THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

XenoPort, Inc. (XNPT)

3/31/2006 Proxy Information

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Investors Rights Agreement

We have entered into an investors rights agreement with the prior holders of our preferred stock and certain warrants, including entities with which certain of our directors are affiliated. Pursuant to the agreement, these stockholders are entitled to rights with respect to the registration of their shares under the Securities Act, subject to certain limitations and restrictions. Also, if at any time we propose to register any of our securities under the Securities Act, either for our own account or for the account of other securities holders, the holders of these shares will be entitled to notice of the registration and, subject to certain exceptions, may be entitled to include, at our expense, their shares of XenoPort common stock in the registration. In addition, the holders of these shares may require us, at our expense and on not more than two occasions, to file a registration statement covering their shares of XenoPort common stock, and we will be required to use our commercially reasonable efforts to have the registration statement declared effective.

Indemnification Agreements

We have entered into an indemnification agreement with each of our directors and officers. The indemnification agreements and our certificate of incorporation and bylaws require us to indemnify our directors and officers to the fullest extent permitted by Delaware law.

Indebtedness of Management

On March 15, 2000, we loaned an aggregate amount of $87,529 to Drs. Ronald W. Barrett, our chief executive officer, William J. Dower, our vice president of discovery biology, and Mark A. Gallop, our senior vice president of research, under non-recourse promissory notes, which were secured by an aggregate of 145,881 shares of our common stock owned by Drs. Barrett, Dower and Gallop. These loans bore interest at an annual rate of 6.71%. These loans were made in connection with exercises of stock purchase rights. In February 2005, Drs. Barrett, Dower and Gallop repaid these loans in their entirety, and the stock previously pledged as collateral was released from the pledge agreement.

On December 20, 2001, we loaned $150,000 to Dr. Kenneth C. Cundy, our senior vice president of preclinical development, under a full-recourse promissory note, which was secured by a deed of trust. This loan bears interest at an annual rate of 4.13%. So long as Dr. Cundy remains employed with us, on each anniversary of the date of this note we will automatically forgive all interest then accrued pursuant to the terms of the note. The loan was made in connection with the purchase of a primary residence. As of December 31, 2005, the outstanding principal and accrued interest totaled $150,186.

On January 11, 2002, we loaned $125,000 to William G. Harris, our senior vice president of finance and chief financial officer, under a non-recourse promissory note, which was secured by an aggregate of 83,333 shares of our common stock owned by Mr. Harris. This loan bears interest at an annual rate of 4.49%. The loan was made in connection with the exercise of stock purchase rights. As of December 31, 2005, the outstanding principal and accrued interest totaled $147,281.

On April 12, 2002, we loaned $25,000 to Dr. Gallop under a non-recourse promissory note, which was secured by an aggregate of 16,666 shares of our common stock owned by Dr. Gallop. This loan bears interest at an annual rate of 4.65%. The loan was made in connection with the exercise of stock purchase rights. As of December 31, 2005, the outstanding principal and accrued interest totaled $29,325.

On May 17, 2002, we loaned $100,000 to Mr. Harris under a full-recourse promissory note, which was secured by a deed of trust. This loan bears interest at an annual rate of 4.99%. So long as Mr. Harris remains employed with us, on each anniversary of the date of this note we will automatically forgive all interest then accrued pursuant to the terms of the note. The loan was made in connection with the purchase of a primary residence. As of December 31, 2005, the outstanding principal and accrued interest totaled $103,130.

On August 26, 2004, we loaned $150,000 to Dr. Pierre V. TrČn, our senior vice president and chief medical officer, under a full-recourse promissory note, which was secured by a deed of trust. This loan bore interest at an annual rate of 4.0%. The loan was made in connection with the purchase of a primary residence. On January 18, 2005, we forgave $152,088 under the loan, which equaled all outstanding principal and accrued interest under the loan as of that date.

On September 20, 2004, we loaned $315,000 to William J. Rieflin, our president, under a non-recourse promissory note, which was secured by an aggregate of 116,666 shares of our common stock owned by Mr. Rieflin. This loan bore interest at an annual rate of 2.34%. The loan was made in connection with the purchase of shares of our common stock. On January 18, 2005, Mr. Rieflin repaid the note in its entirety, and the stock previously pledged as collateral was released from the pledge agreement.