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. BATTELLE/ZOGENIX CO-MARKETING AND DEVELOPMENT SERVICES AGREEMENT

This Co-Marketing and Development Services Agreement (“Agreement”) is made and entered into as of the 26th day of November, 2013 and is by and between Battelle Memorial Institute (“Battelle”) and Zogenix, Inc. (“Zogenix”). Battelle and Zogenix are individually referred to as a “Party” and collectively referred to as the “Parties”.

WHEREAS, Battelle is based in Columbus, OH and is the world’s largest private research and development corporation; and

WHEREAS, Battelle delivers a comprehensive set of R&D services to solve the most complex challenges in human health through significant advances in medical devices, pharmaceuticals, public health, and next-generation diagnostics and therapeutics; and

WHEREAS, Zogenix is a pharmaceutical company developing and commercializing products for the treatment of central nervous system disorders and pain; and

WHEREAS, Zogenix has developed a pre-filled, single-use disposable, needle-free drug delivery system called DosePro®; and

WHEREAS, Zogenix has developed a [***] collectively referred to as “DosePro”); and

WHEREAS, the Parties desire to supersede the Battelle/Zogenix Co-Marketing and Option Agreement between the Parties dated March 22, 2012 (as amended on March 21, 2013) (the “Prior Agreement”) to provide for, among other things, Battelle having the role as primary DosePro development services provider, on the terms and subject to the conditions set forth in this Agreement.

NOW THEREFORE, in consideration of the mutual promises and covenants set forth below, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

c. “Battelle Clients” means those organizations listed on Exhibit A, as may be amended from time to time hereunder.

d.     “Battelle DosePro Transaction” or “Transaction” means a transaction (or proposed transaction, as the case may be) with a Battelle Client relating to use of DosePro Technology in the development and/or commercialization of a DosePro product in the Battelle Field by the Battelle Client pursuant to which Battelle may provide Battelle DosePro Development Services. For clarity, a Battelle DosePro Transaction may include either a [***] product or a [***] product.

e. “Battelle Field” means [***]; provided that the Battelle Field shall not include any such pharmaceutical drugs within the Zogenix Field.

f. “Battelle Invention” means an invention [***].

g. “Battelle Technology” means (i) any and all Know-How controlled by Battelle during the Term other than Know-How within the DosePro Technology; and (ii) those Patents controlled by Battelle during the Term other than Patents within the DosePro Technology.

h.    “Battelle DosePro Development Services” means those research and development services performed by Battelle pursuant to a Transaction Document relating to pharmaceutical research and development activities for DosePro undertaken by Battelle at the request of Zogenix and/or the Battelle Client in order to design or modify DosePro to meet the desired clinical or commercial product profile desired by a Battelle Client. Attached hereto as Exhibit C is an illustrative description of Battelle DosePro Development Services anticipated to be undertaken by Battelle with respect to a [***] Battelle Development Work Plan; the parties will mutually agree on any Battelle DosePro Development Services to be undertaken with respect to any [***] Battelle Development Work Plan. For clarity, the Battelle DosePro Development Services to be provided pursuant to each Transaction Document must be mutually agreed by Battelle and Zogenix.

i.    “Designated Executives” has the meaning set forth in Section 8(d).

j. “Battelle Development Work Plan” has the meaning set forth in Section 3(b).

k. “DosePro Invention” means an invention [***].

l. “DosePro Technology” means: (i) any and all Know-How controlled by Zogenix or any of its Affiliates during the Term relating in whole or in part to DosePro; and (ii) those Patents controlled by Zogenix or any of its Affiliates during the Term with claims covering DosePro, including as set forth in Exhibit D, as such list shall be updated from time to time by Zogenix.

m. “License Related Revenue” means [***]. For clarity, [***] will not be considered “License Related Revenue” until [***].

n. "Know-How" means all technical information and other technical subject matter, proprietary methods, ideas, concepts, formulations, discoveries, inventions, devices, technology, trade secrets, compositions, designs, formulae, know-how, show-how, specifications, drawings, techniques, results, processes, methods, procedures and/or designs, whether or not patentable.

o. “Patent(s)” means issued patents and patent applications, including any and all provisionals, continuations, divisionals, continuation-in-part applications, foreign counterparts, substitutions, reissues, renewals, re-examinations, supplementary protection certificates, patent term extensions, adjustments or restoration rights, registrations, confirmations, successor protective rights or subsequently issued protective rights of similar nature of any of the above.

p. “Revenue” means, in connection with any given Transaction, [***], less only: (i) [***]; and (ii) [***]; and (iii) [***].

For avoidance of doubt, “Revenue” shall not include:

q. “Term” has the meaning set forth in Section 10(a).

r. “Third Party Payments” has the meaning set forth in Section 1(p).

s. “Transaction Document” means a binding written agreement between a Battelle Client and Zogenix for a Battelle DosePro Transaction entered into during the Term, including but not limited to a written binding term sheet, written license agreement,

written binding memorandum of understanding or written binding option agreement.

t. “Work Related Costs” means amounts incurred or paid by Zogenix and/or actually received by Zogenix, in each case which are allocable to incurring, paying, recovering or reimbursing of product development, preclinical or clinical development (including, without limitation, Battelle DosePro Development Services), manufacturing, capital equipment, product supply or other pass-through costs, in each case directly related to DosePro product development for the Battelle Client incurred, or scheduled to be incurred, after the Effective Date by or on behalf of Zogenix.

u. “Zogenix Clients” means those organizations listed on Exhibit B, as may be amended from time to time hereunder.

v. “Zogenix Field” means all human pharmaceutical drugs which include [***] from within the following list, subject to Section 2(b):

   

 

Development Services for the applicable Battelle Client (each, a “Battelle Development Work Plan”). Zogenix shall include the activities, budget and timeline set forth in the applicable Battelle Development Work Plan in any work plan related to each Transaction (the “Battelle Client Work Plan”). Battelle shall have the right to approve each Battelle Client Work Plan in writing before it is presented to the Battelle Client. Battelle shall use its commercially reasonable efforts to perform the activities contemplated under each Battelle Development Work Plan in accordance with such Battelle Development Work Plan (including the associated budget and timelines).

 

 

For clarity, a Transaction Document will contain other financial and customary terms related to the rights of the Battelle Client to use the DosePro Technology in connection with the product of the Battelle Client.

 

any given time period on [***]. Inspections conducted under this Section 3(j) shall be at the expense of the auditing Party, unless a variation or error producing an increase exceeding [***] of the amount stated for the amounts owed for any period covered by the inspection is established in the course of any such inspection, whereupon all costs relating to the inspection for such period and any unpaid amounts that are discovered will be paid promptly by the audited Party. If a variance or error producing an increase of [***] or less of the amount stated for the amounts owed for any period covered by the audit is established, the audited Party shall promptly pay to the auditing Party the unpaid amount.

In the event that a Battelle Client or a Zogenix Client desires to technically assess the DosePro Technology during the Term, the Parties will jointly develop and offer a DosePro Technology technical assessment proposal and execute upon acceptance by the Battelle Client or Zogenix Client, as applicable, upon terms and conditions to be agreed, including whether or not the [***] of the Parties in connection with such assessments would [***]. In addition, Zogenix shall transfer to Battelle all DosePro Technology that is required to perform DosePro Technology technical assessments for Battelle Clients at Battelle or at a Battelle Client site, with the near term objective of establishing a self-sufficient capability and expertise within Battelle and a longer term objective of establishing a center of excellence for DosePro Technology product development at Battelle (“DosePro Center of Excellence”). The cost of establishing the DosePro Center of Excellence shall be borne by [***].

   

For clarity, any exchange of information at JDSC meetings shall be subject to any confidentiality obligations imposed by third party agreements, including, without limitation, any Transaction Document.

the JDSC shall be made by unanimous vote or written consent, with each Party having one vote in all decisions. The JDSC shall use good faith and reasonable efforts to resolve the matters within its roles and functions or otherwise referred to it, however, if the JDSC cannot reach consensus within [***] after it has met and attempted to reach such consensus, the matter shall be referred on the [***] to the designated executive officers ("Designated Executives") who shall meet to resolve the dispute as set forth in Section 15.

herein, or to the extent that the survival of such rights or obligations are necessary to permit their complete fulfillment or discharge. In the event of expiration or termination of this Agreement for any reason, the following provisions shall survive in addition to others specified in this Agreement to survive in such event: Sections 3(b) through (e) (with respect to any Battelle Development Work Plans then in effect), 3(g) through (j) (to the extent required to make payments of Battelle Fees or amounts due for Battelle Development Services), 10(f), 10(g) and Articles 1 (to the extent necessary to interpret other surviving sections), 9, 11, 12 (with respect to any Battelle DosePro Development Services performed after expiration or termination of this Agreement), 13, 15 (with respect to any dispute resolution process begun before the termination of this Agreement), and 16 through 21. All provisions not surviving in accordance with the foregoing shall terminate upon expiration or termination of this Agreement and be of no further force and effect.

  

of activities under this Agreement or any Transaction Document, any information furnished to it by the other Party, its Affiliates or its designees pursuant to the Prior Agreement, this Agreement or a Transaction Document, except to the extent that it can be established by the receiving Party by competent proof that such information: (i) was already known to the receiving Party, other than under an obligation of confidentiality, at the time of disclosure by the disclosing Party; (ii) was generally available to the public or otherwise part of the public domain at the time of its disclosure to the receiving Party; (iii) became generally available to the public or was 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; (iv) was disclosed to the receiving Party, other than under an obligation of confidentiality, by a Third Party who had, to the receiving Party's knowledge, no legal obligation not to disclose such information to others; or (v) was independently generated by the receiving Party without reference to Confidential Information of the disclosing Party (all such information to which none of the foregoing exceptions applies, and the terms of this Agreement, shall be deemed "Confidential Information"). Any and all information, data and materials, including any and all intellectual property rights therein and thereto, owned by a Party shall constitute Confidential Information of such Party which shall be deemed the disclosing Party with respect to such Confidential Information for the purposes of this Section 11. Notwithstanding the foregoing, the obligations of confidentiality under this Section 11(c) regarding any Confidential Information relating to or containing a Party's trade secret that has been suitably identified to the other Party as such shall continue beyond the period set forth in this Section 11(c) (i.e., the Term plus [***]) so long as the subject matter remains a trade secret.

obtained by such Party from the disclosing Party, its Affiliates or its licensees, pursuant to this Agreement or otherwise, solely in connection with the activities or transactions contemplated by this Agreement or any Transaction Document.

other Party and at any time following any such notice each Party shall be free to pursue any legal, equitable or other remedies available to it regarding the matter in dispute.

writing and personally delivered, facsimile transmission (receipt verified) or overnight express courier service (signature required), prepaid, to the Party for which such notice is intended, at the address set forth for such Party below:

Battelle Memorial Institute

Attention:

Fax:        

If to Zogenix:

Zogenix, Inc.

12400 High Bluff Drive, Suite 650

San Diego, California 92130

Attention: Chief Financial Officer

Fax:        

With a copy to (which shall not constitute notice to Zogenix):

Latham & Watkins LLP

12636 High Bluff Drive, Suite 400

San Diego, California 92130

Attention: Faye H. Russell

Facsimile: (858) 523-5450

or any other addresses of which a Party shall notify the other Party in writing; provided that notices of a change of address shall be effective only upon receipt thereof. If delivered personally or by facsimile transmission, the date of delivery shall be deemed to be the date on which such notice or request was given. If sent by overnight express courier service, the date of delivery shall be deemed to be the next business day after such notice or request was deposited with such service.

limitation, the sending or taking of any technical data out of the United States in any manner; disclosing or transferring technical data to a foreign person whether in the United States or abroad; or performing services for a foreign client, whether in the United States or abroad.

[***]

[***]

Zogenix will be the design authority for the DosePro Technology, Battelle will lead the effort to design and implement DosePro Technology specifically into the [***].  Battelle’s focus will be those items necessary to deliver the device technology through the CPV study as described in the [***] DosePro Development Plan jointly developed by Battelle and Zogenix.  While commercial activities are not explicitly described, it is the goal of both Battelle and Zogenix to leverage the development of the CPV product to support the DosePro commercial development for a to be determined (tbd) client(s).  When programs transition from CPV to commercial development, Battelle will maintain its role as the preferred provider of design and development services for [***]. 

Battelle DosePro Development Services may include:

In most Battelle Client Development Work Plans, Zogenix will take the lead on other related activities such as the Investigational Clinical Trial, the Clinical Performance Verification (CPV) Trial, the capsule filling process, and regulatory activities.  Commercial manufacturing and related development activities will likely be led by tbd client(s).  While Battelle and Zogenix each will lead particular tasks, both companies may jointly participate in various tasks as necessary to insure program success.   

[***]