Document:

exv10w20

 

Exhibit 10.20

Confidential materials omitted and filed separately with the

Securities and Exchange Commission. Asterisks denote omissions.

RU-0211 EXCLUSIVE MANUFACTURING AND SUPPLY AGREEMENT

     THIS RU-0211 EXCLUSIVE MANUFACTURING AND SUPPLY AGREEMENT (“Agreement”) is made this 23rd day
of June 2004 (the “Effective Date”), by and among 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 4733 Bethesda Avenue, Suite 450, Bethesda, Maryland 20814, U.S.A. (“SPI”), and the Pharma
Chemical division (formally Sucampo Pharma Manufacturing Division) (“PCD”) of R-Tech Ueno, Ltd., a
corporation organized and existing under the laws of Japan and having its registered office at 4-1,
Techno Park, Sanda, Hyogo, Japan 669-1339 (“RTU”) (each referred to herein as a “Party” and
collectively as the “Parties”).

     WHEREAS, SPI and PCD executed the Basic Exclusive Supply Agreement Term Sheet dated March 7,
2003 (the “Term Sheet”), which sets forth the basic terms and conditions under which PCD shall
manufacture and supply certain products to SPI, and the parties now wish to enter into a definitive
agreement in accordance with the Term Sheet;

     WHEREAS, PCD has expertise in the manufacture of drug substances and drugs for preclinical,
clinical and commercial use;

     WHEREAS, SPI is a United States based pharmaceutical company that seeks a supply source for
Drug Substance and Drug Product (defined below) for SPI clinical evaluation and commercial sale in
the SPI Territory (defined below);

     WHEREAS, PCD has in the past supplied to SPI RU-0211 for preclinical and clinical development,
and as such PCD has developed a substantial level of expertise in the manufacture of Drug Substance
and Drug Product;

     WHEREAS, PCD desires to be the exclusive clinical and commercial supplier of Drug Substance
and Drug Product; and

     WHEREAS, SPI seeks to have PCD supply Drug Substance and Drug Product as further defined
herein for use in SPI clinical development and for future commercial sale in the SPI Territory and
desires to have PCD be SPI’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. “Certificate of Analysis” means a certificate provided by PCD to SPI 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 1.2. “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 1.3. “Drug Substance” means the RU-0211 active ingredient, prior to formulation as a
final drug product.

     Article 1.4. “Drug Product” means a finally formulated RU-0211 drug product ready for clinical
use or commercial sale, as appropriate.

     Article 1.5. “Good Manufacturing Practices” or “GMP” means the current good manufacturing
practices for manufacturing drug substances and drug products as set forth in 21 USC 351(a)(2)(B)
and 21 CFR Parts 210 and 211 or any successor provisions.

     Article 1.6. “NDA” refers to a New Drug Application, as defined in the United States Food,
Drug and Cosmetic Act and applicable regulations promulgated there under, or other appropriate
marketing authorization in the United States, or any counterpart application or marketing
authorization in any country of the SPI Territory.

     Article 1.7. “Net Sales” for a particular period means the amount billed by SPI, its
affiliates and its sublicensees to distributors and other third parties for the sale of a
commercial Drug Product, less cash discounts and/or quantity discounts allowed, credits for
customers; returnes and allowances; all as determined by SPI’s standard accounting practices, which
must be in conformity with Generally Accepted Accounting Principles.

     Article 1.8. “Order” means, with respect to clinical or commercial supply of Drug Product, a
written communication from SPI to PCD of SPI’s need for a particular supply period, issued in
accordance with Articles 2.4 and 2.5.

     Article 1.9. “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 1.10. “RU-0211” means the compound known by the USAN name lubiprostone, as described
in more detail in Appendix A.

     Article 1.11. “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.

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     Article 1.12. “SPI Territory” means all of the countries located in North, Central and South
America, including the Caribbean, and their territories and possessions.

ARTICLE 2. GENERAL TERMS OF MANUFACTURING AND SUPPLY

     Article 2.1. Supply. Subject to the terms of this Agreement, PCD agrees to manufacture and
supply the Drug Substance and the Drug Product to SPI and SPI agrees to purchase said Drug
Substance and Drug Product in all such quantities as required by SPI for SPI’s clinical and
commercial purposes.

     Article 2.2. Cost to Produce. PCD, 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. PCD shall also be
responsible for all process development and scale-up. SPI, 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 SPI as described in Article 2.8.

     Article 2.3. Quality Assurance. PCD, at its sole expense, will 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 will be submitted to SPI
promptly following any reasonable request therefor during the term of this Agreement. PCD shall
make available their facilities and relevant records for inspection by the appropriate government
authorities, SPI or SPI’s agents for regulatory or quality assurance purposes upon reasonable
notice and at reasonable times during normal business hours; provided, however, that the inspection
by SPI or its agents 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, SPI shall grant PCD
the exclusive right to manufacture and supply Drug Substance and Drug Product to SPI for clinical
development purposes. During the term of this agreement, PCD and SPI shall from time to time
confer and agree on SPI’s drug supply needs for SPI’s ongoing clinical development program. SPI
shall inform PCD of its final requirements in advance of needing clinical supply in such timing as
PCD shall reasonably need to duly perform its obligations hereunder, which shall constitute SPI’s
Order to PCD and which, subject to the terms and conditions of this Agreement, PCD agrees to
supply.

     Article 2.5. Commercial Supply; Exclusivity; Forecasting; Order. During the term of this
Agreement, SPI shall grant PCD the exclusive right to manufacture and supply Drug Product to SPI
for commercial purposes subject to appropriate marketing authorization in the United States or any
counterpart marketing authorization in any country of the SPI Territory in respect of the Drug
Product. Commencing from the date of riling of the first NDA for a particular Drug Product, SPI
shall provide to PCD in writing a 12 month forecast of its requirements for Drug Product which
forecast will be updated quarterly until SPI’s first

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commercial sale. Thereafter, SPI shall provide a rolling 12 month forecast, updated monthly.
The monthly update provided to PCD 3 months prior to the actual supply need shall constitute SPI’s
supply Order to PCD, which, subject to the terms and conditions of this Agreement, PCD agrees to
supply.

     Article 2.6. Promotional Sample Supply. For a period of twelve (12) months running from the
time of SPI’s first commercial sale of Drug Product, SPI shall be entitled to purchase a
commercially reasonable number of units of Drug Product for promotional purposes at cost plus
commercially reasonable markup of [**]%.

     Article 2.7. Acceptance or Rejection of an Order. PCD shall have 10 working days from receipt
of an Order from SPI to reject or propose to modify an Order. If an Order is not rejected it shall
be deemed accepted and PCD shall, subject to the terms and conditions of this Agreement, be
obligated to supply it by its terms.

     Article 2.8. Delivery; Risk of Loss. Any Drug Substance and Drug Product supplied hereunder
to SPI shall be shipped from PCD’s manufacturing facility in Sanda (Hyogo, Japan) or its contract
manufacturer and delivered to a common carrier to be transported for importation into the SPI
Territory. The identity of the common carrier and the port of entry shall be mutually determined
by the Parties in writing. Title and risk of loss shall pass to SPI at the time the goods are
delivered to SPI or its designee, and SPI shall assume all responsibility for and costs associated
with the goods upon such delivery.

     Article 2.9. Inventory; Reports. On a monthly basis, PCD shall provide SPI with a report
detailing present inventory of Drug Substance and Drug Product, along with PCD’s schedule for
production for the succeeding three months. PCD agrees to at all time maintain commercially
reasonable inventory levels of Drug Substance and Drug Product.

     Article 2.10. Non-Exclusivity. Nothing in this Agreement shall prohibit PCD, 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 RU-0211, either in the SPI
territory or in other parts of the world, provide, however, that PCD shall be prohibited from
supplying the Drug Substance or the Drug Products in the SPI Territory or to those that induce or
facilitate sale in the SPI Territory of the Drug Substance or the Drug Products by any party other
than SPI.

     Article 2.11. Performance Issue. If either party becomes aware of any issue that may
materially impact PCD’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 3. ADDITIONAL SERVICES

     Article 3.1. Consulting. In addition to the products supplied hereunder, PCD agrees to make
available certain personnel for consulting SPI on manufacturing-related regulatory issues subject
to payment by SPI of service fees at an appropriate hourly charge.

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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 PCD under the terms and conditions set forth in this Agreement
including but not limited to Article 2.5, PCD shall pay SPI a total of $3 million according to the
following schedule.

	 	 	 	 	 
	EVENT	 	PAYMENT	 
	On Execution of this Agreement
	 	$1 million
	Upon commencement of the first Phase II trial for Irritable
Bowel Syndrome
	 	$2 million

     Article 4.2. Clinical Development Schedule and Report. Schedule of the clinical development
of RU-0211 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 change in
the schedule. SPI shall provide PCD with updates in writing in reasonable details of progress and
forecast of the clinical development of RU-0211 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 invoiced based on actual cost, plus a commercially reasonable mark-up of [**]%.

     Article 4.4. Promotional Supply Price. The Promotional samples described in Article 2.6 shall
be supplied at cost, plus a commercially reasonable mark-up of [**]%.

     Article 4.5. Commercial Cost of Goods. In consideration for PCD’s supply of RU-0211 for
commercial sale hereunder, SPI shall pay PCD [**] Yen (in Japanese Yen) per capsule for [**] of the
total quantity and [**] cents (in US dollars) per capsule for the remaining [**] of the total
quantity (the “Commercial Cost of Goods”). In the event that, following launch of the Drug Product
in the United States, the amount billed by SPI, its affiliates and its sublicensees to distributors
and other third parties for the sale of a commercial Drug Product (the “Base Price”) is increased
or decreased, the Commercial Cost of Goods shall automatically be increased or decreased, as the
case may be, in proportion to the ratio of the average Base Price (on a per-capsule basis in
accordance with the units sold) for the three-month period immediately following the increase or
decrease, as the case may be, of the Base Price against the same for the three-month period
immediately prior to the price increase or decreased, as the case may be, of the Base Price;
provided, however, that in the event that PCD receives annual volume discount from
its supplier in relation to RU-0211 Drug Product manufacturing, the amount of the increase of the
Commercial Cost of Goods shall be offset by the amount of such annual volume discount on a per
capsule basis. The Commercial Cost of Goods shall not exceed [**] percent ([**]%) of the Net
Sales. Notwithstanding anything contained in this Article 4.5, in no event shall the Commercial
Cost of Goods be less than [**] Yen/[**] cents per capsule as set forth above in this Article 4.5.

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     Article 4.6. Terms of Payment. Any payments due hereunder shall be made within [**] 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. Shipping Terms. All payments for Drug Substance and Drug Product supplied
hereunder are inclusive of all cost, insurance and freight (CIF) necessary for delivery to SPI as
described in Article 2.8, except that title and risk of loss shall pass to SPI upon delivery to SPI
or its designee.

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. Each party shall retain all right, title and interest in its
intellectual property, including information, improvements, developments, inventions, patents,

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trade secrets and know-how, and Confidential Information and other materials disclosed by it
to the other party hereunder.

     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, PCD 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 SPI Territory, subject, however, to the provisions of Section 2.10.

ARTICLE 7. REGULATORY & LEGAL

     Article 7.1. Compliance. PCD 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. PCD 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 SPI 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 FDA. PCD shall be responsible for
providing information that may be used in, or referenced by, an application filed by SPI with the
U.S. Food and Drug Administration (the “FDA”) for purposes of ensuring that the PCD manufacturing
facility is authorized to manufacture the Drug Substance and Drug Product to be supplied under this
Agreement. SPI shall have no obligation to purchase any Drug Product from PCD 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. PCD shall make its facilities, records and
personnel available to the FDA or any other regulatory authority as may be needed for compliance
with the applicable laws, rules and regulations enforced by such authority. PCD shall advise SPI
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 PCD’s manufacturing facility
for the Drug Product, and shall specify what, if any, inquiry was made; or

          (b) any regulatory authority takes action against PCD on any issue related directly or
indirectly to the manufacturing or distribution of the Drug Product.

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     Article 7.5. Drug Master File. PCD shall produce and maintain a drug master file for Drug
Substance made under this Agreement, which shall contain all information necessary to comply with
FDA, U.S. Environmental Protection Agency, and all U.S. Pharmacopoeia standards with respect to the
applicable manufacturing processes and Drug Product.

     Article 7.6. Import/Export Issues. PCD 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 SPI

     Article 8.1. Organization. SPI represents and warrants to PCD 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. SPI 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. SPI represents and warrants to PCD 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. SPI represents that it will at all times maintain commercially
reasonable levels of insurance, including general liability insurance, in light of their
responsibilities hereunder. SPI shall provide PCD with certificates of insurance upon PCD’s
written request for the same.

     Article 8.5. Obligations of Confidentiality. SPI 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 PCD

     Article 9.1. Organization. RTU represents and warrants to SPI 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

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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 SPI 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 liability insurance, in light of their
responsibilities hereunder. RTU shall provide SPI with certificates of insurance upon SPI’s
written request for the same.

     Article 9.5. Qualified Personnel. PCD 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. PCD 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. PCD 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 9.8. Process and Product Warranties. PCD warrants and represents that:

          (a) Drug Product sold by PCD to SPI 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 PCD to SPI hereunder shall be adulterated or misbranded within the
meaning of the United States Food, Drug, and Cosmetic Act, as amended and in effect at the time of
shipment (the “Act”), or within the meaning of any state or municipal laws in the United States
applicable 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 PCD shall have no responsibility for, misbranding caused directly by SPI as a
result of labels or package texts specified or provided by SPI for the Drug Product; and PCD shall
have no responsibility for issues of regulatory and legal compliance that are the responsibility of
SPI, 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 SPI

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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, PCD shall use commercially reasonable efforts to maintain the continuity of
supply, and SPI shall reasonably cooperate with PCD (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.

ARTICLE 10. INDEMNIFICATION

     Article 10.1. PCD’s Obligation. PCD shall defend, indemnify and hold SPI, 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 PCD’s negligence, willful misconduct or breach of this Agreement (including,
without limitation, PCD’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
PCD). PCD shall have no obligation under this clause to indemnify SPI 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, PCD’s indemnification of SPI hereunder shall extend only to matters of
drug quality.

     Article 10.2. SPI’s Obligation. SPI shall defend, indemnify and hold PCD 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 (1) SPI’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 SPI 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 SPI
under this Agreement. SPI shall have no obligation under this clause to indemnify PCD for claims
described in Article 10.1. For the avoidance of doubt with regard to product liability claims
relating to Drug Product, SPI’s indemnification of PCD 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

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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 SPI 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.

     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

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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. PCD acknowledges that SPI will enter into one or
more agreements with third parties for the purpose of commercial sale of RU-0211 in the SPI
Territory, and in the event that such third parties raise concerns or place demands on SPI
concerning matters pertaining to this Agreement, PCD shall work with SPI to resolve such concerns
or demands, including amending this Agreement, as may be commercially appropriate or necessary.

     SPI acknowledges that RTU will enter into agreements with third parties for the purpose of
procuring various materials necessary for PCD to manufacture and supply RU-0211 hereunder, and in
the event that such third parties raise concerns or place demands on RTU that will result in
increase of manufacturing costs, SPI 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. PCD may subcontract its obligations hereunder without the
consent of SPI; PROVIDED, HOWEVER, that PCD shall assume complete responsibility for the acts of
its subcontractor and agrees to make SPI whole for any act or omission of PCD’s subcontractor that
damages SPI as if the act or omission were PCD’s.

     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

12

 

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 SPI to any entity which
acquired, or otherwise succeeded in interest in, all or substantially all of the assets in relation
to RU0211, and such entity shall be bound by this Agreement. The parties specifically contemplate
that this agreement may be assigned to PCD 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 SPI is entering into this
Agreement on the basis of PCD’s special expertise in manufacturing prostaglandin-related compounds,
and so SPI 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 New York
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:

	 	 	 
	if to SPI:

	 	Sucampo Pharmaceuticals, Inc.
	 

	 	4733 Bethesda Avenue, Suite 450
	 

	 	Bethesda, Maryland 20814 U.S.A.
	 

	 	Attention: Dr. Myra Patchen
	 

	 	Facsimile number: 1-301-961-3440
	 
	 	 
	and if to PCD:

	 	Pharma Chemical Division
	 

	 	R-Tech Ueno, Ltd.
	 

	 	4-1, Techno Park
	 

	 	Sanda,Hyogo 669-1339
	 

	 	Japan
	 

	 	Attention: Mr. Ryu Hirata
	 

	 	Facsimile number: 81-795-60-7180

     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

13

 

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
SPI with respect to non-conforming Drug Product shall relieve PCD from any portion of its warranty
obligations hereunder unless expressly agreed by SPI 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.

[Remainder of Page Intentionally Left Blank]

14

 

     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
PHARMACEUTICALS, INC.	 
	 
	 	 	 
	By: 	/s/ Mitsunaga Tada

	 	By: 	/s/ Myra L. Patchen, PhD	 
	 	 

	 	 	 	 
	 	Mitsunaga Tada

	 	 	Myra L. Patchen, PhD	 
	 	Representative Director

	 	 	Chief Executive Officer and President	 

15

 

Appendix A

Description of RU-0211

	 	 	 
	Generic name:

	 	lubiprostone
	 	 	 
	Chemical names:

	 	[**]
	 	 	 
	Code name:

	 	RU-0211
	 	 	 
	CAS No.:

	 	136790-76-6
	 	 	 
	Structural Formula:

	 	[**]

 

 

Appendix B

Specifications for RU-0211

Drug Product

[**]

1

 

Appendix C

Clinical Development Schedule

To be provided.

 

 

ADDENDUM

Reference is made to that certain RU-0211 Exclusive Manufacturing and Supply Agreement, dated as of
June 23, 2004, by and between Sucampo Pharmaceuticals, Inc. (“SPI”) and R-Tech Ueno, Ltd. (“RTU”)
(“Original Agreement”).

Capitalized terms used in this Addendum and not otherwise defined have the meaning given to such
terms in the Original Agreement.

SPI and RTU shall hereby agree as follows:

1. SPI may elect to qualify a back up supplier (“Back-Up Supplier”) reasonably acceptable to RTU
for the supply of Drug Substance and Drug Product. In the event that RTU is unable, or determines
that it will be unable, to produce Drug Substance or Drug Product in accordance with SPI’s Orders,
it shall notify SPI within five (5) business days. Upon the receipt of such notice or the
rejection (in whole or in part) by RTU of an Order pursuant to Article 2.7, SPI shall be entitled
(i) to purchase and use Drug Substance from the Back-Up Supplier and (ii) to purchase and sell Drug
Product from the Back-Up Supplier, in each case to the extent RTU is unable to fill SPI’s Orders,
as submitted by SPI, in full. For such purpose, RTU shall grant to such Back-Up Supplier a
non-exclusive, royalty-free, license under the patent rights and know-how owned by RTU to
manufacture Drug Substance and Drug Product solely as the Back-Up Supplier pursuant to the terms of
this Addendum. Further, RTU shall promptly provide, at such times and locations as may reasonably
be requested by SPI, and at SPI’s expense at reasonable consulting rates, cooperation to enable the
Back-Up Supplier to establish such manufacturing capability. Notwithstanding anything to the
contrary in this Addendum, if RTU recovers the ability to produce Drug Substance and Drug Product
in accordance with SPI’s Orders, RTU shall notify SPI and SPI shall cause the Back-Up Supplier to
cease manufacturing and supplying Drug Substance and Drug Product within five (5) business days,
and SPI shall not purchase from the Back-Up Supplier after such fifth business day any Drug
Substance or Drug Product.

2. Maintenance of Inventory. In furtherance of Article 2.9, RTU agrees to maintain at least a six
(6) month inventory of Drug Substance and at least a six (6) month inventory of the intermediate
product. RTU shall ensure the inventory of Drug Product has an expiration date of at least [**] at
all times; provided however, that if the shelf life approved by the FDA is less than [**], the
shelf life shall be such period [**], but in no event less than [**].

 

 

3. SPI Territory. For the avoidance of doubt, the term “SPI Territory” shall include all
locations where the United States Food and Drug Administration has jurisdiction over the sale of
pharmaceutical products intended for human use.

4. Payments and Currency Conversion. In furtherance of Article 4.6, SPI and RTU agree that
payments for clinical supply and promotional samples shall be made in Japanese Yen. Payment for
commercial supply shall be made one-half in Japanese Yen and one-half in US Dollars [Yen
[**]/capsules and $[**]/capsule to be automatically modulated in proportion to Base Price change
after launch]-in accordance with Article 4.5. For purposes of calculating the cap on the
Commercial Cost of Goods set forth in Article 4.5, Net Sales of SPI shall be converted first into
US Dollars using the applicable average exchange rate for converting the applicable currency to the
US Dollar as published by Bloomberg on the last business day of each month during the period being
measured, and then [**] of the average Net Sales on a per capsule basis measured in US Dollars
shall be converted into Japanese Yen using the daily exchange rate for converting US Dollars into
Yen as published by Bloomberg on the last date of the period being measured.

	 	 	 	 	 
	Sucampo Pharmaceuticals, Inc.

 	 	 
	By:  	/s/ Mariam Morris
 	 	 
	 	Name:  	Mariam Morris 	 	 
	 	Title:  	CFO 	 	 
	 
	R-Tech Ueno, Ltd.

 	 	 
	By:  	/s/ Ryn Hirata
 	 	 
	 	Name:  	Ryn Hirata 	 	 
	 	Title:  	Director, Pharma Chemical Divisionexv10w29

 

Exhibit 10.29

Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisks denote omissions.

RU-0211 EXCLUSIVE MANUFACTURING AND SUPPLY AGREEMENT

     This RU-0211 EXCLUSIVE MANUFACTURING AND SUPPLY AGREEMENT (“Agreement”) is made this 24th day
of June 2005 (the “Effective Date”), by and among Sucampo Pharma Europe Ltd., a corporation
organized and existing under the laws of United Kingdom and having its principal office at 78
Cannon Street, London EC4N6NQ, United Kingdom (“SPE”), and R-Tech Ueno Ltd., a corporation
organized and existing under the laws of Japan and having its principal office at 1-1-7
Uchisaiwai-cyo, Chiyoda-ku, Tokyo 100-0011, Japan (“RTU”) (each referred to herein as a “Party” and
collectively as the “Parties”).

     WHEREAS, SPE and RTU executed the Basic Exclusive Supply Agreement Term Sheet dated March 30,
2005 (the “Term Sheet”), which sets forth the basic terms and conditions under which RTU shall
manufacture and supply certain products to SPE, and the parties now wish to enter into a definitive
agreement in accordance with the Term Sheet;

     WHEREAS, RTU has expertise in the manufacture of the Drug Substances and Drug Products for
preclinical, clinical and commercial use;

     WHEREAS, SPE is a United Kingdom based pharmaceutical company that seeks a supply source for
Drug Substance and Drug Product (defined below) for SPE clinical evaluation and commercial sale in
the SPE Territory (defined below);

     WHEREAS, RTU desires to be the exclusive clinical and commercial supplier of Drug Substance
and Drug Product; and

     WHEREAS, SPE seeks to have RTU supply Drug Substance and Drug Product as further defined
herein for use in SPE clinical development and for future commercial sale in the SPE Territory
(defined below) and desires to have RTU be SPE’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. “Certificate of Analysis” means a certificate provided by RTU to SPE 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 1.2. “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 1.3. “Drug Substance” means the RU-0211 active ingredient, prior to formulation as a
final drug product.

     Article 1.4. “Drug Product” means a finally formulated RU-0211 drug product ready for clinical
use or commercial sale, as appropriate.

     Article 1.5. “Good Manufacturing Practices” or “GMP” means the current good manufacturing
practices for manufacturing Drug substances and Drug products as set forth in 21 USC 351(a)(2)(B)
and 21 CFR Parts 210 and 211 or any successor provisions.

     Article 1.6. “NDA” refers to a New Drug Application, as defined in the United Kingdom Food,
Drug and Cosmetic Act and applicable regulations promulgated there under, or other appropriate
marketing authorization in the United Kingdom, or any counterpart application or marketing
authorization in any country of the SPE Territory.

     Article 1.7. “Net Sales” for a particular period means the amount billed by SPE, its
affiliates and its sublicensees to distributors and other third parties for the sale of a
commercial Drug Product, less cash discounts and/or quantity discounts allowed, credits for
customers; returnes and allowances; all as determined by SPE’s standard accounting practices, which
must be in conformity with Generally Accepted Accounting Priciples.

     Article 1.8. “Order” means, with respect to clinical or commercial supply of Drug Product, a
written communication from SPE to RTU of SPE’s need for a particular supply period, issued in
accordance with Articles 2.4 and 2.5.

     Article 1. 9. “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 1.10 “RU-0211” means the compound known by the USAN name lubiprostone, as described in
more detail in Appendix A.

     Article 1.11. “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 1.12. “SPE Territory” means all of the countries located in EU, Middle East,

2

 

Africa, and their territories and possessions.

ARTICLE 2. GENERAL TERMS OF MANUFACTURING AND SUPPLY

     Article 2.1. Supply. Subject to the terms of this Agreement, RTU agrees to manufacture and
supply the Drug Substance and the Drug Product to SPE and SPE agrees to purchase said Drug
Substance and Drug Product in all such quantities as required by SPE for SPE’s clinical and
commercial purposes.

     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 scale-up. SPE, 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 SPE as described in Article 2.8.

     Article 2.3. Quality Assurance. RTU, at its sole expense, will 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 will be submitted to SPE
promptly following any reasonable request therefor during the term of this Agreement. RTU shall
make available their facilities and relevant records for inspection by the appropriate government
authorities, SPE or SPE’s agents for regulatory or quality assurance purposes upon reasonable
notice and at reasonable times during normal business hours; provided, however, that the inspection
by SPE or its agents 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, SPE shall grant RTU
the exclusive right to manufacture and supply Drug Substance and Drug Product to SPE for clinical
development purposes. During the term of this agreement, RTU and SPE shall from time to time
confer and agree on SPE’s drug supply needs for SPE’s ongoing clinical development program. SPE
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 SPE’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, SPE shall grant RTU the exclusive right to manufacture and supply Drug Product to SPE
for commercial purposes subject to appropriate marketing authorization in the United Kingdom or any
counterpart marketing authorization in any country of the SPE Territory in respect of the Drug
Product. Commencing from the date of filing of the first NDA for a particular Drug Product, SPE
shall provide to RTU in writing a 12 month forecast of its
requirements for Drug

3

 

Product which forecast will be updated quarterly until SPE’s first commercial sale.
Thereafter, SPE shall provide a rolling 12 month forecast, updated monthly. The monthly update
provided to RTU 8 months prior to the actual supply need shall constitute SPE’s supply Order to
RTU, which, subject to the terms and conditions of this Agreement, RTU agrees to supply.

     Article 2.6. Promotional Sample Supply. For a period of twelve (12) months running from the
time of SPE’s first commercial sale of Drug Product, SPE shall be entitled to purchase a
commercially reasonable number of units of Drug Product for promotional purposes.

     Article 2.7. Acceptance or Rejection of an Order. RTU shall have 10 working days from receipt
of an Order from SPE to reject or propose to modify an Order. If an 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.

     Article 2.8. Delivery; Risk of Loss. Any Drug Substance and Drug Product supplied hereunder
to SPE shall be shipped from RTU’s manufacturing facility in Sanda (Hyogo, Japan) or its contract
manufacturer and delivered to a common carrier to be transported for importation into the SPE
Territory. The identity of the common carrier and the port of entry shall be mutually determined
by the Parties in writing. Title and risk of loss shall pass to SPE at the time the goods are
delivered to SPE or its designee, and SPE shall assume all responsibility for and costs associated
with the goods upon such delivery.

     Article 2.9 Inventory; Reports. On a monthly basis, RTU shall provide SPE with a report
detailing present inventory of Drug Substance and Drug Product, along with RTU’s schedule for
production for the succeeding three months. RTU agrees to at all time maintain commercially
reasonable inventory levels of Drug Substance.

     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 RU-0211, either in the SPE
territory or in other parts of the world, provide, however, that RTU shall be prohibited from
supplying the Drug Substance or the Drug Products in the SPE Territory or to those that induce or
facilitate sale in the SPE Territory of the Drug Substance or the Drug Products by any party other
than SPE.

     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 3. ADDITIONAL SERVICES

     Article 3.1. Consulting. In addition to the products supplied hereunder, RTU agrees to make
available certain personnel for consulting SPE on manufacturing-related regulatory issues subject
to payment by SPE of service fees at an appropriate hourly charge.

4

 

ARTICLE 4. PRICING AND PAYMENT

     Article 4.1. 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 SPE $2 million on Execution of the Term Sheet.

     Article 4.2 Clinical Development Schedule and Report. Schedule of the clinical development of
RU-0211 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 change in
the schedule. SPE shall provide RTU with updates in writing in reasonable details of progress and
forecast of the clinical development of RU-0211 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 supply 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 [**]$(or JPY equivalent of [**]$) per capsule without the packaging cost.

     Article 4.5. Commercial Cost of Goods. In consideration for RTU’s supply of RU-0211 for
commercial sale hereunder, SPE shall pay RTU [**] Yen (in Japanese Yen) per capsule in the case
of BID or [**] Yen per capsule in the case of QD (the “Commercial Cost of Goods”). In no
condition, the Commercial Cost of Goods shall not be less than the Base Price. The Commercial
Cost of Goods shall not exceed [**] percent ([**]%) of the Net Sales. Notwithstanding anything
contained in this Article 4.5, in no event shall the Commercial Cost of Goods be less than the
Commercial Cost of Goods as set forth above in this Article 4.5.

     Article 4.6. Terms of Payment. Any payments due hereunder shall be made within [**] 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. Shipping Terms. All payments for Drug Substance and Drug Product supplied
hereunder are inclusive of all cost, insurance and freight (CIF) necessary for delivery to SPE as
described in Article 2.8, except that title and risk of loss shall pass to SPE upon delivery to SPE
or its designee.

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

5

 

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. Each party shall retain all right, title and interest in its
intellectual property, including information, improvements, developments, inventions, patents,
trade secrets and know-how, and Confidential Information and other materials disclosed by it to the
other party hereunder.

     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 SPE Territory, subject, however, to the provisions of Section 2.10.

6

 

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 SPE 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. RTU shall be responsible for
providing information that may be used in, or referenced by, an application filed by SPE with the
regulatory authority in its territory for purposes of ensuring that the RTU manufacturing facility
is authorized to manufacture the Drug Substance and Drug Product to be supplied under this
Agreement. SPE 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 regulatory authority as may be needed for compliance with the applicable
laws, rules and regulations enforced by such authority. RTU shall advise SPE 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
the regulatory authority, and all European Pharmacopoeia 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.

7

 

ARTICLE 8. REPRESENTATIONS & WARRANTIES OF SPE

     Article 8.1. Organization. SPE 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. SPE 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. SPE 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. SPE represents that it will at all times maintain commercially
reasonable levels of insurance, including general liability insurance, in light of their
responsibilities hereunder. SPE shall provide RTU with certificates of insurance upon RTU’s
written request for the same.

     Article 8.5. Obligations of Confidentiality. SPE 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 SPE 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 SPE 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.

8

 

     Article 9.4. Insurance. RTU represents that it will at all times maintain commercially
reasonable levels of insurance, including general liability insurance, in light of their
responsibilities hereunder. RTU shall provide SPE with certificates of insurance upon SPE’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.

     Article 9.8. Process and Product Warranties. RTU warrants and represents that:

          (a) Drug Product sold by RTU to SPE 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 SPE hereunder shall be adulterated or misbranded within the
meaning of the United Kingdom Food, Drug, and Cosmetic Act, as amended and in effect at the time of
shipment (the “Act”), or within the meaning of any state or municipal laws in the United Kingdom
applicable 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 SPE as a
result of labels or package texts specified or provided by SPE for the Drug Product; and RTU shall
have no responsibility for issues of regulatory and legal compliance that are the responsibility of
SPE, 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 SPE 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 SPE shall reasonably cooperate with RTU (including but not limited to providing

9

 

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.

ARTICLE 10. INDEMNIFICATION

     Article 10.1. RTU’s Obligation. RTU shall defend, indemnify and hold SPE, 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 SPE 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 SPE hereunder shall extend only to matters of
drug quality.

     Article 10.2. SPE’s Obligation. SPE 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,
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) SPE’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 SPE 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 SPE
under this Agreement. SPE 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, SPE’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

10

 

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 from execution of this Agreement, 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.

     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.

11

 

     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 SPE will enter into one or
more agreements with third parties for the purpose of commercial sale of RU-0211 in the SPE
Territory, and in the event that such third parties raise concerns or place demands on SPE
concerning matters pertaining to this Agreement, RTU shall work with SPE to resolve such concerns
or demands, including amending this Agreement, as may be commercially appropriate or necessary.
SPE acknowledges that RTU will enter into agreements with third parties for the purpose of
procuring various materials necessary for RTU to manufacture and supply RU-0211 hereunder, and in
the event that such third parties raise concerns or place demands on RTU that will result in
increase of manufacturing costs, SPE 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 without the
consent of SPE; PROVIDED, HOWEVER, that RTU shall assume complete responsibility for the acts of
its subcontractor and agrees to make SPE whole for any act or omission of RTU’s subcontractor that
damages SPE as if the act or omission were RTU’s.

     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.

12

 

     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 SPE to any entity which
acquired, or otherwise succeeded in interest in, all or substantially all of the assets in relation
to RU0211, 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 SPE is entering into this
Agreement on the basis of RTU’s special expertise in manufacturing prostaglandin-related compounds,
and so SPE 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:

	 	 	 
	if to SPE:

	 	Sucampo Pharma Europe Ltd.
	 

	 	78 Cannon Street, London EC4N6NQ
	 

	 	United Kingdom
	 

	 	Attention: Mr. Alan Chalmers
	 

	 	Facsimile number:
	 
	and if to RTU:

	 	R-Tech Ueno, Ltd.
	 

	 	1-1-7 Uchisaiwai-cyo, Chiyoda-ku, Tokyo
	 

	 	Japan, 100-0011
	 

	 	Attention: Mr. Ryu Hirata
	 

	 	Facsimile number: 81-795-60-7180

     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

13

 

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 SPE with respect to non-conforming Drug Product shall relieve RTU from any portion of
its warranty obligations hereunder unless expressly agreed by SPE 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.

[Remainder of Page Intentionally Left Blank]

14

 

     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 Europe Ltd.	 
	 
	 	 	 
	By: 	/s/ Mitsunaga Tada

	 	By: 	/s/ Alan Chalmers	 
	 	 

	 	 	 	 
	 	Mitsunaga Tada

	 	 	Alan Chalmers	 
	 	Representative Director

	 	 	Director	 

15

 

Appendix A

Description of RU-0211

	 	 	 
	Generic name:

	 	lubiprostone
	 	 	 
	Chemical names:

	 	[**]
	 	 	 
	Code name:

	 	RU-0211
	 	 	 
	CAS No.:

	 	136790-76-6
	 	 	 
	Structural Formula:

	 	[**]

 

 

Appendix B

Specifications for RU-0211

Drug Product

     [**]

 

 

Appendix C

Clinical Development Schedule

To be provided.

 

 

ADDENDUM

Reference is made to that certain RU-0211 Exclusive Manufacturing and Supply Agreement, dated as of
June 24, 2005, by and between Sucampo Pharma Europe Ltd. (“SPE”) and R-Tech Ueno, Ltd. (“RTU”)
(“Original Agreement”).

Capitalized terms used in this Addendum and not otherwise defined have the meaning given to such
terms in the Original Agreement.

SPE and RTU shall hereby agree as follows:

1. SPE may elect to qualify a back up supplier (“Back-Up Supplier”) reasonably acceptable to RTU
for the supply of Drug Substance and Drug Product. In the event that RTU is unable, or determines
that it will be unable, to produce Drug Substance or Drug Product in accordance with SPE’s Orders,
it shall notify SPE within five (5) business days. Upon the receipt of such notice or the
rejection (in whole or in part) by RTU of an Order pursuant to Article 2.7, SPE shall be entitled
(i) to purchase and use Drug Substance from the Back-Up Supplier and (ii) to purchase and sell Drug
Product from the Back-Up Supplier, in each case to the extent RTU is unable to fill SPE’s Orders,
as submitted by SPE, in full. For such purpose, RTU shall grant to such Back-Up Supplier a
non-exclusive, royalty-free, license under the patent rights and know-how owned by RTU to
manufacture Drug Substance and Drug Product solely as the Back-Up Supplier pursuant to the terms of
this Addendum. Further, RTU shall promptly provide, at such times and locations as may reasonably
be requested by SPE, and at SPE’s expense at reasonable consulting rates, cooperation to enable the
Back-Up Supplier to establish such manufacturing capability. Notwithstanding anything to the
contrary in this Addendum, if RTU recovers the ability to produce Drug Substance and Drug Product
in accordance with SPE’s Orders, RTU shall notify SPE and SPE shall cause the Back-Up Supplier to
cease manufacturing and supplying Drug Substance and Drug Product within five (5) business days,
and SPE shall not purchase from the Back-Up Supplier after such fifth business day any Drug
Substance or Drug Product.

2. Maintenance of Inventory. In furtherance of Article 2.9, RTU agrees to maintain at least a six
(6) month inventory of Drug Substance and at least a six (6) month inventory of the intermediate
product. RTU shall ensure the inventory of Drug Product has an expiration date of at least [**] at
all times; provided however, that if the shelf life approved by the FDA is less than [**], the
shelf life shall be such period [**], but in no event less than [**].

 

 

3. Payments and Currency Conversion. In furtherance of Article 4.6, SPE and RTU agree that
payments for clinical supply and promotional samples shall be made in US Dollars or Japanese Yen.
If made in Japanese Yen, the supply price set forth in Article 4.3 or Article 4.4, as applicable,
shall be converted into Yen using the daily exchange rate for converting US Dollars into Yen as
published by Bloomberg on the date of invoice. Payment for commercial supply shall be made in
Japanese Yen in accordance with Article 4.5. For purposes of calculating the cap on the Commercial
Cost of Goods set forth in Article 4.5, Net Sales of SPE shall be converted into Japanese Yen using
the applicable average exchange rate for converting the applicable currency to Japanese Yen as
published by Bloomberg on the last business day of each month during the period being measured.

	 	 	 	 	 
	Sucampo Pharma Europe Ltd.

 	 	 
	By:  	     /s/ Alan A. Chalmers
 	 	26.09.2006
	 	Name:  	Alan A. Chalmers 	 	 
	 	Title:  	Director 	 	 
	 
	R-Tech Ueno, Ltd.

 	 	 
	By:  	/s/ Ryn Hirata
 	 	2 Oct, 2006
	 	Name:  	Ryn Hirata 	 	 
	 	Title:  	Director, Pharma Chemical Division

R-Tech Ueno, Ltd.

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