Document:

exv10w33

 

Exhibit 10.33

CHANGE OF CONTROL AGREEMENT

     This Change of Control Agreement (the “Agreement”) is made and entered into by and
between David R. Savello, PhD (the “Executive”) and XenoPort, Inc., a Delaware corporation
(the “Company”), effective as of November 7, 2007.

RECITALS

     It is expected that the Company from time to time may consider the possibility of an
acquisition by another company or other change of control. The Board of Directors of the Company
(the “Board”) recognizes that such consideration can be a distraction to the Executive and
can cause the Executive to consider alternative employment opportunities. The Board has determined
that it is in the best interests of the Company and its stockholders to assure that the Company
will have the continued dedication and objectivity of the Executive, notwithstanding the
possibility, threat or occurrence of a Change of Control (as defined below) of the Company.

     The Board believes that it is in the best interests of the Company and its stockholders to
provide the Executive with an incentive to continue his employment and to motivate the Executive to
maximize the value of the Company upon a Change of Control for the benefit of its stockholders.

     Certain capitalized terms used in the Agreement are defined in Section 5 below.

     The parties hereto agree as follows:

1. Term of Agreement. This Agreement shall terminate upon the date that all obligations of
the parties hereto with respect to this Agreement have been satisfied.

2. At-Will Employment. The Company and the Executive acknowledge that the Executive’s
employment is and shall continue to be at-will. If the Executive’s employment terminates for any
reason, including (without limitation) any termination prior to a Change of Control, the Executive
shall not be entitled to any payments, benefits, damages, awards or compensation other than as
provided by this Agreement, or as may otherwise be available in accordance with written plans or
agreements with the Company.

3. Termination Following a Change of Control.

     (a) Termination Without Cause or Voluntary Termination For Good Reason. In the event
that a Change of Control (as defined below) of the Company occurs, and during the period beginning
on the closing date of the transaction giving rise to such Change of Control and ending twelve (12)
months after such closing date, the Executive’s employment with the Company (or the successor
entity in such Change of Control transaction) is either (1) terminated by the Company (or its
successor entity) without Cause (as defined below) or (2) terminated by the Executive for Good
Reason (as defined below), then the Executive shall be entitled to receive Termination Benefits (as
defined below); provided, however, that in order for the Executive to terminate for Good Reason,
(i) the Executive must provide written notice to the Company (or the successor
entity in the Change of Control transaction) of the existence of the Good Reason condition within
ninety (90) days following

 

 

the initial existence of the Good Reason condition, and (ii) the Company
(or the successor entity in the Change of Control transaction) shall not be required to provide
Termination Benefits if it is able to remedy the Good Reason condition within a period of thirty
(30) days following such notice.

     (b) Payment of Termination Benefits. If the Executive becomes entitled to receive
Termination Benefits pursuant to Section 3(a), the continued payments of base salary, to the extent
of payments made from the date of the Executive’s termination of employment through March 15 of the
calendar year following such termination, are intended to constitute separate payments for purposes
of Section 1.409A-2(b)(2) of the Treasury Regulations and thus payable pursuant to the “short-term
deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations; to the extent such
payments are made following said March 15, they are intended to constitute separate payments for
purposes of Section 1.409A-2(b)(2) of the Treasury Regulations made upon an involuntary termination
from service and payable pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations, to
the maximum extent permitted by such provision, with any excess amount being regarded as subject to
the distribution requirements of Section 409A(a)(2)(A) of the Internal Revenue Code of 1986, as
amended (the “Code”), including, without limitation, the requirement of Section 409A(a)(2)(B)(i) of
the Code that payment be delayed until six (6) months after the Executive’s termination of
employment if the Executive is a “specified employee” within the meaning of Section
409A(a)(2)(B)(i) of the Code at the time of such termination.

4. Certain Additional Payments by the Company.

     (a) If any payment or benefit the Executive would receive pursuant to a Change of Control from
the Company or otherwise would (i) constitute a “parachute payment” within the meaning of Section
280G of the Code (collectively, the “Payment”) and (ii) but for this sentence, be subject to the
excise tax imposed by Section 4999 of the Code or any interest or penalties payable with respect to
such excise tax (such excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the “Excise Tax”), then such Payment shall be reduced to an amount that
results in no portion of the Payment being subject to the Excise Tax, provided that such reduction
would not result in a ten percent (10%) or greater reduction in the amount of the Payment.

     If such reduction would result in a ten percent (10%) or greater reduction in the amount of
the Payment, then there shall be no such reduction and the Executive shall be entitled to receive
from the Company an additional payment (a “Gross-Up Payment”) in an amount such that after payment
by the Executive of all taxes (including, without limitation, any income and employment taxes and
any interest and penalties imposed with respect thereto resulting from any improper reporting by
the Company for employment tax purposes) imposed upon the Gross-Up Payment, the Executive retains
an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payment; provided,
however, that the maximum amount of any such Gross-Up Payment shall be $3,000,000.00.

     (b) For purposes of determining the amount of the Gross-Up Payment: (1) the Executive shall be
deemed to have paid federal income taxes calculated at the lower rate between:
(i) 35% (which represents the highest marginal rate of federal income taxation applicable to
ordinary income for the 2007 calendar year (the “2007 Federal Tax Rate”)); and (ii) the highest
marginal rate of federal income taxation applicable to ordinary income then in effect for the
calendar year in which the Gross-Up Payment is to be made; (2) the Executive shall be deemed to
have paid applicable state

 

 

income taxes calculated at the lower rate between: (i) 10.3% (which
represents the highest marginal rate of California state income taxation applicable to ordinary
income for the 2007 calendar year, net of the maximum reduction in federal income taxes that could
be obtained from deduction of such state taxes in the 2007 calendar year (the “2007 State Tax
Rate”)); and (ii) the highest marginal rate of California state income taxation applicable to
ordinary income for the calendar year in which the Gross-Up Payment is to be made, net of the
maximum reduction in federal income taxes that could be obtained from deduction of such state
taxes; and (3) the Excise Tax rate shall be deemed to equal the lower rate between: (i) 20% (which
represents the Excise Tax rate in effect for the 2007 calendar year (the “2007 Excise Tax Rate”));
and (ii) the actual excise tax rate imposed by Section 4999 of the Code, or by comparable laws and
regulations, then in effect for the calendar year in which the Gross-Up Payment is to be made. Any
Gross-Up Payment shall be paid to the Executive by the end of the calendar year following the
calendar year in which the Executive remits the applicable taxes.

     (c) In the event that: (1) the highest marginal rate of federal income taxation applicable to
ordinary income then in effect for the Executive for the calendar year in which the Gross-Up
Payment could be made is higher than the 2007 Federal Tax Rate; (2) the highest marginal rate of
California state income taxation for the Executive’s applicable state income taxes applicable to
ordinary income for the calendar year in which the Gross-Up Payment could be made is higher than
the 2007 State Tax Rate; and/or (3) the actual excise tax rate imposed by Section 4999 of the Code, or
by comparable laws and regulations then in effect, is higher than the 2007 Excise Tax Rate, then
the amount of the Gross-Up Payment shall be determined based upon the 2007 Federal Tax Rate, 2007
State Tax Rate and 2007 Excise Tax Rate as set forth in Section 4(b) unless the Board of Directors
of the Company amends this Agreement with the Executive pursuant to Section 8(b) to specifically
provide that the amount of the Gross-Up Payment shall be determined for purposes of this Agreement
based upon rates higher than the 2007 Federal Tax Rate, 2007 State Tax Rate and/or 2007 Excise Tax
Rate. In the event that the Board of Directors of the Company elects to amend this Agreement as
set forth in this Section 4(c), the Company shall deliver an amendment to this Agreement to the
Executive for review and execution no later than twenty (20) calendar days after the date on which
the Executive’s right to a Payment is triggered (if requested at that time by the Company or the
Executive).

     (d) Any reduction of the Payment provided for in this Section 4 shall occur in the following
order unless the Executive elects in writing a different order (provided, however, that such
election shall be subject to Company approval if made on or after the date on which the event that
triggers the Payment occurs): (i) reduction of cash payments; (ii) cancellation of accelerated
vesting of Stock Rights; and (iii) reduction of employee benefits. In the event that acceleration
of vesting of Stock Rights compensation is to be reduced, such acceleration of vesting shall be
cancelled in the reverse order of the date of grant of the Executive’s Stock Rights unless the
Executive elects in writing a different order for cancellation.

     (e) The accounting firm engaged by the Company for general audit purposes as of the day prior
to the effective date of the Change of Control shall perform the foregoing calculations.
If the accounting firm so engaged by the Company is serving as accountant or auditor for the
individual, entity or group effecting the Change of Control, the Company shall appoint a nationally
recognized accounting firm to make the determinations required hereunder. The Company shall bear
all expenses with respect to the determinations by such accounting firm required to be made
hereunder. The accounting firm engaged to make the determinations hereunder shall provide its

 

 

calculations, together with detailed supporting documentation, to the Company and the Executive
within fifteen (15) calendar days after the date on which the Executive’s right to a Payment is
triggered (if requested at that time by the Company or the Executive) or such other time as
requested by the Company or the Executive. If the accounting firm determines that no Excise Tax is
payable with respect to a Payment, it shall furnish the Company and the Executive with an opinion
reasonably acceptable to the Executive that no Excise Tax will be imposed with respect to such
Payment. Any good faith determinations of the accounting firm made hereunder shall be final,
binding and conclusive upon the Company and the Executive.

5. Definition of Terms. The following terms referred to in this Agreement shall have the
following meanings:

          “Cause” shall mean either: (i) any act of personal dishonesty taken by the Executive
in connection with his responsibilities as an Executive and intended to result in substantial
personal enrichment of the Executive; (ii) the conviction of a felony; (iii) a willful act by the
Executive that constitutes gross misconduct and that is injurious to the Company; or (iv) following
delivery to the Executive of a written demand for performance from the Company that describes the
basis for the Company’s belief that the Executive has not substantially performed his duties,
continued violations by the Executive of the Executive’s obligations to the Company that are
demonstrably willful and deliberate on the Executive’s part.

          “Change of Control” means the completion by the Company of a reorganization, merger or
consolidation, in each case with respect to which persons who were the stockholders of the Company
immediately prior to such reorganization, merger or consolidation would not immediately thereafter
own more than 50% of, respectively, the capital stock and the combined voting power entitled to
vote generally in the election of directors of the reorganized, merged or consolidated
corporation’s then-outstanding voting securities, or of a liquidation or dissolution of the Company
or of the sale of all or substantially all of the assets of the Company. For purposes hereof, such
Change of Control shall be deemed to have occurred on the date on which the transaction closes.

          “Good Reason” shall mean any of the following conditions arising without the
Executive’s express written consent:

               (i) an assignment to the Executive of material duties or a material reduction of the
Executive’s duties, either of which results in a significant diminution in the Executive’s position
or responsibilities in effect immediately prior to the closing date of the Change of Control
transaction, or the removal of the Executive from such position and responsibilities;

               (ii) a material reduction by the Company (or the successor entity in the Change of Control
transaction) in the base compensation of the Executive as in effect immediately prior to such
reduction; or

               (iii) a relocation of the Executive’s principal place of employment to a facility or a
location more than 40 miles from the Executive’s then present location.

 

 

          “Stock Rights” shall mean all of the Executive’s options, restricted stock, restricted
stock units or rights to acquire vested ownership of shares of Common Stock of the Company under
plans, agreements or arrangements that are compensatory in nature, including, without limitation,
the Company’s 1999 Stock Plan, the Company’s 2005 Equity Incentive Plan and Restricted Stock
Purchase Agreements between the Company and the Executive.

          “Termination Benefits” shall mean (1) all unvested Stock Rights (as defined above)
shall become fully vested as of the effective date of such termination of employment described in
Section 3(a), and (2) the Executive shall continue to receive for a period of six (6) months
following the effective date of such termination of employment described in Section 3(a) continued
payment of the greater of the Executive’s base salary in effect immediately prior to (i) such
termination or (ii) the closing date of the transaction giving rise to a Change of Control. In
addition, the Executive shall have the right to convert his health insurance benefits to individual
coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) and any
analogous provisions of applicable state law. Should the Executive so elect, the Company shall
reimburse the Executive for six (6) months of such health care coverage following the effective
date of such termination of employment described in Section 3(a).

6. Successors.

     (a) Company’s Successors. Any successor to the Company (whether direct or indirect
and whether by purchase, merger, consolidation, liquidation or otherwise) to all or substantially
all of the Company’s business and/or assets shall assume the obligations under this Agreement and
agree expressly to perform the obligations under this Agreement in the same manner and to the same
extent as the Company would be required to perform such obligations in the absence of a succession.
For all purposes under this Agreement, the term “Company” shall include any successor to the
Company’s business and/or assets that executes and delivers the assumption agreement described in
this Section 6(a) or that becomes bound by the terms of this Agreement by operation of law.

     (b) Executive’s Successors. The terms of this Agreement and all rights of the
Executive hereunder shall inure to the benefit of, and be enforceable by, the Executive’s personal
or legal representatives, executors, administrators, successors, heirs, distributees, devisees and
legatees.

7. Notice.

     (a) General. Notices and all other communications contemplated by this Agreement
shall be in writing and shall be deemed to have been duly given when personally delivered or when
mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In
the case of the Executive, mailed notices shall be addressed to the Executive at his home address
most recently communicated to the Company in writing. In the case of the Company, mailed notices
shall be addressed to its corporate headquarters, and all notices shall be directed to the
attention of its Secretary.

     (b) Notice of Termination. Any termination by the Company for Cause or by the
Executive as a result of a voluntary resignation shall be communicated by a notice of termination
to the other party hereto given in accordance with Section 7(a) of this Agreement. Such notice
shall indicate the specific termination provision in this Agreement relied upon, shall set forth in

 

 

reasonable detail the facts and circumstances claimed to provide a basis for termination under the
provision so indicated, and shall specify the termination date (which shall be not more than 30
days after the giving of such notice).

8. Miscellaneous Provisions.

     (a) No Duty to Mitigate. Except as set forth in Section 4, the Executive shall not be
required to mitigate the amount of any payment contemplated by this Agreement, nor shall any such
payment be reduced by any earnings that the Executive may receive from any other source.

     (b) Amendment; Waiver. No provision of this Agreement shall be amended, modified,
waived or discharged unless the amendment, modification, waiver or discharge is agreed to in
writing and signed by the Executive and by an authorized officer of the Company (other than the
Executive). No waiver by either party of any breach of, or of compliance with, any condition or
provision of this Agreement by the other party shall be considered a waiver of any other condition
or provision or of the same condition or provision at another time.

     (c) Whole Agreement. No agreements, representations or understandings (whether oral
or written and whether express or implied) that are not expressly set forth in this Agreement have
been made or entered into by either party with respect to the subject matter hereof. This
Agreement represents the entire understanding of the parties hereto with respect to the subject
matter hereof and supersedes all prior arrangements and understandings regarding same, including:
(i) that certain Change of Control Agreement, dated as of February 16, 2007, which the parties
hereto agree is terminated in all respects effective as of the date hereof; and (ii) the salary
continuation provisions set forth in Section 6 of that certain offer letter with Executive, dated
August 8, 2005, which the parties hereto agree are terminated in all respects effective as of the
date hereof.

     (d) Choice of Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of California as applied to agreements entered
into among California residents to be performed entirely within California, without regard to
conflict of laws rules.

     (e) Severability. The invalidity or unenforceability of any provision or provisions
of this Agreement shall not affect the validity or enforceability of any other provision hereof,
which shall remain in full force and effect.

     (f) Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed an original, but all of which together will constitute one and the same instrument.

 

 

     IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the
Company by its duly authorized officer, as of the day and year set forth below.

	 	 	 	 	 
	COMPANY:	 	XENOPORT, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Ronald W. Barrett
	 

	 	 	 	 
	 

	 	 	 	Ronald W. Barrett, PhD
	 

	 	 	 	Chief Executive Officer
	 
	 	 	 	 
	EXECUTIVE:	 	David R. Savello, PhD
	 
	 	 	 	 
	 

	 	 	 	/s/ David R. Savello
	 

	 	 	 	 
	 

	 	 	 	David R. Savello, PhD
	 

	 	 	 	Senior Vice President of Development

Signature Page to XenoPort, Inc. Change of Control Agreementxexv10w34

 

Exhibit 10.34

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.

LICENSING AGREEMENT

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

BACKGROUND

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

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

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

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

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

ARTICLE 1

DEFINITIONS

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

 

 

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

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

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

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

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

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

 

			
	*	 	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.

2

 

account of the Compound and the costs of quantities of Compound
destroyed in quality control testing (as such costs are calculated above).

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

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

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

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

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

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

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

     1.13 “IND” shall mean any Investigational New Drug Application (including any
amendments thereto) filed with the FDA pursuant to 21 C.F.R. §312 before the commencement of

 

			
	*	 	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.

3

 

clinical trials involving a Product, or any comparable filing with any Regulatory Authority in
any other jurisdiction.

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

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

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

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

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

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

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

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

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

 

			
	*	 	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.

4

 

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

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

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

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

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

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

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

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

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

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

 

			
	*	 	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

 

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

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

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

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

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

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

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

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

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

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

 

			
	*	 	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.

6

 

     1.36 “XenoPort Know-How” shall mean: (a) all scientific, medical, technical,
regulatory and/or other information relating to: (i) the Intermediate, but only to the extent
necessary or reasonably useful to make the Compound; and (ii) the Compound and/or XenoPort
Products; in each case, that were generated or utilized by XenoPort or its Affiliates in developing
or producing the Intermediate and/or the Compound; (b) XenoPort Data; and (c) Compound
Improvements; and with respect to each of paragraphs (a), (b) and (c), that are Controlled by
XenoPort as of the Effective Date and/or during the term of this Agreement, and that are needed by
or otherwise reasonably useful to Xanodyne in order to exercise its rights and perform its
obligations with respect to the Compound and/or XenoPort Products under this Agreement.

     1.37 “XenoPort Patents” shall mean the XenoPort Compound Patents and the XenoPort
Intermediate Patents.

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

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

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

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

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

	 	 	 	 	 	 	 
	Term	 	Section Defined	 	Term	 	Section Defined
	 
	Agreement
	 	Introduction	 	[... * ...]	 	9.2.4
	Commercial Milestones
	 	6.2.2(b)	 	Joint	 	3.2.1
	 
	 	 	 	Commercialization	 	 
	 
	 	 	 	Committee / JCC	 	 
	Commercialization Plan
	 	5.1.2	 	Joint Development	 	3.1.1
	 
	 	 	 	Committee / JDC	 	 
	Committee
	 	3.3.1	 	Joint Patent	 	10.1.1
	Compound Improvements
	 	10.1.2(b)	 	Liabilities	 	16.1
	Compound Improvement
	 	10.2.1	 	Loss of Exclusivity	 	6.2.2(a)(ii)
	Patents
	 	 	 	 	 	 
	Confidential Information
	 	12.1	 	Negotiation Period	 	5.4.2
	Cooperating Party
	 	12.5	 	Option Notice	 	5.4.1
	Co-Promotion Agreement
	 	5.4.2	 	Pharmaco-Vigilance	 	4.7.1
	 
	 	 	 	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.

7

 

	 	 	 	 	 	 	 
	Term	 	Section Defined	 	Term	 	Section Defined
	Co-Promotion Field
	 	5.4	 	Product Infringement	 	10.4.1
	 
	 	 	 	Actions	 	 
	Co-Promotion Partner
	 	5.4.1(b)(ii)	 	Product Materials	 	14.2.6
	Damages
	 	10.4.4(c)	 	Prosecution and	 	10.2.1
	 
	 	 	 	Maintenance	 	 
	Development Plan
	 	4.1.1	 	Requesting Party	 	12.5
	Dispute
	 	17.1	 	Royalty Transition Date	 	6.3.1(a)(ii)
	Effective Date
	 	Introduction	 	Selling Party	 	1.20
	Election Notice
	 	5.4.2	 	[... * ...]	 	3.5
	[... * ...]
	 	3.5	 	[... * ...]	 	10.4.4(a)
	First Xanodyne Product
	 	6.2.2(a)(i)	 	Supply Transition Date	 	9.1
	First XenoPort Product
	 	6.2.2(a)(i)	 	Supply Transition Plan	 	9.1
	Generic Product
	 	6.4.2(c)	 	Third Party Claim	 	16.1
	ICH
	 	4.7.1	 	Third Party Royalties	 	6.4.1
	[... * ...]
	 	6.4.2(a)	 	Wind-down Period	 	14.2.1(b)
	Improvements
	 	10.1.2(d)	 	Withdrawal Notice	 	3.3.2
	Improvement Patents
	 	10.1.2(d)	 	Xanodyne	 	Introduction
	Increased Royalty
	 	6.3.1(a)(ii)	 	Xanodyne Indemnitees	 	16.2
	Commencement Date
	 	 	 	 	 	 
	Indemnitee
	 	16.3	 	Xanodyne Product	 	6.3.1(a)(i)
	 
	 	 	 	Approval Date	 	 
	Indemnitor
	 	16.3	 	Xanodyne Product	 	4.1.1
	 
	 	 	 	Development Plan	 	 
	Infringement
	 	10.3.1	 	XenoPort	 	Introduction
	Infringement Actions
	 	10.4.1	 	XenoPort Indemnitees	 	16.1
	Intermediate Infringement Actions
	 	10.4.1	 	XenoPort Product
Development Plan	 	4.1.1
	JAMS
	 	17.3.1	 	XenoPort Supply Costs	 	9.2.2(b)
	[... * ...]
	 	9.2.4	 	XP21510	 	1.5

ARTICLE 2

GRANT OF LICENSE

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

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

          2.1.2 a non-exclusive license under the XenoPort Compound Patents, the XenoPort Know-How and
Compound Improvement Patents: (a) to develop or have developed the Compound, alone or as
incorporated into a XenoPort Product, outside the Territory; and/or (b) to manufacture or have
manufactured the Compound and/or the XenoPort Products within or outside the Territory solely: (i)
for development of the Compound, alone or as incorporated into a XenoPort Product, in or outside
the Territory; and (ii) for use, import, offer for sale, and sale of the Compound, alone or as

 

			
	*	 	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.

8

 

incorporated into a XenoPort Product, in the Territory; provided however that, in each case, the
grant of such license to develop or have developed the Compound, alone or as incorporated into a
XenoPort Product, outside the Territory shall exclude the right to conduct any clinical trials; and

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

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

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

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

     2.4 No Other Rights. Except for the rights and licenses expressly granted in this
Agreement, XenoPort retains all rights under its intellectual property, and no additional rights
shall

 

			
	*	 	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.

9

 

be deemed granted to Xanodyne by implication, estoppel or otherwise. For clarity, the
licenses and rights granted in this Agreement shall not be construed to convey any licenses or
rights under the XenoPort Patents with respect to any active pharmaceutical ingredient other than
Compound(s).

ARTICLE 3

GOVERNANCE

     3.1 Joint Development Committee.

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

          3.1.2 Duties. The JDC shall:

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

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

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

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

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

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

     3.2 Joint Commercialization Committee.

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

          3.2.2 Duties. The JCC shall:

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

 

			
	*	 	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.

10

 

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

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

     3.3 Committee Membership.

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

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

 

			
	*	 	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.

11

 

     3.4 Committee Meetings. The JDC and, from and after such time as is appropriate, the
JCC, shall meet at least twice each calendar year, or more or less often as otherwise agreed to by
the Parties. All Committee meetings may be conducted by telephone, video-conference or in person
(subject to the requirement below) as reasonably determined by the chairperson of the applicable
Committee; provided, however, that each Committee shall meet in person at least once each calendar
year, unless the Parties mutually agree to meet by alternative means. Unless otherwise agreed by
the Parties, all in-person Committee meetings shall be held on an alternating basis between
XenoPort’s facilities and Xanodyne’s facilities. Each Party shall bear its own personnel and
travel costs and expenses relating to Committee meetings. With the consent of the Parties (not to
be unreasonably withheld or delayed), other employee representatives of the Parties may attend any
Committee meeting as non-voting observers. Minutes of each Committee meeting will be prepared by
the chairperson and distributed to the members of the applicable Committee for review and comment
within twenty (20) days after each meeting of the applicable Committee, and will be approved as the
first order of business at the immediately succeeding meeting of such Committee.

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

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

 

			
	*	 	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.

12

 

ARTICLE 4

DEVELOPMENT

     4.1 Development Plan.

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

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

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

 

			
	*	 	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.

13

 

     4.2 Development Activities in the Territory.

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

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

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

     4.4 Regulatory Matters.

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

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

 

			
	*	 	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.

14

 

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

     4.5 Exchange of Data and Know-How.

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

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

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

 

			
	*	 	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.

15

 

          4.5.4 Other Licensees. XenoPort shall [... * ...] to the extent that [... * ...]. It
is understood that [... * ...] by XenoPort. However, XenoPort agrees that it [... * ...]. For the
purposes of this Section 4.5.4, “data” shall be deemed to refer to data of the type
described in paragraphs (a) and (b) of the definition of “Xanodyne Data” in Section 1.8.2
above, and “know-how” shall be deemed to refer to information of the type described in the
definition of “Xanodyne Know-How” in Section 1.33 above.

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

     4.7 Reporting; Adverse Drug Reactions.

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

          4.7.2 Adverse Event Reporting. As between the Parties: (i) Xanodyne shall be
responsible for the timely reporting of all ADEs, product quality, product complaints and safety
data relating to the Compound and Products to the appropriate Regulatory Authorities in the
Territory; and (ii) XenoPort (or its designee) shall be responsible for reporting all ADEs, product
quality, product complaints and safety data relating to the Compound and XenoPort Products to the
appropriate Regulatory Authorities outside the Territory; all in accordance with the appropriate
laws and regulations of the relevant countries and Regulatory Authorities. Until the execution of
the

 

			
	*	 	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.

16

 

Pharmaco-Vigilance Agreement, each Party shall keep the other Party informed on a regular basis
with listings about any ADEs and/or any pregnancies of which such Party is aware or is informed
regarding the use of the Compound or XenoPort Products. Xanodyne shall ensure that its Affiliates
comply with such reporting obligations in the Territory, and XenoPort shall ensure that either it
or its Affiliates and/or other licensees comply with such reporting obligations outside the
Territory.

ARTICLE 5

COMMERCIALIZATION

     5.1 Commercialization of Products in the Territory.

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

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

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

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

 

			
	*	 	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.

17

 

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

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

          5.4.1 Option Notice.

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

               (b) Primary Care Physicians.

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

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

 

			
	*	 	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.

18

 

Xanodyne to co-market and co-promote such XenoPort Product on such terms, Xanodyne shall not be
obligated to issue to XenoPort any notice under Section 5.4.1(b)(i) with respect to such
XenoPort Product and XenoPort shall not have an option to co-market and co-promote such XenoPort
Product to primary care physicians for so long as the agreement (or any renewal thereof) between
Xanodyne and its Co-Promotion Partner is in effect with respect to such XenoPort Product.

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

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

 

			
	*	 	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.

19

 

          5.4.3 Additional Matters.

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

               (b) Notwithstanding Section 5.4.3(a) above, if prior to the issuance of any Election
Notice with respect to a particular Co-Promotion Field pursuant to Section 5.4.2 above, the
Parties have already executed a Co-Promotion Agreement with respect to any other Co-Promotion
Field, the Parties may mutually agree not to execute an additional Co-Promotion Agreement but
rather to amend such existing Co-Promotion Agreement to include economic and other appropriate
terms with respect to the co-promotion of the XenoPort Products and, if applicable, Xanodyne
Products in the Territory for such additional Co-Promotion Field.

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

ARTICLE 6

PAYMENTS AND ROYALTIES

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

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

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

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

 

			
	*	 	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.

20

 

     6.2 Milestones.

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

	 	 	 	 	 
	Milestone Event	 	Milestone Payment
	 
	 	 	 	 
	1.

	 	[... * ...] by [... * ...] the [... * ...] in the Territory:
	 	$[... * ...]
	 
	 	 	 	 
	2.

	 	[... * ...] with [... * ...]
	 	$[... * ...]
	 
	 	 	 	 
	3.

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

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

	 	[... * ...] in the Territory:
	 	$[... * ...]
	 
	 	 	 	 
	6.

	 	[... * ...] for the [... * ...] in the Territory:
	 	$[... * ...]
	 
	 	 	 	 
	7.

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

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

	 	(b) The [... * ...] in the Territory provided that [... *
....] in the Territory as of such date:
	 	$[... * ...]
	 
	 	 	 	 
	9.

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

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

 

			
	*	 	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.

21

 

	 	 	 	 	 
	Milestone Event	 	Milestone Payment
	 
	 	 	 	 
	11.

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

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

          6.2.2 Certain Terms.

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

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

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

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

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

          6.2.4 Reports and Payments. Except [... * ...], Xanodyne shall notify XenoPort in
writing [... * ...] after the achievement of each milestone set forth in Section 6.2.1 by
Xanodyne or any of its Affiliates, and each such notice shall be accompanied by the appropriate
milestone payment. With respect to [... * ...], XenoPort shall [... * ...] and the corresponding
milestone payment [... * ...] that such milestone has been achieved. Any milestone payable by
Xanodyne pursuant to this Section 6.2 shall be made no more than once with respect to the
achievement of each

 

			
	*	 	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.

22

 

milestone set forth in Section 6.2.1 and in no event shall the
aggregate amount to be paid by Xanodyne under this Section 6.2 exceed One Hundred Thirty
Five Million Dollars ($135,000,000). For the avoidance of doubt, each milestone payment set forth in this Section 6.2 shall
not be refundable and shall not be creditable against future milestone payments, royalties or other
payments to XenoPort under this Agreement.

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

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

               (a) Royalty Rates for Xanodyne Products.

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

	 	 	 
	Annual Net Sales of Xanodyne Products	 	Royalty Rate
	 
	 	 
	Portion of Annual Net Sales of Xanodyne Products up to and
including [... * ...] Dollars [... * ...]

	 	[... * ...]%
	 
	 	 
	Portion of Annual Net Sales of Xanodyne Products in excess of
[... * ...] Dollars [... * ...] up to and including [... *
....] Dollars [... * ...]

	 	[... * ...]%
	 
	 	 
	Portion of Annual Net Sales of Xanodyne Products in excess of
[... * ...] Dollars [... * ...]

	 	[... * ...]%

Example: If Xanodyne has Annual Net Sales of Xanodyne Products in

the Territory equal to [... * ...], the royalty due to XenoPort would be

calculated as follows

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

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

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

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

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

 

			
	*	 	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.

23

 

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

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

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

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

	 	 	 
	Annual Net Sales of XenoPort Products	 	Royalty Rate
	 
	 	 
	Portion of Annual Net Sales of XenoPort Products up
to and including [... * ...] Dollars [... * ...]

	 	[... * ...]%
	 
	 	 
	Portion of Annual Net Sales of XenoPort Products in
excess of [... * ...] Dollars [... * ...] up to and
including [... * ...] Dollars [... * ...]

	 	[... * ...]%
	 
	 	 
	Portion of Annual Net Sales of XenoPort Products in
excess of [... * ...] Dollars [... * ...] up to and
including [... * ...] Dollars [... * ...]

	 	[... * ...]%
	 
	 	 
	Portion of Annual Net Sales of XenoPort Products in
excess of [... * ...] Dollars [... * ...] up to and
including [... * ...] Dollars [... * ...]

	 	[... * ...]%
	 
	 	 
	Portion of Annual Net Sales of XenoPort Products in
excess of [... * ...] Dollars [... * ...]

	 	[... * ...]%

               (c) Royalty Term.

 

			
	*	 	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.

24

 

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

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

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

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

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

	 	 	 
	Annual Net Sales of Products	 	Royalty Rate
	 
	 	 
	Portion of Annual Net Sales of Products up to and
including [... * ...] Dollars [... * ...]

	 	[... * ...]%
	 
	 	 
	Portion of Annual Net Sales of Products in excess
of [... * ...] Dollars [... * ...] up to and
including [... * ...] Dollars [... * ...]

	 	[... * ...]%
	 
	 	 
	Portion of Annual Net Sales of Products in excess
of [... * ...] Dollars [... * ...] up to and
including [... * ...] Dollars [... * ...]

	 	[... * ...]%
	 
	 	 
	Portion of Annual Net Sales of Products in excess
of [... * ...] Dollars [... * ...] up to and
including [... * ...] Dollars [... * ...]

	 	[... * ...]%
	 
	 	 
	Portion of Annual Net Sales of Products in excess
of [... * ...] Dollars [... * ...]

	 	[... * ...]%

Example: If Xanodyne has Annual Net Sale of Products in the

Territory equal to [... * ...], the royalty due to XenoPort would be

calculated as follows:

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

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

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

 

			
	*	 	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.

25

 

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

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

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

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

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

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

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

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

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

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

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

     6.4 Certain Reductions to Royalties.

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

 

			
	*	 	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.

26

 

paid to XenoPort will not be so reduced to less than [... * ...] of the royalties otherwise due pursuant to Section 6.3.1(b) or 6.3.2, as applicable, with
respect to Net Sales of XenoPort Products.

          6.4.2 Generic Competition.

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

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

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

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

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

 

			
	*	 	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.

27

 

ARTICLE 7

PAYMENTS; BOOKS AND RECORDS

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

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

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

     7.4 Records; Inspection.

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

 

			
	*	 	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.

28

 

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

ARTICLE 8

DILIGENCE; CERTAIN COVENANTS

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

ARTICLE 9

MANUFACTURING AND SUPPLY

     9.1 Transfer of Manufacturing and Supply Responsibilities. [... * ...] following the
Effective Date, XenoPort and Xanodyne shall develop and reasonably agree upon a detailed plan
(“Supply Transition Plan”) to transfer responsibility for manufacturing and supply of the

 
 

			
	*	 	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.

29

 

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

     9.2 Activities Prior to the Supply Transition Date.

          9.2.1 Supplies of the Compound. Upon Xanodyne’s written request, XenoPort shall use
commercially reasonable efforts to supply to Xanodyne the Compound for use in connection with the
development activities for the Compound and XenoPort Products under this Agreement prior to the
Supply Transition Date. It is understood that XenoPort shall provide Xanodyne the Compound in the
same form as in use by XenoPort immediately prior to the Effective Date.

          9.2.2 Reimbursement of XenoPort Supply Costs.

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

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

          9.2.3 Forecast. The Development Plan shall include a reasonable forecast, prepared
and provided by Xanodyne in good faith, of the quantities of the Compound that will be required by
Xanodyne and its Affiliates prior to the Supply Transition Date for use in the development of the
Compound and XenoPort Products in accordance with this Agreement. The Development Plan shall

 
 

			
	*	 	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.

30

 

specify mutually agreed delivery dates for delivery of the Compound to Xanodyne. Notwithstanding
the foregoing, XenoPort shall not have any obligation to supply any quantities of the Compound in
excess of the forecasted amounts unless otherwise agreed by XenoPort in writing.

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

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

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

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

ARTICLE 10

INTELLECTUAL PROPERTY

     10.1 Ownership of Inventions.

          10.1.1 General. As between the Parties: (a) XenoPort shall have sole and exclusive
ownership of all right, title and interest in and to all XenoPort Patents and XenoPort Know-How,
subject to the rights and licenses granted to Xanodyne under this Agreement; and (b) Xanodyne shall
have the sole and exclusive ownership of all right, title and interest in and to all Xanodyne
Patents and Xanodyne Know-How, subject to the rights and licenses granted to XenoPort under this
Agreement. Title to all inventions and other intellectual property made: (i) solely by Xanodyne

 

			
	*	 	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.

31

 

personnel in connection with this Agreement shall be owned by Xanodyne; (ii) solely by XenoPort
personnel in connection with this Agreement shall be owned by XenoPort; and (iii) made jointly by
personnel of XenoPort and Xanodyne in connection with this Agreement shall be jointly owned by
Xanodyne and XenoPort (any Patent with respect to such jointly-owned inventions or other
intellectual property, a “Joint Patent”). Except as expressly provided in this Agreement,
it is understood that neither Party shall have any obligation to obtain any approval of, nor pay a
share of the proceeds to, the other Party to practice, enforce, license, assign or otherwise
exploit such jointly-owned inventions or intellectual property and each Party hereby waives any
right it may have under the laws of any jurisdiction to require such approval or accounting.

     10.1.2 Improvements. Notwithstanding Section 10.1.1 above:

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

               (b) Ownership. Title to all Improvements, excluding any Improvement directed to any
Tools, that relate directly to any Compound, XenoPort Product, Intermediate, and/or any other [...
* ...], and/or the formulation, manufacture and/or use of any of the foregoing (collectively,
“Compound Improvements”) shall be owned by XenoPort, and Xanodyne hereby assigns to
XenoPort all of its right, title and interest in and to any Compound Improvements made by, or under
the authority of, Xanodyne, alone or jointly with XenoPort. Xanodyne shall promptly take, or cause
to be taken, any and all actions necessary to confirm and/or perfect XenoPort’s rights in and to
Compound Improvements.

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

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

     10.2 Prosecution and Maintenance of XenoPort Patents and Joint Patents.

          10.2.1 Patents Directed to the Compound, any XenoPort Product and/or Compound
Improvements. XenoPort shall control, at its expense, the Prosecution and Maintenance of: (a)
the XenoPort Patents as of the Effective Date, or which may be filed after the Effective Date; and
(b) any Joint Patents pursuant to Section 10.1 above; and (c) any Patents directed to a
Compound

 

			
	*	 	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.

32

 

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

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

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

     10.3 Enforcement.

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

 
 

			
	*	 	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.

33

 

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

          10.3.3 Recovery.

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

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

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

     10.4 Third Party Infringement Claims.

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

 
 

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

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

          10.4.4 Damages Reimbursement/Offset.

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

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

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

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

 

			
	*	 	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 11

TRADEMARKS

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

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

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

     11.4 Display. Xanodyne shall have the right to determine all packaging materials,
labels and promotional materials for the XenoPort Products in the Territory as it considers
appropriate, provided that such packaging materials, labels and promotional materials shall display
the trade names of both XenoPort and Xanodyne. The trademarks of Xanodyne, trade dress, style of

 

			
	*	 	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

 

packaging and the like with respect to each XenoPort Product in the Territory shall be determined
by Xanodyne in a manner that is consistent with Xanodyne’s standard trade dress and style.

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

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

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

ARTICLE 12

CONFIDENTIALITY

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

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

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

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

 

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

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

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

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

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

 

			
	*	 	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.

38

 

shall be noted in all publications or presentations by
acknowledgment or co-authorship, whichever is appropriate.

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

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

ARTICLE 13

TERM AND TERMINATION

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

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

 
 

			
	*	 	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.

39

 

effective at the end of such [... * ...] period unless the breaching Party
has cured any such breach or default prior to the expiration of the [... * ...] period.

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

ARTICLE 14

EFFECT OF TERMINATION

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

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

          14.2.1 Wind-down Period.

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

               (b) Commercialization. To avoid a disruption in the supply of XenoPort Products to
patients, if this Agreement is terminated after the first commercial sale of any XenoPort Product
in the Territory, Xanodyne and its Affiliates shall continue to market, promote, distribute and
otherwise commercialize (including with the assistance of any Co-Promotion Partner, to the extent
permitted by any agreement with such Co-Promotion Partner) the XenoPort Products in the Territory
for which Marketing Approval by the FDA has been obtained (unless the FDA or a court of competent
jurisdiction in the Territory issues a directive or order that a particular XenoPort Product be
recalled or withdrawn in the Territory, or the Parties mutually agree that a particular XenoPort
Product should be recalled or withdrawn in the Territory) and in accordance with the terms

 

			
	*	 	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 conditions of this Agreement, until [... * ...], but in no event [... * ...] after the effective
date of any such termination of this Agreement (the “Wind-down Period”); provided that
Xanodyne and its Affiliates shall cease such activities, or any portion thereof, upon [... * ...]
notice by XenoPort requesting that such activities (or portion thereof) be ceased. Notwithstanding
any other provision of this Agreement, during the Wind-down Period, Xanodyne’s rights with respect
to the Compound and XenoPort Products in the Territory shall be non-exclusive and, without limiting
the foregoing, XenoPort shall have the right to engage one or more other distributor(s) and/or
licensee(s) of the Compound and/or any XenoPort Product in the Territory. Any Products sold or
disposed by Xanodyne in the Territory during the Wind-down Period shall be subject to the
applicable payment obligations under Article 6 above and all relevant deductions or credits
due to Xanodyne in accordance with this Agreement. Within [... * ...] of expiration of the
Wind-down Period, Xanodyne shall notify XenoPort of any quantity of the Intermediate, Compound
and/or XenoPort Products remaining in Xanodyne’s inventory and XenoPort shall have the option, upon
notice to Xanodyne, to repurchase any such quantities of the Intermediate, Compound and/or XenoPort
Products, as applicable, from Xanodyne at a price equal to [... * ...] calculated in accordance
with GAAP and Xanodyne’s then-prevailing standard procedures for calculating costs of good sold.
For the sake of clarity, such [... * ...].

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

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

 
 

			
	*	 	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.

41

 

all Data pertaining to the manufacture of the Intermediate, Compound and/or
XenoPort Products, as applicable, to the extent not previously provided to XenoPort, during the
term or pursuant to Section 14.2.2, and XenoPort shall have the right to use (and authorize
the use of), and to disclose, all such Data following termination of this Agreement.

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

          14.2.5 Assignment of Product Trademarks. Promptly following the effective date of any
termination of this Agreement pursuant to Section 13.2 or 13.3, Xanodyne shall assign, or
cause to be assigned, to XenoPort or its designee, at XenoPort’s expense, all right, title and
interest in and to the Product Trademarks, together with all registrations or applications for
registration of such trademarks, in the Territory. In each case, unless otherwise required by any
applicable law or regulation or requested by XenoPort, the foregoing assignment shall be made
within [... * ...] after the effective date of any termination of this Agreement. XenoPort hereby
grants to Xanodyne a non-exclusive license to use the Product Trademarks in the Territory for the
packaging, marketing, distributing, sale and promotion of the XenoPort Products solely for the
purposes of permitting Xanodyne to comply with its obligations under this Section 14.2.
Such license shall become effective upon the assignment to XenoPort of the Product Trademarks, and
all registrations and applications for registration of such Product Trademarks, in the Territory
and shall persist until the expiration of the applicable periods described in Section 14.2.1 or
14.2.3 above, as applicable.

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

 

			
	*	 	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.

42

 

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

ARTICLE 15

REPRESENTATIONS AND WARRANTIES

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

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

          15.1.2 Due Execution; Binding Agreement. This Agreement is a legal and valid
obligation binding upon such Party and enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws of general
application affecting the rights and remedies of creditors and by general equity principles. The
execution, delivery and performance of this Agreement by such Party have been duly authorized by
all necessary corporate action and do not and will not: (a) require any consent or approval of its
stockholders; except, with respect to Xanodyne, the consent of its preferred stockholders as
required by the certificate of incorporation of Xanodyne, which consent has been obtained as of the
Effective Date; (b) to such Party’s knowledge, violate any law, rule, regulation, order, writ,
judgment, decree, determination or award of any court, governmental body or administrative or other
agency having jurisdiction over such Party; nor (c) conflict with, or constitute a default under, any
agreement, instrument or understanding, oral or written, to which such Party is a party or by which
it is bound.

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

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

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

 
 

			
	*	 	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.

43

 

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

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

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

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

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

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

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

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

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

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

          15.3.3 there are no actual, pending, alleged, or to its knowledge, threatened actions, suits,
claims, interference or governmental investigations or intellectual property right litigation or,

 
 

			
	*	 	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

 

to its best knowledge, threatened product liability action involving any Xanodyne Product, or the
Xanodyne Patents, by or against Xanodyne or any of its Affiliates;

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

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

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

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

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

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

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

ARTICLE 16

INDEMNIFICATION

     16.1 Indemnification of XenoPort. Xanodyne shall indemnify and hold harmless each of
XenoPort and its Affiliates and their respective directors, officers and employees and the
respective

 
 

			
	*	 	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.

45

 

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

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

     16.3 Procedure. A Party that intends to claim indemnification under this Article
16 (the “Indemnitee”) shall promptly notify the other Party (the “Indemnitor”)
in writing of any Third Party Claim, in respect of which the Indemnitee intends to claim such
indemnification, and the Indemnitor shall have sole control of the defense and/or settlement
thereof. The indemnity arrangement in this Article 16 shall not apply to amounts paid in
settlement of any action with respect to a Third Party Claim if such settlement is effected without
the consent of the Indemnitor, which consent shall not be withheld or delayed unreasonably. The
failure to deliver written notice to the Indemnitor within a reasonable time after the commencement
of any action with respect to a Third Party Claim, if prejudicial to its ability to defend such
action, shall relieve such Indemnitor of any liability to the Indemnitee under this Article
16, but the omission to so deliver written notice to the Indemnitor shall
not relieve the Indemnitor of any liability that it may have to any Indemnitee otherwise than
under this Article 16. The Indemnitee under this Article 16 shall, at its expense,
cooperate fully with the Indemnitor and its legal representatives in the investigation of any
action with respect to a Third Party Claim covered by this indemnification. For clarity, it is
understood that (a) Xanodyne shall not be obligated to indemnify XenoPort [... * ...]; except, in
each case, to the extent Xanodyne is obligated to indemnify XenoPort for any such amount in
accordance with paragraph (b) of Section 16.1 above; and (b) XenoPort shall not be
obligated to indemnify Xanodyne [... * ...]; except to the extent XenoPort is obligated to
indemnify Xanodyne for any such amount in accordance with paragraph (b) of Section 16.2
above.

     16.4 Insurance. Each Party shall secure and maintain, during the term of this
Agreement and for a period of [... * ...] thereafter, comprehensive general liability insurance,
including products liability insurance and coverage for clinical trials, underwritten by a
reputable and

 
 

			
	*	 	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

 

financially secure insurance carrier, in a form and having liability limits
consistent with standards in the pharmaceutical industry based upon such Party’s activities and
indemnification obligations under this Agreement, as applicable. Each Party shall furnish to the
other Party, on request, certificates of insurance setting forth the amount of liability insurance
and a provision that the other Party shall receive [... * ...] written notice prior to termination
or material reduction to the level of coverage.

ARTICLE 17

DISPUTE RESOLUTION

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

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

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

          17.3.1 Conduct of Arbitration. Any arbitration pursuant to this Section 17.3
shall be conducted in English, by the Judicial Arbitration and Mediation Services, Inc.
(“JAMS”) in New York City, New York, or such other location as the Parties agree, in
accordance with the JAMS Streamlined Arbitration Rules and Procedures, as modified by this
Section 17.3, by a single arbitrator appointed in accordance with such Rules, or if the
Rules do not provide for such appointment, by the chief executive officer of JAMS. If the
arbitrator determines it appropriate, the arbitrator shall select an expert who [... * ...] or an individual as nearly meeting such
qualifications as is practicable as determined by the arbitrator, to advise on the proposed
resolution of the dispute. Each Party shall [... * ...]. If so requested by the arbitrator, [...
* ...] pursuant to this Section 17.3.1; provided that [... * ...].

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

          17.3.3 Costs. The costs of any arbitration under this Section 17.3 shall be
shared equally by the Parties, and each Party shall bear its own costs and expenses in connection
with such arbitration; provided that the arbitrator may require the non-prevailing Party to bear
one hundred percent (100%) of such costs, and/or the direct expenses of the prevailing Party to the
extent the

 
 

			
	*	 	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

 

arbitrator determines that the non-prevailing Party pursued the Dispute in bad faith.
The decision of the arbitrator shall be binding on the Parties, and any judgment upon such decision
of the arbitrator may be entered and enforced in any court of competent jurisdiction.

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

ARTICLE 18

MISCELLANEOUS

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

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

     18.3 Waiver of Breach. Except as otherwise expressly provided in this Agreement, any
term of this Agreement may be waived only by a written instrument executed by a duly authorized
representative of the Party waiving compliance. The delay or failure of either Party at any time
to require performance of any provision of this Agreement shall in no manner affect such Party’s
rights at a later time to enforce the same. No waiver by either Party of any condition or term in
any one or more instances shall be construed as a further or continuing waiver of such condition or term
or of another condition or term.

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

     18.5 Severability. If any provision of this Agreement, or the application of such
provision to any Party or circumstance, shall be held invalid, illegal or unenforceable, the
Parties shall negotiate in good faith a valid, legal and enforceable substitute provision that most
nearly reflects the original intent of the Parties and the remainder of this Agreement shall
continue in full force and

 
 

			
	*	 	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.

48

 

effect. In the event a Party seeks to avoid a provision of this
Agreement by asserting that such provision is invalid, illegal or otherwise unenforceable, the
other Party shall have the right to terminate this Agreement upon [... * ...] prior written notice
to the asserting Party, unless such assertion is eliminated and the effect of such assertion is
cured within such [... * ...] period. Any termination in accordance with the foregoing sentence
shall be deemed an election by Xanodyne to terminate pursuant to Section 13.3 if XenoPort
exercises its right to terminate under this Section 18.5, and a termination for the breach
of XenoPort pursuant to Section 13.2 if Xanodyne exercises its right to terminate under
this Section 18.5.

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

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

	 	 	 
	To XenoPort:

	 	To Xanodyne:
	XenoPort, Inc.

	 	Xanodyne Pharmaceuticals, Inc.
	3410 Central Expressway

	 	One Riverfront Place,
	Santa Clara, California 95051,

	 	Newport, Kentucky 41071,
	Attention: Secretary

	 	Attention: General Counsel
	Phone: (408) 616-7200

	 	Telephone: (859) 371-6383
	Facsimile: (408) 616-7211

	 	Facsimile: (859) 371-6391
	 
	 	 
	With a copy to:

	 	With a copy to:
	Wilson Sonsini Goodrich & Rosati

	 	Dinsmore & Shohl LLP
	650 Page Mill Road

	 	255 East Fifth Street, Suite 1900
	Palo Alto, California 94304-1050

	 	Cincinnati, Ohio 45202-4700
	Attention: Kenneth A. Clark, Esq.

	 	Attention: Paul R. Mattingly, Esq.
	Telephone: (650) 493-9300

	 	Telephone: (513) 977-8200
	Facsimile: (650) 493-6811

	 	Facsimile: (513) 977-8141

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

 

			
	*	 	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.

49

 

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

     18.9 Independent Contractors. Nothing contained in this Agreement is intended, or
shall be deemed or construed, to establish a joint venture or partnership between XenoPort or
Xanodyne. No Party to this Agreement shall have any express or implied right or authority to assume
or create any obligations on behalf of, or in the name of, the other Party, or to bind the other
Party to any contract, agreement or undertaking with any Third Party.

     18.10 Interpretation. The captions to the several Articles and Sections of this
Agreement are not a part of this Agreement, but are included for convenience of reference and shall
not affect its meaning or interpretation. In this Agreement: (a) the word “including” shall be
deemed to be followed by the phrase “without limitation” or like expression; (b) the singular shall
include the plural and vice versa; and (c) masculine, feminine and neuter pronouns and expressions
shall be interchangeable. Each accounting term used herein that is not specifically defined herein
shall have the meaning given to it under GAAP, or other generally accepted cost accounting
principles in the United States, but only to the extent consistent with its usage and the other
definitions in this Agreement.

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

[Remainder of page intentionally left blank; signature page follows]

 

			
	*	 	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.

50

 

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

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	XENOPORT, INC.	 	 	 	XANODYNE PHARMACEUTICALS, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ Ronald W. Barrett	 	 	 	By:	 	/s/ Gregory D. Flexter	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	Ronald W. Barrett
	 	 	 	 	 	Name:
	 	Gregory D. Flexter	 	 
	 

	 	Title:
	 	Chief Executive Officer
	 	 	 	 	 	Title:
	 	President and Chief Executive Officer	 	 

 
 

			
	*	 	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 1.5

Compound

[... * ...]

 

			
	*	 	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 1.15

Intermediate

[... * ...]

 

			
	*	 	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 1.34

Xanodyne 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 1.35

Xanodyne Product

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

 

			
	*	 	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 1.37.1

XenoPort Compound 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 1.37.2

XenoPort Intermediate 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 4.1

Development Plan

(See attached.)

 

			
	*	 	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.

 

 

[... * ...]

 

			
	*	 	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 12.3

Press Release

(See attached.)

 

			
	*	 	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.

 

 

			
	
	 	

	 	 	 
	NEWS RELEASE

	 	Company Contacts:
	For Immediate Distribution

	 	XenoPort: Jackie Cossmon

408-616-7220

ir@XenoPort.com
	 
	 	 
	 

	 	Xanodyne: Tom Jennings

859-371-6383

pr@xanodyne.com

XenoPort and Xanodyne Announce Exclusive U.S. Licensing

Agreement for XP21510

Novel Product Candidate Represents Potential Treatment for Women with Menorrhagia

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

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

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

— more —

 

			
	*	 	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.

 

 

	 	 	 
	XenoPort and Xanodyne Announce Exclusive U.S. Licensing
Agreement for XP21510

	 	Page 2

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

About XP21510

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

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

About XP12B

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

About Menorrhagia

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

— more —

 

			
	*	 	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.

 

 

	 	 	 
	XenoPort and Xanodyne Announce Exclusive U.S. Licensing
Agreement for XP21510

	 	Page 3

About XenoPort

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

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

About Xanodyne

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

Forward-Looking Statements

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

— more —

 

			
	*	 	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.

 

 

	 	 	 
	XenoPort and Xanodyne Announce Exclusive U.S. Licensing
Agreement for XP21510

	 	Page 4

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

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

XNPT2G

#####

 

			
	*	 	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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