exv10w44





[*] = 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.



 









 




[*] = 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



2









 




[*] = Certain confidential information contained in this document, marked by brackets, is filed
with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934, as amended.



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









 




[*] = 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









 




[*] = 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









 










[*] = 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



6









 




[*] = 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.



7









 




[*] = 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



8









 




[*] = 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












 




[*] = 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,



10









 





[*] = 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



11









 





[*] = 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









 




[*] = 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.



13









 




[*] = 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,



14









 





[*] = 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









 





[*] = 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









 





[*] = 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









 





[*] = 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









 





[*] = 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]





19











 




[*] = 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	 	 







20









 








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:

	 	[*]	 	 







 









 








Appendix B

Specifications for LUBIPROSTONE

Drug Product




[*]





 









 







[*] = Certain confidential information contained in this document, marked by brackets, is filed
with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934, as amended.




Appendix C

Clinical Development Schedule




[*]





E-2