6.3.2 above, as applicable;
and (b) this Section 6.4.3 shall not limit the application of the last sentence
in Section 6.4.2(a), [**].

     6.5 Conflicts of Interest. Xanodyne and its Affiliates shall set prices and
discounts for the XenoPort Products in the Territory solely in the interest of
the commercial success of such XenoPort Products in the Territory and not for
the interest of its other products and services. However, the foregoing shall
not be construed to dictate to Xanodyne or its Affiliates any resale prices for
the Products in the Territory.

                                   ARTICLE 7
                           PAYMENTS; BOOKS AND RECORDS

     7.1 Payment Method. Unless otherwise expressly stated in this Agreement,
all payments under this Agreement shall be made by bank wire transfer in
immediately available funds to an account designated by the Party to which such
payments are due. All dollar amounts specified in, and all payments made under,
this Agreement shall be in U.S. dollars.

     7.2 Late Payments. Any payments or portions thereof due under this
Agreement that are not paid by the date such payments are due under this
Agreement shall bear interest at a rate equal to: (a) the prime rate as reported
by Citibank N.A. on the date such payment is due, plus [**]; or (b) if lower,
the maximum rate permitted by applicable law; calculated on the number of days
such payment is delinquent, compounded annually and computed on the basis of a
three hundred sixty five (365) day year. This shall in no way limit any other
remedies available to the Parties.

     7.3 Accounting Matters. In the event that XenoPort is, or reasonably
determines that it shall be, unable to recognize any payments hereunder by
reason of the Financial Accounting Standards Board, Emerging Issues Task Force
No. 00-21, Revenue Arrangements with Multiple Deliverables, or any related
accounting principles, the Parties shall cooperate as reasonably necessary and
in good faith to allow XenoPort to recognize any such payments in a manner that
does not have any material adverse effect on either Party, in exercise of
Xanodyne's reasonable discretion.


                                       27

<PAGE>

     7.4 Records; Inspection.

          7.4.1 Xanodyne. Xanodyne shall keep, and require its Affiliates to
keep, complete, true and accurate books of accounts and records for the purpose
of determining the amounts payable to XenoPort pursuant to this Agreement. Such
books and records shall be kept for at least [**] following the end of the
calendar quarter to which they pertain. Such records will be open for inspection
during such [**] period by an independent auditor chosen by XenoPort, and
reasonably acceptable to Xanodyne, for the purpose of verifying the amounts
payable by Xanodyne hereunder. Such inspections may be made no more than once
each calendar year, at reasonable times and on reasonable prior written notice.
Such records for any particular calendar quarter shall be subject to no more
than one inspection. The independent auditor shall be obligated to execute a
reasonable confidentiality agreement prior to commencing any such inspection.
Inspections conducted under this Section 7.4.1 shall be at the expense of
XenoPort, unless a variation or error producing an underpayment in amounts
payable exceeding [**] of the amount paid for any period covered by the
inspection is established, in which case, all reasonable costs relating to the
inspection for such period and any unpaid amounts that are discovered shall be
paid by Xanodyne, together with interest on such unpaid amounts at the rate set
forth in Section 7.2 above. If XenoPort has been overpaid by an amount exceeding
[**] of the amount due for any period covered by the inspection, then such
overpayment less any reasonable expenses related to the inspection shall be a
credit against the next royalties owed to XenoPort by Xanodyne. The Parties will
endeavor in any such inspection to minimize disruption of Xanodyne's normal
business activities to the extent reasonably practicable.

          7.4.2 XenoPort. XenoPort shall keep complete, true and accurate books
of accounts and records for the purpose of determining payments due from
Xanodyne pursuant to this Agreement (e.g., Cost of Goods). Such books and
records shall be kept for at least [**] following the end of the calendar
quarter to which they pertain. Such records will be open for inspection during
such [**] period by an independent auditor chosen by Xanodyne, and reasonably
acceptable to XenoPort, for the purpose of verifying the amounts payable by
Xanodyne hereunder. Such inspections may be made no more than once each calendar
year, at reasonable times and on reasonable prior written notice. Such records
for any particular calendar quarter shall be subject to no more than one
inspection. Xanodyne's independent auditor shall be obligated to execute a
reasonable confidentiality agreement prior to commencing any such inspection.
Inspections conducted under this Section 7.4.2 shall be at the expense of
Xanodyne, unless a variation or error producing an overpayment in amounts
payable to XenoPort exceeding [**] of the amount paid for any period covered by
the inspection is established in the course of any such inspection, in which
case, all reasonable costs relating to the inspection for such period and any
overpaid amounts that are discovered shall be paid to Xanodyne by XenoPort,
together with interest on such overpaid amounts at the rate set forth in Section
7.2 above. If XenoPort has been underpaid, then Xanodyne shall pay such
underpayment to XenoPort. The Parties will endeavor in such inspection to
minimize disruption of XenoPort's normal business activities to the extent
reasonably practicable.


                                       28

<PAGE>

                                    ARTICLE 8
                          DILIGENCE; CERTAIN COVENANTS

     8.1 Commercially Reasonable Efforts of Xanodyne. Xanodyne shall use
Commercially Reasonable Efforts to develop, achieve Marketing Approval for, and
launch a XenoPort Product for a Menorrhagia Indication in the Territory as soon
as practicable, and thereafter to market, promote and sell XenoPort Product(s)
and to maximize the Net Sales of XenoPort Products in the Territory. In
addition, Xanodyne shall use Commercially Reasonable Efforts to identify
Excessive Bleeding Indications for which the Compound and XenoPort Products may
provide a tangible benefit over existing therapies that have received Marketing
Approval for any such Excessive Bleeding Indication(s) in the Territory and for
which a commercially favorable return in the Territory is reasonably possible.
Following Xanodyne's determination in accordance with the preceding sentence
that a commercially favorable return in the Territory is reasonably possible for
any such Excessive Bleeding Indication(s), and subject to the approval of the
JDC (not to be unreasonably withheld), Xanodyne shall use Commercially
Reasonable Efforts to develop, achieve Marketing Approval for, and launch a
XenoPort Product for such Excess Bleeding Indication(s) in the Territory.

                                    ARTICLE 9
                            MANUFACTURING AND SUPPLY

     9.1 Transfer of Manufacturing and Supply Responsibilities. [**] following
the Effective Date, XenoPort and Xanodyne shall develop and reasonably agree
upon a detailed plan ("Supply Transition Plan") to transfer responsibility for
manufacturing and supply of the Intermediate (for the purposes of manufacturing
or having manufactured the Compound and XenoPort Products in accordance with
this Agreement) and the Compound and XenoPort Products for marketing, promotion
and/or sale in the Territory to Xanodyne by [**] after the Effective Date
("Supply Transition Date"); provided however that, upon the reasonable written
request of Xanodyne, prior to the expiration of such [**] period, such period
may be extended for a further [**]; i.e., [**] (in which event, such date shall
be deemed to be the Supply Transition Date). XenoPort shall use commercially
reasonable efforts and cooperate in good faith with Xanodyne to effect, at
Xanodyne's expense, the transfer of responsibility for the manufacturing and
supply of the Intermediate (for the purposes of manufacturing or having
manufactured the Compound and XenoPort Products in accordance with this
Agreement), the Compound and XenoPort Products for marketing, promotion and/or
sale in the Territory to Xanodyne in an orderly manner in accordance with the
Supply Transition Plan and the timelines set forth therein. Without limiting the
foregoing, the Supply Transition Plan shall include the provision to Xanodyne of
all XenoPort Know-How necessary for the manufacture of the Intermediate and/or
Compound in accordance with the licenses granted to Xanodyne under this
Agreement.

     9.2 Activities Prior to the Supply Transition Date.

          9.2.1 Supplies of the Compound. Upon Xanodyne's written request,
XenoPort shall use commercially reasonable efforts to supply to Xanodyne the
Compound for use in connection with the development activities for the Compound
and XenoPort Products under this Agreement


                                       29

<PAGE>

prior to the Supply Transition Date. It is understood that XenoPort shall
provide Xanodyne the Compound in the same form as in use by XenoPort immediately
prior to the Effective Date.

          9.2.2 Reimbursement of XenoPort Supply Costs.

               (a) Xanodyne shall reimburse XenoPort the amount of the XenoPort
Supply Costs (as defined below) incurred in supplying, or obtaining supply of,
the Compound pursuant to Section 9.2.1 above and/or in performing activities
pursuant to the Supply Transition Plan. XenoPort will invoice Xanodyne for the
XenoPort Supply Costs on a monthly basis, and Xanodyne shall pay XenoPort the
applicable amounts within thirty (30) days following the date of each such
invoice.

               (b) "XenoPort Supply Costs" shall mean the following costs
incurred by XenoPort: (i) the Cost of Goods for quantities of the Compound
supplied to Xanodyne pursuant to Section 9.2.1 above; and (ii) [**] Dollars [**]
per year per XenoPort FTE on a pro rata basis for each XenoPort FTE performing
activities pursuant to the Supply Transition Plan (including, those activities
specified in Section 9.2.4 below). For such purposes, "FTE" shall mean a full
time equivalent employee (i.e., one fully-committed employee or
multiple-partially committed employees aggregating one full-time employee)
employed by XenoPort and assigned to perform specified work.

          9.2.3 Forecast. The Development Plan shall include a reasonable
forecast, prepared and provided by Xanodyne in good faith, of the quantities of
the Compound that will be required by Xanodyne and its Affiliates prior to the
Supply Transition Date for use in the development of the Compound and XenoPort
Products in accordance with this Agreement. The Development Plan shall specify
mutually agreed delivery dates for delivery of the Compound to Xanodyne.
Notwithstanding the foregoing, XenoPort shall not have any obligation to supply
any quantities of the Compound in excess of the forecasted amounts unless
otherwise agreed by XenoPort in writing.

          9.2.4 Further Assistance. Xanodyne acknowledges that, as of the
Effective Date, XenoPort is a party to that certain [**] Agreement between
XenoPort and [**], effective as of [**], pursuant to which XenoPort may obtain
from [**] supplies of the Compound and/or the Intermediate. Until the Supply
Transition Date, XenoPort shall have responsibility for the direct management of
the arrangements with [**]. XenoPort agrees to [**] (for the purposes of
manufacturing or having manufactured the Compound and XenoPort Products in
accordance with this Agreement) and/or the Compound. During the term of this
Agreement, XenoPort shall provide Xanodyne the ability to reference any Drug
Master Files of XenoPort, its Affiliates, or its suppliers regarding the
Compound. For the purposes of this Section 9.2.4, "Drug Master File" shall mean
a submission to the FDA that may be used to provide confidential detailed
information about facilities, processes or articles used in the manufacturing,
processing, packaging and storing of a pharmaceutical product.

          9.2.5 Delivery. Compound supplied by XenoPort under this Section 9.2
shall be delivered to Xanodyne [**], or at such other location as the Parties
may mutually agree in writing. The title to such Compound shall pass [**].


                                       30

<PAGE>

          9.2.6 Other Matters. XenoPort represents to Xanodyne that the [**]
obligates [**] to [**]. XenoPort agrees that it shall not execute any amendment
to the [**] that would result in [**].

     9.3 Activities After the Transition of Supply and Manufacturing
Responsibilities. On and from the date supply of the Compound for use by, or on
behalf of, Xanodyne in the Territory is transferred to Xanodyne (and in any
event no later than the Supply Transition Date), Xanodyne shall have the right,
subject to the terms and conditions of this Agreement, to manufacture, or have
manufactured, the Compound and XenoPort Products and, to practice any method,
process or procedure in connection with the manufacture of the Intermediate for
the purposes of manufacturing or having manufactured the Compound and the
XenoPort Products for use and commercialization in the Territory.

                                   ARTICLE 10
                              INTELLECTUAL PROPERTY

     10.1 Ownership of Inventions.

          10.1.1 General. As between the Parties: (a) XenoPort shall have sole
and exclusive ownership of all right, title and interest in and to all XenoPort
Patents and XenoPort Know-How, subject to the rights and licenses granted to
Xanodyne under this Agreement; and (b) Xanodyne shall have the sole and
exclusive ownership of all right, title and interest in and to all Xanodyne
Patents and Xanodyne Know-How, subject to the rights and licenses granted to
XenoPort under this Agreement. Title to all inventions and other intellectual
property made: (i) solely by Xanodyne personnel in connection with this
Agreement shall be owned by Xanodyne; (ii) solely by XenoPort personnel in
connection with this Agreement shall be owned by XenoPort; and (iii) made
jointly by personnel of XenoPort and Xanodyne in connection with this Agreement
shall be jointly owned by Xanodyne and XenoPort (any Patent with respect to such
jointly-owned inventions or other intellectual property, a "Joint Patent").
Except as expressly provided in this Agreement, it is understood that neither
Party shall have any obligation to obtain any approval of, nor pay a share of
the proceeds to, the other Party to practice, enforce, license, assign or
otherwise exploit such jointly-owned inventions or intellectual property and
each Party hereby waives any right it may have under the laws of any
jurisdiction to require such approval or accounting.

          10.1.2 Improvements. Notwithstanding Section 10.1.1 above:

               (a) Disclosure. Xanodyne agrees to disclose to XenoPort all
Improvements made by, or under the authority of, Xanodyne in connection with the
development and/or commercialization of the Compound and/or any XenoPort Product
under this Agreement.

               (b) Ownership. Title to all Improvements, excluding any
Improvement directed to any Tools, that relate directly to any Compound,
XenoPort Product, Intermediate, and/or any other [**], and/or the formulation,
manufacture and/or use of any of the foregoing (collectively, "Compound
Improvements") shall be owned by XenoPort, and Xanodyne hereby assigns to
XenoPort all of its right, title and interest in and to any Compound
Improvements made by, or under


                                       31

<PAGE>

the authority of, Xanodyne, alone or jointly with XenoPort. Xanodyne shall
promptly take, or cause to be taken, any and all actions necessary to confirm
and/or perfect XenoPort's rights in and to Compound Improvements.

               (c) License. Xanodyne hereby grants to XenoPort a non-exclusive,
worldwide, irrevocable, fully paid-up license, with the right to grant and
authorize sublicenses, under any Improvements (other than Compound Improvements
or any Improvements directed to any Tools) and Improvement Patents to make, have
made, use, offer for sale, sell, import, practice and otherwise exploit the
same, subject to the exclusive rights granted to Xanodyne under this Agreement
with respect to the Compound and XenoPort Products in the Territory.

               (d) Certain Terms. As used in this Agreement, "Improvements"
means any inventions or other intellectual property [**] in connection with
development and/or commercialization of the Compound and/or any XenoPort Product
under this Agreement that is: (i) applicable to the Compound, any XenoPort
Product, [**] and/or (ii) using [**]; and "Improvement Patents" means any Patent
claiming or disclosing an Improvement, other than a Compound Improvement.

     10.2 Prosecution and Maintenance of XenoPort Patents and Joint Patents.

          10.2.1 Patents Directed to the Compound, any XenoPort Product and/or
Compound Improvements. XenoPort shall control, at its expense, the Prosecution
and Maintenance of: (a) the XenoPort Patents as of the Effective Date, or which
may be filed after the Effective Date; and (b) any Joint Patents pursuant to
Section 10.1 above; and (c) any Patents directed to a Compound Improvement
("Compound Improvement Patents"). XenoPort shall: (i) diligently Prosecute and
Maintain the XenoPort Patents and Compound Improvement Patents in the Territory
and any Joint Patents; (ii) [**]; and (iii) shall [**] described in the
preceding subparagraph (ii). If XenoPort determines not to file any Patent, or
to abandon any Patent, within the XenoPort Compound Patents or Compound
Improvement Patents in the Territory or any Joint Patent, as applicable,
XenoPort shall provide Xanodyne with at least [**] written notice of such
decision, prior to the deadline for filing any such XenoPort Compound Patent,
Compound Improvement Patent or Joint Patent, as applicable, or prior to the date
on which such abandonment would become effective. In such event, Xanodyne shall
have the right, at its option, to control the Prosecution and Maintenance of
such XenoPort Compound Patent, Compound Improvement Patent or such Joint Patent.
For the purposes of this Section 10.2, "Prosecution and Maintenance" (including
variations such as "Prosecute and Maintain") shall mean, with respect to a
Patent, the preparing, filing, prosecuting and maintenance of such Patent, as
well as continuations, divisionals, re-examinations, reissues and requests for
patent term extensions and the like with respect to such Patent, together with
the conduct of interferences, the defense of oppositions and other similar
proceedings with respect to a Patent.

          10.2.2 Xanodyne Patents. Xanodyne shall control, at its expense, the
Prosecution and Maintenance of Patents included in the Xanodyne Patents as of
the Effective Date, or that may be filed after the Effective Date.

          10.2.3 Cooperation. Each Party shall cooperate with the other Party in
connection with all activities relating to the Prosecution and Maintenance of
the XenoPort Patents and, if


                                       32

<PAGE>

applicable, any Joint Patents and Compound Improvement Patents undertaken by
such other Party pursuant to this Section 10.2, including: (a) making available
in a timely manner any documents or information such other Party reasonably
requests to facilitate such other Party's Prosecution and Maintenance of the
applicable XenoPort Patents, Joint Patents and/or Compound Improvement Patents
pursuant to this Section 10.2; and (b) if and as appropriate, signing (or
causing to have signed) all documents relating to the Prosecution and
Maintenance of any applicable XenoPort Patents, Joint Patents and/or Compound
Improvement Patents by such other Party. Each Party shall also promptly provide
to the other Party all information reasonably requested by such other Party with
regard to such Party's activities pursuant to this Section 10.2. The Parties
shall treat all information of the other Party disclosed to it under this
Section 10.2 as Confidential Information of such other Party.

     10.3 Enforcement.

          10.3.1 Notice. In the event that XenoPort or Xanodyne becomes aware
of: (a) actual or threatened infringement or misappropriation of any XenoPort
Compound Patent or Compound Improvement Patent by the manufacture, sale or use
in the Territory of a product comprising a pro-drug of tranexamic acid (an
"Infringement") or (b) actual or threatened infringement or misappropriation of
any XenoPort Intermediate Patent, that Party shall promptly notify the other
Party in writing.

          10.3.2 Actions with Respect to Infringement. Xanodyne shall have the
first right, but not the obligation, to bring an enforcement action with respect
to an Infringement, at its own expense and using the counsel of its own choice.
XenoPort shall have the right, at its own expense, to participate in any such
action with counsel of its own choice, subject to Xanodyne's control. If
Xanodyne does not initiate any action against such an Infringement, within [**]
of receipt of a request by XenoPort to do so, then XenoPort shall be entitled to
initiate infringement proceedings or take other appropriate action against an
Infringement at its own expense. The Party conducting such action under this
Section 10.3.2 shall have full control over the conduct of such action,
including settlement thereof; provided, however, that the Party [**] (including,
any [**] within or outside the Territory), [**]. In any event, the Parties shall
assist one another and cooperate in any such action, at their own expense, at
the other's reasonable request.

          10.3.3 Recovery.

               (a) Xanodyne and XenoPort agree that any monetary recovery
realized from a litigation or settlement thereof by either Party pursuant to
Section 10.3.2 shall first [**]. Any excess amount of such a recovery shall [**]
in the Territory.

               (b) In the event that: (i) Xanodyne conducts and controls an
action with respect to an Infringement pursuant to Section 10.3.2; (ii) [**]
from the settlement of such action; and (iii) [**] in accordance with Section
10.3.2 above; then, Xanodyne shall be entitled to [**] associated with such
action from the [**] of the XenoPort Products; provided that, upon XenoPort's
reasonable request, Xanodyne shall promptly provide to XenoPort [**]; provided,
further, that Xanodyne shall make [**] after the date that a final judgment is
awarded or a settlement is executed which is covered by paragraph (ii) above.


                                       33

<PAGE>

          10.3.4 Cooperation. The Parties shall keep one another informed of the
status of their respective activities regarding any litigation or settlement
thereof pursuant to Section 10.3 and shall assist one another and cooperate in
any such litigation at the other's reasonable request (including joining as a
party plaintiff to the extent necessary and requested by the other Party).

     10.4 Third Party Infringement Claims.

          10.4.1 Notice. If the manufacture, use, sale, offer for sale or
importation of any Compound or any Product pursuant to this Agreement results in
a claim, suit or proceeding alleging patent infringement against XenoPort or
Xanodyne (or, to the extent applicable, their respective Affiliates or
licensees) (collectively, "Product Infringement Actions"), such Party shall
promptly notify the other Party hereto in writing. Similarly, if the
manufacture, use, sale, offer for sale or importation of the Intermediate
pursuant to this Agreement results in a claim, suit, proceeding alleging patent
infringement against XenoPort or Xanodyne (or, to the extent applicable, their
respective Affiliates or licensees), such Party shall promptly notify the other
Party hereto in writing (collectively, "Intermediate Infringement Actions"). For
the purposes of this Section 10.4, an "Infringement Action" shall mean,
individually, either a Product Infringement Action or an Intermediate
Infringement Action, as applicable, and collectively, Product Infringement
Actions and Intermediate Infringement Actions.

          10.4.2 Control of Defense. With respect to any Product Infringement
Action in the Territory, the Party subject to such Infringement Action shall
have the right to direct and control the defense thereof at its own expense with
counsel of its choice; provided, however, that the other Party may participate
in the defense and/or settlement thereof at its own expense with counsel of its
choice. With respect to (a) any Intermediate Infringement Action in or outside
of the Territory and (b) any Product Infringement Action outside the Territory
related to any Compound or XenoPort Product, XenoPort (or its designee) shall
have the sole right to direct and control the defense and/or settlement thereof
at its own expense with counsel of its choice; provided that, to the extent
Xanodyne is the subject of any such Infringement Action: (i) Xanodyne shall
cooperate fully with XenoPort (or its designee) and its legal representatives in
any such Infringement Action, as reasonably requested by XenoPort; and (ii)
Xanodyne may participate in the defense of any such Infringement Action, at its
own expense, with counsel of its choice. In any event, the Party that is
controlling the defense of an Infringement Action agrees to keep the other Party
hereto reasonably informed of all material developments in connection with any
such Infringement Action.

          10.4.3 Product Infringement Actions Involving Any Compound or XenoPort
Product. With respect to any Product Infringement Action related to any Compound
or XenoPort Product in the Territory, the following provisions shall apply. The
Party who is subject to any Product Infringement Action described in the
foregoing sentence agrees: (a) [**]; and (b) [**] in such Product Infringement
Action, [**]; in each case, [**].

          10.4.4 Damages Reimbursement/Offset.

               (a) With respect to any Intermediate Infringement Action: (i)
XenoPort shall [**]; and (ii) Xanodyne may [**] above; provided that [**] and,
to the extent such [**], XenoPort shall [**].


                                       34

<PAGE>

               (b) With respect to any Product Infringement Action involving any
Compound or XenoPort Product, Xanodyne may, at its option: (i) [**]; or (ii)
[**]; provided that the amount of [**].

               (c) As used herein, "Damages" shall mean out-of-pocket costs
incurred by Xanodyne with respect to a Product Infringement Action relating to
any Compound or XenoPort Product or any Intermediate Infringement Action,
including but not limited to: (i) reasonable attorney's fees; (ii) monetary
damages awarded by a court and other liabilities that are part of any final
judgment against Xanodyne, and (iii) any monetary amounts paid by Xanodyne in a
settlement of the action that are: (A) in the case of an Intermediate
Infringement Action, agreed to by XenoPort; or (B) in the case of a Product
Infringement Action, approved by XenoPort, such approval not to be unreasonably
withheld or delayed.

     10.5 Patent Marking. Xanodyne agrees to mark, and have its Affiliates mark,
all patented Products they sell or distribute pursuant to this Agreement in
accordance with the applicable patent statutes or regulations in the Territory.

                                   ARTICLE 11
                                   TRADEMARKS

     11.1 Product Trademarks. It is the intent of the Parties to develop, to the
extent reasonably possible, Product Trademarks that are capable of use on and in
connection with the marketing, sale, advertising and/or promotion of the
XenoPort Products worldwide. Accordingly, the Parties shall cooperate in good
faith to identify, in consultation with the JCC, Product Trademarks for use with
each of the XenoPort Products in the Territory, and shall take into account in
the selection of such trademarks, the ability to register and otherwise use such
trademarks in connection with the XenoPort Products outside the Territory;
provided, however, that [**]. In addition, if following the selection of any
Product Trademark in accordance with this Section 11.1, XenoPort determines that
it is not possible to register or otherwise use such Product Trademark in a
particular country outside the Territory, or that the use of such Product
Trademark would not be beneficial from a commercial perspective, XenoPort (or
its designee) may select an appropriate alternative trademark for adoption in
such country. The Parties shall also cooperate and mutually agree upon
assignment of responsibility between Xanodyne and XenoPort for the registration
of Internet domain names that include or are similar to any Product Trademarks.

     11.2 Ownership. As between the Parties: (a) Xanodyne shall own all right,
title and interest in and to the Product Trademark(s) in the Territory and all
goodwill from the use of the Product Trademark(s) in the Territory shall vest in
and inure to the benefit of Xanodyne; and (b) XenoPort shall own all right,
title and interest in and to the Product Trademarks in each country outside the
Territory and all goodwill from the use of the Product Trademarks outside the
Territory shall vest in and inure to the benefit of XenoPort. Following the
selection of any Product Trademark, Xanodyne shall take, or cause to be taken,
any and all actions necessary to confirm and/or perfect XenoPort's rights in and
to such Product Trademark outside the Territory, as reasonably requested by
XenoPort and at XenoPort's expense.


                                       35

<PAGE>

     11.3 Registration of Product Trademarks. Xanodyne shall file, register and
maintain, for the term of this Agreement, appropriate registrations for the
Product Trademark(s) in the Territory, at Xanodyne's sole expense. XenoPort (or
its designee) shall, at its sole expense, file, prosecute and maintain
appropriate registrations for the Product Trademarks outside the Territory. Upon
XenoPort's reasonable request, and at XenoPort's expense, Xanodyne shall
cooperate with XenoPort (or its designee) and take such actions as may be
reasonably necessary to assist XenoPort (or its designees) in the filing and
registration of Product Trademarks in countries outside the Territory. Xanodyne
shall not, and shall not authorize any Affiliate or Third Party to: (a) use any
Product Trademark in connection with any product other than the XenoPort
Products for use within the Territory; nor (b) register, or attempt to register,
any trademarks, marks or trade names confusingly similar to any Product
Trademark, within or outside of the Territory.

     11.4 Display. Xanodyne shall have the right to determine all packaging
materials, labels and promotional materials for the XenoPort Products in the
Territory as it considers appropriate, provided that such packaging materials,
labels and promotional materials shall display the trade names of both XenoPort
and Xanodyne. The trademarks of Xanodyne, trade dress, style of packaging and
the like with respect to each XenoPort Product in the Territory shall be
determined by Xanodyne in a manner that is consistent with Xanodyne's standard
trade dress and style.

     11.5 Grant of License to XenoPort Trade Name. Subject to the terms and
conditions of this Agreement, XenoPort hereby grants to Xanodyne an exclusive
license to use the XenoPort trade name in the Territory for the packaging,
marketing, distribution, sale and/or promotion of the XenoPort Products in
accordance with Section 11.4 above. As between the Parties, XenoPort shall own
all right, title and interest in and to the XenoPort trade name and all goodwill
from the use of the XenoPort trade name under this Agreement shall vest in and
inure to the benefit of XenoPort.

     11.6 Approval of Packaging and Promotional Materials. To the extent
necessary to preserve XenoPort's legal rights in its trade names, Xanodyne shall
submit representative promotional materials, packaging and XenoPort Product
displaying XenoPort's trade name to XenoPort for XenoPort's review and approval
prior to the first use of such promotional materials, packaging or XenoPort
Product and prior to any subsequent change or addition to such promotional
materials, packaging or XenoPort Product; provided that if XenoPort has not
responded within [**] after the submission of such promotional materials,
packaging or XenoPort Product, XenoPort's approval will be deemed to have been
received.

     11.7 Termination of Trademark License. Xanodyne's right to use the XenoPort
trade name in the Territory shall terminate if Xanodyne's rights to distribute
the XenoPort Products are terminated or expire. Xanodyne shall take all such
steps as XenoPort may reasonably request to transfer to XenoPort of all rights,
registrations, recordations and the like for such trade name.


                                       36

<PAGE>

                                   ARTICLE 12
                                 CONFIDENTIALITY

     12.1 Confidential Information. Except as expressly authorized in this
Agreement, the Parties agree that the receiving Party shall not publish or
otherwise disclose and shall not use for any purpose any information furnished
to it by the other Party hereto pursuant to this Agreement (collectively,
"Confidential Information"). Notwithstanding the foregoing, Confidential
Information shall not include information that, in each case as demonstrated by
written documentation:

               (a) was already known to the receiving Party, other than under an
obligation of confidentiality, at the time of disclosure or was developed by the
receiving Party prior to its disclosure by the disclosing Party;

               (b) was generally available to the public or otherwise part of
the public domain at the time of its disclosure to the receiving Party;

               (c) became generally available to the public or otherwise part of
the public domain after its disclosure and other than through any act or
omission of the receiving Party in breach of this Agreement;

               (d) was subsequently lawfully disclosed to the receiving Party by
a person other than the disclosing Party, and who did not directly or indirectly
receive such information from disclosing Party; or

               (e) is developed by the receiving Party without use of, or
reference to, any information or materials disclosed by the disclosing Party.

     12.2 Permitted Disclosures. Notwithstanding the provisions of Section 12.1
above and subject to Sections 12.3 and 12.4 below, each Party hereto may use and
disclose the other Party's Confidential Information to its Affiliates,
licensees, contractors and any other Third Parties to the extent such use and/or
disclosure is reasonably necessary to exercise the rights granted to it, or
reserved by it, under this Agreement, in prosecuting or defending litigation,
complying with applicable governmental laws or regulations, submitting
information to applicable Regulatory Authorities, United States Securities
Exchange Commission, tax or other governmental authorities or conducting
clinical trials as permitted hereunder with respect to the Compound or any
XenoPort Product. If a Party is required by law or regulations to make any such
disclosure of the other Party's Confidential Information, to the extent it may
legally do so, it will give reasonable advance notice to the other Party of such
disclosure and, save to the extent inappropriate in the case of patent
applications or otherwise, will use its good faith efforts to secure
confidential treatment of such Confidential Information prior to its disclosure
(whether through protective orders or otherwise). For any other disclosures of
the other Party's Confidential Information, including to Affiliates, licensees,
contractors and other Third Parties, a Party shall ensure that the recipient
thereof is bound by a written confidentiality agreement as materially protective
of such Confidential Information as this Article 12.


                                       37

<PAGE>

     12.3 Confidential Terms. Each Party agrees not to disclose to any Third
Party [**], except each Party may disclose [**]: (a) [**] on a need to know
basis, [**]; and (b) [**] provided that in the case of the foregoing paragraph
(b), the disclosing Party shall promptly notify the other Party [**] allow the
other Party [**] to the extent allowable by law, to seek limitations on the
portion of the Agreement that is required to be disclosed. Notwithstanding the
foregoing, the Parties [**]; thereafter, each Party may each disclose to Third
Parties the information [**].

     12.4 Publication of XenoPort Product Information. Prior to its publishing,
publicly presenting and/or submitting for written or oral publication a
manuscript, abstract or the like that includes Data or other information
relating to the Compound or any XenoPort Product that has not previously been
published pursuant to this Section 12.4, a Party shall provide the other Party a
copy thereof for its review for at least [**] (unless such Party is required by
law to publish such information sooner). The publishing Party shall consider in
good faith any comments provided by the other Party during such [**] period. In
addition, the publishing Party shall, at the request of the other Party, remove
any Confidential Information of the other Party therefrom, except each Party
shall have the right to publicly disclose any information, including
Confidential Information, pertaining to safety or efficacy of the Compound
and/or any XenoPort Product that such Party believes in good faith it is
obligated or ethically bound to disclose. The contribution of each Party shall
be noted in all publications or presentations by acknowledgment or
co-authorship, whichever is appropriate.

     12.5 General Publicity. The Parties acknowledge the importance of
supporting each other's efforts to publicly disclose results and significant
developments regarding the Compound and XenoPort Products and other activities
in connection with this Agreement, beyond what is required by law, and each
Party may make such disclosures from time to time with the approval of the other
Party, which approval shall not be unreasonably withheld or delayed. Such
disclosures may include, without limitation, achievement of Milestones under
Section 6.2, significant events in the research, development and regulatory
process with respect to the Compound or a Product, commercialization activities
and the like. When a Party (the "Requesting Party") elects to make any such
public disclosure under this Section 12.5, it will give the other Party (the
"Cooperating Party") at least [**] notice to review and comment on such
statement, it being understood that if the Cooperating Party does not notify the
Requesting Party in writing within such [**] period of any reasonable
objections, as contemplated in this Section 12.5, such disclosure shall be
deemed approved; and in any event, the Cooperating Party shall work diligently
and reasonably to agree on the text of any proposed disclosure in an expeditious
manner. The principles to be observed in such disclosures shall be accuracy,
compliance with applicable law and regulatory guidance documents, reasonable
sensitivity to potential negative reactions of the FDA (and its foreign
counterparts) and the need to keep investors informed regarding the Requesting
Party's business. Accordingly, the Cooperating Party shall not withhold its
approval of a proposed disclosure that complies with such principles.

     12.6 Prior Non-Disclosure Agreements. Upon execution of this Agreement, the
terms of this Article 12 shall supersede any prior non-disclosure, secrecy or
confidentiality agreement between the Parties, including that certain
confidentiality agreement between the Parties dated November 15, 2006. Any
information disclosed under such prior agreements shall be deemed disclosed
under this Agreement.


                                       38

<PAGE>

                                   ARTICLE 13
                              TERM AND TERMINATION

     13.1 Term. This Agreement commences on the Effective Date and, unless
terminated earlier as provided in this Article 13, shall continue in full force
and effect on a Product-by-Product basis until Xanodyne has no remaining royalty
obligations with respect to such Product. Upon expiration (but not an earlier
termination) of this Agreement in the Territory with respect to a XenoPort
Product, Xanodyne shall have a perpetual, non-exclusive, fully paid-up,
royalty-free license under the XenoPort Know-How to: (a) develop or have
developed and make or have made, such XenoPort Product in or outside the
Territory (but, outside the Territory, excluding any development constituting
the conduct of clinical trials); and (b) use, import, sell, market, offer for
sale, distribute and promote such XenoPort Product in the Territory.

     13.2 Breach. Either Party to this Agreement may terminate this Agreement in
the event the other Party shall have materially breached or defaulted in the
performance of any of its material obligations hereunder, and such default shall
have continued for [**] after written notice thereof was provided to the
breaching Party by the non-breaching Party. Any such termination shall become
effective at the end of such [**] period unless the breaching Party has cured
any such breach or default prior to the expiration of the [**] period.

     13.3 Termination For Convenience. Xanodyne may terminate this Agreement in
its entirety for any reason upon one hundred twenty (120) days prior written
notice to XenoPort; provided that Xanodyne shall not issue any notice of
termination under this Section 13.3 within the first twelve (12) months after
the Effective Date unless Xanodyne first accelerates and pays to XenoPort the
remaining initial license fee installment as set forth in Section 6.1.2. If at
any time after the first anniversary of the Effective Date there are no XenoPort
Products for which material clinical development activities are being
undertaken, or that are being sold, by Xanodyne in the Territory for a period of
one hundred eighty (180) days, XenoPort may terminate this Agreement on written
notice to Xanodyne.

                                   ARTICLE 14
                              EFFECT OF TERMINATION

     14.1 Accrued Obligations. The expiration or termination of this Agreement
for any reason shall not release either Party from any liability that, at the
time of such expiration or termination, has already accrued to the other Party
or that is attributable to a period prior to such expiration or termination, nor
will any termination of this Agreement preclude either Party from pursuing all
rights and remedies it may have under this Agreement, or at law or in equity,
with respect to any breach of this Agreement.

     14.2 Rights on Termination. This Section 14.2 shall apply upon any
termination of Xanodyne's rights under this Agreement, excluding termination of
this Agreement by Xanodyne pursuant to Section 13.2 above for XenoPort's breach
of this Agreement.


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<PAGE>

          14.2.1 Wind-down Period.

               (a) Development. In the event there are any ongoing clinical
trials of any XenoPort Product in the Territory, at XenoPort's request,
following the date a notice of termination has been issued pursuant to Section
13.2 or 13.3, as applicable, Xanodyne agrees: (i) to take steps to [**]; or (ii)
to the extent so requested by XenoPort, to promptly transition to XenoPort or
its designee such clinical trials or portions thereof; in each case, at
XenoPort's expense. Xanodyne shall continue to [**] in accordance with the terms
and conditions of this Agreement.

               (b) Commercialization. To avoid a disruption in the supply of
XenoPort Products to patients, if this Agreement is terminated after the first
commercial sale of any XenoPort Product in the Territory, Xanodyne and its
Affiliates shall continue to market, promote, distribute and otherwise
commercialize (including with the assistance of any Co-Promotion Partner, to the
extent permitted by any agreement with such Co-Promotion Partner) the XenoPort
Products in the Territory for which Marketing Approval by the FDA has been
obtained (unless the FDA or a court of competent jurisdiction in the Territory
issues a directive or order that a particular XenoPort Product be recalled or
withdrawn in the Territory, or the Parties mutually agree that a particular
XenoPort Product should be recalled or withdrawn in the Territory) and in
accordance with the terms and conditions of this Agreement, until [**], but in
no event [**] after the effective date of any such termination of this Agreement
(the "Wind-down Period"); provided that Xanodyne and its Affiliates shall cease
such activities, or any portion thereof, upon [**] notice by XenoPort requesting
that such activities (or portion thereof) be ceased. Notwithstanding any other
provision of this Agreement, during the Wind-down Period, Xanodyne's rights with
respect to the Compound and XenoPort Products in the Territory shall be
non-exclusive and, without limiting the foregoing, XenoPort shall have the right
to engage one or more other distributor(s) and/or licensee(s) of the Compound
and/or any XenoPort Product in the Territory. Any Products sold or disposed by
Xanodyne in the Territory during the Wind-down Period shall be subject to the
applicable payment obligations under Article 6 above and all relevant deductions
or credits due to Xanodyne in accordance with this Agreement. Within [**] of
expiration of the Wind-down Period, Xanodyne shall notify XenoPort of any
quantity of the Intermediate, Compound and/or XenoPort Products remaining in
Xanodyne's inventory and XenoPort shall have the option, upon notice to
Xanodyne, to repurchase any such quantities of the Intermediate, Compound and/or
XenoPort Products, as applicable, from Xanodyne at a price equal to [**]
calculated in accordance with GAAP and Xanodyne's then-prevailing standard
procedures for calculating costs of good sold. For the sake of clarity, such
[**].

          14.2.2 Assignment of Regulatory Filings and Marketing Approvals. At
XenoPort's option, which shall be exercised by written notice to Xanodyne,
Xanodyne shall assign to XenoPort or its designee (or, to the extent not so
assignable, Xanodyne shall take all reasonable actions to make available to
XenoPort or its designee the benefits of) all regulatory filings and
registrations (including INDs, NDAs and Marketing Approvals by the FDA) for the
Compound and XenoPort Products in the Territory. In each case, unless otherwise
required by any applicable law or regulation, the foregoing assignment (or
availability) shall be effected within [**] after the effective date of any such
termination of this Agreement. In addition, Xanodyne shall promptly provide to
XenoPort a copy of all Data and Xanodyne Know-How pertaining to the Compound and
all XenoPort Products in the Territory, or otherwise relied upon by Xanodyne in
association with any


                                       40

<PAGE>

IND, NDA or other approval for the Compound or any XenoPort Product in the
Territory, to the extent not previously provided to XenoPort, and XenoPort shall
have the right to use and disclose all such Data and Xanodyne Know-How following
termination of this Agreement.

          14.2.3 Supply. To the extent applicable, Xanodyne shall cooperate
fully to transition to XenoPort, upon XenoPort's request, any arrangement with
any contractor from which Xanodyne had arranged to obtain a supply of the
Intermediate, and/or any Compound and/or XenoPort Product, as applicable. In the
event that such materials are manufactured by Xanodyne, then Xanodyne shall sell
to XenoPort such materials pursuant to purchase orders submitted by XenoPort to
Xanodyne, and XenoPort shall purchase from Xanodyne such materials in the
quantities specified in any such purchase orders, for a price calculated in
accordance with this Section 14.2.3 until [**]; provided that [**] and in any
event, Xanodyne's obligations to supply such materials during such transition
time shall not continue for a period of [**]. Xanodyne shall provide the
Intermediate, Compound or XenoPort Products to XenoPort pursuant to this Section
14.2.3 at [**] such Intermediate, Compound and/or XenoPort Products, as
applicable, calculated in accordance with GAAP and Xanodyne's then prevailing
standard procedures for calculating cost of goods. For the sake of clarity,
[**]. In addition, Xanodyne shall promptly provide to XenoPort a copy of all
Data pertaining to the manufacture of the Intermediate, Compound and/or XenoPort
Products, as applicable, to the extent not previously provided to XenoPort,
during the term or pursuant to Section 14.2.2, and XenoPort shall have the right
to use (and authorize the use of), and to disclose, all such Data following
termination of this Agreement.

          14.2.4 Transition. Without limiting the foregoing, Xanodyne shall use
Commercially Reasonable Efforts to cooperate with XenoPort and/or its designee
to effect a smooth and orderly transition in the development, manufacture, sale
and ongoing marketing, promotion and commercialization of the Compound and
XenoPort Products for the Territory during the Wind-down Period. Xanodyne shall,
upon written request from XenoPort, provide XenoPort copies of customer lists,
customer data and other customer information relating to all XenoPort Products
in the Territory (except as prevented by the applicable laws and regulations
relating to the protection of personal information), which XenoPort shall have
the right to use and disclose. Without limiting the foregoing, Xanodyne shall
conduct in a reasonable manner any activities to be conducted under this Section
14.2.

          14.2.5 Assignment of Product Trademarks. Promptly following the
effective date of any termination of this Agreement pursuant to Section 13.2 or
13.3, Xanodyne shall assign, or cause to be assigned, to XenoPort or its
designee, at XenoPort's expense, all right, title and interest in and to the
Product Trademarks, together with all registrations or applications for
registration of such trademarks, in the Territory. In each case, unless
otherwise required by any applicable law or regulation or requested by XenoPort,
the foregoing assignment shall be made within [**] after the effective date of
any termination of this Agreement. XenoPort hereby grants to Xanodyne a
non-exclusive license to use the Product Trademarks in the Territory for the
packaging, marketing, distributing, sale and promotion of the XenoPort Products
solely for the purposes of permitting Xanodyne to comply with its obligations
under this Section 14.2. Such license shall become effective upon the assignment
to XenoPort of the Product Trademarks, and all registrations and


                                       41

<PAGE>

applications for registration of such Product Trademarks, in the Territory and
shall persist until the expiration of the applicable periods described in
Section 14.2.1 or 14.2.3 above, as applicable.

          14.2.6 Return of Materials. Within [**] after the end of the Wind-down
Period (or, to the extent applicable, within [**] after the termination of
Xanodyne's obligations under Section 14.2.3), Xanodyne shall either return to
XenoPort or destroy, as directed by XenoPort, all tangible items comprising,
bearing or containing any Product Trademarks, the XenoPort trade name, and/or
any Data ("Product Materials") and all Confidential Information of XenoPort,
that is in Xanodyne's possession. Except as necessary to comply with its
obligations in Section 14.2.3, effective upon the end of the Wind-down Period
(or, to the extent applicable, within [**] after the termination of Xanodyne's
obligations under Section 14.2.3): (a) Xanodyne shall cease to use all
trademarks (including the Product Trademarks) and trade names of XenoPort in the
Territory; and (b) all rights granted to Xanodyne hereunder with respect to the
Compound and XenoPort Products in the Territory shall terminate. In addition,
all Data generated by, or on behalf of, Xanodyne hereunder during the term of
the Agreement shall, to the extent it specifically pertains to the Compound
and/or the XenoPort Products, be deemed Confidential Information of XenoPort and
not Confidential Information of Xanodyne (and will not be subject to the
exclusion under Section 12.1(a) and (d) above); it being understood that the
foregoing shall not apply to any Tools.

     14.3 Survival. Upon the expiration or termination of this Agreement, all
rights and obligations of the Parties under this Agreement shall terminate
except those described in the following Articles and Sections: [**]. In
addition: (a) upon termination of this Agreement other than by Xanodyne pursuant
to Section 13.2: (i) [**]; and (ii) [**]; (b) upon termination of this Agreement
for any reason, the following Sections shall also survive: [**]; and (c) upon
expiration (but not an earlier termination of this Agreement), the following
Sections shall also survive: [**].

                                   ARTICLE 15
                         REPRESENTATIONS AND WARRANTIES

     15.1 General Representations. Each Party represents and warrants to the
other as of the Effective Date as follows:

          15.1.1 Duly Organized. Such Party is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, and is qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which the conduct of its business or
the ownership of its properties requires such qualification and failure to have
such would prevent such Party from performing its obligations under this
Agreement.

          15.1.2 Due Execution; Binding Agreement. This Agreement is a legal and
valid obligation binding upon such Party and enforceable in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws of general application affecting the rights and
remedies of creditors and by general equity principles. The execution, delivery
and performance of this Agreement by such Party have been duly authorized by all
necessary corporate action and do not and will not: (a) require any consent or
approval of its stockholders; except, with respect to Xanodyne, the consent of
its preferred stockholders as required


                                       42

<PAGE>

by the certificate of incorporation of Xanodyne, which consent has been obtained
as of the Effective Date; (b) to such Party's knowledge, violate any law, rule,
regulation, order, writ, judgment, decree, determination or award of any court,
governmental body or administrative or other agency having jurisdiction over
such Party; nor (c) conflict with, or constitute a default under, any agreement,
instrument or understanding, oral or written, to which such Party is a party or
by which it is bound.

     15.2 Representations and Warranties of XenoPort. XenoPort represents and
warrants to Xanodyne that, as of the Effective Date:

          15.2.1 it has the full right and authority to grant the rights and
licenses as provided herein;

          15.2.2 it: (i) has not previously granted any right, license or
interest in or to the XenoPort Data, the XenoPort Know-How, the XenoPort
Patents, the Compound or any portion thereof; and (ii) is under no obligation to
grant any such license, right or interest; in each case, that is in conflict
with the rights or licenses granted to Xanodyne under this Agreement;

          15.2.3 the XenoPort Patents listed on Exhibit 1.37.1 and Exhibit
1.37.2 are the only Patents owned or Controlled by XenoPort in the Territory
that are (i) necessary to make, have made, use, import, offer for sale or sell
the Compound or the XenoPort Products in the Territory; and (ii) to make or have
made, use and import the Intermediate for the purposes of making or having made
the Compound, alone or as incorporated into a XenoPort Product, in the
Territory;

          15.2.4 to its knowledge, XenoPort owns or Controls all of the
processes necessary to manufacture the Intermediate in the form and in the
manner in which the Intermediate is being manufactured as of the Effective Date,
specifically, to its knowledge, there are no licenses required from a Third
Party to make or have made the Intermediate in such form and manner;

          15.2.5 there are no actual, pending, alleged, or to its knowledge,
threatened actions, suits, claims, interference or governmental investigations,
or intellectual property right litigation, or, to its best knowledge, threatened
product liability action, in each case, in the Territory, involving the
Intermediate, Compound, the XenoPort Patents or the XenoPort Know-How by or
against XenoPort or any of its Affiliates;

          15.2.6 all necessary consents, approvals and authorizations of all
Regulatory Authorities, other governmental authorities and other persons or
entities required to be obtained by XenoPort in order to enter into this
Agreement have been obtained;

          15.2.7 there is no actual, pending, alleged, or to its knowledge,
threatened infringement by a Third Party of any of the XenoPort Patents in the
Territory, and there is no actual, pending, alleged, or to its knowledge,
threatened misappropriation by a Third Party of any of the XenoPort Know-How in
the Territory, and it is not aware of any facts that would give rise to any
claim of infringement of any Third Party's intellectual property as a result of
the manufacture, use or sale of the Compound in the Territory;


                                       43

<PAGE>

          15.2.8 to its knowledge, none of the issued XenoPort Patents are
invalid or unenforceable in the Territory; and

          15.2.9 XenoPort does not have any knowledge that any of Xanodyne's
representations and warranties set forth in Section 15.1 above and Section 15.3
are inaccurate.

     15.3 Representations and Warranties of Xanodyne. Xanodyne represents and
warrants to XenoPort that, as of the Effective Date:

          15.3.1 it has the full right and authority to grant the rights granted
herein;

          15.3.2 the Xanodyne Patents listed on Exhibit 1.34 are the only
Patents owned or Controlled by Xanodyne that are necessary for the manufacture,
sale, use or importation of Xanodyne Products;

          15.3.3 there are no actual, pending, alleged, or to its knowledge,
threatened actions, suits, claims, interference or governmental investigations
or intellectual property right litigation or, to its best knowledge, threatened
product liability action involving any Xanodyne Product, or the Xanodyne
Patents, by or against Xanodyne or any of its Affiliates;

          15.3.4 to its knowledge, none of the issued Xanodyne Patents are
invalid or unenforceable in the Territory;

          15.3.5 to its knowledge, there are no facts or circumstances that
would prevent, or be reasonably likely to prevent, Xanodyne from obtaining
marketing exclusivity for a Xanodyne Product in the Territory pursuant to 21
C.F.R. Section 314.108.

          15.3.6 all necessary consents, approvals and authorizations of all
Regulatory Authorities, other governmental authorities and other persons or
entities required to be obtained by Xanodyne in order to enter into this
Agreement have been obtained;

          15.3.7 there is no actual, pending, alleged or, to its knowledge,
threatened infringement by a Third Party of any of the Xanodyne Patents, and
there is no actual, pending, alleged, or to its knowledge, threatened
misappropriation by a Third Party of any of the Xanodyne Know-How, and it is not
aware of any facts which would give rise to any claim of infringement of any
Third Party's intellectual property as a result of the manufacture, use or sale
of the Xanodyne Products in the Territory; and

          15.3.8 Xanodyne does not have any knowledge that any of XenoPort's
representations and warranties set forth in Sections 15.1 and 15.2 above are
inaccurate.

     15.4 DISCLAIMER. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT,
NEITHER PARTY MAKES ANY REPRESENTATION OR EXTENDS ANY WARRANTIES OF ANY KIND,
EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT OR VALIDITY
OF ANY PATENTS ISSUED OR PENDING.


                                       44

<PAGE>

     15.5 LIMITATION OF LIABILITY. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT OR
OTHERWISE, NEITHER PARTY SHALL BE LIABLE TO THE OTHER WITH RESPECT TO ANY
SUBJECT MATTER OF THIS AGREEMENT, WHETHER UNDER ANY CONTRACT, NEGLIGENCE, STRICT
LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY, FOR ANY INCIDENTAL, INDIRECT,
SPECIAL, EXEMPLARY, PUNITIVE, MULTIPLE OR CONSEQUENTIAL DAMAGES (INCLUDING,
WITHOUT LIMITATION, LOST PROFITS, LOSS OF USE, DAMAGE TO GOODWILL OR LOSS OF
BUSINESS) EXCEPT IN THE CASE OF (A) BREACH OF ARTICLE 12 OR (B) SUCH DAMAGES
OWED TO THIRD PARTIES PURSUANT TO ARTICLE 16.

                                   ARTICLE 16
                                 INDEMNIFICATION

     16.1 Indemnification of XenoPort. Xanodyne shall indemnify and hold
harmless each of XenoPort and its Affiliates and their respective directors,
officers and employees and the respective successors and assigns of any of the
foregoing (the "XenoPort Indemnitees"), from and against any and all
liabilities, damages, penalties, fines, costs and expenses (including reasonable
attorneys' fees and other expenses of litigation) ("Liabilities") from any
claims, actions, suits or proceedings brought by a Third Party (a "Third Party
Claim") incurred by any XenoPort Indemnitee, arising from, or occurring as a
result of: (a) the manufacture, use, marketing, distribution, sale or promotion
of the Compound and/or any Product by Xanodyne, or its Affiliates or licensees;
or (b) any material breach of any representations, warranties or covenants given
by Xanodyne under this Agreement; except to the extent such Third Party Claim
falls within the scope of XenoPort's indemnification obligations set forth in
Section 16.2 below or resulted from the gross negligence or willful misconduct
of a XenoPort Indemnitee.

     16.2 Indemnification of Xanodyne. XenoPort shall indemnify and hold
harmless each of Xanodyne and its Affiliates and their respective directors,
officers and employees and the respective successors and assigns of any of the
foregoing (the "Xanodyne Indemnitees"), from and against any and all Liabilities
from any Third Party Claims incurred by any Xanodyne Indemnitee, arising from,
or occurring as a result of: (a) the manufacture, use, marketing, distribution,
sale or promotion of the Compound and/or any XenoPort Product by XenoPort, or
its Affiliates or licensees (other than Xanodyne or its Affiliates or
licensees); or (b) any material breach of any representations, warranties or
covenants given by XenoPort under this Agreement; except to the extent any such
Third Party Claim falls within the scope of Xanodyne's indemnification
obligations set forth in Section 16.1 above or resulted from the gross
negligence or willful misconduct of a Xanodyne Indemnitee.

     16.3 Procedure. A Party that intends to claim indemnification under this
Article 16 (the "Indemnitee") shall promptly notify the other Party (the
"Indemnitor") in writing of any Third Party Claim, in respect of which the
Indemnitee intends to claim such indemnification, and the Indemnitor shall have
sole control of the defense and/or settlement thereof. The indemnity arrangement
in this Article 16 shall not apply to amounts paid in settlement of any action
with respect to a Third Party Claim if such settlement is effected without the
consent of the Indemnitor, which consent shall not be withheld or delayed
unreasonably. The failure to deliver written notice to the Indemnitor within a
reasonable time after the commencement of any action with respect to a Third
Party Claim, if


                                       45

<PAGE>

prejudicial to its ability to defend such action, shall relieve such Indemnitor
of any liability to the Indemnitee under this Article 16, but the omission to so
deliver written notice to the Indemnitor shall not relieve the Indemnitor of any
liability that it may have to any Indemnitee otherwise than under this Article
16. The Indemnitee under this Article 16 shall, at its expense, cooperate fully
with the Indemnitor and its legal representatives in the investigation of any
action with respect to a Third Party Claim covered by this indemnification. For
clarity, it is understood that (a) Xanodyne shall not be obligated to indemnify
XenoPort [**]; except, in each case, to the extent Xanodyne is obligated to
indemnify XenoPort for any such amount in accordance with paragraph (b) of
Section 16.1 above; and (b) XenoPort shall not be obligated to indemnify
Xanodyne [**]; except to the extent XenoPort is obligated to indemnify Xanodyne
for any such amount in accordance with paragraph (b) of Section 16.2 above.

     16.4 Insurance. Each Party shall secure and maintain, during the term of
this Agreement and for a period of [**] thereafter, comprehensive general
liability insurance, including products liability insurance and coverage for
clinical trials, underwritten by a reputable and financially secure insurance
carrier, in a form and having liability limits consistent with standards in the
pharmaceutical industry based upon such Party's activities and indemnification
obligations under this Agreement, as applicable. Each Party shall furnish to the
other Party, on request, certificates of insurance setting forth the amount of
liability insurance and a provision that the other Party shall receive [**]
written notice prior to termination or material reduction to the level of
coverage.

                                   ARTICLE 17
                               DISPUTE RESOLUTION

     17.1 Dispute Resolution. The Parties agree that any dispute arising with
respect to the interpretation, enforcement, termination or invalidity of this
Agreement, or the failure of any Committee to reach [**] (each a "Dispute"),
shall be resolved through the procedures set forth in this Article 17.

     17.2 [**] Intervention. Except for any failure of any Committee to reach
[**], which shall be resolved in accordance with the procedures specified in
Section 3.5 above, the Dispute shall first be presented to [**]. If [**] cannot
resolve the Dispute within [**] of the request to do so, either Party may
initiate arbitration proceedings in accordance with Section 17.3 below, with
respect to a Dispute which the Parties have agreed to submit to arbitration, as
provided in Section 17.3, or initiate legal proceedings with respect to any
other Dispute.

     17.3 Arbitration Proceedings. If the [**] do not reach a mutually
acceptable resolution as to a Dispute under Section 3.5 above, upon written
notice by either Party to the other Party, the Dispute shall be submitted for
resolution by final, binding arbitration in the manner described in this Section
17.3.

          17.3.1 Conduct of Arbitration. Any arbitration pursuant to this
Section 17.3 shall be conducted in English, by the Judicial Arbitration and
Mediation Services, Inc. ("JAMS") in New York City, New York, or such other
location as the Parties agree, in accordance with the JAMS Streamlined
Arbitration Rules and Procedures, as modified by this Section 17.3, by a single


                                       46

<PAGE>

arbitrator appointed in accordance with such Rules, or if the Rules do not
provide for such appointment, by the chief executive officer of JAMS. If the
arbitrator determines it appropriate, the arbitrator shall select an expert who
[**] or an individual as nearly meeting such qualifications as is practicable as
determined by the arbitrator, to advise on the proposed resolution of the
dispute. Each Party shall [**]. If so requested by the arbitrator, [**] pursuant
to this Section 17.3.1; provided that [**].

          17.3.2 Completion in [**]. In any arbitration under this Section 17.3,
the arbitrator and the Parties shall use all reasonable efforts to resolve such
dispute within [**] after the selection of the arbitrator, or as soon thereafter
as is practicable.

          17.3.3 Costs. The costs of any arbitration under this Section 17.3
shall be shared equally by the Parties, and each Party shall bear its own costs
and expenses in connection with such arbitration; provided that the arbitrator
may require the non-prevailing Party to bear one hundred percent (100%) of such
costs, and/or the direct expenses of the prevailing Party to the extent the
arbitrator determines that the non-prevailing Party pursued the Dispute in bad
faith. The decision of the arbitrator shall be binding on the Parties, and any
judgment upon such decision of the arbitrator may be entered and enforced in any
court of competent jurisdiction.

     17.4 Interim Relief. Notwithstanding anything in this Article 17 to the
contrary, XenoPort and Xanodyne shall each have the right to apply to any court
of competent jurisdiction for appropriate interim or provisional relief, as
necessary to protect the rights or property of that Party, pending the selection
of the arbitrator or the arbitrator's determination of the merits of any
Dispute.

                                   ARTICLE 18
                                  MISCELLANEOUS

     18.1 Force Majeure. If the performance of any part of this Agreement
(except for any payment obligation for goods already shipped or amounts already
accrued under this Agreement) by either Party is prevented, restricted,
interfered with or delayed by reason of force majeure (including fire,
earthquake, flood, embargo, power shortage or failure, acts of war or terrorism,
insurrection, riot, lockout or other labor disturbance, governmental acts or
orders or restrictions, or acts of God), the Party so affected shall, upon
giving written notice to the other Party, be excused from such performance to
the extent of such prevention, restriction, interference or delay; provided that
the affected Party shall use its reasonable efforts to avoid or remove such
causes of non-performance and shall continue performance with the utmost
dispatch whenever such causes are removed.

     18.2 Governing Law. This Agreement and all questions regarding its validity
or interpretation, or the breach or performance of this Agreement, shall be
governed by, and construed in accordance with, the laws of the State of New
York, without reference to conflicts of laws principles.

     18.3 Waiver of Breach. Except as otherwise expressly provided in this
Agreement, any term of this Agreement may be waived only by a written instrument
executed by a duly authorized representative of the Party waiving compliance.
The delay or failure of either Party at any time to


                                       47

<PAGE>

require performance of any provision of this Agreement shall in no manner affect
such Party's rights at a later time to enforce the same. No waiver by either
Party of any condition or term in any one or more instances shall be construed
as a further or continuing waiver of such condition or term or of another
condition or term.

     18.4 Modification. No amendment or modification of any provision of this
Agreement shall be effective unless in writing signed by a duly authorized
representative of each Party. No provision of this Agreement shall be varied,
contradicted or explained by any oral agreement, course of dealing or
performance or any other matter not set forth in an agreement in writing and
signed by a duly authorized representative of each Party.

     18.5 Severability. If any provision of this Agreement, or the application
of such provision to any Party or circumstance, shall be held invalid, illegal
or unenforceable, the Parties shall negotiate in good faith a valid, legal and
enforceable substitute provision that most nearly reflects the original intent
of the Parties and the remainder of this Agreement shall continue in full force
and effect. In the event a Party seeks to avoid a provision of this Agreement by
asserting that such provision is invalid, illegal or otherwise unenforceable,
the other Party shall have the right to terminate this Agreement upon [**] prior
written notice to the asserting Party, unless such assertion is eliminated and
the effect of such assertion is cured within such [**] period. Any termination
in accordance with the foregoing sentence shall be deemed an election by
Xanodyne to terminate pursuant to Section 13.3 if XenoPort exercises its right
to terminate under this Section 18.5, and a termination for the breach of
XenoPort pursuant to Section 13.2 if Xanodyne exercises its right to terminate
under this Section 18.5.

     18.6 Entire Agreement. This Agreement (including the Exhibits attached
hereto), together with any Pharmaco-Vigilance Agreement executed by the Parties
pursuant to Section 4.7.1 and/or any Co-Promotion Agreement executed by the
Parties pursuant to Section 5.4, constitute the entire agreement between the
Parties relating to its subject matter, and supersede all prior or
contemporaneous agreements, understandings or representations, either written or
oral, between XenoPort and Xanodyne with respect to such subject matter.

     18.7 Notices. Unless otherwise agreed by the Parties or specified in this
Agreement, all communications between the Parties relating to, and all written
documentation to be prepared and provided under, this Agreement shall be in the
English language. Any notice required or permitted under this Agreement shall be
in writing in the English language: (a) delivered personally; (b) sent by
registered or certified mail (return receipt requested and postage prepaid); (c)
sent by express courier service providing evidence of receipt, postage pre-paid
where applicable; or (d) sent by facsimile (receipt verified and a copy promptly
sent by another permissible method of providing notice described in paragraphs
(a), (b) or (c) above), to the following addresses of the Parties or such other
address for a Party as may be specified by like notice:


                                       48

<PAGE>

To XenoPort:                            To Xanodyne:
------------                            ------------
XenoPort, Inc.                          Xanodyne Pharmaceuticals, Inc.
3410 Central Expressway                 One Riverfront Place,
Santa Clara, California 95051,          Newport, Kentucky 41071,
Attention: Secretary                    Attention: General Counsel
Phone: (408) 616-7200                   Telephone: (859) 371-6383
Facsimile: (408) 616-7211               Facsimile: (859) 371-6391

With a copy to:                         With a copy to:
Wilson Sonsini Goodrich & Rosati        Dinsmore & Shohl LLP
650 Page Mill Road                      255 East Fifth Street, Suite 1900
Palo Alto, California 94304-1050        Cincinnati, Ohio 45202-4700
Attention: Kenneth A. Clark, Esq.       Attention: Paul R. Mattingly, Esq.
Telephone: (650) 493-9300               Telephone: (513) 977-8200
Facsimile: (650) 493-6811               Facsimile: (513) 977-8141

     Any notice required or permitted to be given concerning this Agreement
shall be effective upon receipt by the Party to whom it is addressed, or within
seven (7) days of dispatch whichever is earlier.

     18.8 Assignment. This Agreement shall not be assignable by either Party to
any Third Party without the written consent of the other Party hereto; except
either Party may assign this Agreement without the other Party's consent to an
entity that acquires substantially all of the business or assets of the
assigning Party which relate to the line of business to which this Agreement
relates, whether by merger, acquisition or otherwise; provided that the entity
to whom this Agreement is assigned assumes this Agreement in writing or by
operation of law. In addition, either Party shall have the right to assign this
Agreement to an Affiliate upon written notice to the non-assigning Party;
provided that the assigning Party guarantees the performance of this Agreement
by such Affiliate; and further provided that if the non-assigning Party
reasonably believes such assignment could result in material adverse tax
consequences to the non-assigning Party, such assignment shall not be made
without the non-assigning Party's consent. Subject to the foregoing, this
Agreement shall inure to the benefit of each Party, its successors and permitted
assigns. Any assignment of this Agreement in contravention of this Section 18.8
shall be null and void.

     18.9 Independent Contractors. Nothing contained in this Agreement is
intended, or shall be deemed or construed, to establish a joint venture or
partnership between XenoPort or Xanodyne. No Party to this Agreement 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.

     18.10 Interpretation. The captions to the several Articles and Sections of
this Agreement are not a part of this Agreement, but are included for
convenience of reference and shall not affect its meaning or interpretation. In
this Agreement: (a) the word "including" shall be deemed to be followed by the
phrase "without limitation" or like expression; (b) the singular shall include
the plural and vice versa; and (c) masculine, feminine and neuter pronouns and
expressions shall be


                                       49

<PAGE>

interchangeable. Each accounting term used herein that is not specifically
defined herein shall have the meaning given to it under GAAP, or other generally
accepted cost accounting principles in the United States, but only to the extent
consistent with its usage and the other definitions in this Agreement.

     18.11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.

      [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]


                                       50

<PAGE>

     IN WITNESS WHEREOF, the Parties hereto have caused this Licensing Agreement
to be duly executed as of the date first above written.

XENOPORT, INC.                          XANODYNE PHARMACEUTICALS, INC.


By: /s/ Ronald W. Barrett               By: /s/ Gregory D. Flexter
    ---------------------------------       ------------------------------------
Name: Ronald W. Barrett                 Name: Gregory D. Flexter
Title: Chief Executive Officer          Title: President and Chief Executive
                                               Officer
<PAGE>

                                   EXHIBIT 1.5

                                    COMPOUND

[**]
<PAGE>

                                  EXHIBIT 1.15

                                  INTERMEDIATE

[**]
<PAGE>

                                  EXHIBIT 1.34

                                XANODYNE PATENTS

[**]
<PAGE>

                                  EXHIBIT 1.35

                                XANODYNE PRODUCT

Provided to Gia Bosko, General Counsel, XenoPort, Inc. by Tom Jennings, General
Counsel, Xanodyne Pharmaceuticals, Inc. by email dated October 1, 2007.

<PAGE>

                                 EXHIBIT 1.37.1

                            XENOPORT COMPOUND PATENTS

[**]
<PAGE>

                                 EXHIBIT 1.37.2

                          XENOPORT INTERMEDIATE PATENTS

[**]

<PAGE>

                                   EXHIBIT 4.1

                                DEVELOPMENT PLAN

                                 (See attached.)

<PAGE>

[**]

<PAGE>

                                  EXHIBIT 12.3

                                  PRESS RELEASE

                                 (See attached.)

<PAGE>

(XENOPORT(R) LOGO)                     (XANODYNE(TM) PHARMACEUTICALS, INC. LOGO)

NEWS RELEASE                                            Company Contacts:
For Immediate Distribution                              XenoPort: Jackie Cossmon
                                                        408-616-7220
                                                        ir@XenoPort.com

                                                        Xanodyne: Tom Jennings
                                                        859-371-6383
                                                        pr@xanodyne.com

             XENOPORT AND XANODYNE ANNOUNCE EXCLUSIVE U.S. LICENSING
                              AGREEMENT FOR XP21510

Novel Product Candidate Represents Potential Treatment for Women with
Menorrhagia

SANTA CLARA, CA, AND NEWPORT, KY, OCTOBER __, 2007 -- XenoPort, Inc. (Nasdaq:
XNPT) and Xanodyne Pharmaceuticals, Inc. announced today that they have entered
into an exclusive license agreement for the development and commercialization by
Xanodyne in the United States of a preclinical, non-hormonal, oral product
candidate known as XP21510, discovered by XenoPort, for the potential treatment
of women diagnosed with menorrhagia, or heavy menstrual bleeding. It is
estimated that 9 to 14 percent of healthy women suffer from menorrhagia.

Greg Flexter, chief executive officer of Xanodyne, stated, "Women suffering from
menorrhagia and their healthcare providers need improved treatments for this
potentially life-altering disorder. Our collaboration with XenoPort to develop
XP21510 may provide a non-hormonal, non-surgical option for addressing the
biological processes resulting in menorrhagia. We plan to develop XP21510, which
is covered by an allowed U.S. composition of matter patent, as a follow on
product to Xanodyne's Phase 3 tranexamic acid product candidate, XP12B, for the
treatment of menorrhagia. We believe that XP12B and XP21510 may provide for a
sustainable product life cycle opportunity in this treatment area."

Ronald W. Barrett, Ph.D., chief executive officer of XenoPort, stated, "We
believe that Xanodyne, which focuses on developing and commercializing products
addressing women's health issues, will be an excellent partner for XP21510. This
agreement with Xanodyne is an excellent example of our strategy to maximize the
value of XenoPort's discovery engine by licensing compounds that fall outside
our therapeutic focus while we concentrate our internal resources on the
development and commercialization of our pipeline of central nervous system
product candidates."

                                   -- more --

<PAGE>

XENOPORT AND XANODYNE ANNOUNCE EXCLUSIVE U.S. LICENSING                   PAGE 2
AGREEMENT FOR XP21510


Under the terms of the agreement, Xanodyne receives exclusive rights to develop
and commercialize XP21510 in the United States. In exchange for these rights,
XenoPort is entitled to receive up-front cash payments totaling $12 million, of
which $6 million is payable upon execution of the agreement and the remaining $6
million is due on the 12-month anniversary of the execution date. XenoPort also
will be eligible to receive aggregate cash payments of up to $130 million and $5
million for XP21510 and XP12B, respectively, upon the achievement of certain
development, regulatory and commercial milestones. In addition, XenoPort is
entitled to receive tiered double-digit royalty payments on potential future
sales of XP21510, as well as escalating single-digit royalties on potential
future sales of XP12B.

ABOUT XP21510

XP21510 is a new chemical entity that is a Transported Prodrug of tranexamic
acid. A prodrug is a chemical precursor to an active drug that is metabolized in
the body to form the active drug and provide its medical benefits. XP21510 is
designed to use the body's natural mechanisms for actively transporting
nutrients through the gastrointestinal tract to enhance the delivery of
tranexamic acid into the bloodstream after oral administration. Tranexamic acid
is approved in many countries in Europe and Asia for the treatment of women with
menorrhagia. Tranexamic acid is a man-made derivative of the naturally occurring
amino acid lysine and works to inhibit, on a molecular basis, the break down of
blood clots.

XP21510 was discovered at XenoPort. A United States patent application with
composition-of-matter claims relating to XP21510, publication number US
2007/0027210, has been allowed by the United States Patent and Trademark Office.

ABOUT XP12B

XP12B is a sustained-release formulation of tranexamic acid developed by
Xanodyne that received Fast Track status from the FDA for the potential
treatment of women with menorrhagia. Xanodyne is conducting Phase 3 clinical
trials with XP12B in the United States.

ABOUT MENORRHAGIA

Women with menorrhagia experience abnormally heavy and prolonged menstrual
periods at regular intervals. While a normal menses cycle lasts 21 to 35 days
with an average of five days of bleeding and total blood flow between 25 and 80
milliliters (mL), women with menorrhagia can have seven or more days of bleeding
and lose more than 80 mL of blood per menses. It is estimated that 9 to 14
percent of healthy women suffer from menorrhagia. Because quantitative means of
diagnosing menorrhagia are generally impractical, healthcare professionals often
diagnose menorrhagia symptomatically by considering frequency of tampon or
sanitary napkin change, spotting and staining events, presence of constant pain
in the lower abdomen, interference with regular work and social routines and
measurements of anemia.

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AGREEMENT FOR XP21510


ABOUT XENOPORT

XenoPort, Inc. is a biopharmaceutical company focused on developing a portfolio
of internally discovered product candidates that utilize the body's natural
nutrient transport mechanisms to improve the therapeutic benefits of existing
drugs. XenoPort's most advanced product candidate, XP13512, has successfully
completed a pivotal trial in its Phase 3 clinical program for the treatment of
restless legs syndrome and has successfully completed a Phase 2a clinical trial
for the management of post-herpetic neuralgia. XenoPort has also reported
positive results from a Phase 2a clinical trial of its second product candidate,
XP19986, in patients with gastroesophageal reflux disease.

To learn more about XenoPort, please visit the web site at www.XenoPort.com.

ABOUT XANODYNE

Xanodyne Pharmaceuticals, Inc. is a privately held pharmaceutical company
focused on applying proprietary drug delivery technologies to known drug
compounds. Xanodyne develops and commercializes new products for significant
markets in the therapeutic areas of women's healthcare and pain management. The
company, located in the greater Cincinnati area, has a nationwide sales force
and currently markets numerous pharmaceutical products. More information
regarding Xanodyne can be accessed at www.xanodyne.com.

FORWARD-LOOKING STATEMENTS

This press release contains "forward-looking" statements, including, without
limitation, all statements related to Xanodyne's future development of XP21510
and XP12B; the therapeutic and commercial potential of XP21510 and XP12B; and
potential receipt by XenoPort of future development, regulatory and commercial
milestone and royalty payments with respect to XP21510 and XP12B. Any statements
contained in this press release that are not statements of historical fact may
be deemed to be forward-looking statements. Words such as "believes,"
"anticipates," "plans," "expects," "will," "intends," "potential" and similar
expressions are intended to identify forward-looking statements. These
forward-looking statements are based upon XenoPort's current expectations.
Forward-looking statements involve risks and uncertainties. XenoPort's actual
results and the timing of events could differ materially from those anticipated
in such forward-looking statements as a result of these risks and uncertainties,
which include, without limitation, the uncertainty of the timing and results of
clinical trials of our product candidates; the uncertainty of the FDA approval
process and other regulatory requirements; our dependence on our current and
additional collaborative partners; and the therapeutic and commercial value of
the company's compounds. These and other risk factors are discussed under the
heading "Risk Factors" in our Quarterly Report on Form 10-Q for the quarter
ended June 30, 2007, filed with the Securities and Exchange Commission on August
9, 2007. XenoPort expressly disclaims any obligation or undertaking to release
publicly any updates or revisions to any forward-looking

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AGREEMENT FOR XP21510


statements contained herein to reflect any change in the company's expectations
with regard thereto or any change in events, conditions or circumstances on
which any such statements are based.

XenoPort and Transported Prodrug are U.S. trademarks of XenoPort, Inc. Xanodyne
is a U.S. trademark of Xanodyne Pharmaceuticals, Inc.

XNPT2G

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