Document:

CHANGE IN CONTROL
AGREEMENT

 

THIS AGREEMENT
(the "Agreement") made as of this 9th day of March, 2012 (the "Effective Date") by, between, and among
Sandy Spring Bancorp, Inc., a registered bank holding company and a Maryland Corporation (“Bancorp”), Sandy
Spring Bank, a Maryland corporation and wholly owned subsidiary of Bancorp with its headquarters in Olney, Maryland
and Jeffrey A. Welch  (the “Officer").

 

WITNESSETH:

 

WHEREAS,
the Officer is employed by the Bank as Executive Vice President and Chief Credit Officer; and

 

WHEREAS,
the Bank and the Officer each desire that the Officer be provided with certain benefits in the event of a Change
in Control, as defined below.

 

NOW,
THEREFORE, in consideration of the premises and mutual covenants herein contained, it is agreed as follows:

 

		1.	Definitions:

a.
Change in Control. A "Change in Control" shall be deemed to occur on the earliest of any of the following events
after the date of this Agreement:

 

i. The acquisition by any entity,
person or group (other than the acquisition by a tax-qualified retirement plan sponsored by Sandy Spring Bancorp, Inc. ("Bancorp")
or the Bank of beneficial ownership, as that term is defined in Rule 13d-3 under the Securities Exchange Act of 1934, of more than
25% of the outstanding capital stock of Bancorp or the Bank entitled to vote generally for the election of directors ("Voting
Stock");

 

ii. The commencement by any entity,
person, or group (other than Bancorp or the Bank, a subsidiary of Bancorp or the Bank, or a tax-qualified retirement plan sponsored
by Bancorp or the Bank) of a tender offer or an exchange offer for more than 20% of the outstanding Voting Stock of Bancorp or
the Bank;

 

iii. The effective time of
(a) a merger or consolidation of Bancorp or the Bank with one or more other corporations as a result of which the holders of the
outstanding Voting Stock of Bancorp or the Bank immediately prior to such merger exercise voting control over less than 80% of
the Voting Stock of the surviving or resulting corporation, or (b) a transfer of substantially all of the property of Bancorp or
the Bank other than to an entity of which Bancorp or the Bank owns at least 80% of the Voting Stock;

 

iv. Upon the acquisition by any
entity, person, or group of the control of the election of a majority of the Bank's or Bancorp's directors;

 

v. At such time that, during
any period of two consecutive years, individuals who at the beginning of such period constitute the Board of Directors ("Board")
of Bancorp or the Board of the Bank (the "Continuing Directors") cease for any reason to constitute at least two-thirds
of such Board, provided that any individual whose election or nomination for election as a member of the Board was approved by
a vote of at least two-thirds of the Continuing Directors of such Board then in office shall be considered a Continuing Director.

 

b. Covered Period. The
"Covered Period" shall mean the period beginning six months before a Change in Control and ending at the end of the term
specified in Section 2 hereof.

c. Good Reason. "Good
Reason" shall be deemed to exist at the time that any of the following events occurs without the Officers express written
consent:

 

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i.
A material reduction in the Officer's responsibilities or authority in connection with his employment by Bancorp or the Bank;

 

ii.
Assignment to the Officer of duties of a non-executive nature or duties for which the officer is not reasonably equipped by the
Officer’s skills and experience;

 

iii.
A reduction in salary or material reduction in benefits;

 

iv.
A requirement that the Officer’s principal business office or principal place of residence be relocated outside any county
in which the Bank has its main office, its branches, or its deposit-taking Automatic Teller Machines; or

 

v.
Failure to provide office facilities, secretarial services, and other administrative services to Officer that are substantially
equivalent to the facilities and services provided to the Officer immediately after the Effective Date (excluding brief periods
during which office facilities may be temporarily unavailable due to fire, natural disaster, or other calamity).

 

vi.
The Officer’s resignation for any reason during the first sixty (60) days immediately following the first six (6) months
after the closing date of a definitive purchase and assumption agreement, the execution of which brought about the Change in Control.

 

Notwithstanding
the foregoing, a reduction or elimination of the Officer's benefits under one or more benefit plans maintained by Bancorp or the
Bank as part of a good faith, overall reduction or elimination of such plan or plans or benefits thereunder applicable to all
participants in a manner that does not discriminate against the Officer (except as such discrimination may be necessary to comply
with law) shall not constitute an event of Good Reason or a material breach of this Agreement, provided that benefits of the type
or to the general extent as those offered under such plan or plans prior to such reduction or elimination are not available to
other officers of Bancorp or the Bank or any company that controls either of them under a plan or plans in or under which the
Officer is not entitled to participate and to receive benefits on a fair and nondiscriminatory basis.

 

Notwithstanding
the foregoing, it is expected that Bancorp and the Bank will perform all duties and agreements to be performed herein, and they
shall have the right to cure non-performance, to the extent such performance is reasonably capable of being cured, and shall promptly
upon receipt of written notice of non-performance that the Officer describes and alleges to be Good Reason, comply with the requirements
of such notice, and further if they shall not comply with such notice to the satisfaction of the Officer within forty-eight (48)
hours after delivery thereof, (except if such compliance cannot be reasonably completed within forty-eight (48) hours, if Bank
shall not commence to comply with such period and thereafter proceed to completion with due diligence) the Officer shall have
the right to proceed with notice of a “Good Reason” termination as specified above.

 

d.
Just Cause. Termination for "Just Cause" shall mean termination of employment by reason of the Officer's:

 

		i.	Personal dishonesty;

 

		ii.	Willful misconduct;

 

		iii.	Breach of fiduciary duty involving personal profit;

 

		iv.	Intentional failure to perform duties; or

 

		v.	Willful violation of any law, rule, or regulation (other than traffic violations or similar offenses) or final cease-and-desist
order.

 

Notwithstanding
the foregoing, it is expected that Officer will perform all duties and agreements to be performed herein, and Officer shall have
the right to cure non-performance, to the extent such performance is reasonably capable of being cured, and shall promptly upon
receipt of written notice of non-performance that Bancorp or the Bank describes and alleges to be Just cause, comply with the requirements
of such notice, and further if Officer shall not comply with such notice to the satisfaction of the Bank within forty-eight (48)
hours after delivery thereof, (except if such compliance cannot be reasonably completed within forty-eight (48) hours, if Officer
shall not commence to comply within such period and thereafter proceed to completion with due diligence) the Bank shall have the
right to proceed with a “Just Cause” termination as described above.

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The Bank shall determine if Just Cause exists with
respect to its employment of the Officer in the exercise of its good faith discretion.

 

e.  Total Annual Compensation.
For purposes of this Agreement, Total Annual Compensation shall mean:

 

i. One-year's
base salary at the highest rate in effect in the period beginning six months before the last Change in Control to occur before
termination of the Officer's employment; plus

 

ii. Other compensation, including,
without limitation, bonus payments, at the rate paid for (i) the calendar year preceding such Change in Control, or (ii) the calendar
year preceding termination of the Officer's employment, whichever is greater, but shall not include the value of benefits that
are not subject to current federal income taxation to the Officer. Such other compensation for a calendar year shall be annualized
on a monthly basis based upon the number of months in the calendar year in which the Officer was employed.

 

		2.	Term. The term of this Agreement shall be the period commencing on the Effective Date and
ending on the last moment of the second anniversary of the Effective Date. On each anniversary of the Effective Date prior to a
termination of the Agreement, the term under this Agreement shall be extended for an additional one-year period beyond the then
effective expiration date without action by any party, provided that neither the Bank nor the Officer shall have given written
notice at least sixty (60) days prior to such anniversary date of its or his desire that the term not be extended.

 

		3.	Termination in Connection with a Change in Control.

a. If, within the Covered Period,
the Bank shall terminate the Officer's employment without Just Cause or the Officer shall terminate his employment with Good Reason,
the Bank shall, within ten calendar days of the termination of Officer's employment, make a lump-sum cash payment to him equal
to 2.99 times his Total Annual Compensation.

b. Also in the event of such
a termination, the Officer shall, for three calendar years following the Officer’s termination of employment, continue to
participate in any benefit plans of Bancorp and the Bank that provide health (including medical and dental), life and disability
insurance, or similar coverage upon terms no less favorable than the most favorable terms provided to executive officers of the
Bank during such period.

 

		4.	Adjustment of Certain Payments and Benefits.

a. In the event that payments
pursuant to this Agreement (including, without limitation, any payment under any plan, program, or arrangement referred to in Section
3 hereof) would result in the imposition of a penalty tax pursuant to Section 28OG of the Internal Revenue Code, such payments
shall be reduced to equal the maximum amount that may be paid under such Section 28OG without exceeding such limits. In the event
any such reduction in payments is necessary, the Officer may determine, in his sole discretion, which categories of payments (including,
without limitation, the value of benefits, acceleration of vesting, or receipt of benefits or amounts) are to be reduced or eliminated.

b. Payments made to the Officer
pursuant to this Agreement or otherwise, are subject to and conditioned upon their compliance with Section I (W) of the Federal
Deposit Insurance Act ("FDIA"), relating to "golden parachute" and indemnification payments and certain other
benefits.

 

		5.	Reimbursement of Officer’s Expenses to Enforce
this Agreement. Bancorp or the Bank shall reimburse the Officer for all out-of-pocket
expenses, including, without limitation, reasonable attorney's fees, incurred by the Officer in connection with successful enforcement
by the Officer of the obligations of Bancorp or the Bank to the Officer under this Agreement. Successful enforcement shall mean
the grant of an award of money or the requirement that Bancorp or the Bank take some action specified by this Agreement (i) as
a result of court order; or (ii) otherwise by Bancorp or the Bank following an initial failure of Bancorp or the Bank to pay such
money or take such action promptly after written demand therefore from the Officer stating the reason that such money or action
was due under this Agreement at or prior to the time of such demand.

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		6.	Confidentiality. The Officer agrees to maintain
the confidentiality of any and all information concerning the operation or financial status of Bancorp, the Bank, and any
of their subsidiaries; the names or addresses of any of the borrowers, depositors, and other customers of any such companies;
any information concerning or obtained from such customers; and any other information concerning Bancorp or the Bank or any of
their subsidiaries to which he may be exposed during the course of his employment. The Officer further agrees that, unless required
by law or specifically permitted by Bancorp or the Bank in writing, he will not disclose to any person or entity, either during
or subsequent to his employment, any of the above-mentioned information which is not generally known to the public, nor shall
he employ such information in any way other than for the benefit of Bancorp and the Bank.

 

		7.	Successors and Assigns.

a. This Agreement shall inure
to the benefit of and be binding upon any corporate or other successor of the Bank that shall acquire, directly or indirectly,
by merger, consolidation, purchase or otherwise, all or substantially all of the assets or stock of the Bank.

b. Since the Bank is contracting
for the unique and personal skills of the Officer, the Officer shall be precluded from assigning or delegating his rights or duties
hereunder without first obtaining the written consent of the Bank.

 

		8.	No Mitigation. The Officer shall not be required to mitigate the amount of any payment provided
for in this Agreement by seeking other employment or otherwise and no such payment shall be offset or reduced by the amount of
any compensation or benefits provided to the Officer in any subsequent employment.

 

		9.	No Plan Created. The Officer and the Bank expressly
declare and agree that this Agreement was negotiated among them and that no provision or provisions of this Agreement are intended
to, or shall be deemed to, create any plan for purposes of the Employee Retirement Income Security Act or any other law or regulation,
and the Bank and the Officer each expressly waives any right to assert the contrary. Any assertion in any judicial or administrative
filing, hearing, or process by or on behalf of the Officer or the Bank that such a plan was so created by this Agreement shall
be deemed a material breach of this Agreement by the party making such an assertion or on whose behalf such assertion was made.

 

		10.	No Additional Rights: Third Party Beneficiary.

a. This Agreement does
not confer any right to employment or any other right not specifically stated herein. Any assertion in any judicial or administrative
filing, hearing, or process by or on behalf of the Officer or the Bank that it does so shall be deemed a material breach of this
Agreement by the party making such an assertion or on whose behalf such assertion was made.

 

b. Bancorp is a third
party beneficiary, with notice thereof, to Section 5 of this Agreement. This Agreement is for the benefit of the parties hereto,
and, except as expressly stated herein with respect to Bancorp, is not intended to be for the benefit of, or to be enforceable
by, any other person.

 

		11.	Certain Regulatory Events.

a. If the Officer is removed
and/or permanently prohibited from participating in the conduct of the Bank's affairs by an order issued under Sections 8(e)(4)
or 8(g)(1) of the FDIA, all obligations of the Bank under this Agreement shall terminate as of the effective date of the order,
but vested rights of the parties shall not be affected.

 

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b. If the Bank is in default
(as defined in Section 3(x)(1) of FDIA), all obligations of the Bank under this Agreement shall terminate as of the date of default,
but vested rights of the parties shall not be affected.

 

c. If a notice served under Sections
8(e)(3) or 8(g)(1) of the FDIA suspends and/or temporarily prohibits the Officer from participating in the conduct of the Bank's
affairs, the Bank's obligations under this Agreement shall be suspended as of the date of such service, unless stayed by appropriate
proceedings. If the charges in the notice are dismissed, the Bank may, in its discretion, (i) pay the Officer all or part of the
compensation withheld while its contract obligations were suspended, and (ii) reinstate (in whole or in part) any of its obligations
that were suspended.

 

The occurrence
of any of the events described in paragraphs a, b, and c above may be considered by the Bank in connection with a termination for
Just Cause.

 

		12.	Notices. All notices, requests, demands and other communications in connection with this
Agreement shall be made in writing and shall be deemed to have been given when delivered by hand or 48 hours after mailing at any
general or branch United States Post Office, by registered or certified mail, postage prepaid, addressed as follows, or to such
other address as shall have been designated in writing by the addressee:

 

		a.	If to the Bank:

 

Sandy
Spring Bank

17801
Georgia Avenue

Olney,
Maryland 20832

Attention:
Daniel J. Schrider, President

 

		b.	If to the Officer:

 

Jeffrey
A. Welch

2803
Green Bower Way

Ellicott
City, MD 21042

 

		13.	Amendments. No amendments or additions to this
Agreement shall be binding unless made in writing and signed by all of the parties.

 

		14.	Applicable Law. Except to the extent preempted
by Federal law, the laws of the State of Maryland, without regard to its conflict of laws principles, shall govern this Agreement
in all respects, whether as to its validity, construction, capacity, performance or otherwise.

 

		15.	Severability. The provisions of this Agreement
shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability
of the other provisions hereof.

 

		16.	Headings. Headings contained herein are for convenience
of reference only.

 

		17.	Entire Agreement. This Agreement, together with
any understanding or modifications thereof as agreed to in writing by the parties, shall constitute the entire agreement among
the parties hereto with respect to the subject matter hereof.

 

		18.	Section 409A

(i)       The
Officer will be deemed to have a termination of employment for purposes of determining the timing of any payments that are classified
as deferred compensation only upon a “separation from service” within the meaning of Section 409A.

 

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(ii)      If
at the time of the Officer’s separation from service, (a) the Officer is a “specified employee” (within
the meaning of Section 409A and using the methodology selected by the Bank) and (b) the Bank makes a good faith determination
that an amount payable or the benefits to be provided hereunder constitutes deferred compensation (within the meaning of Section 409A),
the payment of which is required to be delayed pursuant to the six-month delay rule of Section 409A in order to avoid
taxes or penalties under Section 409A, then the Bank will not pay the entire amount on the otherwise scheduled payment date
but will instead pay on the scheduled payment date the maximum amount permissible in order to comply with Section 409A (i.e.,
any amount that satisfies an exception under the Section 409A rules from being categorized as deferred compensation) and will
pay the remaining amount (if any) in a lump sum on the first business day after such six month period.

 

(iii)     To
the extent the Officer would be subject to an additional 20% tax imposed on certain deferred compensation arrangements pursuant
to Section 409A as a result of any provision of this Agreement, such provision shall be deemed amended to the minimum extent
necessary to avoid application of such tax and the parties shall promptly execute any amendment reasonably necessary to implement
this Section 17.  The Officer and the Bank agree to cooperate to make such amendment to the terms of this Agreement
as may be necessary to avoid the imposition of penalties and taxes under Section 409A; provided, however, that the Officer
agrees that any such amendment shall provide the Officer with economically equivalent payments and benefits, and the Officer agrees
that any such amendment will not materially increase the cost to, or liability of, the Bank with respect to any payment.

 

(iv)For purposes of the this
Agreement, Section 409A shall refer to Section 409A of the Internal Revenue Code of 1986, as amended, and the Treasury regulations
and any other authoritative guidance issued thereunder.

 

 

 

[SIGNATURE PAGE TO FOLLOW]

 

 

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IN WITNESS WHEREOF,
the parties hereto have executed this Agreement on the date first set forth above.

 

	 	SANDY SPRING BANCORP, INC.	 
	 	 	 
	 	 	 
	 	/s/ Daniel J. Schrider	 
	 	Daniel J. Schrider, President and Chief Executive Officer	 
	 	 	 
	 	 	 
	 	SANDY SPRING BANK	 
	 	 	 
	 	 	 
	 	/s/ Daniel J. Schrider	 
	 	Daniel J. Schrider, President and Chief Executive Officer	 
	 	 	 
	 	 	 
	 	OFFICER	 
	 	 	 
	 	/s/ Jeffrey
A. Welch	 
		Jeffrey
A. Welch	 

 

 

 

 

    	7Loan Guarantee and Development
Agreement

 

This Loan Guarantee and
Development Agreement (“Agreement”) dated September 8, 2011 (the “Effective Date”), by and between
Numab AG, a corporation formed under the laws of Switzerland with an address of c/o Penta Treuhand GmbH, Glärnischstrasse
13, 8800 Thalwil (“Numab”) and Sucampo AG, a corporation formed under the laws of Switzerland with an
address of Graben 5, CH-6300 Zug, Switzerland (“Sucampo”) (each a “Party”
and collectively, the “Parties”).

 

WHEREAS,
Numab possesses proprietary technology and has the know-how to discover high-affinity antibodies and stable antibody fragments
and to develop such protein therapeutics until clinical proof of concept;

 

WHEREAS,
Sucampo is interested in engaging Numab to develop antibodies against certain selected targets in order to obtain a product
candidate to be the subject of further preclinical and clinical research in accordance with the terms set forth herein; and

 

WHEREAS, in partial consideration for
certain services as described herein, Sucampo will provide a loan guarantee to secure Numab's financing to enable Numab to begin
its operations and provide such services to Sucampo.

 

NOW, THEREFORE,
for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties intending to be legally
bound, hereby agree as follows:

 

		1.	Definitions

 

		1.1	“Affiliate” shall mean any company, corporation or other form of legal entity which controls, is controlled
by or is under common control with a Party, whereby "control" means ownership of 50% or more of the securities or other
ownership interest representing the equity of an entity or the power to exercise 50% or more of the voting securities in an entity
or otherwise the power to control or direct the management of an entity. 

 

		1.2	“Antibody/ies” shall mean antibody/ies or antibody derivative(s), which also includes antibody fragments
and bispecific antibody formats

 

 

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		1.3	“CDA” shall mean the Confidential Disclosure Agreement dated March 1, 2011 by and between the Parties (with
Numab at that time having a provisional pre-registration name of B1 Biotherapeutics).

 

		1.4	"Co-exclusive" and "Co-exclusivity" shall mean the right of a Party and one (but not more)
other party, including the other Party, to use and exploit, including the right to sub-license, the respective Intellectual Property
Rights and other rights for which Co-Exclusivity is agreed upon.

 

		1.5	“Commercialization Agreement” shall mean an agreement between Sucampo and Numab with respect to the further
development and commercialization of one or more Compounds and in accordance with Section 6.2.

 

		1.6	“Commercialization Criteria” shall mean criteria mutually agreed for each Discovery Project and shall include
IP and exclusivity assurances acceptable to Sucampo.

 

		1.7	“Commercialization Option” shall mean an option granted by Numab to Sucampo to enter into a Commercialization
Agreement with respect to a Compound according to the terms as set forth below in Section 6.2.

 

		1.8	“Commercialization Option Period” shall mean, with respect to each Discovery Project, the period beginning
with the payment of the applicable Success Fee and ending the later of (i) nine (9) months after the IND Ready Criteria were achieved
for the respective Discovery Project; or (ii) six (6) months after Sucampo’s obligations under the Loan Guarantee end, during
which Sucampo may exercise its Commercialization Option for the given Discovery Project.

 

		1.9	“Compound Patents” shall have the meaning set forth in Section 8.2.2.

 

		1.10	“Confidential Information” shall mean any
business, financial, marketing, technical, scientific or other information or, including samples, that is disclosed by one
(the “Disclosing Party”) to the other Party (the “Recipient”) under the CDA or this Agreement,
but shall not include information (a) that previously to the disclosure by the Disclosing Party was known to the Recipient free
of any obligation towards the Disclosing Party to keep it confidential, (b) which becomes generally available to the public through
no wrongful act of the Recipient; (c) that is rightfully received from a third party under no obligation of confidence to such
third party; or (d) that is independently developed by the Recipient without reference to information which has been disclosed
pursuant to this Agreement or under the CDA.

 

 

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			Confidential Information includes not only written or other tangible information, but also information transferred orally,
visually, electronically or by any other means.

 

		1.11	“Compound” shall mean an Antibody to a Sucampo Target.

 

		1.12	“Discovery Project” shall mean activities to meet the IND Ready Criteria for a Compound.

 

		1.13	“Discovery Project No. 1” shall have the meanings set forth in Section 4 below.

 

		1.14	“Effective Date” shall have the meaning set forth in the first paragraph of this Agreement.

 

		1.15	“Escrowed Targets” shall mean the Targets identified and deposited in escrow pursuant to Section 3.4.3 below.

 

		1.16	“FTE Rate” shall mean the yearly costs for a Full Time Equivalent (total yearly cost for a lab employee
including overhead, standard consumables, infrastructure costs and equipment costs). The [...***...] as of the Effective
Date and shall be adjusted yearly according to the inflation index as published by the Swiss Federal Office for Statistics (Bundesamt
für Statistik; Landesindex der Kosumentenpreise).

 

		1.17	“Indebtedness” shall mean any form of debt financing, loan, credit line or the like provided by a third
party, but shall exclude any form of equity financing, leasing or supplier credits.

 

		1.18	“IND Ready Criteria” shall mean objective specifications defining ex vivo primary pharmacodynamic
and biophysical characteristics that will be agreed upon between the Parties for an Antibody against a Sucampo Target. The IND
Ready Criteria shall be included in each Research Plan. IND Ready Criteria shall be defined such that it supports subsequent preclinical
development including current Good Manufacturing Practice (cGMP) manufacturing process development and preclinical safety and toxicology
studies to satisfy the Investigational New Drug (IND) requirements for biologics in accordance with the US Food and Drug Administration
(FDA) or other regulatory authority current regulations and/or guidance. Finally, Antibodies produced in a generic lab scale process
according to Section 3.9.2 could possibly be used for non-Good Laboratory Practice (GLP) in vitro and animal studies to assess
pharmacokinetic and pharmacology.

 

		1.19	“Intellectual Property Rights” means: (i) any and all European and/or foreign patent applications, letters
patent, patents, or any division, continuation, continuation-in-part, reissue, or extension thereof, and any applications (including
provisional applications) therefore; (ii) any and all trade secrets, know-how, and trade secret rights arising under the laws of
Switzerland and/or laws of foreign countries; and (iii) all rights pursuant to (i) and (ii) hereinbefore as may hereafter come
into existence, and all renewals and extensions thereof, regardless of whether such rights arise under the laws of Switzerland
or any other state, country or jurisdiction.

 

*Confidential Treatment Requested

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		1.20	“Joint Scientific Committee” or “JSC” shall be the joint committee to be established
by the Parties and with the tasks and responsibilities as set forth in Section 3.1 below.

 

		1.21	“Loan” shall mean the financing obtained by Numab from a bank or other institution reasonably acceptable
to Sucampo in an amount not greater than CHF 5 million at a market rate of interest and for a term not to exceed five (5) years.

 

		1.22	“Loan Agreement” shall mean the agreement between Numab and any bank or other institution for the Loan,
a copy of which shall be provided to Sucampo by Numab as per Section 12.10 hereunder within two (2) business days of the completed
execution of the Loan Agreement.

 

		1.23	“Loan Guarantee” shall mean the cash collateral to be provided by Sucampo for the Loan reasonably acceptable
in form and substance to Sucampo.

 

		1.24	“Maximally Available Target Exclusivity” shall have the meaning as set forth in Section 3.3.4.

 

		1.25	“New IND Ready Criteria” shall mean modified criteria that are mutually defined in the event that the IND
Ready Criteria for a given Discovery Project were not met.

 

		1.26	“Numab” shall have the meaning set forth in the first paragraph of this Agreement.

 

		1.27	“Party”/“Parties“ shall have the meaning set forth in the first paragraph of this Agreement.

 

		1.28	“Reasonable Best Efforts” shall mean at least the same effort as a pharmaceutical company with comparable
financial, personnel and operating resources applies to develop one of its own products and the same effort that a pharmaceutical
drug development company with comparable financial, personnel and operating resources would apply to develop a product containing
the Compound or compound.

 

		1.29	“Research Plan” shall mean a written plan that details the activities to be performed for a Discovery Project.

 

 

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		1.30	“Restricted Target(s)” shall mean a Target that cannot be a Sucampo Target or a Target for which full exclusivity
is not available for Sucampo as set forth in Section 3.4.

 

		1.31	“Sucampo Target(s)” shall mean Target(s) chosen by Sucampo in its exercise of a Target Option.

 

		1.32	“Sucampo Patents” shall have the meaning set forth in Section 8.2.1.

 

		1.33	“Success Fee” shall mean payment to be made by Sucampo to Numab after the IND Ready Criteria for a given
Discovery Project were achieved in accordance with Section 5.

 

		1.34	“Target” shall mean a secreted or at least partially extra-cellularly exposed protein against which Antibodies
shall be discovered.

 

		1.35	“Target Nomination Period” shall have the meaning as set forth in Section 3.2.1.

 

		1.36	“Target Option” shall mean an option granted by Numab to Sucampo to select a Target against which Numab
shall initiate a Discovery Project.

 

		1.37	“Territory” shall mean worldwide.

 

		1.38	“Third Party Target” shall have the meaning set forth in Section 3.4.5.

 

		2.	Loan Guarantee

 

		2.1	Numab will be responsible for obtaining the Loan and providing a true and correct copy of the Loan Agreement and any amendments
thereto to Sucampo and Sucampo shall provide the Loan Guarantee for the Loan. The Loan shall be senior to any other Indebtedness
incurred by Numab from the Effective Date through the termination of this Agreement. The Loan Guarantee shall be provided by Sucampo
as follows

 

		(a)	in an amount of CHF 2 million as cash collateral to be wire transferred by Sucampo to a respective blocked account with the
bank granting the Loan to Numab within ten (10) days following Sucampo’s receipt of copy of the Loan Agreement; and

 

		(b)	thereafter in amounts of CHF 0.5 million up to the maximum aggregate amount of CHF 5 million as cash collateral to be wire
transferred by Sucampo to a respective blocked account with the bank granting the Loan to Numab each time within thirty (30) days
following receipt of a respective request from Numab to Sucampo.

 

 

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		2.2	In the event Sucampo is required to pay a Success Fee in connection with Discovery Project No. 1, such Success Fee shall reduce
the Loan Guarantee in an amount of up to CHF 3 million pursuant to the terms of the Loan Guarantee and Loan Agreement but in no
event shall be the Loan Guarantee be less than CHF 2.2 million. In the event Sucampo is required to pay a Success Fee for Discovery
Projects Nos. 2, 3, or 4,, the amount of such Success Fee (irrespective of any credit granted against such Success Fee pursuant
to Section 5.1 below) shall reduce the remaining outstanding balance of the Loan Guarantee pursuant to the terms of the Loan Guarantee
and Loan Agreement until Sucampo is released from such Loan Guarantee.

 

		2.3	Numab shall comply with all terms of the Loan Agreement. Any default under or material breach of the Loan Agreement which leads
to a termination for cause of the Loan Agreement by the lending bank shall be deemed a material breach of this Agreement.

 

		2.4	To secure the Loan Guarantee, Numab shall enter into the Security Agreement attached hereto as Exhibit A pursuant to which
Numab shall grant to Sucampo a security interest in certain collateral as set forth in such Security Agreement.

 

		3.	Development

 

		3.1	Joint Scientific Committee Formation and Operative Rules.

 

Within thirty (30) days
following the Effective Date, the Parties shall establish a Joint Scientific Committee (the “JSC”) which shall operate
under the rules and have the tasks and responsibilities as follows:

 

		(a)	Composition. The JSC shall be composed of not more than three (3) named representatives of each Party. Each Party may
change its representatives to the JSC from time to time in its sole discretion, effective upon notice to the other Party of such
change. These representatives shall have appropriate technical credentials, experience and knowledge, and ongoing familiarity with
the Discovery Project(s). Additional representatives or consultants may from time to time, by mutual consent of the Parties, be
invited to attend JSC meetings, subject to an outside consultant’s written agreement to comply with confidentiality and non
use obligations equivalent to those set forth in Section 7 below. Each Party shall bear its own expenses related to the attendance
of such meetings by its representatives. The JSC shall be chaired by a representative of Numab who shall provide Sucampo with an
agenda reasonably in advance of all meetings. Sucampo shall have the right to include
items on the agenda for JCC meetings. All decisions of the JSC shall be unanimous, with the representatives of each Party attending
having collectively one vote irrespective of the number of representatives being present. If the JSC cannot or does not, after
good faith efforts and within fifteen (15) days, reach agreement on an issue, such issue shall be referred to the Chief Executive
Officers of each of the Parties (or their respective designees) who shall use their good faith efforts to mutually agree upon the
proper course of action to resolve the dispute. If the Chief Executive Officers (or their respective designees) cannot or do not,
after good faith efforts, reach agreement on an issue, then no resolution shall be deemed to be adopted on the respective item.

 

 

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		(b)	Responsibilities. The Joint Committee’s responsibilities shall include the following:

 

		(i)	discussion and approval of IND Ready Criteria for each Discovery Project for which Sucampo has exercised its Target Option
pursuant to Section 3.5 below;

 

		(ii)	review and approval of the Research Plan(s) pursuant to Section 3.6 below;

 

		(iii)	determination, discussion and approval of Commercialization Criteria following Sucampo's exercise of a Target Option pursuant
to Section 3.7.1 below;

 

		(iv)	if applicable, discussion and approval of study designs for animal studies pursuant to Section 3.7.2 below;

 

		(v)	if applicable, determination and approval of additional research activities and/or New IND Ready Criteria pursuant to Section
3.9 below;

 

		(vi)	if applicable, approval of any study designs regarding clinical and/or preclinical activities related to a Compound and approval
of the CRO agreements related to such studies pursuant to Section 6.2.4(f) below;

 

		(vii)	generally encouraging and facilitating ongoing cooperation and communication between the Parties with respect to the Discovery
Projects; and

 

		(viii)	such other tasks and responsibilities as the Parties may mutually agree from time to time.

 

		(c)	Meetings. The JSC shall meet as deemed necessary by the JSC members, but at least two (2) times per calendar year at
a location as is mutually agreed by the Parties. Alternatively, the JSC may meet by means of teleconference, videoconference or
other similar communications equipment. Each Party will be responsible for all of its own expenses of participating in JSC meetings.
The first JSC meeting shall take place upon establishing the JSC pursuant to this Section 3.1.

 

		(d)	Minutes. The chairman of the JSC shall be responsible for preparing definitive minutes of each JSC meeting and shall
circulate a draft of the minutes of each meeting to all members of the JSC for comments as promptly as practicable after such meeting.
Final minutes shall be approved as standard agenda item in the next meeting of the JSC

 

 

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		3.2	Target Options. 

 

		3.2.1	Sucampo shall have the right to four (4) Target Options (Target Options 1, 2, 3 and 4, respectively). Each Target Option may
be exercised at any time after the Effective Date and until six (6) months after the Loan Guarantee has been fully released (“Target
Nomination Period”).

 

		3.2.2	Prior to expiration of the Target Nomination Period, the Parties may negotiate an extension of the Target Nomination Period
and payment of an extension fee.

 

		3.2.3	As of the Effective Date, Sucampo hereby exercises Target Option 1 and selects [...***...], jointly, as the Sucampo
Targets to be the subject of Discovery Project No. 1. For the avoidance of doubt, Discovery Project No. 1 shall only account for
one (1) Target Option.

 

		3.3	Exclusivity. Numab hereby grants to Sucampo the Maximally Available Target Exclusivity for each Sucampo Target during
the time required to complete the Discovery Project and until the expiration of the Commercialization Option Period.

 

		3.4	Restricted Targets.

 

		3.4.1	Numab shall retain Co-exclusivity with Sucampo related to all rights granted to Sucampo hereunder on [...***...].

 

		3.4.2	[...***...] are not available to be named as a Sucampo Target. [...***...] is currently under discussion
with third parties. In the event that such discussions do not lead to the conclusion of an agreement with third parties and Numab
would not elect [...***...] as a Restricted Target, [...***...] would become available for Sucampo as a Sucampo
Target. Upon notification that [...***...] is available, Sucampo shall have sixty (60) days to nominate [...***...]
as a Target within the Target Nomination Period.

 

		3.4.3	Three (3) additional specified Targets will be nominated by Numab within sixty (60) days from the Effective Date to be reserved
for collaboration projects with third parties (the “Escrowed Targets”). Unless otherwise agreed upon by Numab,
the Escrowed Targets shall not be available to Sucampo under this Agreement. Within sixty (60) days from the Effective Date, Numab
shall place the identity of the Escrowed Targets in escrow with an independent party mutually agreed upon by the Parties subject
to an escrow agreement mutually agreeable to the Parties. In the event that Sucampo notifies Numab of its interest in a Target
and Numab asserts that such Target is an Escrowed Target, the independent third party shall confirm to Sucampo within thirty (30)
days following Numab's assertion that the Target nominated by Sucampo is an Escrowed Target.

 

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		3.4.4	All other Targets will be made available to Sucampo to the maximum possible degree of exclusivity available at the time of
nomination, which will depend on Numab’s obligations to third parties as set forth in Section 3.4.5 below (“Maximally
Available Target Exclusivity”).  

 

		3.4.5	Sucampo acknowledges that Numab will be engaged and engaging during the term of this Agreement in projects for third parties
that may involve Targets selected by such third parties ("Third Party Targets"). If, prior to its selection by Sucampo,
a certain Third Party Target has been licensed exclusively to a third party or is subject to an active collaboration discussion
with a third party for an exclusive license (subject to proof by written records, whereas the name of the third party and critical
terms discussed will be redacted), Numab will not be obligated to make such Third Party Target available to Sucampo; provided,
however, that if such collaboration discussions do not lead to an agreement with such third party, Numab shall inform Sucampo that
the respective Third Party Target is a Target and allow Sucampo to nominate such Target within the Target Nomination Period. If,
prior to its selection by Sucampo, a certain Third Party Target has been licensed non-exclusively to a third party, or is subject
to an active collaboration discussion with a third party for a non-exclusive license (subject to proof by written records, whereas
the name of the third party and critical terms discussed will be redacted), it will be made available to Sucampo on a Co-exclusive
basis and Sucampo will be granted a Co-exclusive license; provided, however, that if such collaboration discussions do not lead
to an agreement between Numab and such third party, Numab shall inform Sucampo that the respective Third Party Target has become
a Target and, at Sucampo’s option, Numab shall grant full exclusivity to Sucampo with respect to such Target for which previously
Co-exclusivity had been granted to Sucampo. The grant of Co-exclusivity will have the same financial terms (Success Fees, milestone
payments and royalties) as agreed herein for full exclusivity.

 

 

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		3.5	IND Ready Criteria. Upon exercise of a Target Option, the Parties shall through the JSC use good faith efforts to agree
upon IND Ready Criteria with respect to the applicable Sucampo Target(s). The IND Ready Criteria will be agreed upon prior to the
initiation of the Discovery Project. IND Ready Criteria for each Antibody and Compound shall be in writing and shall be attached
hereto as an appendix and shall be deemed a part of this Agreement.

 

		3.6	Research Plans.

 

		3.6.1	For each Target Option exercised by Sucampo, Numab will draft a Research Plan. Numab shall present each Research Plan to the
JSC within ninety (90) days after Sucampo’s written notice of its exercise of such Target Option.

 

		3.6.2	The JSC shall have thirty (30) days to review and approve the Research Plan in good faith. If the Research Plan is not approved,
Numab shall have thirty (30) days to revise and resubmit the Research Plan to the JSC which shall review and approve within thirty
(30) days. If the Research Plan is not approved after such resubmittal, Sucampo may proceed to develop such Sucampo Target with
a third party. In such case such Target shall no more be considered a Sucampo Target and the Target Option used by Sucampo when
nominating such Target shall be available to Sucampo again for selection of another Target.

 

		3.6.3	Upon approval of the Research Plan by JSC and subject to the agreement on the Commercialization Criteria pursuant to Section
3.7, Numab shall use Reasonable Best Efforts to complete the Discovery Project in accordance with such Research Plan within the
time period set forth in the Research Plan.

 

		3.6.4	Each Research Plan approved by the JSC pursuant to Section 3.6.2 shall be attached hereto as an appendix and shall be deemed
a part of this Agreement.

 

		3.7	Commercialization Criteria.

 

		3.7.1	Upon exercise of a Target Option, the Parties through the JSC shall use good faith efforts to agree upon Commercialization
Criteria with respect to the Compound(s) intended to be developed pursuant to a Discovery Project. The Commercialization Criteria
will be agreed upon prior to the initiation of the Discovery Project. Commercialization Criteria for each Compound shall be in
writing and shall be attached hereto as an appendix and shall be deemed a part of this Agreement.

 

 

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		3.7.2	In the event Sucampo desires a specific Discovery Project to have results from animal studies included in the Commercialization
Criteria, Sucampo and Numab shall discuss through the JSC the design of the animal studies, and, if there is agreement thereon,
Sucampo, at its sole discretion, may ask Numab to manage such animal studies. In the event Sucampo selects Numab and Numab reasonably
accepts such selection, the management of the agreed animal studies by Numab shall be conducted at Numab’s FTE Rate plus
Numab’s direct costs of external contractors.

 

		3.8	Numab Capacity Limitations. Sucampo acknowledges that [...***...]. Sucampo further acknowledges that Numab
may have additional discovery obligations to third parties that occurred prior to Sucampo’s exercise of a Target Option.
Numab shall have the right to undertake such third party discovery obligations and may delay the commencement of a Discovery Project
hereunder; provided that (i) upon Sucampo’s exercise of a Target Option, Numab shall not undertake any further obligations
to any third party that would delay the commencement and completion of the Discovery Project with respect to such Target Option;
and (ii) Numab shall not delay a Discovery Project in favor of any third party for more than ten (10) months after Sucampo’s
exercise of a Target Option.

 

		3.9	Discovery Projects.

 

		3.9.1	Numab shall use Reasonable Best Efforts to execute each Discovery Project pursuant to its respective Research Plan and to meet
the applicable IND Ready Criteria.

 

		3.9.2	For each Discovery Project, an Antibody shall be produced in a generic lab-scale process in amounts and quality sufficient
to characterize its pharmacodynamic and biophysical properties according to the agreed IND Ready Criteria. In the event that Sucampo
needs additional quantity of the Antibody or Compound, Sucampo may either negotiate with Numab or with a third party to produce
additional amounts of the Antibody. If necessary, upon Sucampo’s request Numab shall grant such third party the right to
manufacture such additional amounts of the Antibody or Compound, provided that such third party is not a direct competitor of Numab
and agrees to reasonable confidentiality and non-use obligations of the Intellectual Property Rights to be licensed to such third
party for such manufacturing of Compound. The Parties agree that Contract Manufacturing Organizations (CMOs) shall not be considered
direct competitors of Numab, provided that such CMO is not otherwise an Affiliate of a non-CMO direct competitor of Numab.

 

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		3.9.3	Upon Numab‘s achievement of the IND Ready Criteria for a Discovery Project, Sucampo shall, within thirty (30) days after
Numab provides written notification of the achievement of the IND Ready Criteria, notify Numab in writing whether Sucampo agrees
that the IND Ready Criteria have been met for a given Discovery Project. In the event that Sucampo has not replied to such written
notification by Numab at the expiration of the thirty (30) day period, the achievement of the IND Ready Criteria shall be deemed
accepted by Sucampo.

 

(a)In the event
Sucampo agrees that the IND Ready Criteria have been met, Sucampo shall pay the Success Fee for the achievement of the respective
IND Ready Criteria in accordance with Section 5.1 or 5.2, respectively. Upon payment of the applicable Success Fee, Sucampo may
at any time until the expiration of the Commercialization Option Period exercise its Commercialization Option with respect to such
Discovery Project.

 

(b)In the event
IND Ready Criteria for a Discovery Project are not met, Sucampo may elect, within sixty (60) days after Numab has provided written
notice of its failure to meet the IND Ready Criteria, to continue to pursue the Discovery Project. The JSC will, after such election
by Sucampo, determine whether additional research is needed to achieve the IND Ready Criteria and/or determine New IND Ready Criteria
for such Discovery Project. Each Party shall have the opportunity to approve any additional research and New IND Ready Criteria,
such approval shall not be unreasonably withheld or delayed and shall not be conditioned on Numab’s other research obligations.

 

(c)Notwithstanding
the above, if Sucampo does not elect to continue with such Discovery Project or the Parties agree to abandon a Discovery Project
with respect to a Sucampo Target because the IND Ready Criteria or the New IND Ready Criteria (as the case may be) were not met
(but not for any other reason) and thereafter Numab elects to re-initiate on its own behalf or on behalf of a third party further
research on the abandoned Sucampo Target, Numab shall be required to obtain a license from Sucampo to the Intellectual Property
Rights (if any) developed for such Sucampo Target prior to the Discovery Project having been abandoned on such commercial terms
as the Parties may reasonably agree. In the event that Numab obtains access to substantial new or additional research tools and
technology that may increase the chances of success to meet the IND Ready Criteria or the New IND Ready Criteria for an abandoned
Discovery Project as agreed to by the JSC, Sucampo shall have the right of first negotiation to initiate a new Discovery Project
for the Sucampo Target. In the event that Sucampo elects not to exercise its right of first negotiation, or the Parties cannot
agree on the terms discussed under the right of first negotiation within seventy-five (75) days of the election of Sucampo to exercise
its right of first negotiations, Sucampo may elect either to retain the Intellectual Property Rights to such Target upon the [...***...]
of the agreed Success Fee for that Target, or to relinquish any further rights to the such Target and the Intellectual Property
Rights related thereto.

 

 

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		4.	Discovery Project No. 1 

 

		4.1	The Discovery Project described in this Section 4 shall be “Discovery Project No. 1”.

 

		4.2	Discovery Project No. 1 shall have two parts: [...***...]. Part A of Discovery Project No. 1 shall be the discovery
of an [...***...]; Part B of Discovery Project No. 1 shall be the discovery of an [...***...]; and Part C of
Discovery Project No. 1 shall be the [...***...].

 

		4.3	IND Ready Criteria for Parts A and C of Discovery Project No. 1 are set forth in Appendix A. The Parties agree that there will
not be separate IND Ready Criteria for Part B of Discovery Project No. 1.

 

		4.4	Projected completion of Discovery Project No. 1 in its entirety is [...***...].

 

		5.	Fees

 

		5.1	Discovery Project No. 1. Sucampo shall pay to Numab a Success Fee of [...***...] after Numab meets the IND
Ready Criteria for Part A of Discovery Project No. 1. The Success Fee for Discovery Project No. 1 shall be payable within thirty
(30) days of receipt by Sucampo of an invoice from Numab, which invoice will be issued promptly after the achievement of the IND
Ready Criteria for Part A of Discovery Project No. 1 has been accepted by Sucampo pursuant to Section 3.9.3. For the performance
[...***...] FTE Rate. Those activities being reimbursed on an FTE Rate basis shall be outlined in the Research Plan for
Discovery Project No. 1. [...***...] the remaining outstanding
balance of the Loan Guarantee pursuant to Section 2.2. FTE costs shall be invoiced and paid on a quarterly basis.

 

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		5.2	Other Discovery Projects. The Success Fee for each of Discovery Project Nos. 2, 3 and 4 is [...***...] and
shall be payable within thirty (30) days of receipt by Sucampo of an invoice from Numab (such payment to be used in accordance
with Section 2.2), which invoice shall be issued promptly after the achievement of the IND Ready Criteria for the respective Discovery
Project has been accepted by Sucampo pursuant to Section 3.9.3 for each of the Discovery Projects Nos. 2 through 4.

 

		5.3	Bispecific Antibodies. If a Discovery Project (other than Discovery Project No. 1) involves the production of a [...***...],
the provisions related to Discovery Project No. 1 in Section 5.1 above shall apply mutatis mutandis for such Discovery Project
and Numab’s additional effort [...***...] to be invoiced quarterly by Numab and paid within thirty (30) days of
receipt by Sucampo.

 

		5.4	Additional Research; New IND Ready Criteria. [...***...] to be invoiced quarterly by Numab and paid
                                                               within thirty (30) days of receipt of such invoice(s) by Sucampo. Upon meeting the New IND Ready Criteria or meeting
                                                               the original IND Ready Criteria through such research outside the original Research Plan,  [...***...] (as the case
                                                               may be), such payment to be used in                                                                accordance with Section
                                                               2.2. 

 

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		5.5	Late Payments. In the event that amount due for a given Discovery Project is invoiced by Numab and not paid by Sucampo
within thirty (30) days of invoice receipt, any such unpaid amount shall automatically accrue interest as from the day immediately
following the due date at the rate of 1% per month until paid. Notwithstanding the preceding sentence, any non-payment of a Success
Fee or any undisputed FTE amount due shall constitute a material breach of this Agreement; provided that Sucampo shall only dispute
FTE amounts due hereunder in good faith.

 

		6.	License and Commercialization

 

		6.1	Commercialization Option. Upon exercise by Sucampo of a Commercialization Option, the Parties shall negotiate in good
faith to agree on a development plan and execute a Commercialization Agreement for the applicable Compound. The development plan
shall be drafted by Sucampo and be subject to Numab’s approval, which approval shall not be unreasonably withheld, conditioned
or delayed. Sucampo may elect to extend the Commercialization Option Period for any Discovery Project for up to three (3) one-year
periods upon payment of an extension fee of [...***...] for each such one (1) year extension.

 

		6.2	Commercialization Agreement. A Commercialization Agreement shall incorporate the following terms:

 

		6.2.1	License Grant. Numab shall grant Sucampo a worldwide exclusive (pursuant to Sections 6.2.4(c) and 6.2.4(d) below) license,
with the right to sublicense, under Numab’s Intellectual Property Rights to develop, use, make, have made, export, commercialize,
promote, offer for sale, sell and manufacture the Compound in a respective pharmaceutical product subject to the terms of the Commercialization
Agreement.

 

		6.2.2	Assignment. Numab shall assign to Sucampo the Intellectual Property Rights as set forth in Section 8.2.

 

		6.2.3	Compound. The Compound shall be the IND Ready Antibody and/or [...***...] and discovered during one or more
Discovery Project(s).

 

		6.2.4	Other Terms of License.

 

		(a)	Field of License: all uses.

 

		(b)	Territory: worldwide.

 

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		(c)	Compound-specific Degree of Exclusivity: is composed of the Maximally Available Target Exclusivity and the Degree of Compound
Exclusivity.

 

		(d)	Degree of Compound Exclusivity: Full exclusivity on Compound.

 

		(e)	Diligence: Sucampo will apply Reasonable Best Efforts to further develop and commercialize a pharmaceutical product containing
the Compound throughout the Territory.

 

		(f)	To ensure Reasonable Best Efforts by Sucampo, Numab shall accept, if Sucampo elects to do so, to perform any preclinical and
clinical development activities on Sucampo’s behalf at the FTE Rate and at direct external costs, whereas the clinical and/or
preclinical study designs shall be approved by the JSC negotiating a Contract Research Organization agreement mutually agreed upon
by the Parties.

 

		(g)	Milestone Payments: [...***...].

 

		(h)	Royalties: [...***...] on aggregate annual global net sales between [...***...], [...***...]
on aggregate annual global net sales between [...***...], [...***...] on aggregate annual global net sales
above [...***...]. Royalties are payable on a country-by-country basis for the longer of (i) expiration of the last to
expire patents licensed or assigned hereunder by Numab to Sucampo and covering the Compound, or (ii) fifteen (15) years after the
first commercial sale with appropriate reductions in royalties for entry of any generic to the market in the relevant county, provided,
however, that if the Compound is part of a pharmaceutical product which incorporates two or several active pharmaceutical ingredients,
only the sales for such pharmaceutical product that can be allocated to the Compound applying generally accepted industry standards
for such allocation, shall be relevant to calculate the royalties payable.

 

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		(i)	Other terms that are customary for such an agreement (including confidentiality, development reporting, patent prosecution,
sales reporting, audit and inspection rights, termination and effects of termination provisions).

 

		(j)	Applicable law: Swiss law.

 

		7.	Confidentiality

 

		7.1	CDA. The CDA shall be and hereby is terminated as of the Effective Date and its provisions be replaced by the provisions
set forth in this Section 7, provided that any and all Confidential Information disclosed by the Disclosing Party to the Recipient
during the term of the CDA shall be treated as Confidential Information (as defined in Section 1.9 above) and be subject o the
provisions of this Section 7.

 

		7.2	Protection. The Recipient
(as defined in Section 1.9 above)
will hold the Confidential Information of the Disclosing Party (as defined in Section 1.9 above)
in confidence and trust, and will not disclose, or provide access to, any Confidential Information of the Disclosing Party, directly
or indirectly, to any person except as expressly permitted by this Section 7 or with the prior written consent of the Disclosing
Party. The Recipient shall protect the Confidential Information of the Disclosing Party with the same degree of care it protects
similar information of its own, but in no event shall Recipient use less than a reasonable degree of care. The Recipient may make
only such copies of the Confidential Information of the Disclosing Party as are necessary for the respective Discovery Project(s)
and to perform its obligations hereunder. Any such copies must reproduce proprietary or confidentiality markings included therein

 

		7.3	Permitted Disclosure.

 

		7.3.1	Recipient may disclose the Confidential Information of the Disclosing Party pursuant to statutory or regulatory authority or
a court order, provided the Recipient promptly notifies the Disclosing Party of such requirement (where permitted) with reasonably
sufficient time to oppose such disclosure, and the scope of such disclosure is limited to the extent possible.

 

 

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		7.3.2	The Recipient may disclose
the Confidential Information of the Disclosing Party within its organization and to its professional advisors, but only to those
having a need to know for the purposes of this Agreement, are informed of its confidential nature, and expressly agree to be bound
by (or by reason of their employment or service agreement or professional secrecy obligations have a duty to comply with) the terms
of this Section 7. 

 

		7.4	Use. Subject to the other terms of this Agreement, Recipient shall use the Confidential Information of the Disclosing
Party solely for the express purpose of performing its rights and obligations under this Agreement. Furthermore, each Party shall
be permitted to use any and all data, material and other information generated in performing the Discovery Projects to support
the application of all Intellectual Property Rights owned by such Party pursuant to Section 8.2 below, provided that any such use
by either Party shall not jeopardize the filing of any patent owned by the other Party, and provided further, that the foregoing
shall not be construed as a license grant to or under any Intellectual Property Rights from either Party to the other Party outside
of or in addition to the respective license grants explicitly made elsewhere in this Agreement.

 

		7.5	Publicity. Each of Numab and Sucampo agrees not to disclose at any time to any third party, whether by way of press
release, announcement or in any other manner, without the prior written consent of the other Party, the existence, intent or terms
of this Agreement. The Parties agree to announce the collaboration pursuant to this Agreement by means of a press release with
mutually agreed wording not later than forty-five (45) days after the Effective Date. However, either Party may at any time make
any disclosures required by law upon prior written notice to the other Party provided that the disclosing Party first gives the
other Party assistance as reasonably requested in obtaining an order protecting the information from disclosure. Notwithstanding
the provisions in this Section 7.5, Numab may disclose and make accessible this Agreement and its terms to potential investors
and other third parties in the context of a financing round for Numab (including in the context of a due diligence), provided always
that any such third parties are
informed of the confidential nature hereof, and expressly agree to be bound by (or by reason of their service agreement or professional
secrecy obligations have a duty to comply with) confidentiality and non-use obligations at least as stringent as the terms of this
Section 7. 

 

		7.6	Survival. The provisions of this Section 7 shall survive for a period of five (5) years after the expiration or termination
of this Agreement.

 

		7.7	Equitable Relief. 
Each Party acknowledges that the other would suffer immediate and irreparable harm for which monetary damages would be an inadequate
remedy if it were to breach its obligations under this Section 7. Each Party expressly agrees that the other may obtain equitable
relief, including injunctive relief, to protect its intellectual property rights and interests under this Agreement, in addition
to such other remedies as may be available at law or in equity.

 

 

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		8.	Intellectual Property

 

		8.1	Inventorship. Inventorship of any patent applications related to any Sucampo Target or Antibody identified pursuant
to a Discovery Project shall be determined in accordance with applicable law.

 

		8.2	Ownership.

 

		8.2.1	Sucampo shall be the owner of all Intellectual Property Rights specific to the Sucampo Targets, their mechanism of action and
methods of use (the “Sucampo Patents”); provided, however, Sucampo and Numab shall jointly own the patent application
specific to the [...***...], its mechanism of action and methods of use. Numab hereby agrees to assign and hereby does
assign to Sucampo all of its rights, title and interest in and to such Sucampo Patents. To the extent a third party that was requested
by Numab to perform any services or create any work and thereby became the owner of any rights specific to Sucampo Targets, Numab
shall secure access and use of such rights and then assign them to Sucampo in accordance with this Section 8.2.1.

 

		8.2.2	Numab shall be the owner of all patents and patent applications directed to compositions of matter related to any Compound
identified by Numab (the “Compound Patents”) and upon the execution of a Commercialization Agreement, [...***...]:

(i) Sucampo shall be the owner of all patents and patent applications directed to compositions of matter related to any [...***...]
and Numab hereby agrees to assign and hereby does assign all of its rights, title and interest in and to such patent or patent
application, and, to the extent a third party that was requested by Numab to perform any services or create any work and thereby
became the owner of any rights specific to Sucampo Targets, to secure access and use of such rights and then assign them to Sucampo
in accordance with this Section 8.2.2(i); and

 

*Confidential Treatment Requested

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			(ii) any patent or patent application directed solely to any [...***...] shall be owned by Numab and Numab shall
grant Sucampo a Co-exclusive license to such patent or patent application.

 

		8.2.3	[...***...] under and pursuant to this Section 8.2 shall not affect in any way the commercial terms related to any
Discovery Project and/or Compound as set forth in Section 5 or for the Commercialization Agreement set forth in Section 6.2, which
commercial terms shall remain in full force and effect as [...***...] would have been agreed upon or made.

 

		8.2.4	Numab shall be the owner of all Intellectual Property Rights related to discoveries, inventions or improvements made or reduced
to practice during the term or in the context of the performance of this Agreement which are not Sucampo Patents pursuant to Section
8.2.1 or Compound Patents pursuant to Section 8.2.2.

 

		8.3	Filing; Prosecution; Maintenance. Filing, prosecution and maintenance of any patent applications and patents directly
related to a Compound or to a Sucampo Target shall be coordinated between and jointly conducted by the Parties regardless of ownership,
provided that each Party shall be responsible for all costs and expenses related to the filing, prosecution and maintenance of
the patents and patent applications owned by such Party. Upon execution of a Commercialization Agreement, for patents and patent
applications exclusively licensed to Sucampo and with respect to patents or patent applications assigned to Sucampo pursuant to
Section 8.2.1, Sucampo shall bear any and all direct costs and expenses, incurred after the date of the exercise of the respective
Commercialization Option by Sucampo, for the filing, prosecution and maintenance (including patent attorney fees) and may elect
to take the lead and responsibility on such filing, prosecution and maintenance. In addition, Sucampo shall reimburse Numab upon
execution of a Commercialization Agreement for any and all direct cost and expenses for the filing, prosecution and maintenance
(including patent attorney fees) related to any such patents and patent applications exclusively licensed to or assigned to Sucampo,
which Numab incurred as from the initiation of the nationalization phase of such patents and patent applications. In case of any
patent or patent application Co-exclusively licensed to Sucampo, Numab shall retain the lead on the filing, prosecution and maintenance
and any and all direct costs and expenses (including patent attorney fees) shall be shared equally between the Parties.

 

		8.4	No Other Rights Granted. Except for those expressly provided for herein, Sucampo will not acquire any right or license
with respect to any Intellectual Property Rights or to any other rights or interests whatsoever, including without limitation in
the software, Confidential Information or know-how that Numab develops or has developed at their cost and expense as part of the
methodology of or technology for developing the Sucampo Targets).

 

*Confidential Treatment Requested

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		9.	Term; Termination

 

		9.1	Term. This Agreement shall commence on the Effective Date and, unless terminated earlier in accordance with this Section
9, shall expire upon the expiration of the last to expire Commercialization Option Period.

 

		9.2	Termination for Cause. Either Party may terminate this Agreement in
the event the other Party materially breaches this Agreement and fails to cure such breach within thirty (30) days after written
notice of such breach has been provided to such breaching Party.

 

		9.3	Survival. Sections 1, 7,
8, 9.3, 9.4, 11 and 12 shall survive
termination or expiration of this Agreement.

 

		9.4	Effects on Termination or Expiration of Agreement. 

 

		9.4.1	The termination or expiration of this Agreement shall not relieve either Party from
its obligations accrued prior to such termination or expiration. In addition, the election by either Party to terminate this Agreement
pursuant to Section 9.2 shall not in any way limit or restrict any and all rights or claims such terminating Party may have under
any applicable law.

 

		9.4.2	Unless the Parties have entered into a
Commercialization Agreement, within thirty (30) days after termination or expiration of this Agreement, each Party shall,
upon the other’s request, return the other Party's Confidential
Information or provide a written certification to the other Party detailing the destruction of the
Confidential Information, provided that each Party may retain one (1) copy of each item of Confidential Information of the other
Party in confidential files for the sole purpose of determining its continuing obligations with respect thereto after termination
or expiration o this Agreement.

 

		9.4.3	In the event that Numab terminates this Agreement based on Section 9.2 (Termination for Cause), including for non-payment of
any amount payable by Sucampo (including a Success Fee or an invoice for FTE costs), (i) any and all rights granted to Sucampo
pursuant to the Discovery Project for which the Success Fee or FTE costs were unpaid (including without limitation Commercialization
Options, license grants to Intellectual Property Rights and rights to be assigned Compound Patents in such Discovery Project) shall
terminate, and (ii) all Target Options not yet exercised by Sucampo shall be suspended until the non-paid amount payable has been
paid, and (iii) Numab may suspend any and all activities in Discovery Projects, for which the Success Fee has not been paid yet,
until the non-paid amount payable has been paid. For clarity, (i) any Commercialization Option resulting from a Discovery Project
for which the respective Success Fee and all other payments have been fully paid by Sucampo shall not be affected by such termination
and remain in full force and effect in accordance with the terms of this Agreement, and (ii) any Commercialization Agreement executed
by the Parties with respect to any Compound(s) prior to such termination shall be unaffected by such termination of this Agreement,
and (iii) the provisions of this paragraph shall not apply to any Intellectual Property Rights related to the Compound(s) for which
a Commercialization Agreement has been executed.

 

 

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		10.	Warranties 

 

		10.1	Each Party represents to the other Party that it is duly incorporated and in good standing in its respective state of incorporation,
that it has the authority to enter into and perform this Agreement and that the execution and delivery of this Agreement does not
violate any agreement or judicial order to which it is a party or by which it is bound.

 

		10.2	Numab represents and warrants that (i) it will perform each Discovery Project with Reasonable Best Efforts and in a reasonably
efficient, professional and workman like manner; and (ii) its performance of each Discovery Project does, to the best of Numab's
knowledge as of the Effective Date, not infringe or misappropriate the intellectual property rights of any third party.

 

		10.3	The Parties acknowledge and agree that the discovery of Compounds which meet the agreed IND Ready Criteria is a complex task,
and, therefore, Numab may not and does not make any representation or give any warranty that any Compound(s) developed hereunder
will be commercially successful or fit for any particular purpose, or any other representation or warranty except as explicitly
set forth in this Section 10.

 

 

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		11.	Limitation of Liability; Indemnification

 

		11.1	Limitation of Liability. NOTWITHSTANDING ANY PROVISIONS IN THIS AGREEMENT TO THE CONTRARY, UNDER NO CIRCUMSTANCES WILL
EITHER PARTY BE LIABLE TO THE OTHER UNDER, OR WITH RESPECT TO ANY SUBJECT MATTER OF, THIS AGREEMENT FOR ANY INDIRECT, INCIDENTAL,
CONSEQUENTIAL, SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES, SUCH AS, BUT NOT LIMITED TO, LOSS OF REVENUE OR ANTICIPATED PROFITS OR LOST
BUSINESS EVEN IF INFORMED OF THE POSSIBILITY THEREOF. THESE LIMITATIONS SHALL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE
AND APPLY TO ALL CAUSES OF ACTION IN THE AGGREGATE INCLUDING, WITHOUT LIMITATION, BREACH OF CONTRACT, BREACH OF WARRANTY, NEGLIGENCE,
STRICT LIABILITY, AND MISREPRESENTATION EXCEPT GROSS NEGLIGENCE OR WILLFUL INTENT.

 

		11.2	Numab Indemnification. Numab
shall indemnify Sucampo, its Affiliates, agents and their respective
directors, officers, employees, successors and assigns (“Sucampo Indemnified Parties”) against,
and agrees to hold each of them harmless from, any and all claims, demands,
costs, expenses, obligations, liabilities, damages, recoveries and deficiencies, including, without limitation, interest, penalties,
court costs, costs and expenses (including the reasonable fees and expenses of external counsel) (the “Damages”)
incurred or suffered by any of them arising out of or resulting from: (i) any breach of any representation or warranty made by
Numab in this Agreement; (ii) the gross negligence
or willful misconduct of Numab, its employees or its agents, while performing under this Agreement; and (iii) the enforcement by
Sucampo of this Section 11.2.

 

		11.3	Sucampo Indemnification. Sucampo
shall indemnify and hold harmless Numab, its Affiliates, agents and their respective directors, officers, employees, successors
and assigns (“Numab Indemnified Parties”) from and against any and all Damages incurred or suffered by
any of them arising out of or resulting from: (i) breach of any
representation or warranty made by Sucampo in
this Agreement; (ii) the gross negligence or willful misconduct of Sucampo, its employees or its agents, while
performing under this Agreement; and (iii) the enforcement by Numab of this Section 11.3.

 

		11.4	Indemnification Procedure. A Party
seeking indemnification (“Indemnified Party”) shall reasonably notify the Party responsible for indemnification
(“Indemnifying Party”) of a claim
for indemnification, including the nature of the third party's claim. With respect to a third party’s claims, (a) the Indemnified
Party shall reasonably assist the Indemnifying Party and shall have the right to participate in the defense at its own expense;
(b) in no event shall the Indemnifying Party settle the claim without the Indemnified Party's prior written consent (not to be
unreasonably withheld, conditioned or delayed); and (c) the Indemnified Party shall not enter into any settlement that affects
the Indemnifying Party's rights or interest without the Indemnifying Party's prior written approval (not to be unreasonably withheld,
conditioned or delayed). In the event the Indemnified Party fails to promptly notify the Indemnifying Party of a claim for indemnification,
such failure shall not relieve the Indemnifying Party of its obligations under this Section 11, except to the extent such failure
materially prejudices the Indemnifying Party.

 

 

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		12.	Miscellaneous 

 

		12.1	Governing Law. This Agreement shall be governed and construed under the laws of Switzerland without reference to its
conflict of laws principles.

 

		12.2	Dispute Resolution. If any dispute, controversy or claim arises out of this Agreement, the Parties agree that
they will attempt in good faith to resolve the matter through negotiations within thirty (30) days of the written notice of such
dispute, controversy or claim.  If negotiations fail to resolve a dispute, controversy or claim, the matter will be submitted
to arbitration pursuant to Section 12.3.  By agreeing to these dispute resolution terms, the Parties do not intend to deprive
any competent court of such court’s jurisdiction to issue an injunction under Section 7 (Confidentiality).

 

		12.3	Jurisdiction. Any dispute, controversy or claim arising out of or related to this Agreement that is not resolved pursuant
to Section 12.2 shall be settled by final and binding arbitration in accordance with the Rules of Arbitration of the International
Chamber of Commerce (the “ICC”) in effect on the Effective Date. Judgment upon the award rendered by the arbitrators
may be entered in any court of competent jurisdiction. The place of arbitration shall be Zurich, Switzerland. The arbitration shall
be conducted in the English language by three (3) neutral arbitrators. Sucampo shall select one (1) arbitrator and Numab shall
select one (1) arbitrator. The third arbitrator shall be selected by mutual agreement of the two (2) arbitrators selected by the
Parties; provided, that if the third arbitrator cannot be so selected within thirty (30) days after selection of the two (2) arbitrators
selected by the Parties, the third arbitrator shall be selected by the ICC. At least one (1) arbitrator shall have knowledge and
experience in the biologics industry and at least one (1) arbitrator shall have experience in Swiss law and technology licensing.
By agreeing to the terms of this Section 12.3, the Parties do not intend to deprive any competent court of such court’s jurisdiction
to issue an injunction under Section 7 (Confidentiality).

 

 

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		12.4	Assignment and Subcontracting. Each Party may assign its rights and obligations under this Agreement to a third party
only subject to the prior written approval of the other Party (such approval not to be unreasonably withheld, conditioned or delayed);
provided, however, that either Party may assign this Agreement to any of its Affiliates upon notice to the other Party and without
the other Party’s prior approval. Numab may and will sub-contract certain portions of its obligations to specialized third
parties if and to the extent deemed reasonable by Numab.

 

		12.5	Entire Agreement. This Agreement, together with all
                                                                appendices hereto, represent the entire agreement between the
                                                                Parties relating to the subject matter hereof and supersede all
                                                                other prior agreements between the Parties with respect to the
                                                                subject matter hereto. This Agreement shall be construed according
                                                                to its fair meaning and not strictly for or against any Party.

 

		12.6	Waiver; Amendment. The failure of any Party to promptly exercise its rights granted herein, or to require strict performance
of any obligation of the other Party will not be deemed a waiver of such right or of the right to demand subsequent performance
of any and all obligations by any other Party in the future. This Agreement may be amended only in writing signed by authorized
officers of each Party.

 

		12.7	Headings. The section and subsection headings used in this Agreement are inserted for convenience of reference only
and will not be construed to affect the interpretation or construction of this Agreement.

 

		12.8	Interpretation. Unless the context requires otherwise, all words used in this Agreement in the singular will extend
to and include the plural, all words in the plural will extend to and include the singular and all words in any gender will extend
to and include all genders.

 

		12.9	Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed an original,
but all of which together will constitute one and the same agreement. Signatures to this Agreement transmitted by facsimile transmission,
by electronic mail in “portable document format” (“.pdf”) form, or by any other electronic means intended
to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the
paper document bearing the original signature.

 

		12.10	Notices. Each notice, request, demand or other communication by a Party to the another Party pursuant to this Agreement
will be in writing, and (excluding purchase orders, acknowledgments of orders and routine documentation and correspondence) will
be personally delivered, sent by recognized overnight commercial delivery services (e.g. Federal Express, UPS) postage prepaid,
or sent by facsimile (promptly confirmed by hardcopy delivery pursuant to this Section), addressed to the address of the receiving
Party as follows:

 

 

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	 	If to Sucampo:
	 	Address:	Graben 5, CH-6300 Zug, Switzerland
	 	Attn:	Andrew Smith
	 	Fax:	+41 44 250 75 26
	 	 	 
	 	with a cc by email to: Attention:
    Sucampo General Counsel, at tknapp@sucampo.com
	 	 	 
	 	If to Numab:
	 	Address:	c/o PentaTreuhand GmbH, Glärnischstrasse
    13, 8800 Thalwil, Switzerland
	 	Attn:	Chief Business Officer
	 	Fax:	(To be designated after the Effective
    Date)
	 	 	 
	 	with a cc by email to: Ralf
    Rosenow, Blum&Grob Attorneys at Law Ltd, Zurich Switzerland, at r.rosenow@blumgrob.ch

 

			or to such other persons and addresses as will be furnished by like notice by such Party or person. Any notice given in accordance
with this provision will be deemed to have been given and effective (i) immediately upon personal delivery; (ii) upon
confirmation of transmission if sent by facsimile (promptly confirmed by hardcopy delivery),
or (iii) after three (3) business days after such notice is deposited with a recognized overnight commercial delivery service
addressed to the receiving Party at its address listed above.

 

		12.11	Severability. Wherever possible, each provision of this Agreement will be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect
under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other
provision or the effectiveness or validity of any provision in any other jurisdiction, and this Agreement will be reformed, construed
and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had been replaced by such valid legal
and enforceable provision that best reflects the Parties’ common intent when agreeing to the invalid, illegal or unenforceable
provision.

 

		12.12	No Relationship between the Parties. Neither Party shall represent itself as
the agent or legal representative of the other or as joint venturers for any purpose whatsoever, and neither Party shall have any
right to create or assume any obligations of any kind, express or implied, for or on behalf of the other in any way whatsoever.

 

 

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		12.13	All persons executing this Agreement on behalf of either Party represent and warrant that they have full right and authority
to execute this Agreement on such Party's behalf.

 

 

 

 

IN WITNESS WHEREOF, the authorized representatives of
the Parties have executed this Agreement on September 8, 2011 (“Effective Date”).

 

 

Numab AG

 

/s/ Peter Hirchvogel

Name: Peter Hirschvogel

Title: Director

 

 

Sucampo AG

/s/ Ryuji Ueno

Name: Ryuji Ueno

Title: Director

 

 

 

 

 

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Appendix A: IND Ready
Criteria for Discovery Project 1

IND Ready Criteria
for Part A of Discovery Project 1 [...***...]

 

 

IND Ready Criteria
for Part C of Discovery Project 1 [...***...]

 

 

 

 

 

 

 

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[...***...]

 

 

 

 

 

 

 

 

 

*Confidential Treatment Requested

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Exhibit A: Security Agreement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Exhibit A to the Loan Guarantee
and Development Agreement

dated September __, 2011 by and between Numab AG and Sucampo AG

 

 

 

PATENT PLEDGE AGREEMENT

 

 

 

	between	 
	 	 
	 	 
	David Urech	 
	[...***...]	 
	[...***...]	 
	[...***...]	(the "Applicant")
	 	 
	and	 
	 	 
	Numab AG	(the "Pledgor")
	c/o Penta Treuhand GmbH	 
	Glärnischstrasse 13	 
	8800 Thalwil	 
	Switzerland	 
	 	 
	and	 
	 	 
	Sucampo AG	(the "Pledgee")
	Graben 5	 
	6300 Zug	 
	Switzerland	 

 

 

 

WHEREAS:

 

		(1)	The Pledgee and the Pledgor have entered into a loan guarantee and development agreement pursuant
to which the Pledgor will develop certain antibodies for commercialization by the Pledgee and the Pledgee agreed to grant a cash
collateral to secure the Loan (the “Development Agreement”).

 

		(2)	The Pledgor will enter into a loan agreement with Zurich Cantonal Bank, Zurich, Switzerland (the
"Bank") for a loan in the amount of CHF up to 5,000,000 (the “Loan Agreement”).

 

		(3)	To secure any claims of the Bank against the Pledgor under the Loan Agreement the Pledgee will
grant a cash collateral in the maximum amount of CHF 5,000,000 to the Bank (the “Loan Guarantee”) according
to the loan guarantee agreement between the Pledgee and the Bank (the “Loan Guarantee Agreement”).

 

 

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		(4)	To secure the Loan Guarantee the Pledgor shall pledge to the Pledgee the Existing Patent as set
out in Schedule 1 and all Future Patents (as defined below).

 

		(5)	The Applicant is currently the holder of the Existing Patent, which will be assigned and transferred
to the Pledgor in accordance with Section 2. below.

 

NOW, THEREFORE, IT IS AGREED as follows:

 

 

 

 

 

Definitions

 

"Agreement" means this agreement, together
with the schedules hereto, as it may be amended, restated, supplemented or otherwise modified from time to time;

 

"Enforcement" means the enforcement
of the Pledge and realization of the Pledged Patents in accordance with the terms of this Agreement;

 

"Event of Default" means any event or
circumstance under which the Bank enforces the Loan Guarantee;

 

"Existing Patents" means the Patents
set out in Schedule 1 hereto;

 

"Future Patents" means all future Patents
the Pledgor will file during the Term of this Agreement which (i) constitute Sucampo Patents or Compound Patents (as defined in
the Development Agreement); or (ii) claim priority (directly or indirectly) to the Existing Patents;

 

"Patents" means any patent or application
for a patent;

 

"Patent Office" means any governmental,
intergovernmental, or governmentally authorized national or supranational body responsible for receiving and examining applications
for and issuing, extending or maintaining Patents;

 

"Pledge" means a pledge pursuant to
Art. 899 et seq. of the Swiss Civil Code of the Pledged Patents in accordance with the terms of this Agreement;

 

"Pledged Patents" means the
Existing patent and all Future Patents for which the Pledgor has exercised the option pursuant to Section 3.(b), which are subject
to the Pledge hereunder;

 

“Secured Obligation” means
any and all amounts for which the Bank has enforced the Loan Guarantee against the Pledgee under the Loan Guarantee Agreement.

 

All other capitalized terms used herein but
not defined shall have the meaning ascribed to such terms in the Development Agreement.

 

undertaking
to assign and transfer the Existing Patent

 

The Applicant hereby undertakes and agrees to assign
and transfer the Existing Patent to the Pledgor by executing and filing with the competent Patent Office all documents required
for that purpose within five (5) business days following the mutual execution of this Agreement. Upon recording of such assignment
and transfer of the Existing Patent to the Pledgor and prompt notification thereof by the competent Patent Office, Pledgor shall
notify the Pledgee accordingly and provide a copy of the notification by the competent Patent Office to the Pledgee (the "Assignment
Notice").

 

 

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Pledge

 

		(a)	The Pledgor herewith agrees (i) to pledge to the Pledgee the Existing Patent, together with all
rights, claims or benefits pertaining thereto as security for the Secured Obligation until such time as the Loan Guarantee has
been released and discharged in full by the Bank, and no further Secured Obligations are capable of arising and, therefore, the
Pledgor agrees (ii) to do everything necessary or advisable in the opinion of the Pledgee to effect the Pledge.

 

		(b)	In addition, the Pledgor herewith grants the Pledgee the right and option to include any Future
Patents to be pledged by Pledgor to Pledgee under this Agreement, which option may be exercised by written notice from Pledgee
to Pledgor upon any Future Patent coming into existence or any time thereafter during the term of this Agreement.

 

		(c)	For the purpose of effecting the Pledge, the Pledgor undertakes to notify all competent Patent
Offices by filing the respective Notice to Pledge substantially in the form as set forth in Schedule 3 hereto to the competent
patent Offices to register the Pledge in such Patent registers in all those jurisdictions in which such a registration of the Pledge
is possible.

 

Pledgor's
Obligations

 

With effect from the date of this Agreement the Pledgor
herewith agrees to

 

		(a)	promptly execute and deliver at Pledgee's expenses all further instruments and documents, and take
all further action, that the Pledgee may reasonably request, in order to (i) perfect, protect, maintain, renew and enforce the
Pledge under this Agreement, (ii) facilitate the exercise of the Pledgee’s rights and remedies under this Agreement;

 

		(b)	to do all acts which are or will be necessary to maintain and process Pledged Patents, to maintain
the registrations relating to the Pledged Patents and the full validity thereof, including payment of any application, registration
or renewal fee, respectively, and to maintain the protection of the Pledged Patents, including to take all reasonable action necessary
or useful to defend any related challenges and/or to prevent unauthorized use thereof;

 

		(c)	to notify the Pledgee as soon as reasonably possible of any actual, threatened or suspected infringement
of the Pledged Patents or of any other event or circumstances which may be expected to have a material adverse effect on (i) the
validity or enforceability of the Pledge or (ii) the validity or enforceability of the Pledged Patents;

 

		(d)	to do all commercially reasonable and useful acts which are or will be necessary to defend against
the registration of any intellectual property rights by third parties which could endanger the validity or enforceability of the
Pledged Patents;

 

		(e)	to inform the Pledgee immediately upon filing of any application for any Future Patent that may
come into existence after the date hereof and, following the exercise of the option under Section 3.(b) above, to execute upon
request of the Pledgee any declaration or other written instrument and do all other reasonable acts required or useful to secure
or perfect the Pledge also in respect of such Future Patents; and

 

		(f)	to deliver to the Pledgee no later than ten (10) business days following the end of each calendar
year an update of Schedule 1, containing a list of all Pledged Patents as of 31 December of the preceding calendar year,
accompanied by a duly signed notice substantially in the form as set forth in Schedule 2.

 

 

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Delivery
of Documents

 

		(a)	Within five (5) business days following receipt of the Assignment Notice, the Pledgor shall deliver
to the Pledgee copies of duly signed letters in the form as set forth in Schedule 3.with respect to the Existing Patent
filed with the competent Patent Office pursuant to Section 3.(c) above.

 

		(b)	Each time within ten (10) business days following receipt of Pledgee's notice exercising the option
under Section 3.(b) above related to any Future Patent, Pledgor shall deliver to Pledgee copies of the duly signed letters in the
form substantially as set forth in Schedule 3 with respect to such Future Patent filed with the competent Patent Office(s) pursuant
to Section 3.(c).

 

		(c)	After the Pledge has been registered by the competent Patent Office, the Pledgor shall deliver
to the Pledgee copies of such entries in the applicable Patent registers.

 

Representations
and Warranties

 

The Pledgor represents and warrants to the Pledgee as
of the date of this Agreement that:

 

		(a)	the Pledgor is duly incorporated and organized and validly existing under the laws of Switzerland
and has the full corporate power and authority to own and use its assets and properties and to conduct its business as the same
is presently conducted;

 

		(b)	the Applicant is the sole legal and beneficial owner of the Existing Patent and has the legal capacity
to assign and transfer the Existing Patent free of any pledge, mortgage, lien or encumbrance or licences in favour of third parties;

 

		(c)	all details regarding the Existing Patent set out in Schedule 1 are correct and complete;

 

		(d)	to the knowledge of the Pledgor, no claims, actions, proceedings, arbitrations or investigations
are pending or threatened against or relating to the Existing Patent which could lead to a (total or partial) annulment of any
of the Existing Patent;

 

		(e)	this Agreement (i) constitutes legal and valid obligations binding on the Applicant and the Pledgor
(to the extent applicable to each of them), and (ii) is enforceable against the Applicant and the Pledgor, respectively, in accordance
with its terms.

 

Enforcement

 

		(a)	On and at any time after the occurrence of an Event of Default, the Pledgee shall be entitled,
but not obligated, at its discretion and irrespective of any other security granted to the Pledgee, to enforce the Pledge by official
enforcement proceedings pursuant to the Swiss Act on Debt Collection and Bankruptcy.

 

		(b)	Failure by the Pledgee to exercise its enforcement hereunder shall not prejudice any of the rights
the Pledgee may have under this Agreement, nor shall such failure constitute a waiver of any obligation of the Pledgor hereunder.

 

 

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and Sucampo AG, also Exhibit A to Loan Agreement 

    	 

    	 

    

Release

 

		(a)	When the Loan Guarantee has been released and discharged in full by the Bank to the Pledgee in
accordance with the terms of the Loan Guarantee Agreement, the Pledged Patents or any remainder thereof shall be released from
the Pledge and the option of the Pledgee pursuant to Section 3.(b) above shall terminate and cease to exist.

 

		(b)	Within ten (10) business days upon the release of the Pledged Patents pursuant to Section (a) hereinabove,
the Pledgee undertakes to file the respective Notice of release substantially in the form as set forth in Schedule 4 hereto
to the competent Patent Office(s) to register the release of the Pledge on the Pledged Patents in such Patent registers in all
those jurisdictions in which a registration of the Pledge had been recorded. At the same time, Pledgee shall deliver true and complete
copies of such Notices to release filed to Pledgor.

 

use
and exploitation of pledged patents

 

Nothing in this Agreement or the Pledge shall limit,
restrict or otherwise hinder, and, subject to the terms of the Development Agreement, Pledgor is fully entitled to, use, exploit,
and commercialize the technology or any part covered by any Pledged Patent or to enter into any legal instrument, including license
agreements, with third parties aiming at the exploitation of the technology covered by any Pledged Patents.

 

Assignments
and Transfers

 

		(a)	The rights and the obligations of either party under this Agreement may not be assigned or transferred
without the prior written consent of the other party.

 

Cost
and Expenses / Indemnity

 

		(a)	Subject to (b) Hereinbelow, all third party fees, cost and expenses related to or charged or incurred
in connection with the registration of the Pledge and the release and de-registration of the Pledge, including without limitation
filing fees, cost of local agents in the jurisdictions where the Pledge is to be recorded and later de-recorded with Patent Offices,
translation cost etc., shall be born solely by Pledgee, and Pledgee shall within ten (10) business days upon first request and
presentation of respective invoices and/or receipts for any such fees, cost, expenses incurred or paid by Pledgor, reimburse Pledgor
any and all such amounts actually incurred and paid by Pledgor.

 

		(b)	Any and all third party fees and expenses related to the assignment and transfer of the Existing
Patent pursuant to Section 2. above shall be borne by the Pledgor.

 

		(c)	All other costs and expenses in relation to this Agreement and the matters contemplated by this
Agreement not referred to in (a) and (b) hereinabove, including in particular any costs and expenses in relation to the preparation,
negotiation and execution of this Agreement, shall be born by the party as it incurred such cost and expenses.

 

Waivers
and Modifications

 

		(a)	This Agreement and the rights of each party hereunder may be waived, amended or modified only specifically
and in writing signed by the parties hereto. Delay in exercising or non-exercising of any such right is not a waiver of that right.

 

 

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and Sucampo AG, also Exhibit A to Loan Agreement 

    	 

    	 

    

		(b)	This Agreement and the documents referred to in it contain the whole agreement between the parties
relating to the Pledge contemplated by this Agreement and supersede all previous agreements between the parties related to the
subject matter hereof.

 

Severability

 

If any provision of this Agreement is or becomes illegal,
invalid or unenforceable in any jurisdiction, such illegality, invalidity or unenforceability shall not affect:

 

		(a)	the validity or enforceability in that jurisdiction of any other provision of this Agreement; or

 

		(b)	the validity or enforceability in any other jurisdiction or any other provision of this Agreement;

 

and the parties to this Agreement shall negotiate in
good faith a provision to replace the relevant provision reflecting as closely as possible the original intention and the purpose
of this Agreement.

 

Law
and Jurisdiction

 

		(a)	This Agreement shall be governed by and construed in accordance with the laws of Switzerland.

 

		(b)	Any and all disputes arising out of, or in connection with, this Agreement (including disputes
on its proper conclusion, validity and binding effect) shall exclusively be brought before the competent court of Zug.

 

 

Page 6 of 11

 

	Confidential	Patenl Pledge Agreement, 1 109

Numab AG
and Sucampo AG, also Exhibit A to Loan Agreement 

    	 

    	 

    

 

 

IN WITHNESS WHEREOF, the authorised representatives
of the Parties have executed this Agreement on September __, 2011.

 

 

 

The Pledgee:

 

Sucampo AG

 

 

 

		By:	____________________________

Ryuji Ueno

Director

 

 

 

 

The Applicant:

 

 

 

			_____________________________

David Urech

 

 

 

The Pledgor:

 

Numab AG

 

		By:	____________________________

Peter Hirschvogel

Sole member of the board of directors

 

 

 

Page 7 of 11

 

	Confidential	Patenl Pledge Agreement, 1 109

Numab AG
and Sucampo AG, also Exhibit A to Loan Agreement 

    	 

    	 

    

SCHEDULE 1

Existing Patent

 

	Application Number:	[...***...]
	Priority Date:	[...***...]
	Applicant:	[...***...]
	Title:	[...***...]

 

 

 

 

 

 

*Confidential Treatment Requested

Page 8 of 11

 

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and Sucampo AG, also Exhibit A to Loan Agreement 

    	 

    	 

    

SCHEDULE 2

Form of Notice

 

 

 

[Letterhead of Pledgor]

 

To: [Pledgee]

 

 

 

[Place], [date]

 

 

 

NOTICE REGARDING STATUS OF PLEDGED PATENTS

 

 

 

Dear Sirs,

 

We refer to the pledge agreement regarding the pledge
of patents that we entered into with you on September [7], 2011 (the "Pledge Agreement").

 

Any capitalised term used in this notice shall have the
meaning assigned to such term in the Pledge Agreement.

 

With reference to Clause 4.(f) of the Pledge Agreement,
we are sending you an updated list of all Pledged Patents.

 

We herewith confirm the Pledge over the Pledged Patents
and, if any of the Pledged Patents have not yet been validly pledged to you, we herewith pledge such Pledged Patents to you, including
all rights, claims or benefits pertaining thereto, in accordance with the terms and conditions of the Pledge Agreement.

 

 

 

Yours sincerely,

 

[Pledgor]

 

 

 

___________________

 

 

Page 9 of 11

 

	Confidential	Patenl Pledge Agreement, 1 109

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and Sucampo AG, also Exhibit A to Loan Agreement 

    	 

    	 

    

SCHEDULE 3

Form of Notification to competent Patent Office

 

 

 

[Letterhead of Pledgor]

 

To: [competent Patent Office]

 

 

 

[Place], [date]

 

 

 

NOTIFICATION REGARDING THE PLEDGE OF CERTAIN PATENTS

 

 

 

Dear Sirs,

 

We are the owner of the following patent registered with
you under [description of the registration number] (the "Patent"). We herewith notify you that we have
pledged the Patent to Sucampo AG, Graben 5, 6300 Zug, Switzerland (the "Pledgee").

 

We, therefore, kindly ask you to register the pledge
of the Patent in favour of the Pledgee and to provide us with an excerpt of the register confirming that the pledge has been registered.

 

We kindly ask you not to de-register the pledge unless
you have received a written instruction from the Pledgee.

 

 

 

Yours sincerely,

 

[Pledgor]

 

 

 

___________________

 

Page 10 of 11

 

	Confidential	Patenl Pledge Agreement, 1 109

Numab AG
and Sucampo AG, also Exhibit A to Loan Agreement 

    	 

    	 

    

SCHEDULE 4

Form of Notice to Release to competent Patent Office

 

 

 

[Letterhead of Pledgee]

 

To: [competent Patent Office]

 

 

 

[Place], [date]

 

 

 

NOTIFICATION REGARDING RELEASE OF THE PLEDGE OF CERTAIN
PATENTS

 

 

 

Dear Sirs,

 

As per notice of Numab AG, [ADDRESS], Switzerland sent
to you on [DATE] to notify you of the pledge in our favour of the patent(s) registered with you under [description of the registration
number] (the "Patent"), we herewith notify you that the pledge on the Patent has terminated and the patent
has been released from such pledge.

 

We, therefore, kindly ask you to de-register and delete
the pledge of the Patent in our favour and to provide us with an excerpt of the register confirming that the pledge has been de-registered
and deleted.

 

 

 

Yours sincerely,

 

[Pledgee]

 

 

 

___________________

 

 

Page 11 of 11

 

	Confidential	Patenl Pledge Agreement, 1 109

Numab AG
and Sucampo AG, also Exhibit A to Loan Agreement

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