ELAN PHARMAINTERNATIONAL LIMITED AND ZOGENIX, INC.

Exhibit 10.12

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

ELAN PHARMA INTERNATIONAL LIMITED

AND

ZOGENIX, INC.

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INDEX

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THIS AGREEMENT is dated November      , 2007

PARTIES:

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

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

BACKGROUND:

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

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

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

TERMS:

The Parties agree as follows:

1.              DEFINITIONS AND INTERPRETATION

1.1.          Definitions.  In this Agreement:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

and “Prosecution” has a corresponding meaning.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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1.3.          Interpretation.  In this Agreement:

2.              THE LICENSE

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

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

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3.              INTELLECTUAL PROPERTY

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

3.2.          Patent Prosecution and Maintenance.

3.3.          Enforcement.

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4.              NON-COMPETITION

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

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

5.              PRODUCT DEVELOPMENT

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

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

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

6.              REGULATORY MATTERS

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

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

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

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

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

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

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

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

6.7.1        Zogenix further agrees that:

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

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7.              REGISTRATION, MARKETING AND THE PROMOTION OF THE PRODUCT

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

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

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

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

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

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

7.7.                              Reports and Meetings.

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

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

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

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

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

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

8.                                      MANUFACTURE AND SUPPLY

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

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

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9.                                      MANUFACTURING LICENSE

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

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

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

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

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

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

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

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

10.                               FINANCIAL PROVISIONS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

11.                                PAYMENTS, REPORTS AND AUDITS

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

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

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

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

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

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

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

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

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

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

11.5.3        payment of royalties [***].

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

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

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

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

12.                               DURATION AND TERMINATION

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

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

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

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

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

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

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

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

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

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

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

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

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

12.4.2        Zogenix fails to [***]; or

12.4.3        Zogenix fails to [***]; or

12.4.4        Zogenix fails to [***]; or

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

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

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

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

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

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

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

12.6.                        Dispute Resolution.

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

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

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Party of its decision to institute arbitration proceedings under Clause 12.6.1. Such arbitration shall be initiated within thirty (30) calendar days of either Party providing written notice to the other Party of its intent to institute arbitration proceedings, unless mutually agreed by the Parties to extend such time.

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

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

13.                               CONSEQUENCES OF EXPIRATION OR TERMINATION

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

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

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

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

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

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

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

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

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

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

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

13.2.4.6           Elan shall either:

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

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

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

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

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

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

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

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

14.                               WARRANTIES, INDEMNIFICATION AND LIABILITY

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

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

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

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

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

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

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

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

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

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SCHEDULE 1          TECHNOLOGICAL COMPETITORS

[***]

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SCHEDULE 3          MANUFACTURING COST

“Manufacturing Cost” is [***].

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

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

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[Signature Page to License Agreement]