[*] = Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
Exhibit 10.44
LUBIPROSTONE EXCLUSIVE MANUFACTURING AND SUPPLY AGREEMENT
     THIS LUBIPROSTONE EXCLUSIVE MANUFACTURING AND SUPPLY AGREEMENT
(“Agreement”) is made this 23th day of February, 2009 (the “Effective Date”), by
and among Sucampo Pharma, Ltd., a corporation organized and existing under the
laws of Japan and a wholly-owned subsidiary of Sucampo Pharmaceuticals, Inc., a
corporation organized and existing under the laws of the state of Delaware,
U.S.A., and having its principal office at Sakurabashi Toyo Building, Fourth
Floor, 2-2-16 Sonezakishinchi, Kita-ku, Osaka 530-0002 (“SPL”), R-Tech Ueno,
Ltd., a corporation organized and existing under the laws of Japan and having
its registered office at 1-1-7 Uchisaiwaicho, Chiyoda-ku, Tokyo 100-0011 (“RTU”)
(each referred to herein as a “Party” and collectively as the “Parties”).
          WHEREAS, RTU has expertise in the manufacture of drug substances and
drugs for preclinical, clinical and commercial use;
     WHEREAS, SPL is a Japan-based pharmaceutical company that seeks a supply
source for Drug Substance and Drug Product (defined below) for SPL clinical
evaluation and commercial sale in the SPL Territory (defined below);
     WHEREAS, SPL may, from time-to-time, and in accordance with this Agreement,
enter into Third Party (as defined below) agreements with Persons (as defined
below) for joint clinical evaluation and joint commercial sale of Drug Substance
and Drug Product in the SPL Territory;
     WHEREAS, RTU has in the past supplied to SPL LUBIPROSTONE (also known as
RU-0211, SPI-0211, and AMITIZA®) for preclinical and clinical development, and
as such RTU has developed a substantial level of expertise in the manufacture of
Drug Substance and Drug Product;
     WHEREAS, RTU desires to be the exclusive clinical and commercial supplier
of Drug Substance and Drug Product; and
     WHEREAS, SPL seeks to have RTU supply Drug Substance and Drug Product as
further defined herein for use in SPL clinical development and for future
commercial sale in the SPL Territory and desires to have RTU be SPL’s exclusive
supplier of Drug Substance and Drug Product.
     NOW, THEREFORE, in consideration of the mutual promises herein, the Parties
agree as follows:
ARTICLE 1. DEFINITIONS
     Article 1.1. “Additional Materials” means all raw materials, resins,
chemical intermediates, components, excipients, and other ingredients and
packaging materials and supplies, needed to manufacture the Drug Substance and
Drug Product for use in SPL Territory, including costs for relevant in-bound
freight.

 

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[*] = 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.
     Article 1.2 “Applicable Law” mean all federal, state, local, national and
supra-national laws, statutes, rules and regulations, including any rules,
regulations, or requirements of Regulatory Authorities, major national
securities exchanges or major securities listing organizations, that may be in
effect from time to time during the Term and applicable to a particular activity
hereunder.
     Article 1.3 “Certificate of Analysis” means a certificate provided by RTU
to SPL with each shipment of the Drug Substance and the Drug Product, which sets
forth: (a) the results of any quality assurance testing; and (b) the
manufacturing date.
     Article 1.4. “Confidential Information” means all information, whether in
tangible form or not, provided by either party hereunder to the other, including
but not limited to: financial information, including but not limited to current
and projected financials and funding needs; information on research and
development compounds, products, and processes; trade secrets; technical
know-how; formulas; studies; regulatory submissions and records; research data
and information; sales and marketing information (including, without limitation,
customer lists); inventions; patent information and all other information
pertaining to a party’s intellectual property; in any form (including but not
limited to information provided orally, electronically, or in writing). It shall
further include the existence and nature and terms of this Agreement, and any
and all attachments or exhibits thereto.
     Article 1.5. “Drug Substance” means the LUBIPROSTONE active ingredient,
prior to formulation as a final drug product.
     Article 1.6. “Drug Product” means a finally formulated LUBIPROSTONE drug
product PRIOR to packaging for clinical use or commercial sale, as appropriate.
     Article 1.7 “Good Manufacturing Practices” or “GMP” means quality systems
and current good manufacturing practices applicable to the manufacture,
labeling, packaging, handling, storage, and transport of active pharmaceutical
ingredients, bulk dosage forms and packaged dosage forms, as set forth in the
Pharmaceutical Affairs Law and its related Ordinances including the MHLW
Ordinance No. 179, December 24, 2004, any update thereto and any other laws,
regulations, policies, or guidelines applicable to the manufacture, labeling,
packaging, handling, storage, and transport of pharmaceutical products in the
Territory, and/or any applicable foreign equivalents thereof, and any updates of
any of the foregoing.
     Article 1.8 “Latent Defect” means Drug Substance or Drug Product not
conforming to RTU’s obligation for Drug Product pursuant to Article 2.1 and
pursuant to batch testing and release such that the related non-conformance of
Drug Product is not readily discoverable based on SPL’s or SPL designee’s normal
incoming-goods inspections, as the case may be.
     Article 1.9 “LUBIPROSTONE” means the compound known as RU-0211, SPL-0211,
or SPI-0211 or Amitiza® as described in more detail in Appendix A.
     Article 1.10 “NDA” refers to a New Drug Application, as defined by laws for
such

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[*] = 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.
application within the SPL Territories (as defined below) and applicable
regulations promulgated in the countries or territories there under, or other
appropriate marketing authorization in Japan, or any counterpart application or
marketing authorization in any country of the SPL Territory.
     Article 1.11 “Order” means, with respect to clinical or commercial supply
of Drug Product, a written communication from SPL to RTU of SPL’s need for a
particular supply period, issued in accordance with Articles 2.4 and 2.5.
     Article 1. 12 “Person” means any individual, trust (or any of its
beneficiaries), estate, partnership, limited partnership, association, limited
liability company, corporation, any other enterprise engaged in the conduct of
business or operating as a non-profit entity, however formed or wherever
organized, or any governmental body, agency or unit.
     Article 1.13 “Product Defect” means Drug Product not conforming to RTU’s
obligations for Drug Product pursuant to Article 2.1 and pursuant to batch
testing and release such that the related non-conformance of Drug Product may be
readily discovered based on SPL’s or its designee’s normal incoming-goods
inspections procedures, as the case may be.
     Article 1.14 “Regulatory Approval” means any and all approvals, licenses
(including product and establishment licenses), registrations, or authorizations
of any Regulatory Authority necessary to develop, manufacture, commercialize,
promote, distribute, transport, store, use, sell or market the Drug Substance or
Drug Product for use in the SPL Territory.
     Article 1.15 “Regulatory Authority” means any national, supra-national,
regional, federal, state, provincial or local regulatory agency, department,
bureau, commission, council or other governmental entity (including, without
limitation, the Minister of Health, Labour and Welfare of Japan, the National
Health Insurance Plan, and any prefecture having jurisdiction over the
manufacture of the Product in the Territory) regulating or otherwise exercising
authority over the distribution, importation, exportation, manufacture, use,
storage, transport, clinical testing or sale of the Drug Substance or Drug
Product.
     Article 1.16 “Regulatory Filings” means, with respect to the Product in the
Territory, all applications, registrations, licenses, authorizations and
approvals (including all Regulatory Approvals), all correspondence submitted to
or received from the Regulatory Authorities (including minutes and official
contract reports relating to any communications with any Regulatory Authority)
and all supporting documents, and all data contained in any of the foregoing.
     Article 1.17. “SKU(s)” means Stock Keeping Unit(s) and are the smallest
unit of measure to identify manufacturing and distribution of the Drug Product.
     Article 1.18 “Specifications” mean the manufacturing, quality control,
packaging, labeling, shipping and storage specifications as separately set out
for Drug Product in Appendix B and as updated from time to time on mutual
agreement in writing by the parties.
     Article 1.19. “SPL Territory” means all of the countries located in Japan,
Asia and Oceania,

3

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[*] = 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.
and their territories and possessions.
     Article 1.20 “Third Parties” means any Person other than SPL and RTU and
their respective affiliates and subsidiaries.
ARTICLE 2. GENERAL TERMS OF MANUFACTURING AND SUPPLY
     Article 2.1. Supply. Subject to the terms of this Agreement, and to the
terms and conditions of agreements related to development and commercialization
of Drug Substance and Drug Product with Third Parties, RTU agrees to manufacture
and supply the Drug Substance and the Drug Product to SPL and SPL agrees to
purchase said Drug Substance and Drug Product in all such quantities as required
by SPL for SPL’s clinical and commercial purposes. All such Drug Substance and
Drug Product manufactured or supplied by RTU in accordance with this Agreement
shall:

  (a)   be manufactured in accordance and in compliance with Applicable Law,
including GMP;     (b)   be manufactured in accordance with the applicable
Regulatory Filings and Regulatory Approvals;     (c)   upon delivery, not be
adulterated or misbranded as defined by Applicable Law;     (d)   upon delivery,
have a minimal shelf life of the longer of [*] ([*]) months or [*] percent
([*]%) of the shelf life registered in the underlying Regulatory Approval;    
(e)   be free from defects in materials and workmanship; and     (f)   be in
compliance with all Specifications for the Drug Substance and Drug Product.

     Article 2.2. Cost to Produce. RTU, at its sole expense, will provide all
labor, utilities, equipment, personnel, facilities, raw materials and components
necessary for manufacturing, development and implementation of all appropriate
quality control measures, shipping, and storage of the Drug Substance and the
Drug Product in compliance with the Specifications and the warranties contained
in Article 9 and the Regulatory and Legal requirements of Article 7. RTU shall
also be responsible for all process development and validation, including
manufacturing process improvements, and scale-up. SPL, at its sole expense, will
provide all resources necessary to ship, store, and otherwise handle such Drug
Substance and Drug Product in a manner necessary to meet applicable Regulatory
and Legal requirements, after delivery of the Drug Substance and the Drug
Product to SPL as described in Article 2.8. RTU shall purchase all Additional
Materials (as referred to in the relevant Regulatory Approvals) which are needed
for the manufacture of the Drug Substance and Drug Products as per the current
regulatory files, under its own liability and costs. If RTU wishes to change
suppliers and the change will have an impact of a Regulatory Filing, such change
shall be subject to SPL’s prior written approval, such approval not to be
unreasonably withheld.
     Article 2.3. Quality Assurance. RTU, at its sole expense, will (i) conduct
the commercial stability program with respect to the Drug Product pursuant to
Applicable Law, and (ii) perform all testing for compliance with the
Specifications and the applicable GMPs and will supply a chemical Certificate of
Analysis with each batch of Drug Substance and Drug Product and any other
documentation required by law or regulation. Complete copies of all test results
and/or assays and/or batch records will be submitted to SPL promptly following
any reasonable request therefor during the term of this Agreement. RTU shall
make available their facilities and relevant records for inspection

4

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[*] = 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.
by the appropriate government authorities, SPL or its licensee for regulatory or
quality assurance purposes upon reasonable notice and at reasonable times during
normal business hours; provided, however, that the inspection by SPL or its
licensee hereunder shall be within the scope of inspection that is allowed under
the relevant statutes and regulations.
     Article 2.4. Clinical Supply; Order. During the term of this Agreement, SPL
shall grant RTU the exclusive right to manufacture and supply Drug Substance and
Drug Product to SPL for clinical development purposes. During the term of this
agreement, RTU and SPL shall from time to time confer and agree on SPL’s drug
supply needs for SPL’s ongoing clinical development program. SPL shall inform
RTU of its final requirements in advance of needing clinical supply in such
timing as RTU shall reasonably need to duly perform its obligations hereunder,
which shall constitute SPL’s Order to RTU and which, subject to the terms and
conditions of this Agreement, RTU agrees to supply.
     Article 2.5. Commercial Supply; Exclusivity; Forecasting; Order. During the
term of this Agreement, SPL shall grant RTU the exclusive right to manufacture
and supply Drug Product to SPL for commercial purposes subject to appropriate
marketing authorization in Japan or any counterpart marketing authorization in
any country of the SPL Territory in respect of the Drug Product. Commencing from
the date of filing of the first NDA for a particular Drug Product, SPL shall
provide to RTU in writing a 12 month forecast of its requirements for Drug
Product which forecast will be updated quarterly until SPL’s first commercial
sale. Thereafter, SPL shall provide RTU a forecast in accordance with the
following:

  (a)   No later than the last business day of each calendar month during the
Term SPLwill provide RTU with an updated twenty-four (24) month rolling forecast
of the Drug Product to be manufactured and supplied by RTU (each a “Rolling
Forecast”) for the twenty-four (24) month period commencing at the beginning of
the following month with the first three (3) months considered an Order. Each
Rolling Forecast will be broken down for each month of such period into the
quantity (by SKU, packaging and size of Drug Product) and shipping dates. The
first two (2) months of each Rolling Forecast will restate the balance of the
purchase order period of the prior Rolling Forecast, and the third month of the
Rolling Forecast will constitute the new Order for which SPL will be obligated
to purchase and take delivery of the Drug Product.     (b)   Except as set forth
herein, all months of the Rolling Forecast other than the first three (3) months
will set forth SPL’s best estimate of its requirements for the supply of Drug
Product, and the Rolling Forecast for the months four (4) through twenty-four
(24) of each Rolling Forecast will not be binding.     (c)   The Rolling
Forecast for the months four (4) through twenty-four (24) of each Rolling
Forecast shall not increase or decrease by more than [*] percent ([*]%) on a
month-to-month basis.     (d)   Increases or decreases in the Rolling Forecast
beyond those set out in Section 2.5(c) shall be at RTU’s discretion.

5

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[*] = 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.
     Article 2.6. Promotional Sample Supply. During the term of this agreement,
RTU and SPL shall from time to time confer and agree on SPL’s Drug Product
supply needs for promotional purpose. SPL shall inform RTU of its final
requirements in advance of needing promotional sample shall reasonably need to
duly perform its obligations hereunder, which shall constitute SPL’s Order to
RTU and which, subject to the terms and conditions of this Agreement, RTU agrees
to supply.
     Article 2.7. Placement and Acceptance of an Order.

  2.7.2   Placement. All purchases of Drug Products shall be pursuant to written
Orders consistent with Article 2.5(a), which shall be placed by SPL and/or its
distributors at least sixty (60) days prior to the date of which Drug Products
shall be delivered to SPL or the applicable distributor. Each such purchase
order will be in agreement with the purchase order period of the most recent
Rolling Forecast. If an Order for any month is not submitted by the above
deadline, SPL will be deemed to have submitted an Order in that month for the
amount of Drug Product set forth in the most recent Rolling Forecast for such
month. Each Order hereunder shall specify the desired quantities of each of the
Drug Products, in finished forms and samples, and the delivery dates therefore.
    2.7.3   Acceptance. RTU shall have ten (10) Business Days from receipt of an
Order from SPA to reject or propose to modify an Order. RTU may only reject an
Order that (a) lists products that are not covered by this Agreement, or
(b) that is in excess of the amount permitted by Article 2.5 and Section 2.7.2.

     Article 2.8. Delivery; Risk of Loss. The Drug Products hereunder shall be
delivered per SPL specifications for the relevant Drug Product on or up to three
(3) days before the delivery date specified in the order accepted by RTU,
subject to the release of the relevant Drug Products as per Article 2.3. SPL
shall designate to RTU the carrier which will take delivery of the Drug
Products. RTU shall contact such carrier when the Drug Products are ready for
shipping and shall arrange for collection, and transportation of the Drug
Products. RTU shall inform SPL two (2) Business Days prior to pick-up by the
carrier. SPL or a designated Third Party shall bear the costs for transport of
the Drug Product and will be invoiced directly by the carrier. The quantity of
each Drug Product actually delivered by RTU with respect to each accepted Order
shall not exceed a range of minus [*] percent ([*]%) up to plus [*] percent
([*]%) of the quantity of the relevant Drug Product specified in the Order,
unless agreed differently by SPL or its designated Third Party. Delivery
documents shall include Order, quantity, copy of the Certificate of Analysis,
items codes and description, lot number, expiry date of Products, number of
shippers, weight, number of pallets.
     Article 2.9 Inventory; Reports. On a monthly basis, RTU shall provide SPL
with a report detailing present inventory of Drug Substance and Drug Product,
along with RTU’s schedule for production for the succeeding three months. In the
event that Drug Product available to SPL is in short supply, RTU shall notify
SPL of such shortage as soon as possible. In the event there is a short supply
of Drug Product and RTU cannot supply Drug Product to SPL in an amount equal to
SPL’s firm order, then RTU (i) shall indemnify SPL for any loss, including but
not limited to loss of profit, arising from such shortage of Drug Product and
(ii) shall allocate available Drug Product to SPL in each month that such a
shortfall exists (and in each month thereafter until the shortfall to SPL is
remedied) in an amount equal to the Drug Product of (a) the amount of available
Drug Product for that month, and (b) a

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[*] = 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.
fraction the numerator of which is (i) the aggregate of firm orders made by SPL
over the subsequent twelve (12) month period including the shortfall month and
the denominator of which is (ii) the sum of (x) the aggregate quantity of firm
orders made by SPL over the subsequent twelve (12) month period including the
shortfall months and (y) the aggregate quantity of lubiprostone product over the
same twelve (12) month period required by other licensees outside the SPL
Territory by reference to firm orders placed with RTU for such licensees’
requirements outside the SPL Territory.
     Article 2.10. Non-Exclusivity. Nothing in this Agreement shall prohibit
RTU, either clinically or commercially, from manufacturing or supplying, either
on its behalf or for any third party, drug products containing the Drug
Substance, or drug products containing different active ingredients which
require the same reagents as the production of LUBIPROSTONE, either in the SPL
territory or in other parts of the world, provided, however, that RTU shall be
prohibited from supplying the Drug Substance or the Drug Products in the SPL
Territory or to those that induce or facilitate sale in the SPL Territory of the
Drug Substance or the Drug Products by any party other than SPL.
     Article 2.11. Performance Issue. If either party becomes aware of any issue
that may materially impact RTU’s ability to fulfill its obligations under this
Agreement, it shall immediately notify the other party and both parties shall
confer in good faith in order to address such issue.
     Article 2.12 Manufacturing Changes. RTU assumes any and all responsibility
to make changes to the manufacturing processes, test methods, etc. for the
manufacture of products at the manufacturing location, not specific to the Drug
Substance and Drug Product, and will solely bear all expenses related thereto.
For changes that are not required by a Regulatory Authority, including but not
limited to reformulations of the Drug Substance or Drug Product, addition of new
strengths to the Drug Product, new presentations and formats of the Product that
negatively impacts SPL’s commercialization of the Product, then RTU shall
indemnify SPL or its designee for any loss, including but not limited to loss of
profit, arising from such change.
ARTICLE 3. ADDITIONAL SERVICES
     Article 3.1 Laboratory and Regulatory Consulting Services. From
time-to-time, under this Agreement, SPL may request performance of “Additional
Services” by RTU, which may include without limitation (i) the formulation
and/or process development of Drug Substance and/or Drug Product, or
(ii) regulatory consulting in connection with RTU’s supply of such compound
and/or product. The resulting work products of Additional Services will be
“Deliverables”.
     Article 3.2 Placement and Acceptance of an Order for Additional Services.
3.2.1 Placement. SPL shall place an Order for Additional Services at least
thirty (30) days prior to the date of which Deliverable shall be due to SPL.
3.2.2 Acceptance. RTU shall have ten (10) Business Days from receipt of an Order
for Additional Services from SPL to reject or propose to modify such Order. If
such Order is not rejected it shall be deemed accepted and RTU shall, subject to
the terms and conditions of this Agreement, be obligated to supply it by its
terms.

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[*] = 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.
     Article 3.3 Performance of Additional Services. RTU shall perform
Additional Services in accordance with the terms of this Agreement, the Order,
and all Applicable Laws. RTU shall provide, at its own expense, a place of work
and all equipment, tools, and other materials necessary to complete the Order.
In performing the Additional Services, RTU shall not utilize the intellectual
property of a third party or incorporate know-how owned by any third party
without first obtaining SPL’s prior written approval. RTU shall not initiate any
Additional Services prior to execution of the applicable Order by the Parties.
     Article 3.4 Change Proposals. Upon receipt of proposal from SPL to change
the terms of an Order for Additional Services (a “Change Proposal”), RTU shall
promptly provide (i) any information requested in such proposal, and (ii) its
written acceptance or rejection of the proposal. RTU may not reject any Change
Proposal that does not materially shorten the delivery or performance schedule
or materially alter the Additional Services or Deliverables, and may not
unreasonably reject any other Change Proposal. The Order shall be revised
accordingly and authorized by the parties involved, including any change in fees
and costs caused by or resulting from such Change Proposal.
     Article 3.5 Acceptance of Additional Services and/or Deliverables. SPL
shall have the right to inspect RTU’s progress of the Additional Services or
preparation of Deliverables in accordance with a schedule set forth in the
applicable Order. SPL shall have the right to accept or reject the Service
and/or Deliverable, or any portion thereof, in writing, within five (5) Business
Days from the date of such inspection or the receipt of the Services and/or
Deliverables at the conclusion of the Additional Services, as the case may be.
Such acceptance or rejection shall be consistent with the criteria set forth in
the Order. If SPL does not reject in writing within five (5) Business Days, the
Additional Service and /or Deliverable shall be considered accepted by SPL.
Within five (5) Business Days, SPL shall clearly state in writing the reasons
for any rejection, and within five (5) Business Days of receipt of rejection,
RTU shall present a corrective plan of action to SPL. Upon approval by SPL, RTU,
at no additional cost to SPL, shall make corrections, and where applicable RTU
shall resubmit the corrected Additional Service or Deliverable to SPL.
ARTICLE 4. PRICING AND PAYMENT
     Article 4.1. Up-Front and Milestone Payments. In consideration of the
exclusive rights to manufacture and supply granted to RTU under the terms and
conditions set forth in this Agreement including but not limited to Article 2.5,
RTU shall pay SPL a total of $1 million (within a consumption tax) according to
the following schedule.

                          EVENT   PAYMENT
On Execution of this Agreement
  $0.25 million
NDA approval in Japan
  $  0.5 million
At beginning of commercial launch in Japan
  $0.25 million

     Article 4.2 Clinical Development Schedule and Report. Schedule of the
clinical development of LUBIPROSTONE in each Phase shall be outlined, in
reasonable details, in Appendix C, which shall be updated from time to time
during the term of this Agreement as there arises any material

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[*] = 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.
change in the schedule. SPL shall provide RTU with updates in writing in
reasonable details of progress and forecast of the clinical development of
LUBIPROSTONE on at least a quarterly basis and as reasonably requested from time
to time during the term of this Agreement.
     Article 4.3. Clinical Supply Price. Drug Substance and Drug Product for use
in clinical development shall be supplied pursuant to an Order issued under
Article 2.4 on a batch-by-batch basis and supplied at [*]$ (or JPY equivalent of
[*]$) per capsule without the packaging cost.
     Article 4.4. Promotional Supply Price. The Promotional samples described in
Article 2.6 shall be supplied at [*]JPY (in Japanese Yen) per capsule without
the packaging cost.
     Article 4.5. Commercial Cost of Goods; Base Price. In consideration for
RTU’s supply of Drug Product for commercial sale hereunder, SPL shall pay RTU
[*] JPY (in Japanese Yen) per capsule (without the packaging cost) in the case
of BID (the “Base Price”). Notwithstanding the terms above, in the vent of
significant economic changes, including those with regards to the price of
AMITIZA®, the Parties shall meet and discuss in good faith about modifications
to the Base Price in accordance with Article 13.1 below.
     Article 4.6. Terms of Payment. Any payments due hereunder shall be made
within thirty (30) days of receipt of an invoice. Payment may be made by wire
transfer or other suitable means agreed upon by the parties.
     Article 4.7. Non-conforming Shipments. SPL or its designee will have a
period of thirty (30) business days from the date of its receipt of a shipment
of Drug Product to inspect and reject such shipment for non-conformance with the
obligations under this Article 4.7 and the obligations of RTU pursuant to
Article 2.1 including the Specifications based on SPL’s normal incoming-goods
inspections procedures, by providing RTU with written notice of rejection for
any Product Defect within such period of thirty (30) business days together with
samples of the non-conforming Drug Products in the relevant shipment for
testing. In the case of Product with Latent Defects, SPL or its designee will
promptly, and in no event more than thirty (30) business days of SPL knowing of
any such Latent Defect, notify RTU of such Latent Defect; provided however, that
any Latent Defect must be notified no later than one (1) month following the
expiry date of the applicable Drug Product, together with samples of the
non-conforming Drug Products in the relevant shipment for testing. If RTU
determines that such shipment did conform to the warranties of RTU for product
pursuant to Article 2.1 including the Specifications and did conform to
documented batch testing and release, the Parties will submit samples of such
shipment to a mutually acceptable independent laboratory for testing. If such
independent laboratory determines that the shipment conformed to the obligations
of RTU for Drug Product pursuant to Article 2.1 including the Specifications and
conformed to batch testing and release and was not affected by a Product or
Latent Defect, SPL or its designee will bear all expenses of shipping and
testing by such independent laboratory of such shipment samples. If RTU or such
independent laboratory confirms that such shipment did not meet the obligations
of RTU for product pursuant to Article 2.1 including the Specifications and did
not conform to documented batch testing and release, RTU will, as soon as
practicable, give SPL or its designee a credit for any amount paid with respect
to that portion of the Product which does not conform and will bear all of SPL’s
expenses of returning such Drug Product

9

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[*] = 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.
to RTU or its nominee. RTU or SPL, as directed by RTU, will dispose of any
non-conforming portion of any shipment, at RTU’s expense. The costs of the
activities of any such independent laboratory will be borne by the Party in
error.
ARTICLE 5. CONFIDENTIALITY
     Article 5.1. General Obligation. In order that each party may provide
appropriate products and services, each has, and will continue to provide the
other with, certain Confidential Information prepared by or on behalf of and
belonging to the “Disclosing Party.” The “Receiving Party” shall maintain
Confidential Information in confidence and shall not, without Disclosing Party’s
written authorization, disclose to any Person any Confidential Information.
Receiving Party shall not use Confidential Information for any purpose except
for the purposes delineated in this Agreement and for the Disclosing Party’s
benefit.
     Article 5.2. Exceptions. Article 5.1 shall not apply to any information
(1) that was in Receiving Party’s possession prior to receipt from Disclosing
Party, (2) that was in the public domain at the time of receipt from Disclosing
Party, (3) that becomes part of the public domain without breach of any
obligation of confidentiality to Disclosing Party, (4) that is lawfully received
by Receiving Party from a third party independent of Disclosing Party that has
no obligation of confidentiality to Disclosing Party, or (5) that is required by
law to be disclosed.
     Article 5.3. Notice; Return of Confidential Information. Receiving Party
shall provide immediate notice to Disclosing Party of any request or demand for
Disclosing Party’s Confidential Information, or any request or demand for
information pertaining to the subject matter of this Agreement. Upon written
request, Receiving Party shall promptly provide to Disclosing Party all
Confidential Information provided to Receiving Party or prepared by Receiving
Party on Disclosing Party’s behalf in connection with this agreement.
     Article 5.4. Irreparable Harm. The Parties mutually acknowledge and agree
that Confidential Information disclosed under this Agreement is valuable
principally because of its confidential nature, and so any improper disclosure
of Confidential Information will represent irreparable harm that cannot be
adequately compensated monetarily.
     Article 5.5. Term. This Article 5 confidentiality provision in all events
shall remain in effect for ten (10) years following any disclosure made
hereunder. Notwithstanding the foregoing, however, any trade secret disclosed to
either Party, shall be held in strict confidence in perpetuity or until said
trade secret is publicly disclosed through no fault of the receiving party.
ARTICLE 6. INTELLECTUAL PROPERTY
     Article 6.1. Ownership.
6.1.1. Prior to each Order placed hereunder, and in compliance with any existing
agreements between the Parties as of the date of each Order, each Party shall
retain all right, title and interest in its intellectual property, including
without limitation information, improvements,

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[*] = 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.
developments, inventions, patents, trade secrets and know-how, and Confidential
Information (“Intellectual Property”).
6.1.2. RTU shall retain sole rights to any data processes, software (including
codes), technology, means and know-how developed by RTU which relate solely to
manufacture and supply processes and its refinement/improvement and which do not
utilize SPL’s Intellectual Property.
6.1.3. SPL shall retain sole rights to any know-how developed for SPL in (i) the
production of Drug Substance and Drug Product and/or (ii) Additional Services
and/or Deliverables, which are prepared or submitted to SPL by RTU under this
Agreement.
6.1.4. RTU will disclose to SPL (in accordance with Article 13.7 (Notices)
hereunder) within ten (10) business days of occurrence, any and all inventions,
discoveries and/or improvements utilizing SPL Intellectual Property
(“Inventions”). Ownership of such Inventions shall be negotiated by the Parties
in good faith in compliance with each Party’s Intellectual Property obligations
to any third party at the time of Invention.
     Article 6.2. Grant of Limited License. Subject to the terms and conditions
of this Agreement, each party hereby grants to the other party a non-exclusive,
non-transferable license to the extent, and only to the extent, necessary to
perform this Agreement. All rights and licenses not granted herein are reserved
to each party, and no other rights or licenses are granted or will be deemed to
be granted to the other party (whether by implication, estoppel or otherwise).
Without limiting the generality of the foregoing, RTU retains the right to
manufacture the Drug Substance and the Drug Product, and to permit third parties
to manufacture the Drug Substance and the Drug Product, both in and out of the
SPL Territory, subject, however, to the provisions of Sections 2.10 and 6.1.
ARTICLE 7. REGULATORY & LEGAL
     Article 7.1. Compliance. RTU shall at all times remain in substantial
compliance, with all applicable laws, regulations and guidelines that apply to
the manufacturing and supply contemplated hereunder.
     Article 7.2. Records. RTU shall keep accurate written records in
substantial compliance with all applicable legal and regulatory requirements
that apply to the manufacturing and supply contemplated hereunder. Such records
will be made available to SPL on reasonable request for inspection, to the same
extent that they would be available to an appropriate governmental inspector,
during normal business hours. Records shall be maintained for the period of time
required by applicable laws or regulations, or if there is no period of time
specified by such laws or regulations, for three (3) years following the
respective dates of records.
     Article 7.3. Authorization of the Manufacturing Facility by MHLW. RTU shall
be responsible for providing information that may be used in, or referenced by,
an application filed by SPL with the Ministry of Health, Labor and Welfare (the
“MHLW”) or any other relevant regulatory authority for purposes of ensuring that
the RTU manufacturing facility is authorized to manufacture the

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[*] = 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.
Drug Substance and Drug Product to be supplied under this Agreement. SPL shall
have no obligation to purchase any Drug Product from RTU if they are produced in
a manufacturing facility that is not, in any material respect, in compliance
with all applicable legal and regulatory requirements.
     Article 7.4. Regulatory Audits; Notice of Audit. RTU shall make its
facilities, records and personnel available to the MHLW or any other relevant
regulatory authority as may be needed for compliance with the applicable laws,
rules and regulations enforced by such authority. RTU shall advise SPL in
writing immediately if:
          (a) an agent of any regulatory body having jurisdiction over the
manufacture or distribution of the Drug Product makes an inquiry about the Drug
Product or visits RTU’s manufacturing facility for the Drug Product, and shall
specify what, if any, inquiry was made; or
          (b) any regulatory authority takes action against RTU on any issue
related directly or indirectly to the manufacturing or distribution of the Drug
Product.
     Article 7.5. Drug Master File. RTU shall produce and maintain a drug master
file for Drug Substance made under this Agreement, which shall contain all
information necessary to comply with MHLW standards with respect to the
applicable manufacturing processes and Drug Product.
     Article 7.6. Import/Export Issues. RTU shall be responsible for
(i) obtaining all governmental permits, consents and approvals which are
required in order to export Drug Product from the country of origin, and
(ii) making any required notifications or other filings (whether before or after
shipment) which are required in connection with the exportation of Drug Product
from the country of origin.
ARTICLE 8. REPRESENTATIONS & WARRANTIES OF SPL
     Article 8.1. Organization. SPL represents and warrants to RTU that it is a
corporation duly organized, validly existing, and, where applicable, in good
standing under the laws of the jurisdiction of its incorporation.
     Article 8.2. Authority. SPL represents and warrants that it: (a) has the
right to enter into this Agreement; (b) has the power and authority to execute
and deliver this Agreement and to perform its obligations hereunder; and (c) has
by all necessary corporate action duly and validly authorized the execution and
delivery of this Agreement and the performance of its obligations hereunder.
     Article 8.3. No Conflicts. SPL represents and warrants to RTU that it has
not and will not during the term of this Agreement enter into any agreement
which conflicts with or which will result in any breach of, or constitute a
default under, any note, security agreement, commitment, contract or other
agreement, instrument or undertaking to which it is a party.
     Article 8.4. Insurance. SPL represents that it will at all times maintain
commercially reasonable levels of insurance, including general liability
insurance, in light of their responsibilities hereunder. SPL shall provide RTU
with certificates of insurance upon RTU’s written request for the same.

12

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[*] = 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.
     Article 8.5. Obligations of Confidentiality. SPL represents and warrants
that any employee or other affiliated person, including subcontractors, who will
be involved in performing this Agreement is bound, or will be bound prior to
performing any work, by a proprietary information and technology agreement in
favor of the other party, consistent with the obligations of Article 5, pursuant
to which such employee or other person is obligated to confidentiality.
ARTICLE 9. REPRESENTATIONS AND WARRANTEES OF RTU
     Article 9.1. Organization. RTU represents and warrants to SPL that it is a
corporation duly organized, validly existing, and, where applicable, in good
standing under the laws of the jurisdiction of its incorporation.
     Article 9.2. Authority. RTU represents and warrants that it: (a) has the
right to enter into this Agreement; (b) has the power and authority to execute
and deliver this Agreement and to perform its obligations hereunder; and (c) has
by all necessary corporate action duly and validly authorized the execution and
delivery of this Agreement and the performance of its obligations hereunder.
     Article 9.3. No Conflicts. RTU represents and warrants to SPL that it has
not and will not during the term of this Agreement enter into any agreement
which conflicts with or which will result in any breach of, or constitute a
default under, any note, security agreement, commitment, contract or other
agreement, instrument or undertaking to which it is a party.
     Article 9.4. Insurance. RTU represents that it will at all times maintain
commercially reasonable levels of insurance, including general product liability
insurance, in light of their responsibilities hereunder. RTU shall provide SPL
with certificates of insurance upon SPL’s written request for the same.
     Article 9.5. Qualified Personnel. RTU warrants that it will at all time use
appropriately qualified personnel, having the appropriate levels of training and
skill, to fulfill its obligations arising under this Agreement
     Article 9.6. Regulatory and Legal Compliance. RTU hereby warrants that its
facilities and processes supplied hereunder substantially comply with, or will
substantially comply with at all relevant times, all applicable legal and
regulatory requirements necessary to fulfill its obligations under this
Agreement, including without limitation, securing and maintaining any necessary
certificates or permits.
     Article 9.7. Obligations of Confidentiality. RTU represents and warrants
that any employee or other affiliated person, including subcontractors, who will
be involved in performing this Agreement is bound, or will be bound prior to
performing any work, by a proprietary information and technology agreement in
favor of the other party, consistent with the obligations of Article 5, pursuant
to which such employee or other person is obligated to confidentiality.

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[*] = 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.
     Article 9.8. Process and Product Warranties. RTU warrants and represents
that:
          (a) Drug Product sold by RTU to SPL hereunder shall (i) materially
comply with the Specifications for Drug Product, and (ii) materially conform
with the information shown on the Certificate of Analysis provided for the
particular shipment;
          (b) no Drug Product sold by RTU to SPL hereunder shall be adulterated
or misbranded within the meaning of the applicable Pharmaceutical Law of Japan,
as amended and in effect at the time of shipment to the Drug Product and
containing terms with substantially similar meanings as the meaning of
adulteration or misbranding under the Act; provided, however, that this
paragraph shall not apply to, and RTU shall have no responsibility for,
misbranding caused directly by SPL as a result of labels or package texts
specified or provided by SPL for the Drug Product; and RTU shall have no
responsibility for issues of regulatory and legal compliance that are the
responsibility of SPL, including but not limited to (1) maintaining a complete
and valid NDA for the product, (2) ensuring that the product specifications are
consistent with the NDA, and (3) ensuring that the product is stored and
distributed in the SPL Territory in a manner that does not result in its
becoming adulterated, misbranded, or otherwise in violation of law.
     Article 9.9. Continuity of Supply. The parties acknowledge that continuous
supply of Drug Substance and Drug Product are of critical importance to the
commercial interests of both parties, and accordingly, RTU shall use
commercially reasonable efforts to maintain the continuity of supply, and SPL
shall reasonably cooperate with RTU (including but not limited to providing
forecasts pursuant to Article 2.5 of this Agreement), so that Drug Substance and
Drug Product be supplied continuously during the term of this Agreement. RTU
shall maintain a safety stock of active Drug Substance equal to six (6) months
of forecast demand based on SPL’s most recent Rolling Forecast. RTU shall
maintain a safety stock of Additional Materials to support the drug product
manufacture and packaging equal to three (3) months of forecast demand based on
SPL’s most recent Rolling Forecast.
ARTICLE 10. INDEMNIFICATION
     Article 10.1. RTU’s Obligation. RTU shall defend, indemnify and hold SPL,
and the respective officers, directors and employees of each, harmless from and
against any and all claims, demands, losses, damages, liabilities (including
without limitation product liability), settlement amounts, cost or expenses
whatsoever (including reasonable legal fees and costs and court costs) arising
from or relating to any claim, action or proceeding made or brought against such
person by a third party as a result of RTU’s negligence, willful misconduct or
breach of this Agreement (including, without limitation, RTU’s failure to comply
with the Specifications, any breach by RTU of the warranties contained in
Article 9, or otherwise any breach of the provisions of this Agreement by RTU).
RTU shall have no obligation under this clause to indemnify SPL for claims
described in Article 10.2. For the avoidance of doubt with regard to product
liability claims relating to Drug Substance and Drug Product, RTU’s
indemnification of SPL hereunder shall extend only to matters of drug quality.
     Article 10.2. SPL’s Obligation. SPL shall defend, indemnify and hold RTU
and the respective officers, directors and employees of each harmless from and
against any and all claims, demands, losses, damages, liabilities (including
without limitation product liability), settlement amounts,

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[*] = 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.
cost or expenses whatsoever (including reasonable legal fees and costs and court
costs) arising from or relating to any claim, action or proceeding made or
brought against such person by a third party as a result of (1) SPL’s
negligence, willful misconduct or any breach of the terms of this Agreement
(including any of its representations and warranties set forth therein), (2) the
manufacture and delivery to SPL of Drug Substance and Drug Product done in
accordance with the Specifications, warranties and provisions of this Agreement,
and/or (3) the investigation, administration, use, sale, marketing, promotion,
advertising, storage, distribution, and any other activity with respect to the
Drug Substance and the Drug Product that is the responsibility of SPL under this
Agreement. SPL shall have no obligation under this clause to indemnify RTU for
claims described in Article 10.1. For the avoidance of doubt with regard to
product liability claims relating to Drug Product, SPL’s indemnification of RTU
hereunder shall extend only to matters inherent to the drug substance.
     Article 10.3. Notice; Defense of Claims. In the event of any claim, action
or proceeding for which a person is entitled to indemnity hereunder, the Person
seeking indemnity (“Claimant”) shall promptly notify the relevant party
(“Indemnitor”) in reasonable detail in writing the factual basis for such claim,
action or proceeding and the amount of the claim; provided, however, that any
delay by the Claimant in giving such notice shall not relieve the Indemnitor of
its obligations under this Agreement except and only to the extent that the
Indemnitor is materially damaged by such delay. The Indemnitor shall be entitled
to assume the defense thereof at its own expense, with counsel satisfactory to
such Claimant in its reasonable judgment; provided, however, that any Claimant
may, at its own expense, retain separate counsel to participate in such defense.
The Claimant shall not settle, compromise, discharge or otherwise admit to any
liability for any claim or demand for which it is indemnified without the prior
written consent of the Indemnitor (which consent shall not be unreasonably
withheld or delayed). The Indemnitor shall not settle, compromise, discharge or
otherwise admit to any liability for any claim or demand on a basis that would
adversely affect the future activity or conduct of the Claimant without the
prior written consent of the Claimant.
ARTICLE 11. TERM AND TERMINATION
     Article 11.1. Term. This Agreement shall become effective as of the date
hereof and remain in full force and effect for twenty (20) years following the
first commercial sale of the Drug Product under this Agreement to be approved by
a competent regulatory authority in the SPL Territory, unless otherwise earlier
terminated by mutual written agreement or by the provisions set forth below.
     Article 11.2. Termination for Cause. In addition to any other rights or
remedies a party may have, either party may terminate this Agreement upon the
occurrence of any of the following events of default which is not cured within
sixty (60) days after written notice thereof is received by the other party:
          (a) breach by the other party of any of its material obligations
hereunder; or
          (b) should the other party become subject of proceedings involving
bankruptcy, receivership, administration, insolvency, moratorium of payment
reorganization or liquidation, or make any assignment for the benefit of the
creditors or any equivalent measures in any relevant jurisdiction.

15

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[*] = 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.
     Article 11.3. Survival of Certain Rights and Obligations. The obligations
under Article 5, Article 6, Article 8, Article 9, Article 10, this Article 11.3
and Article 12 shall survive any expiration or other termination of this
Agreement in accordance with their terms.
ARTICLE 12. DISPUTE RESOLUTION
     Article 12.1. Negotiation. The parties agree to consult and negotiate in
good faith to try to resolve any dispute, controversy or claim, of any nature or
kind, whether in contract, tort or otherwise, that arises out of or relates to
this Agreement. No formal dispute resolution shall be used by either party
unless and until the chief executive officers of each party shall have attempted
to meet in person to achieve such an amicable resolution.
     Article 12.2. Arbitration. Any dispute, controversy or claim that arises
out of or relates to this Agreement that is not resolved under Article 12.1
shall be settled by final and binding arbitration in accordance with the Rules
of Arbitration of the International Chamber of Commerce (“ICC”) in effect on the
Effective Date, as modified by Article 12.3 below. Judgment upon the award
rendered by the arbitrators may be entered in any court of competent
jurisdiction. The place of arbitration shall be Paris, France unless another
location is agreed upon between the parties and arbitrators. The arbitration
shall be conducted in the English language by three (3) neutral arbitrators
selected by mutual agreement of the parties or, if that is not possible within
thirty (30) days of the initial demand for such arbitration, by the ICC. At
least one (1) arbitrator shall have knowledge of and experience in the ethical
pharmaceutical industry.
     Article 12.3. Special Rules. Notwithstanding any provision to the contrary
in the ICC’s Rules of Arbitration, the parties hereby stipulate that any
arbitration hereunder shall be subject to the following special rules:
          (a) The arbitrators may not award or assess punitive damages against
either party; and
          (b) Each party shall bear its own costs and expenses of the
arbitration and shall share equally the fees and costs of the arbitrators,
subject to the power of the arbitrators, in their sole discretion, to award all
such reasonable costs, expenses and fees to the prevailing party.
ARTICLE 13. MISCELLANEOUS
     Article 13.1. Changed Circumstances. The parties recognize that the
obligations of this Agreement may run for many years in the future. In the event
of any material change in circumstances, the parties shall meet and confer in
good faith in order to try and find a solution that accommodates the interests
of both parties. RTU acknowledges that SPL will enter into one or more
agreements with third parties for the purpose of commercial sale of LUBIPROSTONE
in the SPL Territory, and in the event that such third parties raise concerns or
place demands on SPL concerning matters pertaining to this Agreement, RTU shall
work with SPL to resolve such concerns or demands, including amending this
Agreement, as may be commercially appropriate or necessary. SPL acknowledges
that RTU will enter into agreements with third parties for the purpose of
procuring various materials necessary for

16

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[*] = 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.
RTU to manufacture and supply LUBIPROSTONE hereunder, and in the event that such
third parties raise concerns or place demands on RTU that will result in
increase of manufacturing costs, SPL shall work with RTU to resolve such
concerns or demands, including amending this Agreement, as may be commercially
appropriate or necessary.
     Article 13.2. Subcontracting. RTU may subcontract its obligations hereunder
with SPL’s prior written consent, which shall not be unreasonably withheld,
conditioned or denied.
     Article 13.3. Entire Agreement. This Agreement, together with the
Appendices attached hereto, constitutes the entire agreement of the parties with
respect to the subject matter hereof and supersedes the Term Sheet and any and
all other previous proposals or agreements, oral or written, and all
negotiations, conversations or discussions heretofore between the parties
related to the subject matter of this Agreement.
     Article 13.4. Independent Contractor; No Agency. This agreement shall not
be construed to create an employment or agency relationship between the parties.
This Agreement is not intended to create any agency relationship of any kind;
the Parties agree not to contract any obligations in the name of the other or to
use each other’s credit in conducting any activities under this Agreement. Each
party is solely responsible for the payroll taxes, workman’s compensation
insurance, and any other benefits owed to their own employees.
     Article 13.5. Assignment. Upon written approval of the other party, which
approval shall not unreasonably be withheld and shall be timely given, a party
may assign or otherwise transfer its rights and obligations under this Agreement
to any successor in interest (by merger, share exchange, combination or
consolidation of any type, operation of law, purchase or otherwise), provided
that such assignee or successor agrees to be bound by the terms hereof.
Notwithstanding anything contained in this Article, this Agreement shall be
assigned from SPL to any entity which acquired, or otherwise succeeded in
interest in, all or substantially all of the assets in relation to LUBIPROSTONE,
and such entity shall be bound by this Agreement. The parties specifically
contemplate that this agreement may be assigned to RTU if it becomes an
independent company from R-Tech Ueno, Ltd. and retains the proper expertise,
equipment and personnel for carrying out the obligations of this Agreement. For
the avoidance of doubt, the parties acknowledge that SPL is entering into this
Agreement on the basis of RTU’s special expertise in manufacturing
prostaglandin-related compounds, and so SPL may withhold their approval of a
proposed assignment if the proposed successor does not have reasonably
comparable expertise.
     Article 13.6. Governing Law. This Agreement shall be construed in
accordance with Japanese law, excluding its choice of law provisions.
     Article 13.7. Notices. All notices or other communications to a party
required or permitted hereunder shall be in writing and shall be delivered
personally or by telecopy (receipt confirmed) to such party (or, in the case of
an entity, to an executive officer of such party) or shall be given by certified
mail, postage prepaid with return receipt requested, addressed as follows:

17

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[*] = 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.

         
 
  if to SPL:   Sucampo Pharma, Ltd.
 
      2-2-2 Uchisaiwai-cho, Chiyoda-ku
 
      Tokyo, 100-0011
 
      Japan
 
      Attention: Mr. Takashi Sekida
 
      Facsimile number: [*]
 
       
 
  and if to RTU:   R-Tech Ueno, Ltd.
 
      4-1, Techno Park
 
      Sanda, Hyogo 669-1339
 
      Japan
 
      Attention: Mr. Ryu Hirata
 
      Facsimile number: [*]

     Article 13.8. Severability. If a court of competent jurisdiction holds any
provision of this Agreement invalid, the remaining provisions shall nonetheless
be enforceable according to their terms. Further, if any provision is held to be
overbroad as written, such provision shall be deemed amended to narrow its
application to the extent necessary to make the provision enforceable according
to applicable law and shall be enforced as amended.
     Article 13.9. Waiver, Discharge, etc. This Agreement may not be released,
discharged, abandoned, changed or modified in any manner, except by an
instrument in writing signed on behalf of each of the parties to this Agreement
by their duly authorized representatives. The failure of either party to enforce
at any time any of the provisions of this Agreement shall in no way be construed
to be a waiver of any such provision, nor in any way to affect the validity of
this Agreement or any part of it or the right of either party after any such
failure to enforce each and every such provision. No waiver of any breach of
this Agreement shall be held to be a waiver of any other or subsequent breach.
No inspection or acceptance, approval, acquiescence, or payment by SPL with
respect to non-conforming Drug Product shall relieve RTU from any portion of its
warranty obligations hereunder unless expressly agreed by SPL in writing.
     Article 13.10. Titles and Headings; Construction. The titles and headings
to Articles herein are inserted for the convenience of reference only and are
not intended to be a part of or to affect the meaning or interpretation of this
Agreement. This Agreement shall be construed without regard to any presumption
or other rule requiring construction hereof against the party causing this
Agreement to be drafted.
     Article 13.11. Benefit. Nothing in this Agreement, expressed or implied, is
intended to confer on any person other than the parties to this Agreement or
their respective permitted successors or assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
     Article 13.12. Execution in Counterparts. This Agreement may be executed in
one or more counterparts, all of which shall be considered one and the same
agreement, and shall become a binding agreement when one or more counterparts
have been signed by each party and delivered to the other party.

18

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[*] = 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.
[Remainder of Page Intentionally Left Blank]

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[*] = 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.
     IN WITNESS WHEREOF, each of the parties has caused this Exclusive Supply
Agreement to be executed in the manner appropriate to each, effective as of the
date first above written.

                      R-TECH UENO, LTD.       SUCAMPO PHARMA, LTD.    
 
                   
By:
  /s/ Yukiko Hashitera
 
      By:   /s/ Misako Nakata
 
   
 
  Yukiko Hashitera           Misako Nakata    
 
  President           Representative Director    

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Appendix A
Description of LUBIPROSTONE

         
Generic name:
  lubiprostone    
 
       
Chemical names:
  [*]    
 
       
Code name:
  LUBIPROSTONE    
 
       
CAS No.:
  333963-40-9 (bicyclic type)    
 
  or    
 
  136790-76-6 (monocyclic type)    
 
       
Structural Formula:
  [*]    

 

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Appendix B
Specifications for LUBIPROSTONE
Drug Product
[*]

 

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[*] = 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.
Appendix C
Clinical Development Schedule
[*]

E-2