Document:

exv10w1

 

Exhibit
10.1

RESTATED STOCK OPTION GRANT PROGRAM

FOR

NONEMPLOYEE DIRECTORS UNDER THE

AQUANTIVE, INC.

RESTATED 1999 STOCK INCENTIVE COMPENSATION PLAN

(as amended by the Board of Directors effective March 22, 2007)

     The following provisions set forth the terms of the stock option grant program (the “Program”)
for nonemployee directors of aQuantive, Inc. (the “Company”) under the Company’s Restated 1999
Stock Incentive Compensation Plan (the “Plan”). The following terms are intended to supplement,
not alter or change, the provisions of the Plan, and in the event of any inconsistency between the
terms contained herein and in the Plan, the Plan shall govern. All capitalized terms that are not
defined herein shall be as defined in the Plan.

     1. Eligibility

     Each director of the Company elected or appointed who is not otherwise an employee of the
Company or any Subsidiary (an “Eligible Director”) shall be eligible to receive Initial Grants and
Annual Grants under the Plan, as discussed below.

     2. Initial Grants

     A Nonqualified Stock Option to purchase 15,000 shares of Common Stock (“Initial Grant”) shall
be granted to each Eligible Director upon such Eligible Director’s initial election or appointment
to the Board. Initial Grants shall vest and become exercisable in equal installments on the first,
second and third anniversaries of the Grant Date, assuming continued service on the Board for such
period.

     3. Annual Grants

     Each Eligible Director shall automatically receive a Nonqualified Stock Option to purchase
10,000 shares of Common Stock immediately following each year’s Annual Meeting (each, an “Annual
Grant”); provided that any Eligible Director who received an Initial Grant within three months
prior to an Annual Meeting shall not receive an Annual Grant until immediately following the second
Annual Meeting after the date of such Initial Grant. Annual Grants shall fully vest and become
exercisable on the earlier of (a) the first anniversary of the date of grant, or (b) the date of
the next following Annual Meeting, so long as that date is no more than 60 days earlier than the
date of the Annual Meeting on which the Annual Grant was granted, in each case assuming continued
service on the Board for such period.

     4. Option Exercise Price

     The exercise price of an Option shall be the Fair Market Value of the Common Stock as
applicable, on the date of grant.

     5. Manner of Option Exercise

     An Option shall be exercised by giving the required notice to the Company, stating the number
of shares of Common Stock with respect to which the Option is being exercised, accompanied by
payment in full for such Common Stock, which payment may be in whole or in part (a) in cash or
check, (b) in shares of Common Stock, owned by the Eligible Director for at least six months (or
any shorter period

 

 

necessary to avoid a charge to the Company’s earnings for financial reporting purposes) having a Fair
Market Value on the day prior to the exercise date equal to the aggregate Option exercise price, or
(c) if and so long as the Common Stock is registered under the Exchange Act, by delivery of a
properly executed exercise notice, together with irrevocable instructions to a broker, to properly
deliver to the Company the amount of sale or loan proceeds to pay the exercise price, all in
accordance with the regulation of the Federal Reserve Board.

     6. Term of Options

     Each Option shall expire seven years from the date of grant thereof, but shall be subject to
earlier termination as follows:

     (a) In the event that an Eligible Director ceases to be a director of the Company for any
reason, the unvested portion of any Option granted to such Eligible Director shall terminate
immediately and the vested portion of the Option may be exercised by the Eligible Director only
within one year after the date he or she ceases to be a director of the Company or prior to the
date on which the Option expires by its terms, whichever is earlier.

     (b) In the event of the death of an Eligible Director, the unvested portion of any Option
granted to such Eligible Director shall terminate immediately and the vested portion of the Option
may be exercised only within one year after the date of death of the Eligible Director or prior to
the date on which the Option expires by its terms, whichever is earlier, by the personal
representative of the Eligible Director’s estate, the person(s) to whom the Eligible Director’s
rights under the Option have passed by will or the applicable laws of descent and distribution or
the beneficiary designated pursuant to Section 11 of the Plan.

     7. Corporate Transactions

     In the event of any Corporate Transaction, other than a Related Party Transaction, each
Initial and Annual Grant that is at the time outstanding shall automatically accelerate so that
each such grant shall, immediately prior to the specified effective date for the Corporate
Transaction, become fully vested and exercisable. Notwithstanding the foregoing, such acceleration
shall not occur if, in the opinion of the Company’s outside accountants, it would render
unavailable “pooling of interest” accounting for a Corporate Transaction that would otherwise
qualify for such accounting treatment.

     8. Amendment

     The Board may amend the provisions contained herein in such respects as it deems advisable.
Any such amendment shall not, without the consent of the Eligible Director, impair or diminish any
rights of an Eligible Director or any rights of the Company under an Option.

     Provisions of the Plan (including any amendments) that were not discussed above, to the extent
applicable to Eligible Directors, shall continue to govern the terms and conditions of Options
granted to Eligible Directors.

     9. Effective Date

     The Program shall become effective on the day shares of the Common Stock are first offered to
the public in an underwritten initial public offering pursuant to a registration statement filed
with and declared effective by the Securities and Exchange Commission.

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Exhibit 10.29

Certain confidential information contained in this document, marked by brackets, is

filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the

Securities Exchange Act of 1934, as amended.

DEVELOPMENT AND COMMERCIALIZATION AGREEMENT

     THIS DEVELOPMENT AND COMMERCIALIZATION AGREEMENT (“Agreement”) dated as of February 7,
2007 (“Effective Date”), is entered into between XenoPort, Inc., a Delaware corporation
having its principal place of business at 3410 Central Expressway, Santa Clara, CA 95051
(“XenoPort”) and Glaxo Group Limited, a company existing under the laws of England and
Wales, having its registered office at Glaxo Wellcome House, Berkeley Avenue, Greenford, Middlesex,
UB6 0NN, England (“GSK”).

BACKGROUND

     A. XenoPort is developing a Transported ProdrugTM of gabapentin (as further defined below, the
“Product”) for the treatment of restless leg syndrome (“RLS”) and the management of
neuropathic pain. XenoPort owns or controls certain patents, know-how and other intellectual
property relating to such Product;

     B. GSK desires to co-develop and co-commercialize the Product with XenoPort in the United
States (as hereinafter defined), and to further develop and commercialize the Product in other
countries in the Territory (as hereinafter defined), and XenoPort desires to have the Product
developed and commercialized in the Territory by and with GSK, in accordance with this Agreement;
and

     C. GSK desires to obtain from XenoPort certain distribution and license rights for the Product
in the Territory, and XenoPort is willing to grant to GSK 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 (as hereinafter defined) hereby agree as follows:

ARTICLE I

DEFINITIONS

     As used in this Agreement, the following capitalized terms will have the meanings set forth in
this Article 1 when used in this Agreement.

     1.1 “Affiliate” of a Party shall mean any Person 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 as long as such control exists. As used in this Section 1.1,
“control” shall mean: (a) to possess, directly or indirectly, the power to direct the
management and policies of such Person, 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. A “Controlled Affiliate” is an Affiliate that [... * ...].

     1.2 “Annual Net Sales” shall mean total Net Sales in a country or countries in the
Territory in a particular calendar year.

     1.3 “Anti-Kickback Statute” means the Medicare and Medicaid Anti-Kickback Statute set
forth at 42 U.S.C. §1320a-7b(b).

     1.4 “Applicable Commercial Practices Policies” means the portions as identified by GSK
of the Commercial Practices Policies of GSK applicable (and as applied generally to GSK’s own
personnel) to the marketing, sale, promotion and detailing of pharmaceutical products, as amended
or supplemented by GSK from time to time, a copy of which will be delivered to XenoPort prior to
XenoPort Co-Promoting and Detailing the Product and/or Detailing the REQUIPTM Products in the United
States and updated copies will thereafter be delivered to XenoPort as and when amended or
supplemented.

     1.5 “Applicable Laws” means the applicable provisions of any and all national,
supranational, regional, state and local laws, treaties, statutes, rules, regulations,
administrative codes, guidances, ordinances, judgments, decrees, directives, injunctions, orders,
permits (including Marketing Approvals) of or from any court, arbitrator, Regulatory Authority or
governmental agency or authority having jurisdiction over or related to the subject item.

     1.6 “Asian Territory” shall mean Indonesia, Japan, Korea, Philippines, Taiwan and
Thailand.

     1.7 “Astellas” shall mean Astellas Pharma Inc. and its Affiliates, and any other Third
Parties to whom Astellas or XenoPort has granted a right to sell, market, distribute and/or promote
a Product in a country in the Asian Territory. To the extent Astellas’ rights in the Asian
Territory terminate and XenoPort grants rights to a Third Party, references herein to Astellas
shall be deemed to reference such Third Party.

     1.8 “Astellas Agreement” shall mean the Distribution and License Agreement dated
December 1, 2005 between XenoPort and Astellas.

     1.9 “Astellas Know-How” shall mean any scientific, medical, technical, marketing,
regulatory and/or other information, data and materials (including, preclinical data, clinical
data, clinical pharmacology data and regulatory filings and approvals submitted or obtained,
together with

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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its supporting data and regulatory correspondence and rights to reference the same) primarily
relating to the Compound and/or any Product, which is Controlled by Astellas as of the Effective
Date or during the Term; provided, however, that [... * ...].

     1.10 “Call” shall mean a face-to-face meeting in an individual, hospital or group
setting between a Sales Representative and one or more members of the Target Audience.

     1.11 “Change of Control” shall mean either: (a) a sale of all or substantially all of
the assets of a Party in one or a series of integrated transactions not in the ordinary course of
business to a Third Party; or (b) the acquisition of a Party by a Third Party by means of any
transaction or series of related transactions to which such Party is a party (including, any stock
acquisition, merger or consolidation). For clarity, a Change of Control would not include any
transaction or series of transactions in which the holders of voting securities of a Party
outstanding immediately prior to such transaction continue to retain (either by such voting
securities remaining outstanding or by such voting securities being converted into voting
securities of the surviving entity), as a result of shares in the Party held by such holders prior
to such transaction, fifty percent (50%) or more of the total voting power represented by the
voting securities of the acquiring entity outstanding immediately after such transaction or series
of transactions.

     1.12 “Commercially Reasonable Efforts” shall mean that level of efforts and resources
consistent with the usual practice followed by a Party in the exercise of reasonable business
discretion relating to other pharmaceutical products owned by it or to which it has exclusive
rights, which is of similar market potential and at a similar stage in development or product life,
taking into account issues of patent coverage, safety and efficacy, product profile, the
competitiveness of the marketplace, the proprietary position of the compound or product, the
regulatory structure involved, the profitability of the products (including, without limitation,
pricing and reimbursement status achieved), and other relevant factors, including without
limitation technical, legal, scientific, and/or medical factors.

     1.13 “Compound” shall mean that certain compound, referred to internally at XenoPort
as XP13512, the structure of which is set forth on Exhibit 1.13, and all esters, hydrates,
metabolites [... * ...], salts, solvates, isomers and/or mixtures of isomers thereof.

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

     1.15 “Co-Promotion” (including any variations such as “Co-Promote”) shall mean
those promotional and sales activities undertaken by a pharmaceutical company’s sales force in
concert with at least one other pharmaceutical company’s sales force in a single territory to
implement the marketing and/or sales plans with respect to a particular prescription pharmaceutical
product under the same trademark in such territory.

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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     1.16 “Data” shall mean any and all research data, pharmacology data, preclinical data,
clinical data and/or 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 Product, in each case that are Controlled by a Party or its Controlled Affiliates as of the
Effective Date or during the Term.

     1.17 “Detail” (including any variations such as “Detailing”) shall mean that
part of the activity undertaken by a Sales Representative during a Call whereby a Sales
Representative, who has been trained with respect to the REQUIPTM Products or the Product, as
applicable, in accordance with Section 5.4(c), makes a presentation: (a) describing [... * ...] as
applicable; (b) which may also include [... * ...]; and (c) in accordance with the [... * ...], as
applicable. [... * ...], shall not constitute a Detail. [... * ...] as applicable, shall not constitute a
Detail. As used herein, a [... * ...] in which [... * ...] (as consistent with industry norms) [... * ...].

     1.18 “EMEA” shall mean the European Medicines Agency of the European Union, or any
successor entity thereto performing similar functions.

     1.19 “Existing Phase III Studies” shall mean those certain Phase III clinical studies
[... * ...]

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

     1.21 “FD&C Act” means the federal Food, Drug and Cosmetic Act, as amended, and the
regulations promulgated thereunder from time to time.

     1.22 “Field” shall mean the diagnosis, palliation, treatment and/or prevention of any
disease or health condition in humans.

     1.23 “Filing” of an MAA shall be deemed to occur on the date of receipt of written
notice of acceptance from the FDA in the United States, or other relevant Regulatory Authority
outside of the United States, of such MAA for substantive review. Validation of an MAA by the EMEA
shall be deemed to constitute acceptance of such MAA for substantive review in a Major Market
(other than the United States) and, if an MAA is submitted under the EU mutual recognition
procedure and validated by the relevant Regulatory Authority in the reference member state, such
MAA shall be deemed to be accepted in a Major Market (other than the United States) upon
confirmation that the resulting approval in the reference member state will serve as the basis for
a mutual recognition procedure in such Major Market (other than the United States).

     1.24 “First Commercial Sale” shall mean, on a country-by-country basis and
Product-by-Product basis, the first bona fide, arm’s length sale of a Product in a country
following receipt of Marketing Approval of such Product in such country for use or consumption by
the general public of such Product in such country. Sales of a Product for registration samples,
compassionate use sales,

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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named patient use, inter-company transfers to Affiliates of a Party and the like will not
constitute a First Commercial Sale.

     1.25 “GSK Know-How” shall mean all scientific, medical, technical, marketing,
regulatory and other information primarily relating to the Product (including Data), which are
Controlled by GSK or its Controlled Affiliates during the Term, that are needed by or reasonably
useful to XenoPort in order for XenoPort to exercise its rights or perform its obligations under
this Agreement and the Astellas Agreement; provided, however, that [... * ...].

     1.26 “GSK Trademarks” shall mean the Trademarks Controlled by GSK or its Controlled
Affiliates as of the Effective Date or during the Term, which are used with the Products in the
Field in the Territory.

     1.27 “IND” shall mean any Investigational New Drug Application (including any
amendments thereto) filed with the FDA pursuant to 21 C.F.R. §321 before the commencement of
clinical trials of a Product, or any comparable filings with any Regulatory Authority in any other
jurisdiction.

     1.28 “Major Market” shall mean the United States, France, Germany, Italy, Spain and/or
the United Kingdom.

     1.29 “Major Pharmaceutical Company” shall mean a company that is engaged in the
business of selling pharmaceutical products, whose revenues from such sales (on a consolidated
basis in the last full fiscal year prior to the closing of any Change of Control) was in excess of
[... * ...]. Any Affiliate of such company shall be deemed to be a Major Pharmaceutical Company.

     1.30 “Marketing Approval” shall mean all approvals, licenses, registrations or
authorizations of the 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
or other similar 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. Notwithstanding the foregoing, Marketing Approval shall be deemed to have
occurred for a particular indication for a Product in such jurisdiction upon the First Commercial
Sale of such Product in such jurisdiction with labeling for such indication.

     1.31 “Marketing Approval Application” (or “MAA”) shall mean a NDA submitted to
the FDA in the United States or a corresponding application for Marketing Approval that has been
submitted to a Regulatory Authority in any other country in the Territory.

     1.32 “NDA” shall mean a New Drug Application as defined in Title 21 of the U.S. Code
of Federal Regulations, Section 314.50, et seq., which is filed with the FDA in order to gain the
FDA’s approval to commercialize a pharmaceutical product in the United States for the indications
set forth in the New Drug Application.

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

 - 5 - 

 

     1.33 “Net Sales” shall mean the gross invoice price by GSK or its Affiliates or
Sublicensees, as the case may be, for all Products sold by of GSK, its Affiliates or Sublicensees
(“Selling Party”) under this Agreement in a country or countries in the Territory in arm’s
length sales to Third Parties less the following deductions that are actually incurred, allowed,
paid, accrued or specifically allocated to the extent that such amounts are deducted from gross
invoiced sales amounts as reported by the Selling Party in its financial statements in accordance
with the International Financial Reporting Standards (“IFRS”), applied on a consistent
basis:

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

     (b) credits, rebates and charge backs or equivalents thereof (including those to managed-care
entities, national, state/provincial, local and other governments, their agencies and purchasers,
and to trade customers);

     (c) allowances or credits to customers on account of rejection or returns (including
wholesaler and retailer returns), retroactive price reductions affecting such Product or billing
errors;

     (d) freight, postage and duties, and transportation charges relating to such Product
(including handling and insurance thereto) separately identified on the invoice or other
documentation maintained in the ordinary course of business;

     (e) sales (such as value-added tax or its equivalent) and excise taxes, other consumption
taxes, customs duties and compulsory payments to governmental authorities and any other
governmental charges imposed upon the sale of a Product to Third Parties;

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

     (g) [... * ...] bad debt reported [... * ...] in which [... * ...] or [... * ...] or [... * ...] in which [... * ...];
and

     (h) any other items actually deducted from (and therefore not included as) gross invoiced
sales amounts in determining revenue, and not otherwise included as an item of income or the like,
as reported by a Selling Party in its financial statements in accordance with the IFRS, applied on
a consistent basis.

     Sales between GSK and its Affiliates or Sublicensees for resale shall be excluded from the
computation of Net Sales, and no payments will be payable on such sales except where such
Affiliates or Sublicensees are end users. If a Product is sold or transferred for consideration
other than cash, 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 [... * ...] in which [... * ...] In the event that [... * ...] then Net Sales for purposes

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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of [... * ...] shall be [... * ...] on the [... * ...] shall not [... * ...] If [... * ...] as provided in this
paragraph, the matter shall be resolved in accordance with Section 18.2 below.

     1.34 “Neuropathic Pain Indication” shall mean an indication for the Product involving
[... * ...].

     1.35 “Party” shall mean XenoPort or GSK individually, and “Parties” shall mean
XenoPort and GSK collectively.

     1.36 “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.

     1.37 “PDMA” means the federal Prescription Drug Marketing Act of 1987, as amended, and
the regulations promulgated thereunder from time to time.

     1.38 “Person” means any individual, corporation, partnership, firm, association, joint
venture, joint stock company, trust or other entity, or any government or regulatory administrative
or political subdivision or agency, department or instrumentality thereof.

     1.39 “Phase I” shall mean a human clinical trial, the principal purpose of which is to
demonstrate safety, tolerability and pharmacokinetics of the Product in volunteer or patient
subjects, as further described in 21 C.F.R. §312.21(a) (including, any such clinical study in any
country other than the United States).

     1.40 “Phase III” shall mean a human clinical trial, the principal purpose of which is
to establish safety and efficacy of the Product in patients with the disease being studied, as
further described in 21 C.F.R. §312.21(c) (including, any such clinical study in any country other
than the United States), 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 MAA for the indication being
studied.

     1.41 “Phase IV” shall mean a human clinical trial conducted with respect to a Product:
(a) after [... * ...]; (b) within the [... * ...]; and (c) intended as [... * ...]. Phase IV studies may
include, for example, [... * ...], and the like. Phase IV studies shall not include any human clinical
trials: (i) [... * ...]; and/or (ii) from which [... * ...] for the purposes of: [... * ...] or [... * ...]
provided that in the case of paragraph (ii), [... * ...].

     1.42 “PhRMA Code” means the PhRMA Code on Interactions with Health Care Professionals,
as amended.

     1.43 “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.

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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     1.44 “Promotional Materials” means all written, printed, video or graphic advertising,
promotional, educational and communication materials [... * ...] for marketing, advertising, promotion
and sale of the Product or the REQUIPTM Products, as applicable, for use in the United States (a) [...
* ...].

     1.45 “Regulatory Authority” shall mean the FDA, or a regulatory body with similar
regulatory authority in any other jurisdiction within the Territory.

     1.46 “Regulatory Filing” means all approvals, licenses, registrations, submissions and
authorizations made to or received from a Regulatory Authority in a country necessary for the
development, manufacture and/or commercialization of a pharmaceutical product in the Territory,
including any INDs, Marketing Approval Applications and Marketing Approvals.

     1.47 “REQUIPTM Products” shall mean those certain pharmaceutical products Controlled by
GSK or its Affiliates as of the Effective Date, which contain ropinirole HCL as an active
ingredient and are known as of the Effective Date as REQUIP CR and REQUIP XL 24h.

     1.48 “REQUIPTM Trademarks” shall mean shall mean the Trademarks Controlled by GSK or
its Affiliates as of the Effective Date and during the Term, which are used with the REQUIPTM
Products in the Field in the Territory.

     1.49 “RLS Indication” shall mean an indication for the Product involving RLS.

     1.50 “Sales Representative” shall mean a professional pharmaceutical sales
representative engaged or employed by either Party to conduct sales activities and other
promotional efforts with respect to a Product and/or the REQUIPTM Products.

     1.51 “Samples” shall mean individual physician sample units of the Product or the
REQUIPTM Products, as applicable.

     1.52 “Sublicensee” shall mean a Third Party to whom GSK has granted a right to sell,
market, distribute and/or promote a Product in the Territory pursuant to Section 2.2 and
“Sublicense” shall mean an agreement or arrangement between GSK and a Sublicensee granting
such rights. As used in this Agreement, “Sublicensee” shall not include a wholesaler or reseller
of a Product who does not market or promote such Product.

     1.53 “Target Audience” means those health care professionals legally permitted to
prescribe the Product or the REQUIPTM Products, as applicable, or issue hospital orders for the
Product or the REQUIPTM Products, as applicable, in each case in the United States, or those other
allied professionals that are part of the treatment team and who are recognized for this purpose in
the Co-Promotion Plan or the REQUIPTM Sales Plan, as applicable.

     1.54 “Territory” shall mean worldwide, except for the Asian Territory.

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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     1.55 “Third Party” shall mean any Person other than XenoPort, GSK and their respective
Affiliates.

     1.56 “Trademarks” means registered and unregistered trademarks, including words and
logos, and any applications for registrations thereof, and intellectual property rights residing in
such trademarks, including copyrights and design rights.

     1.57 “United States” or “U.S.” means the fifty (50) states of the United
States of America and the District of Columbia.

     1.58 “XenoPort Know-How” shall mean all scientific, medical, technical, regulatory and
other information primarily relating to the Compound and the Product (including the Data), which
are Controlled by XenoPort or its Controlled Affiliates as of the Effective Date or during the
Term, that were generated or utilized by XenoPort or its Controlled Affiliates in developing or
producing the Product or are otherwise reasonably necessary for GSK to exercise its rights or
perform its obligations under this Agreement; provided, however, that [... * ...].

     1.59 “XenoPort Patents” shall mean: (a) the Patents Controlled by XenoPort or its
Controlled Affiliates listed on Exhibit 1.59, 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; and (b) all [... *
....].

     1.60 “XenoPort Trademarks” shall mean the Trademarks Controlled by XenoPort or its
Controlled Affiliates and reflected in Exhibit 1.60 hereto, the applications for which have
been filed in the name of XenoPort, or another mutually agreed Trademark Controlled by XenoPort or
its Affiliates, in each case for use with the Products in the Field in the Territory.

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

	 	 	 	 	 	 	 
	Term	 	Section Defined	 	Term	 	Section Defined
	Acquired Party
	 	9.1(d)	 	Infringement Actions	 	12.4
	[... * ...]
	 	Exhibit 6.5	 	JAMS	 	18.2
	Additional Sales Representatives
	 	5.2(e)	 	Joint Commercialization Committee / JCC	 	3.3(a)
	Agreement
	 	Introduction	 	Joint Development Committee / JDC	 	3.2(a)
	Alliance Manager
	 	3.7	 	Joint P&L	 	6.5(c)
	Asian Territory Agreement
	 	8.4(a)(ii)	 	[... * ...]	 	6.2(c)(v)
	Auditor
	 	7.4(a) / 7.4(b)	 	Liabilities	 	17.1
	Clinical Studies and Activities
	 	4.3(a)	 	[... * ...]	 	Exhibit 6.5
	[... * ...]
	 	1.33	 	[... * ...]	 	5.2(d)(ii)
	Commercialization Plan
	 	5.1(b)	 	 	 	 
	Committee
	 	3.4(a)	 	[... * ...]	 	5.2(e)

 

			
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Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

 - 9 - 

 

	 	 	 	 	 	 	 
	Term	 	Section Defined	 	Term	 	Section Defined
	[... * ...]
	 	6.2(c)(i)	 	More Favorable	 	8.4(c)
	 
	 	 	 	Negotiation Period	 	8.4(a)(ii)
	Competitive Compound
	 	12.3(a)	 	[... * ...]	 	4.6(a)
	[... * ...]
	 	6.2(c)(ii)	 	Operating Profit/Loss Percentage	 	6.5(c)
	[... * ...]
	 	 	 	 	 	 
	Confidential Information
	 	11.1	 	Operating Profits or Loss	 	Exhibit 6.5
	Contingent Right
	 	8.4(d)(ii)	 	[... * ...]	 	Exhibit 6.5
	Continuing Party
	 	9.1(d)	 	Payment Report	 	6.3(c)
	Cooperating Party
	 	11.5	 	[... * ...]	 	1.34
	 
	 	 	 	Personnel	 	5.4(h)
	Co-Promotion Agreement
	 	5.5	 	[... * ...]	 	1.34
	Co-Promotion Option
	 	5.2(a)	 	[... * ...]	 	6.2(c)(vi)
	Co-Promotion Plan
	 	5.2(b)	 	Product Materials	 	15.2(g)
	 
	 	 	 	Prosecution and Maintenance	 	12.2(a)
	Co-Promotion Year
	 	5.2(d)(i)	 	Re-Offer Notice	 	8.4(a)(iii)(A)
	[... * ...]
	 	Exhibit 6.5	 	Requesting Party	 	11.5
	Damages
	 	12.4	 	REQUIPTM Materials	 	15.2(i)
	Development Plan
	 	4.1(a)	 	REQUIPTM Sales Plan	 	5.3(b)
	[... * ...]
	 	6.2(c)(iii) / 6.2(c)(iv)	 	 	 	 
	Dispute
	 	18.1	 	Reversion Notice	 	8.4(a)(i)
	DOJ
	 	19.2	 	Revised Terms	 	8.4(a)(iii)(A)
	 
	 	 	 	RLS	 	Recitals
	Effective Date
	 	Introduction	 	[... * ...]	 	Exhibit 6.5
	Election Notice
	 	8.4(a)(ii)	 	Selling Party	 	1.33
	[... * ...]
	 	3.6	 	[... * ...]	 	3.6
	Executive
Steering 
Committee / ESC
	 	3.1(a)	 	Subcommittee	 	3.1(c)
	 
	 	 	 	Sublicense	 	1.52
	FTC
	 	19.2	 	Supply Transition Date	 	10.1
	Generic Competition
	 	6.4(c)	 	Supply Transition Plan	 	10.1
	Generic Product
	 	6.4(c)	 	Term	 	14.1
	GSK
	 	Introduction	 	Third Party Claim	 	17.1
	GSK Indemnitees
	 	17.2	 	Third Party Royalties	 	6.4(a)
	GSK Prosecuted XP Patents
	 	12.2(a)	 	[... * ...]	 	2.3(c)
	GSK Operating Expenses
	 	6.5(c)	 	Wind-down Period	 	15.2(a)(ii)
	HSR Act
	 	19.1	 	Withdrawal Notice	 	3.4(b)
	HSR Clearance Date
	 	19.1	 	[... * ...]	 	6.2(c)(vii)
	HSR Conditions
	 	19.1	 	XenoPort	 	Introduction
	IFRS
	 	1.33	 	XenoPort House Marks	 	13.3
	[... * ...]
	 	12.1	 	XenoPort Indemnitees	 	17.1
	[... * ...]
	 	12.1	 	XenoPort Operating Expenses	 	6.5(c)
	Indemnitee
	 	17.3	 	XenoPort Prosecuted Patents	 	12.2(b)
	Indemnitor
	 	17.3	 	XenoPort Trademarks Option	 	13.2
	Infringement
	 	12.3(a)	 	 	 	 

 

			
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Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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ARTICLE II

GRANT OF LICENSE

     2.1 License. Subject to the terms and conditions of this Agreement, XenoPort hereby
grants to GSK an exclusive license, with the right to grant sublicenses as provided in Section 2.2,
under the XenoPort Patents and XenoPort Know-How to develop, use, make, have made, offer for sale,
sell, import, market, distribute and promote the Compound and Products, in each case solely in the
Field in the Territory. The rights and licenses in this Section 2.1 shall be exclusive even as to
XenoPort, except with respect to: (a) [... * ...] in accordance with [... * ...] (b) [... * ...] in accordance
with [... * ...] (c) [... * ...] in accordance with [... * ...] (d) [... * ...] and (e) [... * ...].

     2.2 Sublicensees.

     (a) GSK shall have the right to sublicense its rights under this Agreement: (i) in any
country in the Territory to its Affiliates; (ii) to a Third Party in a particular country in the
Territory if neither GSK nor any of its Affiliates have direct sales operations in such country;
and (iii) to Third Parties to permit such Third Parties to provide services to and on behalf of GSK
relating to the manufacturing or development of the Product, in each case of (i) through (iii)
without the consent of XenoPort. GSK may sublicense its rights as provided in this Section 2.2(a)
to such Affiliates solely for so long as such Person remains an Affiliate.

     (b) Except as otherwise provided in Section 2.2(a), GSK may engage Sublicensees and grant
Sublicenses in any country in the Territory [... * ...] To the extent that [... * ...] In addition, [... *
....] to the same extent [... * ...]. Promptly following the execution of each Sublicense as provided in
this Section 2.2(b), [... * ...].

     2.3 Activities Outside the Territory.

     (a) GSK agrees that neither it, nor any of its Controlled Affiliates, will sell or provide the
Compound or the Products to any Third Party if GSK or its relevant Controlled Affiliate knows, or
has reason to believe, that the Compound and/or the Products, as the case may be, sold or provided
to such Third Party would be sold or transferred, directly or indirectly, for use in the Asian
Territory.

     (b) XenoPort agrees that it and its Affiliates will not, and that it will use Commercially
Reasonable Efforts to exercise its rights under any agreements with Astellas (including the
Astellas Agreement) to cause Astellas not to, sell or provide the Compound or the

 

			
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Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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Product to any Third Party if XenoPort, its relevant Affiliate or Astellas knows, or has
reason to believe, that the Compound and/or the Products, as the case may be, sold or provided to
such Third Party would be sold or transferred, directly or indirectly, for use in the Territory;
provided, however, that nothing in this Agreement (including this Section 2.3(b)) shall be deemed
to [... * ...]; and provided, further, that: (i) XenoPort shall [... * ...]; and (ii) XenoPort will [... *
....] and/or [... * ...] to the extent that [... * ...] and provided that [... * ...].

     (c) Subject to [... * ...] with respect to [... * ...], XenoPort agrees to keep GSK reasonably
informed through the JDC of [... * ...] relating to [... * ...] to the extent XenoPort [... * ...] XenoPort
represents to GSK that XenoPort [... * ...] In addition, XenoPort agrees to [... * ...] or the [... * ...]
and/or [... * ...] and/or [... * ...].

     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 GSK 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 the Compound.

ARTICLE III

GOVERNANCE

     3.1 Executive Steering Committee.

     (a) Establishment. Within thirty (30) days following the HSR Clearance Date, XenoPort
and GSK shall establish an Executive Steering Committee (“Executive Steering Committee” or
“ESC”) to oversee, review and coordinate the activities of the Parties under this
Agreement, including, the development of the Product for registration, and the marketing,
commercialization and distribution of Products, in the Field in the Territory, subject to the
provisions of this Article 3.

     (b) Duties. The ESC shall:

          (i) Review and approve material changes to the Development Plan;

          (ii) Review and approve material changes to the Commercialization Plan for the United States
in the event that XenoPort has exercised the Co-Promotion Option as provided in Section 5.2(a);

          (iii) Review the Commercialization Plan for each Major Market country (including, in the event
that XenoPort has not exercised the Co-Promotion Option as provided in Section 5.2(a), the United
States);

 

			
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          (iv) Provide a forum for the Parties to exchange information and coordinate their respective
activities with respect to matters pertaining to the development, manufacture, marketing and
distribution of the Products in the Territory, and matters pertaining to Regulatory Filings for the
Product in the Territory;

          (v) Provide a forum for resolving matters to be decided by the JDC or JCC under this
Agreement;

          (vi) Provide a forum to review with XenoPort decisions by GSK regarding material development,
regulatory, manufacturing and commercial matters pertaining to the Product in the Territory that
are not decided by the JDC or the JCC; and

          (vii) Perform such other duties as are specifically assigned to the ESC in this Agreement.

     (c) Subcommittees. From time to time, the ESC may establish subcommittees to oversee
particular projects or activities within the scope of authority of the ESC, as it deems necessary
or advisable (each, a “Subcommittee”). Each Subcommittee shall consist of such number of
representatives of each Party as the ESC determines is appropriate from time to time. Each
Subcommittee shall meet with such frequency as the ESC shall determine. Each Subcommittee shall
operate by unanimous vote in all decisions, with each Party having one (1) vote and with at least
one (1) representative from each Party participating in such vote. If, with respect to a matter
that is subject to a Subcommittee’s decision-making authority, the Subcommittee cannot reach
unanimity, the matter shall be referred to the ESC, which shall resolve such matter in accordance
with Section 3.6.

     3.2 Joint Development Committee.

     (a) Establishment. Within thirty (30) days following the HSR Clearance Date, GSK and
XenoPort shall establish a joint development committee (“Joint Development Committee” or
“JDC”) to plan, oversee and coordinate the conduct of the development activities for the
Product in the Territory.

     (b) Duties. The JDC shall:

          (i) Subject to oversight by the ESC, determine the Development Plan in accordance with Section
4.1;

          (ii) Subject to and within the parameters of the Development Plan:

               (A) Oversee the implementation of the Development Plan, allocate responsibilities to each
Party in connection with executing the Development Plan and review each Party’s execution of its
responsibilities under the Development Plan (including review of the clinical trials conducted by
each Party pursuant to the Development Plan); and

 

			
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               (B) Approve certain regulatory matters as provided in Section 4.7 below;

          (iii) Present any proposed revisions or amendments to the Development Plan, and the results of
development efforts, to the ESC as needed, but no less frequently than once each calendar
half-year;

          (iv) Oversee XenoPort’s conduct of the Clinical Studies and Activities; and

          (v) Perform such other duties as are specifically assigned to the JDC in this Agreement or
delegated to the JDC by the ESC.

     3.3 Joint Commercialization Committee.

     (a) Establishment. Within thirty (30) days after XenoPort’s election to exercise its
Co-Promotion Option under Section 5.2(a) below, GSK and XenoPort shall establish a joint
commercialization committee (“Joint Commercialization Committee” or “JCC”) to
oversee the conduct of the commercialization, marketing and Co-Promotion activities for Products in
the United States.

     (b) Duties. The JCC shall:

          (i) Subject to oversight by the ESC, review and approve the Commercialization Plan for the
United States developed by GSK in accordance with Section 5.1(b);

          (ii) Review and approve the Co-Promotion Plan developed in accordance with Sections 5.2(b) and
5.2(c); and

          (iii) Perform such other duties as are specifically assigned to the JCC in this Agreement or
delegated to the JCC by the ESC.

     3.4 Committee Membership.

     (a) Membership. Subject to Section 3.4(b), the ESC, JDC and JCC (each, a
“Committee”) shall each be composed of an equal number of representatives from each of GSK
and XenoPort, selected by such Party. Unless the Parties otherwise agree, the exact number of
representatives for each of GSK and XenoPort shall be: (a) with respect to the ESC, subject to
Section 3.4(b), two (2) representatives, at least one (1) of whom shall be [... * ...], or a delegate
of such [... * ...] (or representative of [... * ...]); provided that such delegate shall [... * ...]; and (b)
with respect to the JDC and the JCC, three (3) representatives, at least one (1) of whom shall [... *
....], or a delegate of such [... * ...] (or representative of [... * ...]); provided that such delegate 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

 

			
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 - 14 - 

 

replacement of a Party’s representative on any such Committee. Each Committee will be chaired
by a GSK representative and GSK may, from time to time and in its sole discretion, change the
representative who serves as the chairperson on any Committee with prior written notice to
XenoPort.

     (b) Withdrawal from Committees. At any time during the Term and for any reason,
XenoPort shall have the right to withdraw from participation in the Committees upon written notice
to GSK, which notice shall be effective immediately upon receipt (“Withdrawal Notice”).
Following the issuance of a Withdrawal Notice and subject to this Section 3.4(b), XenoPort’s
representatives to the Committees shall not participate in any meetings of the Committees, nor
shall XenoPort have any right to vote on decisions within the authority of the Committees. If, at
any time, following the issuance of a Withdrawal Notice, XenoPort wishes to resume participation in
the Committees, XenoPort shall notify GSK in writing and, thereafter, XenoPort’s representatives to
the Committees shall be entitled to attend any subsequent meeting of the Committees and to
participate in the activities of, and decision-making by, the Committees as provided in this
Article 3 as if a Withdrawal Notice had not been issued by XenoPort pursuant to this Section
3.4(b). Following XenoPort’s issuance of a Withdrawal Notice pursuant to this Section 3.4(b),
unless and until XenoPort resumes participation in the Committees in accordance with this Section
3.4(b): (i) all meetings of the Committees shall be held at GSK’s facilities; (ii) GSK shall have
the right to make the final decision on all matters within the scope of authority of the
Committees; and (iii) XenoPort shall have the right to continue to receive the minutes of Committee
meetings, but shall not have the right to approve the minutes for any Committee meeting held after
XenoPort’s issuance of a Withdrawal Notice.

     3.5 Committee Meetings. The ESC shall meet at least once each calendar half-year, or
more or less often as otherwise agreed to by the Parties. The JDC and, from and after such time as
is appropriate, the JCC shall meet at least once each calendar quarter, 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 as determined by the applicable Committee; provided, however, that
each Committee shall meet in person at least twice each calendar year, unless the Parties mutually
agree to meet by alternative means. Unless otherwise agreed by the Parties, all in-person meetings
for each Committee shall be held on an alternating basis between XenoPort’s facilities and GSK’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 Committee meeting.

     3.6 Decision-Making. Subject to Section 3.4(b), decisions of each Committee shall be
[... * ...]. In the event the JDC or the JCC [... * ...] with respect to a particular matter within its
authority, then upon request by either Party such matter shall be referred to the ESC for

 

			
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resolution. In the event that the ESC [... * ...] with respect to a particular matter [... * ...] as
requested by [... * ...]. The Parties’ [... * ...] to resolve such matter; provided, however that with
respect to [... * ...]. If, [... * ...] are unable to resolve such matter [... * ...].

     3.7 Alliance Managers. Within thirty (30) days following the HSR Clearance Date, each
Party shall appoint a representative (“Alliance Manager”) to facilitate communications
between the Parties (including coordinating the exchange of Data and Know-How of each Party as
required under this Agreement) and to act as a liaison between the Parties with respect to such
other matters as the Parties may mutually agree in order to maximize the efficiency of the
collaboration. Each Party may replace its Alliance Manager with an alternative representative
satisfying the requirements of this Section 3.7 at any time with prior written notice to the other
Party.

     3.8 Scope of Governance. Notwithstanding the creation of the ESC, 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 ESC, JDC and JCC, as applicable, are only those specific
issues that are expressly provided in this Agreement to be decided by the ESC, JDC and JCC, as
applicable.

ARTICLE IV

DEVELOPMENT AND REGULATORY ACTIVITIES

     4.1 Development Plans.

     (a) Initial Development Plan. An initial development plan for the collaboration is
attached to this Agreement as Exhibit 4.1 (“Development Plan”) and sets out
separately the development activities to be conducted by each Party. Within [... * ...] the HSR
Clearance Date, the JDC shall review and finalize the details of the Development Plan, which shall
be consistent with the Development Plan in Exhibit 4.1.

     (b) Changes to a Development Plan. The JDC shall review the Development Plan on an
ongoing basis, and in no event less frequently than [... * ...]. The JDC may propose to the ESC
revisions to the then-current Development Plan; provided, however, the [... * ...].

     4.2 Development Activities of GSK.

     (a) Conduct of Development Activities. Except as provided in Section 4.3 below, GSK
shall, at its expense, use Commercially Reasonable Efforts to carry out all clinical development
and other activities required to obtain Marketing Approvals for the Product in the Territory. GSK

 

			
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shall carry out all such activities in accordance with the then-current Development Plan and
the provisions of this Agreement.

     (b) Diligence. GSK shall use Commercially Reasonable Efforts to achieve the goals of
the then-current Development Plan in accordance with the timelines specified therein and to realize
the commercial opportunity for the Product in other indications.

     4.3 Development Activities of XenoPort.

     (a) Conduct of Development Activities. Except as otherwise mutually agreed, XenoPort
shall, at its expense and with oversight by the JDC, continue to conduct the Existing Phase III
Studies and those other clinical studies and activities listed on Exhibit 4.3 to this
Agreement (collectively, the “Clinical Studies and Activities”). XenoPort shall make
reasonable modifications to the protocols for such Clinical Studies and Activities, as requested by
GSK from time to time; provided, however, that [... * ...]. Notwithstanding the foregoing, [... * ...]
Existing Phase III Study [... * ...] of such modifications. In addition, XenoPort shall [... * ...]
Clinical Studies and Activities [... * ...] Existing Phase III Studies, [... * ...].

     (b) Diligence. XenoPort shall use Commercially Reasonable Efforts to conduct and
complete the Clinical Studies and Activities in order to achieve the goals of the then-current
Development Plan in accordance with the timelines specified therein.

     4.4 Change in Formulation. Before [... * ...], GSK shall discuss the proposed [... * ...]
with XenoPort at the ESC and [... * ...]. Subject to the foregoing, XenoPort agrees that GSK may [... *
....] that were so discussed [... * ...] by the ESC.

     4.5 Conduct of Activities. Each Party shall conduct those activities allocated to
such Party under the Development Plan in compliance in all material respects with all Applicable
Laws and in accordance with good scientific and clinical practices, applicable under the Applicable
Law of the country in which such activities are conducted.

     4.6 Regulatory Matters.

     (a) Assignment of Regulatory Filings. At a reasonable time [... * ...], XenoPort shall
assign or cause to be assigned to GSK all Regulatory Filings for the Compound in the Territory;
provided, however, that, [... * ...] XenoPort shall maintain [... * ...]. Notwithstanding the foregoing,
it is understood that XenoPort may [... * ...] and/or [... * ...] provided that [... * ...] For such purposes,
[... * ...] at which XenoPort [... * ...].

     (b) Responsibility for Regulatory Filings. Except for [... * ...], GSK shall be
responsible, at its expense, for filing, obtaining and maintaining all Regulatory Filings for the
Compound and each Product in the Territory. [... * ...]. GSK shall also obtain any export approvals
required by the FDA to import or export the Product to any country within the Territory. All such

 

			
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Act Of 1934, As Amended.

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filings will be in the name of GSK, except where otherwise required by Applicable Law in any
country within the Territory.

          4.7 Regulatory Cooperation. [... * ...], GSK shall be responsible for liaising with and
managing all interactions with Regulatory Authorities in the Territory, including with respect to
all Regulatory Filings for Product in the Territory, other than [... * ...], and XenoPort shall be
entitled to participate in such interactions as provided in this Section 4.7.

          (a) Involvement of XenoPort. To the extent relating to the Product within the [... * ...]
or [... * ...], GSK shall provide XenoPort with:

               (i) reasonable advanced notice [... * ...] of substantive meetings with the [... * ...] that are
either scheduled with, or initiated by or under the authority of, GSK or its Affiliates;

               (ii) an opportunity to have [... * ...] representatives attend, and [... * ...], all substantive
meetings with [... * ...]; and in any case, GSK shall keep the JDC informed as to all material
interactions with Regulatory Authorities; and

               (iii) a copy of any material documents, information and correspondence submitted to [... * ...]
relating to Regulatory Filings for the Product as soon as reasonably practicable, together with
English translations and summaries thereof, to the extent such translations and summaries exist.

     The JDC shall approve the overall strategy and positioning of all [... * ...] Regulatory Filings
with [... * ...], based upon reasonably detailed reports and summaries of such submissions and filings
presented to the JDC by GSK. In connection with such review, [... * ...].

          (b) Involvement by GSK. With respect to the Regulatory Filings maintained by XenoPort
under Section 4.6(a) and Regulatory Filings relating to the trials permitted to be conducted by
XenoPort in the Territory under Section 2.3(b) above, XenoPort shall provide GSK with:

               (i) reasonable advanced notice [... * ...] of substantive meetings with the [... * ...] that are
either scheduled with, or initiated by or under the authority of, XenoPort or its Affiliates
relating to such Regulatory Filings;

               (ii) an opportunity to have [... * ...] representatives attend, and [... * ...], all substantive
meetings with [... * ...] relating to such Regulatory Filings; and in any case, XenoPort shall keep the
JDC informed as to all material interactions with Regulatory Authorities relating to such
Regulatory Filings; and

               (iii) a copy of any material documents, information and correspondence submitted to [... * ...]
relating to such Regulatory Filings as soon as reasonably practicable, together with English
translations and summaries thereof, to the extent such translations and summaries exist.

 

			
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     (c) Assistance by XenoPort. XenoPort will provide reasonable cooperation and
assistance to GSK in the event that GSK must respond to questions from Regulatory Authorities in
the Territory concerning development activities conducted by or on behalf of XenoPort with the
Compound or Product, including the Clinical Studies and Activities.

     (d) Other Regulatory Matters. Each Party will promptly provide the other Party with
copies of all material documents, information and correspondence received from a Regulatory
Authority (including a written summary of any material communications in which such other Party did
not participate) within the Territory and, upon reasonable request, with copies of any other
documents, reports and communications from or to any Regulatory Authority within the Territory
relating to the Compound, the Product and/or activities under this Agreement.

     4.8 Exchange of Data and Know-How.

     (a) By XenoPort. Promptly following the HSR Clearance Date, XenoPort will make
available to GSK, at no cost or expense to GSK, all XenoPort Know-How that is necessary, or
materially useful, for GSK to develop and/or commercialize the Compound and Products in the
Territory, including all Data from any and all clinical trials (including the Clinical Studies and
Activities) and preclinical studies and non-clinical development work for the Compound and Products
that have been obtained by XenoPort as of the Effective Date.

     (b) By Either Party. During the Term, each Party shall provide to the other Party all
such Party’s Know-How (i.e., in case of XenoPort, XenoPort Know-How, and in the case of GSK, all
GSK Know-How) and that has not previously been provided hereunder, in each case promptly upon
request by the other Party. The Party providing such Party’s 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 GSK
Know-How. [... * ...]; provided that [... * ...] or [... * ...]. For the avoidance of doubt, [... * ...].
Accordingly, and consistent with the proviso in the fourth sentence of this Section 4.8(b),
XenoPort shall [... * ...].

     (c) Provision of Data to JDC. Upon request by the JDC, each Party shall promptly
provide the JDC with summaries in reasonable detail of all Data generated or obtained in the course
of such Party’s performance of activities under a Development Plan.

     4.9 Sharing of Regulatory Filings. Without limiting Section 4.8 above, each Party
shall permit the other 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 under
this Agreement [... * ...], all of such Party’s, its Affiliates’ and, to the extent it has the right to
do so, its Sublicensees’ Data, Regulatory Filings and regulatory communications associated with any

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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submissions of MAAs or other approvals for the Product respectively in the Territory. Without
limiting the foregoing, XenoPort shall permit GSK to access and shall provide GSK with sufficient
rights to reference and use, in support of MAAs filed and Marketing Approvals received by or on
behalf of GSK, the IND of XenoPort for the Compound in the Territory. Notwithstanding the
foregoing, GSK shall be obligated to [... * ...].

     4.10 Inspection Right. 

     (a) Inspection by Astellas. To the extent any Regulatory Authority [... * ...] requests
an audit of the clinical trial sites and, if GSK supplies Compound or Product to Astellas during
the Term, manufacturing sites in the Territory [... * ...], GSK shall permit such Regulatory Authority
[... * ...] to enter the all relevant clinical trial sites and, if applicable, manufacturing sites of
GSK and its Affiliates during normal business hours and upon reasonable advance notice to inspect
and verify compliance with applicable regulatory requirements. GSK shall, at XenoPort’s expense,
provide reasonable assistance for a full and correct carrying out of the inspection. Such
inspection shall not relieve GSK of any of its obligations under this Agreement.

     (b) Diligence. GSK shall use Commercially Reasonable Efforts to secure the rights set
forth in Section 4.10(a) from GSK’s Sublicensees, trial sites and other contractors for the
Product. In the event GSK is unable to secure such inspection rights from any of its Sublicensees,
trial sites or contractors, GSK agrees to secure such rights for itself and [... * ...] GSK shall
exercise such rights [... * ...] and fully report the results thereof to XenoPort and Astellas.

     4.11 Clinical Trial Register. Notwithstanding anything in this Agreement to the
contrary, including Article XI, GSK shall have the right to publish in its clinical trial register
the results or summaries of the results of all clinical trials for the Compound and Products
conducted: (a) by either Party in the Territory pursuant to this Agreement; and (b) by [... * ...]
provided, however, that [... * ...]. The Parties will discuss the process for [... * ...].

     4.12 Reporting; Adverse Drug Reactions.

     (a) Pharmacovigilance Agreement. Within ninety (90) days after the HSR Clearance
Date, the Parties shall enter into a pharmacovigilance agreement on terms no less stringent than
those required by ICH guidelines, including: (i) providing detailed procedures regarding the
maintenance of core safety information and the exchange of safety data relating to the Compound and
the Products for the Territory within appropriate timeframes and in an appropriate format to enable
each Party to meet both expedited and periodic regulatory reporting requirements; and (ii) ensuring
compliance 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 ICH
Guidelines, and all applicable regulatory and legal requirements regarding the management of safety
data.

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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     (b) Adverse Event Reporting. As between the Parties: (i) XenoPort shall be
responsible for [... * ...] (ii) GSK shall be responsible for [... * ...] and (iii) XenoPort or Astellas
shall be responsible for [... * ...] all in accordance with the Applicable Laws of the relevant
countries and regulatory authorities. GSK shall ensure that its Affiliates and Sublicensees comply
with such reporting obligations in the Territory, and XenoPort [... * ...]

     (c) Global Safety Database. GSK shall maintain the global safety database with
respect to the Product for the Territory and [... * ...] XenoPort agrees to [... * ...] enable GSK to
maintain such global safety database for [... * ...].

ARTICLE V

COMMERCIALIZATION AND PROMOTION

     5.1 GSK Commercialization of Product.

     (a) GSK’s Responsibility. Except as provided below, GSK shall have sole
responsibility for the commercialization, distribution, marketing and promotion of the Products in
the Field in the Territory. Further, regardless of whether XenoPort exercises the Co-Promotion
Option as provided in Section 5.2 below, during the Term, GSK will have the exclusive right and
responsibility in the Territory for the following:

          (i) establishing pricing and reimbursement for Product;

          (ii) managed care contracting for Product;

          (iii) receiving, accepting and filling orders for Product from customers;

          (iv) distributing Product to customers;

          (v) controlling invoicing, order processing and collecting accounts receivable for sales of
Product; and

          (vi) recording sales of Product in the Territory in its books of account for sales.

     (b) Commercialization Plan. At least [... * ...], GSK shall prepare [... * ...] a plan
setting forth the strategic plan for the marketing, promotion and commercialization of the Products
in such [... * ...], which plan shall be in reasonable scope and detail (the “Commercialization
Plan”); provided, however, that [... * ...]; provided further that [... * ...] with respect thereto, [...
* ...]. Each Commercialization Plan for [... * ...] shall be presented by GSK to the ESC or the JCC [... *
....], as applicable. The ESC and the JCC [... * ...] shall review the Commercialization Plans for [... *
....] on an ongoing basis, and in no event less frequently than once each calendar year. Subject to
Section 5.2, GSK shall carry out all marketing, promotion and

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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commercialization of the Products in the Territory in accordance with the then-current
Commercialization Plan and the provisions of this Agreement.

     5.2 Co-Promotion Option of XenoPort.

     (a) Exercise of Co-Promotion Option. XenoPort shall have a non-sublicensable option
to Co-Promote the Product with GSK in the United States (“Co-Promotion Option”) in
accordance with the terms and conditions of this Article 5. To facilitate such Co-Promotion
Option, GSK shall notify XenoPort of its right to exercise the Co-Promotion Option [... * ...]. To
exercise the Co-Promotion Option, XenoPort shall notify GSK in writing [... * ...]; provided that [... *
....]. In the event that XenoPort exercises the Co-Promotion Option as provided in this Section
5.2(a), XenoPort will have an exclusive right to Co-Promote and Detail the Product with GSK in the
United States until [... * ...]. In the event that XenoPort does not exercise the Co-Promotion Option
as provided in this Section 5.2(a) or if XenoPort does not provide written notice to GSK that it is
exercising the Co-Promotion Option [... * ...], XenoPort will have no right to Co-Promote or Detail the
Product with GSK in the United States, and GSK will have no further obligation with respect to the
Co-Promotion Option.

     (b) Co-Promotion Plan. In the event that XenoPort exercises the Co-Promotion Option,
GSK shall prepare, in consultation with XenoPort and the JCC, the tactical plan for promoting and
marketing the Product in the United States, consistent with the Commercialization Plan for the
United States (“Co-Promotion Plan”), which shall be reviewed and approved by the JCC [... *
....]. The Co-Promotion Plan shall set out in reasonable detail: (i) [... * ...] in connection with the
Co-Promotion [... * ...] (ii) [... * ...] (iii) [... * ...] and (iv) [... * ...].

     (c) Changes to the Co-Promotion Plan. After the submission of the initial
Co-Promotion Plan, the JCC shall review and amend if necessary the Co-Promotion Plan on an ongoing
basis and in no event less frequently than [... * ...].

     (d) Sales Efforts.

          (i) The Parties shall each use Commercially Reasonable Efforts to Co-Promote and Detail the
Product in the United States pursuant to the terms and conditions hereof and the then-current
Co-Promotion Plan. The JCC will agree upon and monitor each Party’s Co-Promotion and Detailing
activities for each Co-Promotion Year. “Co-Promotion Year” shall mean, for the calendar
year in which the Parties are first engaged in Co-Promotion, the portion of the calendar year
remaining beginning upon the date of the First Commercial Sale in the United States, and shall mean
the relevant January 1 through December 31 calendar year, or pro rata portion thereof, for all
subsequent calendar years until the expiration or earlier termination of XenoPort’s right to
Co-Promote the Product as provided herein.

          (ii) During any Co-Promotion Year, XenoPort shall use Commercially Reasonable Efforts to [... *
....] the Co-Promotion Plan approved by the JCC [... * ...].

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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          (iii) The Co-Promotion Plan approved by the JCC for each Co-Promotion Year shall: (A) specify
[... * ...] to be provided [... * ...] the number of Sales Representatives [... * ...] (B) [... * ...] in a manner
that ensures [... * ...] to be provided [... * ...] and (C) to the extent [... * ...] Sales Representatives
that [... * ...].

     (e) Sales Efforts of XenoPort. At the time XenoPort exercises the Co-Promotion
Option, it shall notify GSK of the number of Sales Representatives that XenoPort elects to deploy
initially for the Product, provided that [... * ...]. Promptly after such exercise of the Co-Promotion
Option, XenoPort will [... * ...] of Sales Representatives that XenoPort so elects, [... * ...] in
accordance with the Co-Promotion Plan [... * ...]. XenoPort shall, as requested by GSK, within [... *
....]; provided that, subject to [... * ...] Sales Representatives that XenoPort deploys [... * ...]. In the
event that XenoPort desires to increase the number of XenoPort Sales Representatives who Detail and
Co-Promote Product [... * ...] in accordance with the Co-Promotion Plan, [... * ...] Co-Promoting and
Detailing the Product as provided herein [... * ...]. In the event that GSK does not agree to using
such Additional Sales Representatives in the Co-Promotion and Detailing of the Product, XenoPort
will [... * ...].

     (f) Costs of Co-Promotion. If XenoPort exercises its Co-Promotion Option as provided
in Section 5.2(a), the Parties shall [... * ...]. Notwithstanding the foregoing GSK shall [... * ...] in
accordance with the Co-Promotion Plan [... * ...]. Such [... * ...].

     (g) Co-Promotion Coordination. GSK shall be responsible for developing the strategies
and programs to carry out the Co-Promotion activities, including the assignment of sales activities
in accordance with the Commercialization Plan for the United States and Co-Promotion Plan.

     5.3 Non-exclusive Right to Detail the REQUIPTM Products.

     (a) Commencement of Right to Detail the REQUIPTM Products. If XenoPort exercises the
Co-Promotion Option for the Product, XenoPort shall also obtain a non-sublicensable, non-exclusive
right to Detail the REQUIPTM Products in the United States on and from the date on which XenoPort
exercises its Co-Promotion Option, to the extent such REQUIPTM Products are approved for
commercialization in the United States. Such right shall continue until [... * ...]. If GSK (or its
Affiliate) has not obtained the approvals required to commercialize the REQUIPTM Products in the
United States at the time that XenoPort exercises the Co-Promotion Option, the Parties [... * ...].

     (b) The REQUIPTM Sales Plan. GSK shall prepare and determine, in consultation
with XenoPort, the tactical plan for XenoPort’s Detailing of the REQUIPTM Products by XenoPort Sales
Representatives in the United States (the “REQUIPTM Sales Plan”) and shall provide the
REQUIPTM Sales Plan to XenoPort [... * ...]. The REQUIPTM Sales Plan shall set out in reasonable detail:
(i) [... * ...] in connection with [... * ...] and (ii) [... * ...] under such REQUIPTM Sales Plan, [... * ...] and
which is [... * ...]. XenoPort shall be entitled to dedicate a number of Sales

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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Representatives elected by XenoPort, up to [... * ...], to Detail the REQUIPTM Products in the
United States. XenoPort’s right to deploy such Sales Representatives shall commence [... * ...].

     (c) Coordination. GSK shall be responsible for developing strategies and programs to
carry out in an optimal fashion Detailing activities of the Parties with respect to the REQUIPTM
Products, including the assignment of Detailing activities in accordance with the REQUIPTM Sales
Plan.

     (d) Reimbursement. GSK shall reimburse XenoPort for each Detail provided by the
XenoPort Sales Representatives Co-Promoting the REQUIPTM Products in the United States in accordance
with the REQUIPTM Sales Plan in an amount equal to: (i) [... * ...] and/or [... * ...] and (ii) [... * ...].
Such reimbursements shall be made to XenoPort [... * ...].

     (e) GSK’s Exclusive Responsibilities for the REQUIPTM Products. During the period that
XenoPort is Detailing the REQUIPTM Products in the United States as provided herein, GSK will have
the exclusive right and responsibility in the United States for the following:

          (i) establishing pricing and reimbursement for the REQUIPTM Products;

          (ii) managed care contracting for the REQUIPTM Products;

          (iii) receiving, accepting and filling orders for the REQUIPTM Products from customers;

          (iv) distributing the REQUIPTM Products to customers;

          (v) controlling invoicing, order processing and collecting accounts receivable for sales of
the REQUIPTM Products;

          (vi) all marketing and promotion activities relating to the REQUIPTM Products other than
Detailing; and

          (vii) recording sales of the REQUIPTM Products in the Territory in its books of account for
sales.

     5.4 XenoPort Sales Representatives.

     (a) Qualifications. All XenoPort Sales Representatives Co-Promoting and Detailing
Product and/or Detailing the REQUIPTM Products shall be required to have comparable educational
qualifications and experience as GSK requires for its own Sales Representatives. Such XenoPort
Sales Representatives shall be subject to a reasonable proficiency examination relevant to the
Product or the REQUIPTM Products in the same manner as GSK’s Sales Representatives.

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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     (b) No Contract Sales Force. XenoPort shall not be permitted to use a contract sales
force to fulfill its Co-Promotion and Detailing responsibilities with respect to the Product and/or
Detailing responsibilities with respect to the REQUIPTM Products under this Agreement.

     (c) Training. GSK shall provide the same sales training on the Product and on the
REQUIPTM Products for XenoPort Sales Representatives who will be Co-Promoting and Detailing the
Product and/or promoting the REQUIPTM Products, as applicable, as the training on the Product and
the REQUIPTM Products that GSK provides to its own Sales Representatives who promote and Detail the
Product and/or the REQUIPTM Products, as applicable, in the United States. XenoPort shall be
responsible for causing its Sales Representatives to attend and successfully complete the GSK
training program prior to such Sales Representatives Co-Promoting and Detailing Product and/or
Detailing the REQUIPTM Products in the United States. The Parties acknowledge and agree that in
order for a XenoPort Sales Representative to be deemed to have successfully completed the training,
such XenoPort Sales Representative must demonstrate thorough knowledge of the medical and technical
aspects of the Product and/or the REQUIPTM Products, as applicable, the Applicable Commercial
Practices Policies and must achieve scores on certifications for the Product and the REQUIPTM
Products, as applicable, at similar rates to those required for GSK sales representatives who are
Co-Promoting and Detailing the Product and/or Detailing the REQUIPTM Products, as applicable.
XenoPort Sales Representatives will be entitled to attend those sections of national and regional
sales or plan of action meetings for GSK Sales Representatives, except [... * ...]. The costs of such
sales training for XenoPort Sales Representatives for the Product and attendance at meetings shall
[... * ...].

     (d) Timing. XenoPort and GSK shall cooperate to have the XenoPort Sales
Representatives hired and trained as provided in this Agreement prior to [... * ...].

     (e) Compensation and Bonus System for Sales Representatives. The Parties acknowledge
that in order to attract and retain professional Sales Representatives, there may be a degree of
discrepancy between the compensation and bonus incentive structure for GSK’s Sales Representatives
and the compensation and bonus incentive structure for XenoPort’s Sales Representatives. To ensure
consistency of efforts between the Sales Representatives of the Parties, each Party agrees that in
designing such Party’s compensation and bonus incentive structure, each Party will give due
consideration to the effect that such Party’s compensation and bonus structure may have on the
other Party’s sales force, provided that [... * ...].

     (f) XenoPort Salaries and Wages. XenoPort acknowledges and agrees that it will be
solely responsible for paying all salaries, wages, benefits and other compensation that its
employees, including XenoPort Sales Representatives, may be entitled to receive in connection with
providing services under this Agreement.

     (g) Support. Except as otherwise agreed, XenoPort shall be solely responsible for
providing its own equipment, automobiles, offices and fixtures, working facilities, and such other
facilities, services and support as may be required for XenoPort Sales Representatives Co-Promoting

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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and Detailing Product and/or Detailing the REQUIPTM Products as provided in this Agreement and
pursuant to the Co-Promotion Plan or REQUIPTM Sales Plan, as applicable.

     (h) No Employment by GSK. For the avoidance of doubt, XenoPort Sales Representatives
will not be, and will not be considered or deemed to be, employees of GSK for any purpose. GSK is
engaging XenoPort hereunder, and XenoPort will perform its obligations hereunder, strictly as an
“independent contractor.” Sales Representatives and any other employee or agent that is involved
in performing XenoPort’s obligations under this Agreement (collectively, “Personnel”) will
not be, and will not be considered or deemed to be, employees of GSK for any purpose. GSK will not
have any responsibility for the hiring, termination, compensation, benefits or other conditions of
employment or engagement of the Personnel of XenoPort.

     (i) GSK Benefit Plans. Personnel of XenoPort are not eligible to participate in any
benefit programs offered by GSK to its employees, or in any pension plans, profit sharing plans,
insurance plans or any other employee benefit plans offered from time to time by GSK to its
employees. XenoPort acknowledges and agrees that GSK does not, and will not, maintain or procure
any workers’ compensation or unemployment compensation insurance for or on behalf of the XenoPort’s
employees, including, without limitation, XenoPort Sales Representatives. Personnel of XenoPort are
not eligible to participate in any benefits programs offered by GSK to its employees, or in any
pension plans, profit sharing plans, insurance plans or any other employee benefits plans offered
from time to time by GSK to its employees.

     (j) Management of Sales Representatives. XenoPort will be responsible for supervising
its Sales Representatives. In connection therewith, at all times that XenoPort is Co-Promoting and
Detailing the Product and/or Detailing the REQUIPTM Products, XenoPort will provide a sufficient
number of full time employees to serve as district managers. XenoPort may, but will not be
obligated to, designate one (1) or more full time employees to serve as regional directors having
the responsibility for supervising a group of its district managers in a particular geographic
region of the United States. XenoPort will provide GSK with contact information for its district
managers and regional directors, and will update that information periodically or as requested by
GSK from time to time. XenoPort acknowledges and agrees that it comply with this Section 5.4 in
the hiring and employment of all district managers and regional directors, and that the provisions
in this Section 5.4 will apply to all such district managers and regional directors.

     5.5 Co-Promotion Agreement. Promptly following XenoPort’s exercise of its
Co-Promotion Option for the Product in accordance with Section 5.2(a), for the purposes of
permitting GSK to comply with its obligations under Applicable Law, GSK and XenoPort shall enter
into a co-promotion agreement setting out such obligations of XenoPort, including with respect to
the activities of its Sales Representatives, in the Co-Promotion and Detailing of the Product and
the Detailing of the REQUIPTM Products and containing terms substantially similar to the terms set
out on Exhibit 5 and which is consistent with the terms and conditions of this Agreement
(“Co-Promotion Agreement”). Notwithstanding the foregoing, the obligations imposed on
XenoPort, including with respect to the activities of its Sales Representatives, in the
Co-Promotion and

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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Detailing of the Product and the Detailing of the REQUIPTM Products, including the terms of the
Co-Promotion Agreement to be executed by GSK and XenoPort as provided in this Section 5.5, shall be
[... * ...]. It is understood that XenoPort may continue to exercise its rights under this Article 5
pending completion of such Co-Promotion Agreement, provided however, that [... * ...].

     5.6 Promotional Materials.

     (a) Subject to Article XIII, GSK will own all right, title and interest in and to all
Promotional Materials during and after the Term, including any intellectual property rights
(including Trademarks) in the Promotional Materials other than the XenoPort Trademarks.

     (b) The determination of the content of the Promotional Materials shall be the sole
responsibility of GSK. The quantity and method of distribution of the Promotional Materials in the
United States for the XenoPort Sales Representatives shall be as set forth in the Co-Promotion Plan
or the REQUIPTM Sales Plan, as applicable.

     (c) With respect to the Co-Promotion of the Product, XenoPort will cause its Sales
Representatives to utilize only the Promotional Materials relating to Product provided to them by
GSK, and will not utilize any other promotional, advertising, educational or communication
materials or other materials relating to or referring to the Product. With respect to the
Detailing of the REQUIPTM Products, XenoPort Sales Representatives will utilize only the Promotional
Materials relating to the REQUIPTM Products provided to them by GSK, and will not utilize any other
promotional, advertising, educational or communication materials or other materials relating to or
referring to the REQUIPTM Products. XenoPort Sales Representatives will conduct only those
promotional and other sales activities relating: (i) to the Product that have been approved in
advance in accordance with the Co-Promotion Plan; and (ii) to the REQUIPTM Products that have been
approved in advance in accordance with the REQUIPTM Sales Plan. XenoPort Sales Representatives
shall not modify, change or alter the Promotional Materials provided by GSK in any way whatsoever,
without the express prior written consent of GSK. XenoPort Sales Representatives shall use such
Promotional Materials solely for the purpose of performing their obligations under this Agreement.

     5.7 Reports and Audit Rights.

     (a) XenoPort will keep accurate records in sufficient detail of the XenoPort’s Sales
Representatives’ Detailing activities relating to the Product and/or the REQUIPTM Products to
determine the amounts owed by GSK to XenoPort hereunder. XenoPort shall keep such records
regarding such Sales Representatives’ Detailing activities during the period during which XenoPort
is Co-Promoting the Product and/or the REQUIPTM Products, as applicable, and for a period of [... * ...]

     (b) During normal business hours and with not less than [... * ...] advance written notice to
XenoPort, XenoPort will permit GSK or its authorized representatives to (i) have

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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access to the records of XenoPort Sales Representative Detailing activities maintained by
XenoPort for purposes of verifying the accuracy of the invoices presented by XenoPort hereunder,
and (ii) audit such records; provided, however that [... * ...]. Any and all audits undertaken by GSK
pursuant to this Section shall be performed [... * ...].

     5.8 Reimbursement. Within [... * ...], XenoPort shall submit to GSK a report containing
an accounting of the Sales Representatives deployed by XenoPort in Co-Promoting and Detailing the
Product and/or Detailing the REQUIPTM Products (as the case may be) in the United States and [... *
....]. Such reimbursements shall be made to XenoPort [... * ...]. The amount of such reimbursement shall
be as specified in Section 5.2(f) or 5.3(d), as applicable.

     5.9 XenoPort and GSK Right to Terminate.

     (a) XenoPort Termination Right. After XenoPort has exercised the Co-Promotion Option,
XenoPort shall have the right to terminate its Co-Promotion of the Product and/or of the REQUIPTM
Products, respectively, and the sharing of Operating Profit or Loss under Section 6.5 below, upon
[... * ...].

     (b) GSK Termination Right.

          (i) As to the Product. After XenoPort has exercised the Co-Promotion Option, GSK
shall have the right to terminate XenoPort’s right to Co-Promote and Detail the Product: (A) [... *
....] in accordance with the Co-Promotion Plan) [... * ...] and/or (B) [... * ...] with respect to [... * ...].

          (ii) As to the REQUIPTM Products. After XenoPort has exercised the Co-Promotion
Option, GSK shall have the right to [... * ...] terminate XenoPort’s right to Detail the REQUIPTM
Products upon [... * ...].

          (iii) Sole Remedy. GSK’s rights under this Section 5.9(b) to terminate XenoPort’s
right to Co-Promote and Detail the Product and/or to terminate XenoPort’s right to Detail the
REQUIPTM Products shall be GSK’s sole remedy with respect to [... * ...] In addition, termination of
the Co-Promotion Agreement by GSK for XenoPort’s material breach of such agreement will not
constitute grounds for GSK to terminate this Agreement pursuant to Section 14.2.

     (c) Extension of the REQUIPTM Products Detailing. GSK shall notify XenoPort,
[... * ...] as to whether GSK elects to terminate XenoPort’s Detailing of the REQUIPTM Products at [... *
....]. If GSK does not so notify XenoPort, XenoPort’s right to Detail the REQUIPTM Products will
continue [... * ...].

     (d) Mutual Termination. The Parties may mutually agree to terminate XenoPort’s right
to Co-Promote and Detail the Product and/or Detail the REQUIPTM Products, respectively, at any time.

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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     (e) Consequences of Termination of Product. Upon termination of XenoPort’s right to
Co-Promote the Product pursuant to Section 5.9(a), Section 5.9(b)(i), Section 5.9(d) or Section
9.1(a): (i) XenoPort shall [... * ...] (ii) [... * ...] with respect to the Product [... * ...] in accordance
with [... * ...] in accordance with [... * ...] (iii) XenoPort shall [... * ...] and (iv) XenoPort shall [... *
....] with respect to Product [... * ...].

     (f) Consequences of Termination of the REQUIPTM Products. Upon termination of
XenoPort’s right to Detail the REQUIPTM Products pursuant to Section 5.9(a), Section 5.9(b)(ii),
Section 5.9(d) or Section 9.1(b), XenoPort shall [... * ...].

ARTICLE VI

PAYMENTS

     6.1 Initial License Fee. GSK shall pay to XenoPort an initial license fee in the
amount of Seventy Five Million Dollars ($75,000,000) within five (5) days following the HSR
Clearance Date in accordance with the payment provisions of Article 7. The initial license fee set
forth in this Section shall not be refundable or creditable against any future milestone payments,
royalties or other payments by GSK to XenoPort under this Agreement.

     6.2 Milestone Payments.

     (a) Milestone Payments. In addition, GSK shall pay to XenoPort the milestone payments
set out below following the first achievement by GSK, or any of its Affiliates or Sublicensees, of
the corresponding milestone set out below, in accordance with this Section 6.2 and the payment
provisions in Article 7:

	 	 	 
	Milestone Event	 	Milestone Payment
	[... * ...]

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

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

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

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

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

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

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

	 	[... * ...]

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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	Milestone Event	 	Milestone Payment
	[... * ...]

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

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

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

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

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

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

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

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

	 	[... * ...]

     (b) Skipped Milestone Payment. If: (i) [... * ...] to the achievement of [... * ...] in
respect of which [... * ...] shall be [... * ...] and/or [... * ...] as applicable [... * ...] the achievement of
[... * ...] in this Section 6.2(b) [... * ...] and the milestone payment due upon the achievement of [... *
....] in this Section 6.2(b) [... * ...] or (ii) [... * ...] the achievement of [... * ...] and the corresponding
milestone payment of [... * ...] in Section 6.2(a) [... * ...] then GSK shall [... * ...] the achievement of [...
* ...] achievement of [... * ...] If, [... * ...] the achievement of [... * ...] and/or [... * ...] this Section
6.2(b) [... * ...] specified in this Section 6.2(b), [... * ...] the achievement of [... * ...] and/or [... * ...]
this Section 6.2(b) [... * ...] otherwise [... * ...].

     (c) Definitions. For the purposes of the milestone payments due under Section 6.2(a):

          (i) [... * ...] (A) any of the following, [... * ...] in the context of [... * ...] as applicable: [... *
....] mutually agreed by the Parties; provided that, [... * ...] of the [... * ...] as applicable, and [... * ...]
of such [... * ...] and in the event [... * ...] other than [... * ...] this Section 6.2, [... * ...] until the
Parties mutually agree [... * ...]

          (ii) [... * ...] as provided in [... * ...] shall be [... * ...] of the [... * ...] together with [... * ...]

          (iii) [... * ...] as to [... * ...] above, the achievement of [... * ...] against which [... * ...] in the [...
* ...] and/or [... * ...] that is [... * ...] than such [... * ...]

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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          (iv) [... * ...] as to [... * ...] above, receipt [... * ...] the Product [... * ...] that would [... * ...]
and/or [... * ...] that is [... * ...] than such [... * ...].

          (v) [... * ...] as required by the protocol for such trial, by the [... * ...] in such [... * ...].

          (vi) [... * ...] as provided in [... * ...] above, shall mean achievement of [... * ...] the Product [... *
....] and/or [... * ...] than such [... * ...] for which [... * ...] by the Parties.

          (vii) [... * ...] as provided in [... * ...] above, shall mean [... * ...] the Product [... * ...] of the [... *
....].

     (d) Reports and Payments. GSK shall notify XenoPort in writing promptly, but [... * ...]
the achievement of [... * ...]. Any milestone payable by GSK pursuant to this Section 6.2 shall be
made no more than once with respect to the achievement of each milestone set out in Section 6.2(a)
by GSK, its Affiliates or Sublicensees, and in no event shall the aggregate amount to be paid by
GSK under this Section 6.2 exceed Five Hundred Sixty-Five Million Dollars ($565,000,000.00). For
the avoidance of doubt, the milestone payments 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.

     (a) U.S. Royalty Rate. Subject to the terms and conditions of this Agreement
(including Section 6.4), in further consideration of the rights granted to GSK under this
Agreement, GSK shall pay to XenoPort royalties at the rate set out below on Net Sales of Products
in the United States in the event that XenoPort shall not elect the Co-Promotion Option in the
United States (or the Co-Promotion terminates, as provided in Section 5.9 above) or in the event
that XenoPort’s rights to Co-Promote the Product are terminated for any reason:

	 	 	 
	Annual Net Sales of Product in the United States	 	Royalty Rate
	[... * ...]

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

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

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

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

	 	[... * ...]

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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     (b) Ex-U.S. Royalty Rate. Subject to the terms and conditions of this Agreement
(including Section 6.4), in further consideration of the rights granted to GSK under this
Agreement, GSK shall pay to XenoPort royalties at the rate set out below on Net Sales of Products
in the Territory outside the United States:

	 	 	 
	Annual Net Sales of Product in the Territory outside the U.S.	 	Royalty Rate
	[... * ...]

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

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

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

	 	[... * ...]

     (c) Reports and Royalty Payment. Within [... * ...], GSK shall send to XenoPort a written
report with respect to the preceding calendar quarter, stating the gross invoiced sales for
Product, a top-line summary of the deductions specified in Section 1.33 taken from gross sales and
the Net Sales, in each case on a country-by-country basis, during such calendar quarter in United
States dollars (each, a “Payment Report”). In each country where Net Sales have occurred
in a currency other than United States dollars, such Net Sales will be converted to United States
dollars at the end of the applicable calendar quarter in accordance with Section 7.2. Royalties
will be calculated based on the Payment Report. GSK shall pay the appropriate royalties set forth
in the Payment Report within [... * ...].

     (d) No Separate Patent Royalties. It is understood that the royalties to be paid
under this Section 6.3 are in consideration of the XenoPort Know-How, commercial opportunities and
other undertakings of XenoPort provided in this Agreement, and that no separate royalty is due with
respect to the XenoPort Patents.

     6.4 Certain Reductions to Royalties.

     (a) Third Party Royalties. In the event GSK or its Affiliates pays to a Third Party
royalties under agreements for patent rights 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”), which GSK reasonably believes [... * ...] then GSK [... * ...] with respect to [... *
....] pursuant to [... * ...]. For such purposes, [... * ...].

     (b) Patent Litigation Expenses. XenoPort acknowledges and agrees that GSK may [... * ...]
or [... * ...] as provided [... * ...] pursuant to [... * ...] provided that [... * ...] (i) [... * ...] as a result
of [... * ...] or [... * ...] in connection therewith; and (ii) [... * ...] XenoPort shall [... * ...].

     (c) Generic Competition. On a country-by-country and Product-by-Product basis,

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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if: (A) one or more Generic Products are being marketed for an approved indication of the
Product in such country; and (B) such Generic Product(s) represent a total unit volume of [... * ...]
in any calendar quarter determined by [... * ...] during such in such calendar quarter [... * ...]
(“Generic Competition”), and GSK reasonably determines that it is not likely to recover
such lost market share, then the royalties payable pursuant to Sections 6.3 with respect to such
Product sold in such country for such quarter shall thereafter be reduced by [... * ...]; provided
however that if such Generic Competition continues for a period of [... * ...], then upon the date that
is on the [... * ...] of the initiation of such Generic Competition, GSK shall no longer be required to
pay royalties to XenoPort with respect to such Product in such country. “Generic Product”
shall mean a [... * ...] being sold hereunder in such country [... * ...].

     6.5 Cost-Profit Sharing in the United States. If XenoPort exercises the Co-Promotion
Option for the Product in the United States, then in lieu of the royalties specified in Section
6.3(a) with respect to Net Sales in the United States, the Parties shall share Operating Profit or
Loss (as defined in Exhibit 6.5) in the United States as provided in this Section 6.5.

     (a) Co-Promotion Expenses. After XenoPort’s exercise of the Co-Promotion Option,
those expenses outlined in Exhibit 6.5 shall be allocated to the Joint P&L calculated under
Section 6.5(c).

     (b) Allocation of Operating Profit or Loss. In consideration for each Party’s efforts
pursuant to the Co-Promotion Plan in the United States, for each calendar quarter, GSK shall be
entitled to the following percentage of the Operating Profit or Loss for such quarter and XenoPort
shall be entitled to following percentage of the Operating Profit or Loss for such quarter, such
amounts to be distributed to the Parties pursuant to Section 6.5(c):

	 	 	 	 	 
	[... * ...]	 	GSK’s Share of	 	XenoPort’s
	 	 	Operating Profit	 	Share of
	 	 	or Loss	 	Operating Profit
	 	 	 	 	or Loss
	[... * ...]

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

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

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

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

     (c) Joint P&L. Within [... * ...], XenoPort shall furnish to GSK a statement setting
forth its year-to-date [... * ...] (collectively, “XenoPort Operating Expenses”) for such
quarter in the United States, as defined in Exhibit 6.5. Within [... * ...], GSK shall furnish
to XenoPort a statement (the “Joint P&L”) setting forth the year-to-date Net Sales in the
United States during such quarter, and GSK’s year to date [... * ...] (collectively, “GSK Operating
Expenses”) for such quarter in the United States, as defined in Exhibit 6.5. Whenever
GSK provides XenoPort with

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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a statement of GSK Operating Expenses, or XenoPort provides GSK with a statement of XenoPort
Operating Expenses, the providing Party shall provide such supporting documentation as the
receiving Party may reasonably request. Such Joint P&L will also include the amount of the
Operating Profits or Loss for the quarter and year-to-date and the percentage of such Operating
Profits or Loss to Net Sales (the “Operating Profits/Loss Percentage”). GSK will calculate
each Party’s share of the Operating Profit or Loss as follows: [... * ...]. In the event that the
calculation of XenoPort’s share of the Operating Profits or Loss is a positive number, GSK shall
pay to XenoPort, [... * ...] receipt of an invoice therefor from XenoPort as provided in Section 7.1,
the difference between the amount owed to XenoPort under the then-current Joint P&L and any amounts
already paid to or received from XenoPort pursuant to this Section 6.5(c) with respect to prior
Joint P&Ls for the same year. In the event that the calculation of XenoPort’s share of the
Operating Profits or Loss is a negative number, XenoPort shall, [... * ...] its receipt of an invoice
provided by GSK together with, or after providing, such a Joint P&L, pay to GSK the difference
between the amount owed to GSK under the then current Joint P&L and any amounts already paid to or
received from GSK pursuant to this Section 6.5(c) with respect to prior Joint P&Ls for the same
year. For clarity, it is understood that XenoPort is [... * ...] with respect to [... * ...] in accordance
with [... * ...]. Examples of the calculation of each Party’s share of the Operating Profits or Loss
is provided in Exhibit 6.5. In the event that the foregoing procedure does not permit one
or both of the Parties to comply with reporting requirements under applicable United States
securities laws, rules and regulations, the JCC will modify the foregoing procedure to permit the
Parties to comply with such reporting requirements, consistent with the general approach set forth
in this Section 6.5(c).

     (d) Operating Losses Prior to First Commercial Sale. It is understood that the
calculation of Marketing Costs shall commence as of the date XenoPort exercises its Co-Promotion
Option in accordance with Section 5.2(a) above and shall include those Marketing Costs incurred
after such date. [... * ...] provided that [... * ...] the date XenoPort exercises its Co-Promotion Option
[... * ...].

     (e) Financial Reporting. To facilitate financial reporting, including earnings
forecasts, each Party agrees to keep the other Party fully informed as to its forecasts of Net
Sales, Operating Expenses and Operating Profit or Loss.

ARTICLE VII

PAYMENTS; BOOKS AND RECORDS

     7.1 Payment Method; Invoices. All milestone payments under this Agreement shall be
made by bank wire transfer in immediately available funds to an account designated in an invoice
from the Party to which such payments are due, which invoice should include bank details, the
contact name for any issue resolution and be marked for the attention of the Alliance Manager of
the Party to whom such payment is due. 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: (i) the prime rate as reported by Citibank N.A., [... * ...]; or (ii) if lower,

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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the maximum rate permitted by 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 Section 7.1 shall in no way limit any other remedies available to the Parties. All
amounts owed by GSK to XenoPort hereunder shall be paid by an entity resident in the United Kingdom
from a bank account located in the United Kingdom.

     7.2 Currency Conversion. With respect to sales of the Product invoiced in United
States dollars, the Net Sales and the amounts due hereunder will be expressed in United States
dollars. With respect to sales of the Product invoiced in a currency other than United States
dollars, the Net Sales and amounts due hereunder will be reported in United States dollars,
calculated using the average exchange rates as calculated and utilized by GSK’s group reporting
system and published accounts. As of the Effective Date, [... * ...].

     7.3 Withholding Taxes; Taxes Generally.

     (a) If taxes are required under Applicable Law in the United Kingdom to be withheld by GSK on
any payment on behalf of XenoPort, GSK will (a) deduct those taxes from the payment and (b) pay the
taxes to the proper taxing authority. In the event such taxing authorities routinely provide a tax
receipt upon payment, GSK will procure such receipt for any such withholding evidencing payment of
such taxes, which will be forwarded to XenoPort. XenoPort represents and warrants that it
is resident for tax purposes in the United States and that it is entitled to relief from the United
Kingdom income tax under the terms of the double tax agreement between the United Kingdom and the
United States. [... * ...] GSK shall [... * ...] GSK shall [... * ...] the United Kingdom and the United
States. [... * ...] withholding tax [... * ...]

     (b) Each Party shall be responsible for paying taxes imposed by any taxing authority on any
income earned by such Party under this Agreement.

     7.4 Records; Inspection.

     (a) GSK. GSK shall keep, and require its Affiliates and Sublicensees 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 and shall be open
for inspection and audit by XenoPort during such [... * ...] period on the terms of this Section
7.4(a). Upon not less than [... * ...] prior written notice, GSK shall permit an independent,
certified public accountant selected by XenoPort and reasonably acceptable to GSK, which acceptance
will not be unreasonably withheld or delayed (for the purposes of this Section 7.4(a), the
“Auditor”), to audit or inspect those books or records of GSK that relate to Net Sales and
Payment Reports, and/or Joint P&L (including the components thereof) for the sole purpose of
verifying the: (i) royalties and other payments payable hereunder in respect of Net Sales or
Operating Profit or Loss for such annual period under review; (ii) withholding taxes, if any,
required by Applicable Law to be deducted as a payment by GSK in respect of such Net Sales; and
(iii) exchange rates used in

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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determining the amount of United States dollars. The Auditor will disclose to XenoPort only
the amount and accuracy of payments reported and actually paid or otherwise payable under this
Agreement. The Auditor will send a copy of the report to GSK at the same time it is sent to
XenoPort. Such inspections may be made no more than once each calendar year and during normal
business hours. Such records for any particular calendar quarter shall be subject to no more than
one inspection. The Auditor shall be obligated to execute a reasonable confidentiality agreement
prior to commencing any such inspection. Inspections conducted under this Section 7.4(a) shall be
at the expense of XenoPort, unless a variation or error producing an underpayment in amounts
payable exceeding [... * ...] of the amount paid for a 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 GSK, together with interest on such unpaid amounts at
the rate set forth in Section 7.1 above. The Parties will endeavor in such inspection to minimize
disruption of GSK’s normal business activities to the extent reasonably practicable.

     (b) XenoPort. XenoPort shall keep complete, true and accurate books of accounts and
records for the purpose of determining payments due from GSK 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 and shall be open for inspection and audit by GSK during such [... * ...] period on
the terms of this Section 7.4(b). Upon not less than [... * ...] prior written notice, XenoPort shall
permit an independent, certified public accountant selected by GSK and reasonably acceptable to
XenoPort, which acceptance will not be unreasonably withheld or delayed (for the purposes of this
Section 7.4(b), the “Auditor”), to audit or inspect those books or records of XenoPort that
relate to XenoPort Operating Expenses and Sales Costs, for the sole purpose of verifying the
amounts payable hereunder. The Auditor will disclose to GSK only the amount and accuracy of
payments reported and actually paid or otherwise payable under this Agreement. The Auditor will
send a copy of the report to XenoPort at the same time it is sent to GSK. Such inspections may be
made no more than once each calendar year and during normal business hours. Such records for any
particular calendar quarter shall be subject to no more than one inspection. Auditor shall be
obligated to execute a reasonable confidentiality agreement prior to commencing any such
inspection. Inspections conducted under this Section 7.4(b) shall be at the expense of GSK, unless
a variation or error producing an overpayment in amounts payable exceeding [... * ...] of the amount
paid for a period covered by the inspection is established, in which case all reasonable costs
relating to the inspection for such period and any overpaid amounts that are discovered shall be
paid by XenoPort, together with interest on such overpaid amounts at the rate set forth in Section
7.1 above. The Parties will endeavor in such inspection to minimize disruption of XenoPort’s
normal business activities to the extent reasonably practicable.

ARTICLE VIII

CERTAIN COVENANTS

     8.1 Diligent Efforts of GSK. GSK shall use Commercially Reasonable Efforts to [... * ...]
Without limiting the foregoing, GSK agrees to [... * ...].

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

 - 36 - 

 

     8.2 Diligent Efforts of XenoPort. XenoPort shall use Commercially Reasonable Efforts
to conduct the Clinical Studies and Activities and, in the event that it exercises the Co-Promotion
Option, use Commercially Reasonable Efforts in its Co-Promotion and Detailing of the Product and/or
Detailing the REQUIPTM Products, as applicable.

     8.3 General Communications. Each Party shall keep the other Party fully and promptly
informed as to its progress and activities relating to the development, commercialization,
marketing and promotion of the Product in the Territory, including with respect to regulatory
matters and meetings with Regulatory Authorities, by way of updates to appropriate Committees at
their meetings and as otherwise specified in this Agreement, or as reasonably requested by the
other Party. In connection therewith, XenoPort and GSK shall provide each other with such
information regarding such progress and activities under the Development Plan, the
Commercialization Plan and/or any Co-Promotion Plan, or otherwise relating to the Product, as the
other Party may request from time to time. In order to facilitate the Parties’ exercise of their
rights and fulfillment of their obligations hereunder, each Party agrees to give due consideration
to any comments provided by the other Party with respect to such development, commercialization,
marketing and promotion of the Compound and/or any Product in the Territory.

     8.4 Reversion of Rights to the Product in the Asian Territory; Right of First
Negotiation.

     (a) Election to Negotiate.

          (i) Notice. If, during the Term, all of the rights to the Compound and Products in a
country in the Asian Territory revert to XenoPort upon a termination of the Astellas Agreement and
XenoPort proposes to enter into a collaboration with a Third Party with respect to the
commercialization of the Compound and Products in such country, XenoPort shall notify GSK in
writing (a “Reversion Notice”).

          (ii) Election to Negotiate. If GSK notifies XenoPort in writing, within [... * ...] after
receiving a Reversion Notice from XenoPort pursuant to Section 8.4(a)(i), that GSK is interested in
entering into a collaboration with respect to the Compound and Products in a country in the Asian
Territory (the “Election Notice”), XenoPort shall provide GSK with a term sheet outlining
the potential terms of such a transaction for such country, and the Parties shall negotiate towards
mutually acceptable terms and conditions for such a transaction. If the Parties agree on such
terms, the Parties shall prepare and execute a definitive agreement setting forth the agreed terms
(each such agreement, an “Asian Territory Agreement”). If the Parties have not entered
into an Asian Territory Agreement within [... * ...] after the date of the Election Notice
(“Negotiation Period”), then XenoPort shall be free to grant to one or more Third
Party(ies) rights to the Compound and/or any Product in such country; provided that the terms of
such grant are More Favorable (as defined below) to XenoPort. If GSK does not provide an Election
Notice to XenoPort within [... * ...] after receiving a Reversion Notice, or if, after delivering the
Election Notice and during the Negotiation Period, GSK neither agrees to enter into a transaction
on the terms last proposed by XenoPort nor

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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offers to XenoPort in writing alternative terms under which GSK would agree to enter into a
transaction with respect to the Compound and Product, then, notwithstanding the foregoing, XenoPort
shall be free to grant to one or more Third Parties rights to the Compound and/or any Product in
such country in the Asian Territory, without further obligation to GSK under this Section 8.4.

          (iii) Re-offer to GSK.

               (A) If XenoPort desires to grant to a Third Party rights to the Compound and Products in a
country in the Asian Territory on terms and conditions that would not be More Favorable to
XenoPort, then to the extent XenoPort has a continuing obligation to GSK under Section 8.4(a)(ii)
above, XenoPort shall notify GSK in writing (a “Re-Offer Notice”) and provide a revised
term sheet of proposed terms (“Revised Terms”). In such event, the Parties shall repeat
the procedures of Section 8.4(a)(ii) above, except that the Negotiation Period shall be [... * ...].

               (B) If GSK provides an Election Notice pursuant to Section 8.4(a)(iii)(A) above and desires to
accept the Revised Terms, it shall so agree in writing within [... * ...], in which case the Parties
shall enter into an Asian Territory Agreement reflecting such Revised Terms and such other terms
and conditions as are reasonable. If the Parties are unable to agree on any remaining terms and
conditions of such Asian Territory Agreement, then, upon request by either Party, such remaining
terms shall be determined pursuant to Section 18.2 below.

     (b) Independent Development and Commercialization of the Compound and Products if No Asian
Territory Agreement. It is understood that neither XenoPort nor GSK shall have any obligation
to collaborate or enter into any arrangement or agreement with respect to the development and/or
commercialization of the Compound and/or Products in a country in the Asian Territory. If,
however, GSK does not elect to negotiate an Asian Territory Agreement for a country in the Asian
Territory as described above following GSK’s receipt of a Reversion Notice, or if XenoPort has made
a bona fide, good faith offer to GSK with respect to a collaboration with respect to the Compound
and Products in a country in the Asian Territory in accordance with Section 8.4(a)(ii) above and
the Parties have not entered into an Asian Territory Agreement granting GSK commercialization
rights for the Compound and Products in such country in the Asian Territory, then XenoPort shall be
free to commercialize the Compound and Products itself or through Affiliates and/or Third Parties
in such country, without further obligation to GSK under this Section 8.4 (except that any grant of
commercialization rights to a Third Party licensee for the Compound and Products in such country
would be subject to Section 8.4(a)(ii), if such obligation is still applicable by its terms). In
addition, once XenoPort has provided one notice to GSK that XenoPort proposes to enter into a
collaboration with a Third Party with respect to the commercialization of the Compound and Product
in a country in the Territory, XenoPort’s obligation under this Section 8.4 shall be deemed fully
satisfied with respect to such country only.

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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     (c) More Favorable Terms. For purposes of this Section 8.4, terms of a Third Party
agreement for a country in the Asian Territory shall be deemed “More Favorable” if, on the
whole, such terms for such country are more favorable from XenoPort’s perspective than the terms
last offered by GSK for such country in the Negotiation Period. In the event of a dispute as to
whether the terms or proposed terms of a Third Party agreement for a country are More Favorable,
such dispute shall be resolved by binding arbitration in accordance with Section 18.2 below.

     (d) Additional Procedures; Matters.

          (i) Term Sheet Level. The negotiations to be pursued between the Parties under
Section 8.4 with respect to a country in the Asian Territory may be conducted at the term sheet
level, and therefore may not include all of the terms and conditions of the definitive agreement.
The terms proposed for a country in the Territory need not be exactly those proposed to one or more
Third Parties for such country; provided that, [... * ...].

          (ii) No Implied Obligations. The only obligations of GSK and XenoPort under this
Section 8.4 are as expressly stated herein, and there are no further implied obligations relating
to the matters contemplated therein. Without limiting the foregoing, XenoPort is not at any time
obligated to disclose the identity of any Third Party with whom it is discussing a Third Party
agreement and GSK’s rights under this Section 8.4 shall be triggered only once for a country in the
Asian Territory, upon the first reversion to XenoPort of all rights to the Compound and Products in
such country. It is further acknowledged and agreed that: (A) this Section 8.4 shall not be
deemed to apply to a transaction by which a Third Party acquires substantially all of the business
or assets of XenoPort; and (B) if XenoPort enters into a transaction with a Third Party in
accordance with this Section 8.4 that includes the grant by XenoPort of an option or other
contingent right to acquire the right to market and/or distribute one or more products (each such
option or right being referred to as a “Contingent Right”), then the grant of rights by
XenoPort upon a Third Party’s exercise of such Contingent Right shall not be subject to this
Section 8.4 so long as the grant of such Contingent Right was made in a transaction entered into
with the Third Party in compliance with this Section 8.4.

     (e) No Licenses Granted. It is understood that no license or other right to develop
or commercialize the Compound and/or Products in the Asian Territory are granted under this
Agreement to GSK. Any such rights would be granted only under a separate written Asian Territory
Agreement entered into by the Parties in accordance with this Section 8.4 or otherwise agreed upon
and executed by the Parties.

     (f) Disputes. Any disputes under this Section 8.4 shall be resolved in accordance
with Section 18.2 below. If GSK disputes XenoPort’s right to grant a right or license by reason of
this Section 8.4, GSK shall promptly so notify XenoPort. In the event of a dispute under this
Section 8.4, GSK shall initiate an arbitration proceeding under Section 18.2 within [... * ...] after
XenoPort notifies GSK in writing that XenoPort disputes GSK’s position or interprets this Section
8.4 as applying in a particular way. If GSK does not initiate such arbitration within such [... * ...]

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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period, GSK shall have no further right to dispute XenoPort’s right to grant any right or
license under this Section 8.4 on any grounds that were the basis of such dispute, or otherwise
dispute XenoPort’s interpretation of this Section 8.4 as reflected in XenoPort’s notice.

8.5 Managed Care Contracting. [... * ...]

ARTICLE IX

CHANGE OF CONTROL

     9.1 Change of Control of XenoPort. XenoPort shall notify GSK in writing within [... *
....]. During the [... * ...] following its receipt of such notice from XenoPort, GSK shall have the
right, upon [... * ...] written notice to XenoPort:

     (a) To terminate XenoPort’s right to Co-Promote and Detail the Product as provided in Article
5 above if such Change of Control involves a Major Pharmaceutical Company; provided that [... * ...];
and

     (b) To terminate XenoPort’s right to Detail the REQUIPTM Products as provided in Article 5
above, whether or not such Change of Control involves a Major Pharmaceutical Company.

     (c) If GSK exercises such right of termination as provided in Section 9.1(a) above: (i) the
provisions of Article 3 shall terminate, in which case references in this Agreement to approvals or
actions of the ESC, JDC or JCC shall thereafter be deemed to be satisfied by approvals or actions
of GSK; (ii) Section 4.3 shall terminate; and (iii) XenoPort’s rights and GSK’s obligations under
Section 4.7(a) shall terminate.

     (d) If as a result of a Change of Control of a Party (the “Acquired Party”), such
Acquired Party becomes obligated to divest rights to the Compound and Products in one (1) or more
countries in the Territory, such Party shall notify the other Party (the “Continuing
Party”) in writing. Within [... * ...], the Continuing Party shall notify the Acquired Party in
writing whether it is interested in acquiring all of the Acquired Party’s rights to the Compound
and Products in such country or countries in the Territory. If the Continuing Party so notifies
the Acquired Party, the Parties shall discuss mutually acceptable terms upon which the Continuing
Party may acquire all of the Acquired Party’s rights to the Compound and Products in such country
or countries in the Territory. In such case, if the Parties do not agree on such terms then prior
to divesting such rights, the Acquired Party shall notify the Continuing Party in writing, together
with the full set of terms and conditions under which the Acquired Party proposes to divest such
rights, and the Continuing Party shall have the right, exercisable within [... * ...], to acquire such
rights on such terms and conditions.

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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     (e) For the avoidance of doubt, except as set out in this Section 9.1, a Change of Control of
XenoPort shall not otherwise affect the rights or obligations of the Parties with respect to the
Compound and Products in the Territory under this Agreement, and shall not be deemed to modify or
expand the scope of GSK’s rights under Section 2.1 or 2.2 above.

ARTICLE X

MANUFACTURING AND SUPPLY

     10.1 Transfer of Manufacturing and Supply Responsibilities. Within [... * ...] the HSR
Clearance Date, XenoPort and GSK shall develop and reasonably agree upon a detailed plan
(“Supply Transition Plan”) to transfer to GSK responsibility for manufacturing and supply
of the Compound and Products for use in the Territory by GSK by [... * ...] (“Supply Transition
Date”). The Supply Transition Plan shall include technical transfer requirements, which shall
include transfer to GSK of the items contained in Exhibit 10.1. XenoPort shall use Commercially
Reasonable Efforts to allocate appropriate resources to effect the transfer of such responsibility
in an orderly and timely 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 GSK of all XenoPort Know-How necessary for the manufacture of the Compound and
Products in accordance with the licenses granted to GSK under this Agreement.

     10.2 Activities After the HSR Clearance Date. Promptly after the HSR Clearance Date:

     (a) XenoPort shall, at GSK’s request, transfer responsibility for the process and formulation
development of the Compound and for sourcing GSK’s requirements of clinical and commercial supplies
of the Compound and/or Products for the purposes of this Agreement to GSK. However, if requested
by GSK, XenoPort shall continue its current work for process and formulation development of the
Compound until such time as GSK determines that a development milestone has been reached which will
allow for the most efficient transfer of process and formulation development of the Compound.
Notwithstanding such eventual transfer, XenoPort shall use Commercially Reasonable Efforts to
provide all necessary consultation and assistance to GSK for such process and formulation
development.

     (b) Upon request and in accordance with the Supply Transition Plan, GSK may at its option,
request that XenoPort transition all works in progress, drug substance, quantities of usable
materials and finished Products to GSK, which GSK will pay for at XenoPort’s cost, except [... * ...].

     (c) GSK (or its designee) shall have responsibility for the direct management of the
arrangements with any Third Party suppliers of the Compound and/or Products. Upon request,
XenoPort shall provide GSK with any contact information for any Third Party suppliers it currently
uses.

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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     10.3 Activities After the Supply Transition Date. On and from the Supply Transition
Date, as between the Parties and subject to the terms and conditions of this Agreement, GSK shall
have the exclusive right to manufacture the Compound and the Products for distribution in the
Territory; except that [... * ...] the Compound and Products [... * ...] the Territory [... * ...] It is
understood that [... * ...] with respect to the manufacture of the Compound and Products for
distribution [... * ...].

ARTICLE XI

CONFIDENTIALITY

     11.1 Confidential Information. Except as expressly provided 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, as shown by written documentation, 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 Confidential
Information disclosed by the disclosing Party.

     11.2 Permitted Disclosures. Notwithstanding the provisions of Section 11.1 above and
subject to Sections 11.3 and 11.4 below, each Party hereto may use and disclose the other Party’s
Confidential Information to its Affiliates, licensees, permitted Sublicensees, 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, prosecuting or defending
litigation, complying with Applicable Laws, submitting information to tax or other governmental
authorities or

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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conducting clinical trials hereunder with respect to any Product. If a Party is required by
Applicable Law 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 latter 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,
permitted Sublicensees, 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 11.

     11.3 Confidential Terms. Each Party agrees not to disclose to any Third Party [... * ...]
except each Party may disclose [... * ...] (a) [... * ...] or (b) [... * ...] to the extent allowable by
Applicable Law, [... * ...] that is required [... * ...] Notwithstanding the foregoing, [... * ...] of which
[... * ...] thereafter, [... * ...].

     11.4 Publication of Product Information. Prior to its publishing, publicly presenting
and/or submitting for written or oral publication a manuscript, abstract or the like in the
Territory with respect to GSK and with respect to XenoPort (to the extent XenoPort has the right to
do so) in the Asian Territory, that includes Data or other information relating to the Compound or
any Product that has not previously published, a Party shall provide the other Party a copy thereof
for its clinical review for at least [... * ...] (unless such Party is required by Applicable Law to
publish such information sooner). Such 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 of a Product that such Party believes in good faith it is
obligated or appropriate to disclose. Without limiting the foregoing, it is understood that the
principles to be observed in any disclosures described in this Section 11.4 shall be accuracy,
compliance with Applicable Law, reasonable sensitivity to potential negative reactions of the FDA
(and its foreign counterparts) and the need to keep investors informed regarding the publishing
Party’s business. Accordingly, any comments provided by the other Party on a disclosure submitted
to it by the publishing Party pursuant to this Section and/or any requests for any Confidential
Information to be removed from any such disclosure shall comply with such principles. The
contribution of each Party shall be noted in all publications or presentations by acknowledgment or
co-authorship, whichever is appropriate. For the avoidance of doubt, XenoPort will not be
permitted to publish, publicly present and/or submitting for written or oral publication a
manuscript, abstract or the like in the Territory relating to the Product without the prior written
consent of GSK, which consent will not be unreasonably withheld. Nothing in this Section 11.4
shall, however, be deemed to limit Astellas’ rights to publish, publicly present and/or submit for
publication a manuscript, abstract or the like that includes data or other information relating to
the Compound or any Product under development or being commercialized by or under the authority of
Astellas in the Asian Territory.

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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     11.5 Publicity Review. The Parties acknowledge the importance of supporting each
other’s efforts to publicly disclose results and significant developments regarding the Product and
other activities in connection with this Agreement that may reflect the terms of this Agreement or
information that is not otherwise permitted to be disclosed under this Article 11, beyond what is
required by Applicable 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, significant events in the
development and regulatory process, commercialization activities and the like. When a Party (the
“Requesting Party”) elects to make any such public disclosure under this Section 11.5, 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 11.5, 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, 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.

     11.6 Prior Non-Disclosure Agreements. Upon execution of this Agreement, the terms of
this Article 11 shall supersede any prior non-disclosure, secrecy or confidentiality agreement
between the Parties. Any information disclosed under such prior agreements shall be deemed
disclosed under this Agreement.

ARTICLE XII

PATENT PROSECUTION AND ENFORCEMENT

     12.1 Ownership of Inventions. Title to all inventions and other intellectual property
(other than XenoPort Trademarks) made solely by GSK personnel in connection with this Agreement
shall be owned by GSK. Title to all inventions and other intellectual property (other than GSK
Trademarks) made solely by XenoPort personnel in connection with this Agreement shall be owned by
XenoPort. Title to all inventions and other intellectual property (other than Trademarks) made
jointly by personnel of XenoPort and GSK in connection with this Agreement shall be jointly owned
by XenoPort and GSK. Prosecution of any Patent with respect to such jointly-owned inventions and
intellectual property shall be solely as mutually agreed. 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 Applicable Laws of any jurisdiction to require such approval
or accounting. GSK hereby grants to XenoPort [... * ...]

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

 - 44 - 

 

     12.2 Prosecution and Maintenance of XenoPort Patents.

     (a) GSK Control of Prosecution. [... * ...] GSK shall have the right, at its expense, to
control the Prosecution and Maintenance of Patents included in the XenoPort Patents as of the
Effective Date, or which may be filed in any country of the Territory after the Effective Date, to
the extent the same are directed to the Compound or any Product, and/or manufacturing and/or use
thereof, in the Field in the Territory (such XenoPort Patents [... * ...], are referred to below as the
“GSK Prosecuted XP Patents”)]. GSK shall diligently Prosecute and Maintain the GSK
Prosecuted XP Patents; shall consult with XenoPort in good faith regarding the Prosecution and
Maintenance of such GSK Prosecuted XP Patents; and shall take into account XenoPort’s reasonable
comments related to such matters. If GSK determines not to file any Patent, or to abandon any
Patent within the GSK Prosecuted XP Patents, with respect to any subject matter described in this
Section 12.2(a), as applicable, GSK shall provide XenoPort with at least [... * ...] written notice of
such decision, prior to the deadline for filing any such Patent or the date on which such
abandonment would become effective. In such event, XenoPort shall have the right, at its option,
to control the Prosecution and Maintenance of such Patent. For the purposes of this Section 12.2,
“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 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. Also, as used in this Section 12.2, to
“abandon” a Patent shall include deciding not to defend against an opposition, not to defend an
interference or similar proceeding or not to pursue an appeal of an adverse decision, in each case
with respect to such Patent in the United States Patent & Trademark Office or a corresponding
patent examining authority in another country of the Territory.

     (b) XenoPort Prosecuted Patents. XenoPort shall have the right, at its expense, to
control the Prosecution and Maintenance of the XenoPort Patents [... * ...] and shall diligently
Prosecute and Maintain the XenoPort Prosecuted Patents in the Territory. [... * ...] If XenoPort
determines not to file, or to abandon, any such Patent within such XenoPort Patents, [... * ...]
XenoPort shall [... * ...] to the extent of [... * ...] In addition, [... * ...] XenoPort shall [... * ...]

     (c) XenoPort Patents in the Asian Territory. If, and only to the extent, permitted
under its Agreement with Astellas, XenoPort shall consult with GSK in good faith regarding the
Prosecution and Maintenance of XenoPort Patents in the Asian Territory and shall take into account
GSK’s reasonable comments related to such matters.

     (d) Cooperation. Each Party shall cooperate with the other Party in connection with
all activities relating to the Prosecution and Maintenance of the XenoPort Patents undertaken by
such other Party pursuant to this Section 12.2, including: (i) 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 XenoPort Patents pursuant to this Section 12.2; and (ii) if and
as appropriate, signing (or causing to have signed) all documents relating to the Prosecution and

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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Maintenance of any XenoPort 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 12.2, and if requested, permit such other Party to
participate at its own expense in any opposition, interference, appeal or similar proceeding with
respect to a XenoPort Patent, to the extent the same are directed to the Compound or any Product,
and/or manufacturing and/or use thereof, in the Field in the Territory. GSK shall hold all
information disclosed to it under this Section as Confidential Information.

     12.3 Enforcement.

     (a) Notice. In the event that XenoPort or GSK becomes aware of actual or threatened
infringement or misappropriation of any XenoPort Patent or XenoPort Know-How by the manufacture,
sale or use in the Territory of a product containing a Competitive Compound for the treatment of an
Indication that competes directly with a Product in any country within the Territory, including the
filing of an Abbreviated New Drug Application with the FDA (an “Infringement”), that Party
shall promptly notify the other Party in writing. “Competitive Compound” shall mean [... *
....].

     (b) Initiating Enforcement Actions. GSK has the right to initiate infringement
proceedings or take other appropriate actions against an Infringement in the Territory. If
Applicable Law in a country in the Territory does not permit an exclusive licensee to initiate such
actions (i.e., such action may only be initiated by the owner of the patent being infringed), GSK
would have the right to insist that XenoPort initiates such action on GSK’s behalf and at GSK’s
expense. If GSK does not initiate proceedings or take other appropriate action 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 shall have full control over the conduct of such action, including
settlement thereof; provided, however, that the Party conducting such action may not settle any
such action, or make any admissions or assert any position in such action, in a manner that would
materially adversely affect the rights or interests of the other Party (including by making any
admission or assertion of any position, that would materially adversely affect the validity,
enforceability or scope of any XenoPort Patent in or in the Asian Territory), without the prior
written consent of the other Party, which shall not be unreasonably withheld or delayed. The Party
conducting such action (except in the case of XenoPort, where XenoPort conducts such action at the
request of GSK) will [... * ...]. In any event, the Parties shall assist one another and cooperate in
any such action at the other’s reasonable request.

     (c) Recovery. GSK and XenoPort shall [... * ...] associated with any litigation against
infringers undertaken pursuant to Section 12.3 above or settlement thereof [... * ...] to the extent [...
* ...].

     (d) Cooperation. The Parties shall keep one another informed of the status of their
respective activities regarding any litigation or settlement thereof concerning an Infringement

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

 - 46 - 

 

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).

     12.4 Third Party Infringement Claims. If the production, sale or use of the Compound
or any Product in the Territory pursuant to this Agreement results in a claim, suit or proceeding
alleging patent infringement against XenoPort or GSK (or their respective Affiliates, licensees or
Sublicensees) (collectively, “Infringement Actions”), such Party shall promptly notify the
other Party hereto in writing. The Party subject to such Infringement Action shall have the first
right, but not the obligation, to direct and control the defense thereof; provided, however, that
the other Party may participate in the defense and/or settlement thereof at its own expense with
counsel of its choice. In any event, the Party that is subject to the Infringement Action agrees
to keep the other Party hereto reasonably informed of all material developments in connection with
any such Infringement Action. The Party who is subject to the Infringement Action agrees not to
settle such Infringement Action, or make any admissions or assert any position in such Infringement
Action, in a manner that would adversely affect the Compound or the manufacture, use or sale of the
Compound or any Product within or outside the Territory, without the prior written consent of the
other Party, which shall not be unreasonably withheld or delayed. GSK may [... * ...]. As used
herein, “Damages” shall mean out-of-pocket costs incurred by GSK, including reasonable
attorney’s fees, damages and other liabilities that are part of any final judgment awarded against
GSK, and any amounts paid by GSK in a settlement of the action that is approved by XenoPort, such
approval not to be unreasonably withheld or delayed. The Parties shall assist one another and
cooperate in any such action at the other’s reasonable request.

     12.5 Patent Marking. GSK agrees to mark, and have its Affiliates and Sublicensees
mark, all patented Products they sell or distribute pursuant to this Agreement in accordance with
the applicable patent statutes or regulations in the country or countries of sale thereof.

     12.6 Regulatory Data Protection

     (a) To the extent required or permitted by Applicable Law, the Parties will use Commercially
Reasonable Efforts to promptly, accurately and completely list, with the applicable Regulatory
Authorities during the Term all applicable XenoPort Patents, and/or any Patents that are Controlled
by GSK or its Controlled Affiliates, for any Product and that the Parties intend, or have begun, to
commercialize in the Territory and that have become the subject of an NDA submitted to FDA, such
listings to include all so called “Orange Book” listings required under the Hatch-Waxman Act
(regardless of which Party is the sponsor of record of the NDA at such time) and all so called
“Patent Register” listings as required in Canada.

     (b) In connection with such listings, the Parties will meet to evaluate and identify all
applicable Patents that are Controlled by each Party. GSK will retain final decision making
authority as to the listing of all applicable Patents for any Product regardless of which Party
Controls such Patent.

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

 - 47 - 

 

     (c) Patent Rights Certifications and Infringement Suits. Each Party will
immediately give notice to the other Party of any certification received under the Hatch-Waxman Act
or any foreign equivalents with respect to a Product. Notwithstanding any provision herein to the
contrary, the following provisions of this Section 12.6(c) will apply for certifications claiming
that any of the XenoPort Patents are invalid, unenforceable or that no infringement will arise from
the manufacture, use or sale of a Third Party’s product containing a Competitive Compound (i.e., a
Paragraph IV Certification under 21 U.S.C. Section 355 and 21 C.F.R. Part 314). GSK has the first
right, but not the obligation to bring suit against the Third Party that filed the certification.
If GSK decides to bring suit, GSK has sole control of all decisions regarding all aspects of such
litigation; provided that XenoPort will have the right to participate in such
litigation and to share in recoveries from such litigation in the same manner as set forth in
Section 12.3(c) with respect to infringement litigation brought by GSK thereunder. XenoPort will
execute such legal papers necessary for the prosecution of such suit and cooperate with GSK as may
be reasonably requested by GSK. If GSK decides not to bring infringement proceedings against the
entity making such a certification with respect to any such XenoPort Patents, GSK will give notice
to XenoPort of its decision not to bring suit within [... * ...] after receipt of notice of such
certification and XenoPort shall have the right, but not the obligation, to bring suit against the
Third Party that filed the certification, in the same manner that XenoPort has the right to bring
actions under Section 12.3(b) if GSK does not exercise its first right to bring suit thereunder.
If XenoPort decides to bring suit, XenoPort will have sole control of such litigation and will, at
GSK’s request, execute an agreement confirming that the decision to sue was made despite GSK’s
objection and indemnifying GSK for all claims and losses suffered by GSK as a result of such suit.
If XenoPort decides to sue, XenoPort is responsible for all litigation costs and shall have no
right to obtain reimbursement for its litigation costs from GSK; provided, however, that [... *
....].

ARTICLE XIII

TRADEMARKS

     13.1 Non-Exclusive License. GSK shall have a non-exclusive, royalty-free license,
with the right to grant sublicenses, to use the XenoPort Trademarks solely for market research and
other similar activities to determine whether GSK will use the XenoPort Trademarks or GSK
Trademarks in connection with the commercialization and promotion of the Product in the Field in
the Territory.

     13.2 Option for XenoPort Trademarks. For [... * ...] the HSR Clearance Date, GSK shall
have an exclusive option to obtain an exclusive, royalty-free license, with the right to grant
sublicenses, to use the XenoPort Trademarks in each country in the Territory in connection with the
developing, making, having made, use, sale, offering for sale, importation, distributing and
promoting of the Product in the Field in the Territory (the “XenoPort Trademarks Option”).
In the event that GSK notifies XenoPort in writing that GSK is exercising the XenoPort Trademarks

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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Option within [... * ...], XenoPort hereby grants to GSK an exclusive, royalty-free license, with
the right to grant sublicenses as provided in Section 2.2, to use the XenoPort Trademarks in each
country in the Territory in connection with the developing, making, having made, use, sale,
offering for sale, importation, distributing and promoting of the Product in the Field in the
Territory. Such license under the XenoPort Trademarks would include a right to use the XenoPort
Trademarks as part of a domain name. In the event that (a) GSK determines not to exercise the
XenoPort Trademarks Option, (b) GSK determines to use the GSK Trademarks in connection with
Products in the Field in the Territory, or (c) GSK fails to notify XenoPort that it wishes to
exercise the XenoPort Trademarks Option within [... * ...] the HSR Clearance Date, GSK’s rights under
the XenoPort Trademarks Option shall terminate and XenoPort shall have no further obligations to
GSK under such XenoPort Trademarks Option.

     13.3 XenoPort House Marks. All packaging, and package inserts for the Product shall,
along with the GSK brand name and logo, include the XenoPort brand name and logo (such XenoPort
brand name and logo, collectively “XenoPort House Marks”) (in such form as is reasonably
requested by XenoPort) in reasonable size and prominence; it being understood that the exact size,
placement and prominence of such XenoPort House Marks shall be determined by GSK in its reasonable
discretion, and shall be subject to the approval of the ESC. XenoPort hereby grants to GSK a
non-exclusive, royalty-free license, with the right to grant sublicenses as provided in Section
2.2, to use the XenoPort House Marks in connection with the developing making, having made, use,
sale, offering for sale, importation, distributing and promotion of the Product in the Field in the
Territory.

     13.4 Use of XenoPort Trademarks. With respect to GSK’s use of the XenoPort House
Marks as provided in Section 13.3 above and GSK’s use the XenoPort Trademarks, if GSK exercises the
XenoPort Trademarks Option as provided in Section 13.2 above, the following shall apply, to the
extent relevant:

     (a) Restriction on Use. XenoPort agrees that it will not, and will cause its
Affiliates and Astellas not to, use the XenoPort Trademarks or any substantially identical or
similar marks in any country of the Territory for any reason without obtaining the prior written
consent of GSK, which consent will not be unreasonable withheld.

     (b) Display. All final packaging, labels and Promotional Materials for the Product
shall display the XenoPort Trademarks. Further, GSK will clearly indicate on all such final
packaging, labels and promotional materials for the Product that the XenoPort Trademarks are owned
by XenoPort. The trade dress and style of packaging used for each Product in the Field in the
Territory shall be determined by GSK in a manner that is consistent with GSK’s then current
standards for trade dress and style, and as part of GSK’s updates to the ESC, GSK shall keep
XenoPort informed of GSK’s plans with respect to trade dress and style of packaging for the
Product. For the avoidance of doubt, GSK may include the GSK logo and trade name on all final
packaging, labels and promotional materials for the Product in any country in the Territory.

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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     (c) Registration of Trade Marks. GSK agrees to file, register and maintain, during
the Term and at GSK’s expense, appropriate trademark registrations for the XenoPort Trademarks in
each country of the Territory in which Products are or will be sold. Such registrations for the
XenoPort Trademarks shall be obtained by GSK in XenoPort’s name, to the extent permitted by
Applicable Law in each country within the Territory. GSK shall promptly take all steps that may be
reasonably necessary to transfer any such registration(s) for the Product Trade Marks in GSK’s name
to XenoPort.

     (d) Ownership. As between the Parties, XenoPort shall own, and is hereby assigned,
all right, title and interest in and to the XenoPort Trademarks and the XenoPort House Marks. The
ownership and all goodwill from the use of the XenoPort Trademarks and the XenoPort House Marks
shall vest in and inure to the benefit of XenoPort.

     (e) Recordation of Licenses. In those countries where a trademark license must be
recorded, XenoPort will provide to GSK, on GSK’s written request, a separate trademark license for
the XenoPort Trademarks and, if necessary, XenoPort House Marks on terms that are consistent with,
and no broader or more onerous than, the terms of this Agreement and GSK will arrange for the
recordation of such trade mark license with the appropriate Regulatory Authority, at GSK’s expense,
promptly following receipt of such license from XenoPort. GSK shall cooperate in the preparation
and execution of such documents.

     13.5 Approval of Packaging and Promotional Materials. Solely to the extent necessary
to preserve XenoPort’s legal rights in the XenoPort House Marks and, if applicable, the XenoPort
Trademarks, GSK shall submit to XenoPort, not less than [... * ...] to XenoPort for XenoPort’s review
and approval solely with respect to GSK’s use of the XenoPort House Marks and XenoPort Trademarks,
as applicable, which approval will not be unreasonably withheld or delayed. If XenoPort has not
responded within [... * ...] XenoPort’s approval to GSK’s use of the XenoPort House Marks and XenoPort
Trademarks, as applicable, on such promotional materials and packaging and will be deemed to have
been received. GSK may make any subsequent changes to promotional materials and packaging bearing
the XenoPort House Marks, or an approved XenoPort Trademark, other than changes to the XenoPort
House Marks or XenoPort Trademark, as applicable, without the subsequent approval from XenoPort.

     13.6 Enforcement of XenoPort Trademarks.

     (a) Notice. If, after GSK has exercised the XenoPort Trademark Option, XenoPort or
GSK becomes aware of actual or threatened infringement or misappropriation of any XenoPort
Trademark in the Territory, that Party shall promptly notify the other Party in writing.

     (b) Initiating Enforcement Actions. GSK has the right to initiate infringement
proceedings or take other appropriate actions against an infringement of the XenoPort Trademark in
the Territory. If Applicable Law in a country in the Territory does not permit an exclusive
licensee to initiate such actions (i.e., such action may only be initiated by the owner of the
trademark being

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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infringed), GSK would have the right to insist that XenoPort initiates such action on GSK’s
behalf and at GSK’s expense. If GSK does not initiate proceedings or take other appropriate action
within [... * ...] then XenoPort shall be entitled to initiate infringement proceedings or take other
appropriate action against an infringement of the XenoPort Trademark at its own expense. The Party
conducting such action shall have full control over the conduct of such action, including
settlement thereof; provided, however, that the Party conducting such action may not settle any
such action, or make any admissions or assert any position in such action, in a manner that would
materially adversely affect the rights or interests of the other Party, without the prior written
consent of the other Party, which shall not be unreasonably withheld or delayed. The Party
conducting such action (except in the case of XenoPort, where XenoPort conducts such action at the
request of GSK) will [... * ...]. In any event, the Parties shall assist one another and cooperate in
any such action at the other’s reasonable request.

     (c) Recovery. GSK and XenoPort shall [... * ...] associated with any litigation against
infringers undertaken pursuant to this Section 13.6 or settlement thereof [... * ...] to the extent [...
* ...].

     (d) Cooperation. The Parties shall keep one another informed of the status of their
respective activities regarding any litigation or settlement thereof concerning an infringement of
the XenoPort Trademark 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).

     13.7 Enforcement of GSK Trademarks.

     (a) Notice. If XenoPort becomes aware of actual or threatened infringement or
misappropriation of any GSK Trademark in the Territory, XenoPort shall promptly notify GSK in
writing.

     (b) Initiating Enforcement Actions. GSK has the sole and exclusive right to initiate
infringement proceedings or take other appropriate actions against an infringement of the GSK
Trademarks in the Territory. GSK shall have full control over the conduct of such action,
including settlement thereof. XenoPort shall assist GSK and cooperate in any such action at the
other’s reasonable request.

     (c) Recovery. GSK shall [... * ...].

     (d) Cooperation. XenoPort shall provide any necessary assistance and cooperate in any
such litigation concerting the infringement of the GSK Trademarks at GSK’s reasonable request.

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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ARTICLE XIV

TERM AND TERMINATION

     14.1 Term. This Agreement shall commence on the Effective Date, and unless terminated
earlier as provided in this Article 14, shall continue in full force and effect on a
country-by-country and Product-by-Product basis until [... * ...]. Upon expiration (but not an earlier
termination) of this Agreement in each country of the Territory, GSK shall have a perpetual,
non-exclusive, fully paid-up, royalty free license under the XenoPort Patents and XenoPort
Know-How, and XenoPort Trademarks if GSK exercised the XenoPort Trademarks Option as provided in
Article XIII, in such country to make, have made, use, sell, offer for sale and import such Product
in such country.

     14.2 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 [... * ...] unless the breaching Party has cured
any such breach or default prior to the expiration of the [... * ...].

     14.3 Termination For Convenience. GSK may terminate this Agreement in its entirety
for any reason: (a) upon [... * ...] prior written notice to XenoPort prior to [... * ...]; and (b) upon
[... * ...] prior written notice to XenoPort following [... * ...]; provided that GSK shall not [... * ...].

     14.4 Bankruptcy. Either Party may terminate this Agreement in its entirety at any
time during the Term by giving written notice to the other Party if the other Party files in any
court or agency pursuant to any statute or regulation of any state or country, a petition in
bankruptcy or insolvency or for reorganization or for an arrangement or for the appointment of a
receiver or trustee of the Party or of its assets, or if the other Party is served with an
involuntary petition against it, filed in any insolvency proceeding, and such petition will not be
dismissed with [... * ...] after the filing thereof, or if the other Party makes a general assignment
for the benefit of creditors.

ARTICLE XV

EFFECT OF TERMINATION

     15.1 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 breach of this Agreement.

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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          15.2 Rights on Termination by XenoPort for Breach. This Section 15.2 shall apply upon
any termination of GSK’s rights under this Agreement in its entirety pursuant to Section 14.2 or
pursuant to Section 14.3.

          (a) Wind-down Period.

          (i) Development. In the event there are any ongoing clinical trials of any Product in
the Territory, at XenoPort’s request, following the date a notice of termination has been issued
pursuant to Section 14.2 or 14.3, GSK agrees to continue such trials in the normal course until [...
* ...].

          (ii) Commercialization. To avoid a disruption in the supply of Product to patients,
if the Agreement is terminated after the First Commercial Sale, GSK, its Affiliates and its
Sublicensees shall continue to distribute the Product in each country of the Territory for which
Marketing Approval therefor has been obtained, in accordance with the terms and conditions of this
Agreement, until [... * ...] the effective date of any termination of this Agreement (the
“Wind-down Period”); provided that [... * ...]. Notwithstanding any other provision of this
Agreement, during the Wind-down Period, GSK’s and its Affiliates’ and Sublicensees’ rights with
respect to the Compound and the 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 any Product in all or part of the Territory. Any Product sold or disposed by
GSK in the Territory during the Wind-down Period shall be subject to applicable payment obligations
under Article 6 above. Within [... * ...], GSK shall notify XenoPort of any quantity of the Products
remaining in GSK’s inventory and XenoPort shall have the option, upon notice to GSK, to repurchase
any such quantities of the Products from GSK at [... * ...].

          (b) Assignment of Regulatory Filings and Marketing Approvals. At XenoPort’s option,
which shall be exercised by written notice to GSK, and to the extent permitted under Applicable
Law, GSK shall assign or cause to be assigned to XenoPort or its designee (or to the extent not so
assignable, GSK shall take all reasonable actions to make available to XenoPort or its designee the
benefits of) all Regulatory Filings for all Product in the Territory, including any such Regulatory
Filings made or owned by GSK’s Affiliates and/or Sublicensees. In each case, unless otherwise
required by any Applicable Law, the foregoing assignment (or availability) shall be made [... * ...]
the effective date of such termination, [... * ...]. In addition, GSK shall promptly provide to
XenoPort a copy of all Data and GSK Know-How pertaining to all Products in the Territory to the
extent not previously provided to XenoPort and XenoPort shall have the right to use and disclose
all Data and GSK Know How pertaining to such Products following termination of this Agreement.

          (c) Supply. In addition, GSK shall use Commercially Reasonable Efforts to transition
to XenoPort upon XenoPort’s request any arrangement with any contractor from which GSK had arranged
to obtain a supply of the Compound or Products. In the event that such materials are manufactured
by GSK, then, upon request by XenoPort, GSK shall continue to provide XenoPort with such materials
[... * ...]; provided that XenoPort shall use Commercially Reasonable Efforts to

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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obtain such alternative source as soon as practicable. In addition, GSK shall promptly
provide to XenoPort a copy of all Data pertaining to the manufacture of the Compound and the
Products to the extent not previously provided to XenoPort, during the Term or pursuant to Section
15.2(b), and XenoPort shall have the right to use (and authorize the use of) and to disclose all
such Data following termination of this Agreement.

     (d) Transition. Without limiting the foregoing, GSK shall use Commercially Reasonable
Efforts to cooperate with XenoPort and/or its designee to effect a smooth and orderly transition in
the development, sale and ongoing marketing, promotion and commercialization of the Products in the
Territory during the Wind-down Period. Without limiting the foregoing, GSK shall use Commercially
Reasonable Efforts to conduct in an expeditious manner any activities to be conducted under this
Section 15.2.

     (e) Licenses. Effective as of the date of any notice of termination of this Agreement
pursuant to Section 14.2 or 14.3, to the extent requested by XenoPort, XenoPort shall have and is
hereby granted by GSK a non-exclusive, worldwide license, with the right to grant sublicenses,
under: (i) any Patents owned or Controlled by GSK that are reasonably necessary, for the purposes
of making, having made, using, developing, importing, offering for sale, selling, distributing,
marketing, promoting and otherwise exploiting the Compound and Products; and (ii) the GSK Know How
to make, have made, use, develop, import, offer for sale, sell, distribute, market, promote and
otherwise exploit the Compound and Products.

     (f) Royalty Back. In the event of a termination by GSK under Section 14.3 after GSK
has obtained a Marketing Approval in a Major Market for a Neuropathic Pain Indication and
commercially launched the Product for such Indication in such Major Market, XenoPort shall pay to
GSK royalties on Net Sales of such Product by XenoPort, its Affiliates and licenses of such
Product, as follows: (i) if GSK achieved Annual Net Sales for such Product in a calendar year
prior to termination of [... * ...] XenoPort shall pay to GSK a royalty of [... * ...] of the Net Sales of
such Product; and (ii) if GSK achieved Annual Net Sales for such Product in a calendar year prior
to termination of [... * ...], then in lieu of the royalty specified in (i) above, XenoPort shall pay
to GSK a royalty of [... * ...] of the Net Sales of such Product. Such royalty shall continue for a
period of ten years (10) from the date of such termination, or if longer, on a country-by-country
basis until the expiration of the last XenoPort Patent that would be infringed by the unlicensed
sale of such Product in such country. For such purposes, the provisions of Sections 1.33, 6.3(c)
and 6.4, and of Article 7, shall apply mutatis mutandis.

     (g) Return of Materials. Within [... * ...] after the end of the Wind-down Period upon
request by XenoPort, GSK shall use Commercially Reasonable Efforts either return to XenoPort or
destroy all tangible items comprising, bearing or containing trademarks (including the XenoPort
Trademarks), trade names, patents, copyrights, designs, drawings, formulas or other Data,
photographs, samples, literature, sales and promotional aids (“Product Materials”) and all
Confidential Information of XenoPort, that is in GSK’s possession. Effective upon the end of the
Wind-down Period, GSK shall: (i) cease to use all trademarks and trade names of XenoPort

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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(including the XenoPort Trademarks) in the Territory, and all rights granted to GSK hereunder
with respect to the Compound and all Products in the Territory shall terminate; and (ii) assign to
XenoPort all trademarks and trade names of XenoPort (including the XenoPort Trademarks).

     (h) Sublicensees. Any contracts with Sublicensees of any Product in the Territory
engaged by GSK other than GSK’s Affiliates shall be assigned to XenoPort to the extent GSK has the
right to do so and XenoPort so requests. In the event such assignment is not requested by XenoPort
or GSK does not have the right to do so, then the rights of such Sublicensees shall terminate upon
termination of GSK’s rights with respect to the Product in the Territory. GSK shall contractually
require that its Affiliates and such Sublicensees (if not assigned to XenoPort pursuant to this
Section15.2(h)) shall use Commercially Reasonable Efforts to transition all Products back to
XenoPort in the manner set forth in this Section 15.2 as if such Affiliate or Sublicensee were
named herein.

     (i) Termination of XenoPort’s Rights to Detail the REQUIPTM Products. Within [... * ...],
upon request by GSK, XenoPort shall either return to GSK or destroy all tangible items comprising,
bearing or containing trademarks, trade names, patents, copyrights, designs, drawings, formulas or
photographs, Samples, literature, and Promotional Materials relating solely to the REQUIPTM Products
(the “REQUIPTM Materials”) and Confidential Information of GSK directed to the REQUIPTM
Products, that is in XenoPort’s possession. Effective [... * ...], XenoPort shall cease to use all
trademarks and trade names of GSK relating solely to the REQUIPTM Products in the Territory, and all
rights granted to XenoPort hereunder with respect to the REQUIPTM Products in the Territory shall
terminate.

     15.3 Rights Upon Termination for Bankruptcy. Notwithstanding the bankruptcy of
XenoPort, or the impairment of performance by XenoPort of its obligations under this Agreement as a
result of bankruptcy or insolvency of XenoPort, upon the termination of this Agreement by GSK
pursuant to Section 14.4, GSK will be entitled to retain all rights and licenses granted to GSK by
XenoPort under this Agreement. All rights and licenses granted under or pursuant to this Agreement
by XenoPort to GSK are, and will otherwise be deemed to be, for purposes of Article 365(n) of the
Bankruptcy Code, licenses of rights to “intellectual property” as defined under Article 101(52) of
the Bankruptcy Code. The Parties agree that GSK, as a licensee of such rights under this
Agreement, will retain and may fully exercise all of its rights and elections under the Bankruptcy
Code. The Parties further agree that, in the event of the commencement of a bankruptcy proceeding
by or against XenoPort under the Bankruptcy Code, GSK will be entitled to a complete duplicate of
(or complete access to, as appropriate) any such intellectual property and all embodiments of such
intellectual property, and same, if not already in its possession, will be promptly delivered to
GSK (i) upon any such commencement of a bankruptcy proceeding upon written request therefore by
GSK, unless XenoPort elects to continue to perform all of its obligations under this Agreement, or
(ii) if not delivered under (i) above, upon the rejection of this Agreement by or on behalf of
XenoPort upon written request therefore by GSK.

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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     15.4 Additional Rights. The expiration or termination of this Agreement for any
reason shall not relieve the Parties of any obligation (including any payments) that accrued prior
to such expiration or termination. Further, neither Party will be precluded from pursuing all
rights and remedies that it may have hereunder at law or in equity with respect to any breach of
this Agreement nor prejudice either Party’s right to obtain performance of any obligation.

     15.5 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 provisions: [... * ...] In addition: (a) [... * ...] and (b) [... * ...] shall survive with respect
to [... * ...].

ARTICLE XVI

REPRESENTATIONS, WARRANTIES AND COVENANTS

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

     (a) Duly Organized. Such Party is a corporation duly organized, validly existing and
is in good standing under the laws of the jurisdiction of its incorporation, 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.

     (b) Due Execution; Binding Agreement. This Agreement is a legal and valid obligation
binding upon such Party and enforceable in accordance with its terms. 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: (i) require any consent or approval of its stockholders; (ii) to
such Party’s knowledge, violate any Applicable Law, order, writ, judgment, decree, determination or
award of any court, governmental body or administrative or other agency having jurisdiction over
such Party; nor (iii) 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.

     (c) No Other Affiliates.  As of the Effective Date, such Party does not have any
Affiliates that are not Controlled Affiliates.

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

     (a) it has the full right and authority to grant the rights and licenses as provided herein;

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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     (b) it has not previously granted any right, license or interest in or to the XenoPort Patents
or XenoPort Trademarks, or any portion thereof, that is in conflict with the rights or licenses
granted to GSK under this Agreement;

     (c) to its knowledge, there are no actual, pending, anticipated, alleged or threatened
actions, suits, claims, interference or governmental investigations involving the Compound, the
XenoPort Patents, the XenoPort Know-How or the XenoPort Trademarks by or against XenoPort, or any
of its Affiliates; provided that no representation or warranty is made with respect to any Patent
rights of a Third Party of which GSK is aware as of the Effective Date. In particular, to its best
knowledge, there is no pending or threatened product liability action nor intellectual property
right litigation in relation to the Compound;

     (d) subject to Article 19, 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; to its knowledge,
there is no actual, pending, anticipated, alleged or threatened infringement by a Third Party of
any of the XenoPort Patents, the XenoPort Know-How or the XenoPort Trademarks;

     (e) to its knowledge, none of the issued XenoPort Patents or applications or registrations for
the XenoPort Trademarks are invalid or unenforceable; and

     (f) it has not, up through and including the Effective Date, knowingly withheld any material
information in its possession from GSK in response to GSK’s reasonable inquiries in connection with
GSK’s due diligence relating to the Compound, this Agreement and the underlying transaction, and to
the best of its knowledge, the information related to the Compound that XenoPort has provided to
GSK prior to the Effective Date is up-to-date and accurate in all material respects.

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

     (a) it has the full right and authority to grant the rights granted herein;

     (b) subject to Article 19, all necessary consents, approvals and authorizations of all
Regulatory Authorities, other governmental authorities and other persons or entities required to be
obtained by GSK in order to enter into this Agreement have been obtained; and

     (c) GSK does not have any knowledge that any of XenoPort’s representations and warranties set
forth in Sections 16.1 and 16.2 above are inaccurate.

     16.4 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

 

			
	*	 	Certain Confidential Information Contained In This Document,
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Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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PARTICULAR PURPOSE, NONINFRINGEMENT OR VALIDITY OF ANY PATENTS ISSUED OR PENDING.

ARTICLE XVII

INDEMNIFICATION

     17.1 Indemnification of XenoPort. GSK shall indemnify and hold harmless each of
XenoPort, its Affiliates and the directors, officers, stockholders and employees of such entities
and the successors and assigns of any of the foregoing (the “XenoPort Indemnitees”), from
and against any and all liabilities, damages, penalties, fines, costs, 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, importation or sale of any Product by GSK, its
Affiliates or Sublicensees in the Territory; (b) gross negligence or willful misconduct in the
conduct of the research and development activities in the Territory conducted by GSK, or any of its
Affiliates or Sublicensees, related to the Compound and/or any Product; and (c) any material breach
of any representations, warranties or covenants by GSK in Article 16 above; except to the extent
such Third Party Claims fall within the scope of XenoPort’s indemnification obligations set forth
in Section 17.2 below or result from the gross negligence or fault of a XenoPort Indemnitee. In
the event XenoPort exercises the Co-Promotion Option and is Co-Promoting Product and/or the REQUIPTM
Products, GSK’s indemnification obligations set forth in this Section 17.1 shall [... * ...].

     17.2 Indemnification of GSK. XenoPort shall indemnify and hold harmless each of GSK,
its Affiliates and Sublicensees and the directors, officers and employees of GSK, its Affiliates
and Sublicensees and the successors and assigns of any of the foregoing (the “GSK
Indemnitees”), from and against any and all Liabilities from any Third Party Claims incurred by
any GSK Indemnitee, arising from, or occurring as a result of (a) gross negligence or willful
misconduct in the conduct of the research and development activities conducted by XenoPort or its
Affiliates related to Compound and/or any Product, (b) the use, marketing, distribution, or sale of
any Product by XenoPort, its Affiliates or Sublicensees in the Asian Territory, or (c) any material
breach of any representations, warranties or covenants by XenoPort in Article 16 above, except to
the extent such Third Party Claims fall within the scope of GSK’s indemnification obligations set
forth in Section 17.1 above or result from the fault of an GSK Indemnitee.

     17.3 Procedure. A Party that intends to claim indemnification under this Article 17
(the “Indemnitee”) shall promptly notify the other Party (the “Indemnitor”) in
writing of the assertion or the commencement of Third Party Claim and will provide the Indemnitor
such information with respect thereto that the Indemnitor may reasonably request. The Indemnitor
shall be entitled to participate in the defense of any Third Party Claim and, subject to the
limitations set forth in this Section, shall be entitled to control and appoint lead counsel for
such defense, in each case at its expense. If the Indemnitor shall assume the control of the
defense of any Third Party

 

			
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Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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Claim in accordance with the provisions of this Section 17.3, the Indemnitor shall obtain the
prior written consent of the Indemnitee (which shall not be unreasonably withheld) before entering
into any settlement of such Third Party Claim. 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 prejudicial to its ability to defend such action, shall relieve such Indemnitor of
any liability to the Indemnitee under this Section 17.3, 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 Section 17.3. The Indemnitee under this Section 17.3 shall
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.

ARTICLE XVIII

DISPUTE RESOLUTION

     18.1 Dispute Resolution. The Parties agree that with respect to any disputes that are
not within the authority of the ESC, JDC or JCC as provided in Article 3 (all such disputes that
are not within the authority of the ESC, JDC or JCC would include disputes arising with respect to
the interpretation, enforcement, termination or invalidity of this Agreement, and for the purposes
of this Article 18, each a “Dispute”), the Dispute shall first be presented to the Chief
Executive Officer of XenoPort and the Chief Operating Officer of GSK, or their respective designees
for resolution. If the Chief Executive Officers, or their respective designees, cannot resolve the
Dispute within [... * ...] of the request to do so, either Party may initiate legal proceedings with
respect thereto. Notwithstanding anything in this Article 18 to the contrary, XenoPort and GSK
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.

     18.2 Arbitration of Certain Limited Disputes. If: (i) the Parties do not agree upon:
(A) [... * ...]; (ii) there is a dispute as to the interpretation, enforcement or breach of [... * ...];
or (iii) the Parties otherwise mutually agree to the resolution of a dispute by binding
arbitration; in each case, such dispute shall, upon written notice of either Party to the other, be
resolved by final, binding arbitration in accordance with the provisions of this Section 18.2. The
arbitration shall be conducted by the Judicial Arbitration and Mediation Services, Inc. (or any
successor entity thereto) (“JAMS”) under its rules of arbitration then in effect, except as
modified in this Agreement. The arbitration shall be conducted in the English language, by a
single arbitrator. If the Parties are unable to agree on an arbitrator, the arbitrator shall be
selected in accordance with the JAMS rules, or if the JAMS Rules do not provide for such selection,
by the chief executive of JAMS. At his or her election, the arbitrator may engage an independent
expert with experience in the subject matter of the Dispute to advise the arbitrator.

     (a) With respect to any dispute to be resolved under this Section 18.2, the Parties and the
arbitrator shall use all reasonable efforts to complete any such arbitration within [... * ...] from
the issuance of notice of a referral of any such dispute to arbitration. The arbitrator shall

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

 - 59 - 

 

determine what discovery will be permitted, consistent with the goal of limiting the cost and
time that the Parties must expend for discovery; provided that the arbitrator shall permit such
discovery as he or she deems necessary to permit an equitable resolution of the Dispute.

     (b) The arbitration under this Section 18.2 with respect to the matter described in (i) above
shall [... * ...] Accordingly, [... * ...] with respect to [... * ...] the arbitrator shall [... * ...].

     (c) The Parties agree that the decision of the arbitrator shall be the binding remedy between
them regarding the dispute presented to the arbitrator. Any decision of the arbitrator may be
entered in a court of competent jurisdiction for judicial recognition of the decision and an order
of enforcement. The arbitration proceedings and the decision of the arbitrator shall not be made
public without the joint consent of the Parties and each Party shall maintain the confidentiality
of such proceedings and decision unless each Party otherwise agrees in writing; provided that
either Party may make such disclosures as are permitted for Confidential Information of the other
Party under Article 11 above.

     (d) Unless otherwise mutually agreed upon by the Parties, the arbitration proceedings shall be
conducted in New York, New York. The Parties agree that they shall share equally the cost of the
arbitration filing and hearing fees, the cost of the independent expert retained by the arbitrator,
and the cost of the arbitrator and administrative fees of JAMS. Each Party shall bear its own
costs and attorneys’ and witnesses’ fees and associated costs and expenses.

ARTICLE XIX

HART-SCOTT-RODINO

     19.1 HSR Act Compliance. Notwithstanding anything to the contrary in this Agreement,
this Agreement shall be binding upon the Parties as of the Effective Date; however, the provisions
of Articles 2-7 shall not take effect, and commencement of the collaboration shall not occur, until
the HSR Clearance Date. As used herein, the “HSR Clearance Date” shall mean such time as:
(a) the Parties shall have complied with all applicable requirements of the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended the (“HSR Act”); (b) the waiting period
under the HSR Act shall have expired or earlier been terminated; (c) no judicial or administrative
proceeding opposing consummation of all or any part of this Agreement shall be pending; (d) no
injunction (whether temporary, preliminary or permanent) prohibiting consummation of the
transactions contemplated by this Agreement or any material portion hereof shall be in effect; and
(e) no requirements or conditions shall have been formally requested or imposed by the DOJ or FTC
in connection therewith that are not reasonably and mutually satisfactory to the Parties
(collectively, the “HSR Conditions”). In the event that the HSR Conditions are not met
within [... * ...], this Agreement shall be null and void.

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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     19.2 HSR Filing. Both Parties shall promptly file following execution of this
Agreement their respective pre-merger notification and report forms with the Federal Trade
Commission (“FTC”) and the Department of Justice (“DOJ”) pursuant to the HSR Act
which forms shall specifically request early termination of the initial HSR Act waiting period.
GSK shall pay the filing fee.

     19.3 Cooperation.

     (a) The Parties shall use their Commercially Reasonable Efforts to obtain prompt clearance
required under the HSR Act for the consummation of this Agreement and the transactions contemplated
hereby and shall keep each other apprised of the status of any communications with, and any
inquiries or requests for additional information from, the FTC and the DOJ and shall comply
promptly with any such inquiry or request; provided, however, that neither Party shall be required
to consent to the divestiture or other disposition of any of its or its Affiliates’ assets or to
consent to any other structural or conduct remedy, and each Party and its Affiliates shall have no
obligation to contest, administratively or in court, any ruling, order or other action of the FTC
or DOJ or any third party respecting the transactions contemplated by this Agreement.

     (b) The Parties hereto commit to instruct their respective counsel to cooperate with each
other and use Commercially Reasonable Efforts to facilitate and expedite the identification and
resolution of any such issues and, consequently, the expiration of the applicable HSR Act waiting
period. Said Commercially Reasonable Efforts and cooperation include, but are not limited to,
counsel’s undertaking: (i) to keep each other appropriately informed of communications from and to
personnel of the reviewing antitrust authority; and (ii) to confer with each other regarding
appropriate contacts with and response to personnel of the FTC or DOJ.

ARTICLE XX

GENERAL PROVISIONS

     20.1 Force Majeure. If the performance of any part of this Agreement (except for any
payment obligation under this Agreement) by either Party is prevented, restricted, interfered with
or delayed by reason of force majeure (including, fire, flood, embargo, power shortage or failure,
acts of war, insurrection, riot, terrorism, strike, lockout or other labor disturbance 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.

     20.2 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
and enforced in accordance with, the laws of the State of Delaware, without reference to conflict
of law principles.

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

 - 61 - 

 

     20.3 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 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.

     20.4 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.

     20.5 Severability. In the event any provision of this Agreement should be held
invalid, illegal or unenforceable in any jurisdiction, 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 all other provisions of this Agreement shall remain in full force and effect in
such jurisdiction. Such invalidity, illegality or unenforceability shall not affect the validity,
legality or enforceability of such provision in any other jurisdiction. 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 cured within such [... * ...] period. Any termination in accordance with the
foregoing shall be deemed a termination pursuant to Section 14.3 if the Party who made the
assertion was GSK, and shall be deemed a termination under Section 14.2 by reason of a breach by
XenoPort, if XenoPort is the Party who made such assertion.

     20.6 Entire Agreement. This Agreement (including the Exhibits attached hereto)
constitutes the entire agreement between the Parties relating to its subject matter and supersedes
all prior or contemporaneous agreements, understandings or representations, either written or oral,
between XenoPort and GSK with respect to such subject matter.

     20.7 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 (b), (c) or (d) above), to the
following addresses of the Parties or such other address for a Party as may be specified by like
notice:

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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	To XenoPort:

	 	To GSK:
	 
	 	 
	XenoPort, Inc.

	 	Glaxo Group Limited
	3410 Central Expressway

	 	Glaxo Wellcome House, Berkeley Avenue
	Santa Clara, CA 95051

	 	Greenford, Middlesex, UB6 0NN, England
	Telephone: (408) 616-7200

	 	Telephone: 44 20 8 047 4501
	Facsimile: (408) 616-7211

	 	Facsimile: 44 20 8 047 6904
	Attention: Secretary

	 	Attention: Company Secretary
	 
	 	 
	With a copy to:

	 	With a copy to:
	 
	 	 
	Wilson, Sonsini, Goodrich & Rosati

	 	GlaxoSmithKline
	650 Page Mill Road

	 	709 Swedeland Road
	Palo Alto, CA 94304

	 	P.O. Box 1539
	Telephone: (650) 493-9300

	 	King of Prussia, PA 19406-0939 USA
	Facsimile: (650) 493-6811

	 	Telephone: (610) 270-5397
	Attention: Kenneth A. Clark

	 	Facsimile: (610) 270-5880
	 

	 	Attention : Senior Vice President,
	 

	 	Worldwide Business Development
	 
	 	 
	 

	 	and
	 
	 	 
	 

	 	GlaxoSmithKline
	 

	 	2301 Renaissance Boulevard
	 

	 	Mailcode RN0220
	 

	 	King of Prussia, PA 19406-2772
	 

	 	Telephone: (610) 787-3626
	 

	 	Facsimile: (610) 787-7084
	 

	 	Attention: Vice President and Associate General
	 

	 	Counsel, Business Development Transactions

     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.

          20.8 Assignment. This Agreement shall not be assignable by either Party to any Third
Party hereto 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, whether by merger, acquisition or otherwise,
provided that the Party 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

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

 - 63 - 

 

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 20.8 shall be null and void.

     20.9 No Partnership or Joint Venture. Nothing in this Agreement is intended, or shall
be deemed, to establish a joint venture or partnership between XenoPort and GSK. Neither 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.

     20.10 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 interchangeable. Each accounting term used herein that is not specifically defined herein
shall have the meaning given to it under International Generally Accepted Accounting Principles.
All references to a “business day” or “business days” in this Agreement means any day other than a
day which is a Saturday, a Sunday or any day banks are authorized or required to be closed in the
United States or in the United Kingdom.

     20.11 Export Laws. Notwithstanding anything to the contrary contained herein, all
obligations of XenoPort and GSK are subject to prior compliance with the export regulations of the
United States, the European Union or any other relevant country and such other laws and regulations
in effect in the United States, the European Union or any other relevant country as may be
applicable, and to obtaining all necessary approvals required by the applicable agencies of the
governments of the United States, the countries within the European Union and any other relevant
countries. XenoPort and GSK shall cooperate with each other and shall provide assistance to the
other as reasonably necessary to obtain any required approvals.

     20.12 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.

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

 - 64 - 

 

     IN WITNESS WHEREOF, the Parties have executed this Development and Commercialization Agreement
as of the date first set forth above.

	 	 	 	 	 	 	 
	 	 	XENOPORT, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	BY:

NAME:
	 	/s/ Ronald W. Barrett
 

Ronald W. Barrett
	 	 
	 

	 	TITLE:
	 	Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	GLAXO GROUP LIMITED	 	 
	 
	 	 	 	 	 	 
	 

	 	BY:

NAME:
	 	/s/ JP Garnier
 

JP Garnier
	 	 
	 

	 	TITLE:
	 	Chief Executive Officer	 	 

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

 

EXHIBIT 1.13

[... * ...]

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

 

EXHIBIT 1.59

XenoPort Patents

[... * ...]

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

  

 

EXHIBIT 1.60

XenoPort Trademarks

[... * ...]

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

  

 

EXHIBIT 2.3(b)

Phase I Activities

[... * ...]

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

  

 

EXHIBIT 2.3(c)

[... * ...]

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

 

 

EXHIBIT 4.1

Initial Development Plan for Restless Legs Syndrome

[... * ...]

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

 

 

EXHIBIT 4.1 (contd.)

Initial Development Plan for Neuropathic Pain

[... * ...]

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

 

 

EXHIBIT 4.3

Clinical Studies and Activities

[... * ...]

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

 

 

EXHIBIT 5

Co-Promotion Agreement Terms

[... * ...]

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

 

 

EXHIBIT 6.5

Financial Planning, Accounting and Reporting Methodologies

(Operating Profit or Loss)

This Exhibit 6.5 addresses the financial planning, accounting policies and procedures to be
followed under the Agreement in determining sharing of revenue and expenses and related share of
Operating Profit or Loss in the United States. Terms not defined in this Exhibit 6.5 shall
have the meanings set forth in the Agreement.

[... * ...]

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

 

 

EXHIBIT 10.1

Supply Transition – Technical Transfer Requirements

Documentation and materials to be supplied by XenoPort as part of technical transfer requirements
include, but are not limited to, the follow:

[... * ...]

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

 

 

EXHIBIT 11.3

Press Release

(See publicly filed press release.)

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

  

 

EXHIBIT 12.2

XenoPort Prosecution and Maintenance

[... * ...]

 

			
	*	 	Certain Confidential Information Contained In This Document,
Marked By Brackets, Is Filed With The Securities And Exchange
Commission Pursuant To Rule 24b-2 Of The Securities Exchange
Act Of 1934, As Amended.

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