Exhibit 10.1
INDEMNIFICATION AGREEMENT
     INDEMNIFICATION AGREEMENT (this “Agreement”) dated as of July 16, 2008 by
and between Sucampo Pharmaceuticals, Inc. (the “Company”), a Delaware
corporation, and Andrew J. Ferrara (“Indemnitee”):
     WHEREAS, competent persons are reluctant to serve a corporation as a
director or in another capacity unless they are provided with adequate
protection through insurance or adequate indemnification against inordinate
risks of claims and actions against them arising out of their service to and
activities on behalf of corporations;
     WHEREAS, the Board of Directors of the Company has determined that the
ability to attract and retain such persons is in the best interests of the
Company’s stockholders and that the Company should act to assure such persons
that there will be increased certainty of such protection in the future; and
     WHEREAS, it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify such persons to the fullest extent
permitted by applicable law so that they will serve or continue to serve the
Company free from undue concern that they will not be so indemnified; and
     WHEREAS, Indemnitee is willing to serve, continue to serve and to take on
additional service for or on behalf of the Company on the condition that
Indemnitee be so indemnified;
     NOW, THEREFORE, in consideration of the premises, the mutual agreements
herein set forth below and other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties agree as follows:
     1. Definitions. For purposes of this Agreement the following terms shall
have the meanings set forth below:
     (a) “Board” shall mean the Board of Directors of the Company.
     (b) “Change of Control” shall mean any of the following events:
     (i) Unless approved by the affirmative vote of at least two-thirds of those
members of the Board who are in office immediately prior to the event(s) and who
are not employees of the Company:
     (A) the merger or consolidation of the Company with, or the sale of all or
substantially all of the assets of the Company to, any person or entity or group
of associated persons or entities; or
     (B) the acquisition of direct or indirect beneficial ownership in the
aggregate of securities of the Company representing twenty percent (20%) or more
of the total combined voting power of the Company’s then

 

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issued and outstanding securities by any person or entity, or group of
associated persons or entities acting in concert, not affiliated (within the
meaning of the Securities Act of 1933) with the Company as of the date of this
Agreement; or
     (C) approval by the stockholders of the Company of any plan or proposal for
the liquidation or dissolution of the Company; or
     (ii) A change in the composition of the Board at any time during any
consecutive 24-month period such that the “Continuing Directors” cease for any
reason to constitute at least a seventy percent (70%) majority of the Board. For
purposes of this clause (ii), “Continuing Directors” means those members of the
Board who either:
     (A) were members of the Board at the beginning of such consecutive 24-month
period; or
     (B) were elected by, or on the nomination or recommendation of, at least a
two-thirds majority (consisting of at least five directors) of the then-existing
Board.
     (c) “Corporate Status” describes the status of a person who is or was a
director, officer, employee, agent or fiduciary of the Company or of any other
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise which such person is or was serving at the express written request of
the Company.
     (d) “Disinterested Director” means a director of the Company who is not and
was not a party to the Proceeding in respect of which indemnification is sought
by Indemnitee.
     (e) “Enterprise” shall mean the Company and any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise of
which Indemnitee is or was serving at the express written request of the Company
as a director, officer, employee, agent or fiduciary.
     (f) “Expenses” shall include all reasonable attorneys’ fees, retainers,
court costs, transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, and all other disbursements or expenses of the types
customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, being or preparing to be a witness in a
Proceeding.
     (g) “Good Faith” shall mean Indemnitee having acted in good faith and in a
manner Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal Proceeding, having
had no reasonable cause to believe Indemnitee’s conduct was unlawful.

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     (h) “Independent Counsel” means a law firm, or a member of a law firm, that
is experienced in matters of corporation law and neither presently is, nor in
the past five years has been, retained to represent: (i) the Company or
Indemnitee in any matter material to either such party or (ii) any other party
to the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term “Independent Counsel” shall not include
any person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the Company
or Indemnitee in an action to determine Indemnitee’s rights under this
Agreement.
     (i) “Proceeding” includes any action, suit, arbitration, alternate dispute
resolution mechanism, investigation, administrative hearing or any other actual,
threatened or completed proceeding whether civil, criminal, administrative or
investigative, other than one initiated by Indemnitee. For purposes of the
foregoing sentence, a “Proceeding” shall not be deemed to have been initiated by
Indemnitee where Indemnitee seeks pursuant to Section 9 of this Agreement to
enforce Indemnitee’s rights under this Agreement.
     2. Term of Agreement. This Agreement shall continue until and terminate
upon the later of: (a) 10 years after the date that Indemnitee has ceased to
serve as a director, officer, employee, agent or fiduciary of the Company or of
any other corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise which Indemnitee served at the express written request of
the Company or (b) the final termination of all pending Proceedings in respect
of which Indemnitee is granted rights of indemnification or advancement of
expenses hereunder and of any proceeding commenced by Indemnitee pursuant to
Section 9 of this Agreement relating thereto. In addition, no legal action shall
be brought and no cause of action shall be asserted by or in the right of the
Company against Indemnitee, Indemnitee’s estate, spouse, heirs, executors or
personal or legal representatives after the expiration of five (5) years from
the date of accrual of such cause of action, and any claim or cause of action of
the Company shall be extinguished and deemed released unless asserted by the
timely filing of a legal action within such five (5) year period; PROVIDED,
HOWEVER, that if any shorter period of limitations is otherwise applicable to
any such cause of action, such shorter period shall govern.
     3. Services by Indemnitee, Notice of Proceedings.
     (a) Services. Indemnitee agrees to serve as a director of the Company.
Indemnitee may at any time and for any reason resign from such position (subject
to any other contractual obligation or any obligation imposed by operation of
law).
     (b) Notice of Proceeding. Indemnitee agrees promptly to notify the Company
in writing upon being served with any summons, citation, subpoena, complaint,
indictment, information or other document relating to any Proceeding or matter
that may be subject to indemnification or advancement of Expenses covered
hereunder.

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     4. Indemnification.
     (a) In General. In connection with any Proceeding, the Company shall
indemnify and advance Expenses to Indemnitee as provided in this Agreement and
to the fullest extent permitted by applicable law in effect on the date hereof
and to such greater extent as applicable law may thereafter from time to time
permit.
     (b) Proceedings Other Than Proceedings by or in the Right of the Company.
Indemnitee shall be entitled to the rights of indemnification provided in this
Section 4(b) if, by reason of Indemnitee’s Corporate Status, Indemnitee is, or
is threatened to be made, a party to any Proceeding, other than a Proceeding by
or in the right of the Company. Indemnitee shall be indemnified against
Expenses, judgments, penalties, fines and amounts paid in settlements actually
and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection
with such Proceeding or any claim, issue or matter therein, if Indemnitee acted
in Good Faith including without limitation, any and all losses, claims, damages,
expenses and liabilities, joint or several (including any investigation, legal
and other expenses incurred in connection with, and any amount paid in
settlement of, any action, suit, proceeding or any claim asserted) under the
Securities Act of 1933, the Securities Exchange Act of 1934, as amended (the
“Exchange Act of 1934”) or other federal or state statutory law or regulation,
at common law or otherwise or which relate directly or indirectly to the
registration, purchase, sale or ownership of any securities of the Company or to
any fiduciary obligation owed with respect thereto or as a direct or indirect
result of any Proceeding or any claim, issue or matter therein made by any
stockholder of the Company against Indemnitee and arising out of or related to
any round of financing of the Company (including but not limited to Proceedings
or any claims, issues or matters therein regarding non-participation, or non-pro
rata participation, in such round by such stockholder), or made by a third party
against Indemnitee based on any misstatement or omission of a material fact by
the Company in violation of any duty of disclosure imposed on the Company by
federal or state securities or common laws.
     (c) Proceedings by or in the Right of the Company. Indemnitee shall be
entitled to the rights of indemnification provided in this Section 4(c) if, by
reason of Indemnitee’s Corporate Status, Indemnitee is or is threatened to be
made a party to any Proceeding brought by or in the right of the Company to
procure a judgment in its favor. Indemnitee shall be indemnified against
Expenses, judgments, penalties and amounts paid in settlement, actually and
reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with
such Proceeding if Indemnitee acted in Good Faith. Notwithstanding the
foregoing, no such indemnification shall be made in respect of any claim, issue
or matter in such Proceeding as to which Indemnitee shall have been adjudged to
be liable to the Company if applicable law prohibits such indemnification;
provided, however, that, if applicable law so permits, indemnification shall
nevertheless be made by the Company in such event if and only to the extent that
the Court of Chancery of the State of Delaware, or the court in which such
Proceeding shall have been brought or is pending, shall determine.

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     (d) Indemnification of a Party Who is Wholly or Partly Successful.
Notwithstanding any other provision of this Agreement, to the extent that
Indemnitee is, by reason of Indemnitee’s Corporate Status, a party to and is
successful, on the merits or otherwise, in any Proceeding, Indemnitee shall be
indemnified to the maximum extent permitted by law against all Expenses,
judgments, penalties, fines and amounts paid in settlement, actually and
reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection
therewith. If Indemnitee is not wholly successful in such Proceeding but is
successful, on the merits or otherwise, as to one or more but less than all
claims, issues or matters in such Proceeding, the Company shall indemnify
Indemnitee to the maximum extent permitted by law, against all Expenses,
judgments, penalties, fines and amounts paid in settlement, actually and
reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with
each successfully resolved claim, issue or matter. For purposes of this Section
4(d) and without limitation, the termination of any claim, issue or matter in
such a Proceeding by dismissal, with or without prejudice, shall be deemed to be
a successful result as to such claim, issue or matter, so long as there has been
no finding (either adjudicated or pursuant to Section 6) that Indemnitee did not
act in Good Faith.
     (e) Indemnification for Expenses of a Witness. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee is, by reason of
Indemnitee’s Corporate Status, a witness in any Proceeding, Indemnitee shall be
indemnified against all Expenses actually and reasonably incurred by Indemnitee
or on Indemnitee’s behalf in connection therewith.
     (f) Assumption of Defense and Settlement. Notwithstanding any other
provision of this Agreement, with respect to any such Proceeding as to which the
Indemnitee gives notice to the Company of the commencement thereof:
     (1) the Company will be entitled to participate therein at its own expense;
     (2) the Company, jointly with any other indemnifying party similarly
notified, shall be entitled to assume the defense thereof, with counsel
satisfactory to the Indemnitee. If the Company assumes the defense of the
Indemnitee, it shall notify the Indemnitee, and after the Indemnitee receives
such notice, the Company shall not be liable to the Indemnitee under this
Agreement for any Expenses incurred by the Indemnitee after the date such notice
was received. The Indemnitee shall be entitled to employ Indemnitee’s own
counsel at Indemnitee’s own expense. Nevertheless, the Company shall pay for
Indemnitee’s own counsel if (1) the Company agrees to do the same, (2) the
Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Company and the Indemnitee regarding the defense of such
action, or (3) the Company shall not in fact have employed counsel to assume the
defense of the Proceeding. The Company shall not be entitled to assume the
defense of any Proceeding brought by or on behalf of the Company or as to which
the Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Company and the Indemnitee regarding the defense of such
Proceeding; and

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     (3) the Company shall not be liable to the Indemnitee under this Agreement
for any amounts paid in settlement of any Proceeding unless the Company consents
to such settlement. The Company shall not settle any Proceeding in any manner
that would impose any penalty or limitation on the Indemnitee without the
Indemnitee’s written consent. Neither the Company nor the Indemnitee will
unreasonably withhold their consent to any proposed settlement.
     (g) Contribution.
     (1) Notwithstanding any other provision of this Agreement, if the
indemnification provided for in this Section 4 for any reason is held by a court
of competent jurisdiction to be unavailable to Indemnitee in respect of any
losses, claims, damages, expenses or liabilities referred to therein, then the
Company, in lieu of indemnifying Indemnitee thereunder, shall contribute to the
amount paid or payable by Indemnitee as a result of such losses, claims,
damages, expenses or liabilities
     (A) in such proportion as is appropriate to reflect the relative benefits
received by the Company and Indemnitee; or
     (B) if the allocation provided by clause (A) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (A) above but also the relative fault of
the Company and Indemnitee in connection with the action or inaction which
resulted in such losses, claims, damages, expenses or liabilities, as well as
any other relevant equitable considerations.
     (2) In connection with the registration of the Company’s securities, the
relative benefits received by the Company and Indemnitee shall be deemed to be
in the same respective proportions that the net proceeds from the offering
(before deducting expenses) received by the Company and Indemnitee, in each case
as set forth in the table on the cover page of the applicable prospectus, bear
to the aggregate public offering price of the securities so offered. The
relative fault of the Company and Indemnitee shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or Indemnitee and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and Indemnitee agree that it
would not be just and equitable if contribution pursuant to this Section 4(g)
were determined by pro rata or per capita allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to in the immediately preceding paragraph.

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     (3) In connection with the registration of the Company’s securities, in no
event shall Indemnitee be required to contribute any amount under this Section
4(g) in excess of the lesser of:
     (A) that proportion of the total of such losses, claims, damages or
liabilities indemnified against equal to the proportion of the total securities
sold under such registration statement which is being sold by Indemnitee; or
     (B) the proceeds received by Indemnitee from its sale of securities under
such registration statement.
     (4) Persons found guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act of 1933) shall only be entitled
to contribution from any person who was found guilty of such fraudulent
misrepresentation.
     5. Exceptions
     Any other provision herein to the contrary notwithstanding, the Company
shall not be obligated pursuant to the terms of this Agreement:
     (a) Claims Under Section 16(b). To indemnify Indemnitee for expenses and
the payment of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section 16(b) of the Exchange Act of 1934 or any
similar successor statute; or
     (b) Unlawful Indemnification. To indemnify Indemnitee if a final decision
by a court having jurisdiction in the matter shall determine that such
indemnification is not lawful.
     6. Advancement of Expenses. Notwithstanding any provision to the contrary
in Section 7, the Company shall advance all reasonable Expenses which, by reason
of Indemnitee’s Corporate Status, were incurred by or on behalf of Indemnitee in
connection with any Proceeding, within 20 days after the receipt by the Company
of a statement or statements from Indemnitee requesting such advance or
advances, whether prior to or after final disposition of such Proceeding. Such
statement or statements shall reasonably evidence the Expenses incurred by
Indemnitee and shall be preceded or accompanied by an undertaking by or on
behalf of Indemnitee to repay any Expenses if it shall ultimately be determined
that Indemnitee is not entitled to be indemnified against such Expenses. Any
advance and undertakings to repay pursuant to this Section 6 shall be unsecured
and interest free.
     7. Procedures for Determination of Entitlement to Indemnification.
     (a) Initial Request. To obtain indemnification under this Agreement,
Indemnitee shall submit to the Company a written request, including therein or
therewith such documentation and information as is reasonably available to
Indemnitee and is reasonably necessary to determine whether and to what extent
Indemnitee is entitled to

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indemnification. The Secretary of the Company shall promptly advise the Board in
writing that Indemnitee has requested indemnification.
     (b) Method of Determination. A determination (if required by applicable
law) with respect to Indemnitee’s entitlement to indemnification shall be made
as follows:
     (1) if a Change in Control has occurred, unless Indemnitee shall request in
writing that such determination be made in accordance with clause (2) of this
Section 7(b), the determination shall be made by Independent Counsel in a
written opinion to the Board, a copy of which shall be delivered to Indemnitee;
     (2) if a Change of Control has not occurred, the determination shall be
made by the Board by a majority vote of Disinterested Directors, even though
less than a quorum. In the event that there are no Disinterested Directors or if
such Disinterested Directors so direct, the determination shall be made by
Independent Counsel in a written opinion to the Board, a copy of which shall be
delivered to Indemnitee.
     (c) Selection, Payment, Discharge, of Independent Counsel. In the event the
determination of entitlement to indemnification is to be made by Independent
Counsel pursuant to Section 7(b) of this Agreement, the Independent Counsel
shall be selected, paid and discharged in the following manner:
     (1) If a Change of Control has not occurred, the Independent Counsel shall
be selected by the Board, and the Company shall give written notice to
Indemnitee advising Indemnitee of the identity of the Independent Counsel so
selected.
     (2) If a Change of Control has occurred, the Independent Counsel shall be
selected by Indemnitee (unless Indemnitee shall request that such selection be
made by the Board, in which event clause (1) of this Section 7(c) shall apply),
and Indemnitee shall give written notice to the Company advising it of the
identity of the Independent Counsel so selected.
     (3) Following the initial selection described in clauses (1) and (2) of
this Section 7(c), Indemnitee or the Company, as the case may be, may, within
seven days after such written notice of selection has been given, deliver to the
other party a written objection to such selection. Such objection may be
asserted only on the ground that the Independent Counsel so selected does not
meet the requirements of “Independent Counsel” as defined in this Agreement, and
the objection shall set forth with particularity the factual basis of such
assertion. Absent a proper and timely objection, the person so selected shall
act as Independent Counsel. If such written objection is made, the Independent
Counsel so selected may not serve as Independent Counsel unless and until a
court has determined that such objection is without merit.
     (4) Either the Company or Indemnitee may petition any court of competent
jurisdiction if the parties have been unable to agree on the selection of

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Independent Counsel within 20 days after submission by Indemnitee of a written
request for indemnification pursuant to Section 7(a) of this Agreement. Such
petition may request a determination whether an objection to the party’s
selection is without merit and/or seek the appointment as Independent Counsel of
a person selected by the Court or by such other person as the Court shall
designate. A person so appointed shall act as Independent Counsel under Section
7(b) of this Agreement.
     (5) The Company shall pay any and all reasonable fees and expenses of
Independent Counsel incurred by such Independent Counsel in connection with
acting pursuant to this Agreement, and the Company shall pay all reasonable fees
and expenses incident to the procedures of this Section 7(c), regardless of the
manner in which such Independent Counsel was selected or appointed.
     (6) Upon the due commencement of any judicial proceeding or arbitration
pursuant to Section 9(c) of this Agreement, Independent Counsel shall be
discharged and relieved of any further responsibility in such capacity (subject
to the applicable standards of professional conduct then prevailing).
     (d) Cooperation. Indemnitee shall cooperate with the person, persons or
entity making the determination with respect to Indemnitee’s entitlement to
indemnification under this Agreement, including providing to such person,
persons or entity upon reasonable advance request any documentation or
information which is not privileged or otherwise protected from disclosure and
which is reasonably available to Indemnitee and reasonably necessary to such
determination. Any costs or expenses (including attorneys’ fees and
disbursements) incurred by Indemnitee in so cooperating with the person, persons
or entity making such determination shall be borne by the Company (irrespective
of the determination as to Indemnitee’s entitlement to indemnification) and the
Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
     (e) Payment. If it is determined that Indemnitee is entitled to
indemnification, payment to Indemnitee shall be made within 10 days after such
determination.
     8. Presumptions and Effect of Certain Proceedings.
     (a) Burden of Proof. In making a determination with respect to entitlement
to Indemnification hereunder, the person or persons or entity making such
determination shall presume that Indemnitee is entitled to indemnification under
this Agreement if Indemnitee has submitted a request for indemnification in
accordance with Section 7(a), and the Company shall have the burden of proof to
overcome that presumption in connection with the making by any person, persons
or entity of any determination contrary to that presumption.
     (b) Effect of Other Proceedings. The termination of any Proceeding or of
any claim, issue or matter therein, by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent, shall not
(except as otherwise expressly

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provided in this Agreement) of itself adversely affect the right of Indemnitee
to indemnification or create a presumption that Indemnitee did not act in Good
Faith.
     (c) Reliance as Safe Harbor. For purposes of any determination of Good
Faith, Indemnitee shall be deemed to have acted in Good Faith if Indemnitee’s
action is based on the records or books of account of the Enterprise, including
financial statements, or on information supplied to Indemnitee by the officers
of the Enterprise in the course of their duties, or on the advice of legal
counsel for the Enterprise or on information or records given or reports made to
the Enterprise by an independent certified public accountant or by an appraiser
or other expert selected with reasonable care by the Enterprise. The provisions
of this Section 8(c) shall not be deemed to be exclusive or to limit in any way
the other circumstances in which the Indemnitee may be deemed to have met the
applicable standard of conduct set forth in this Agreement.
     (d) Actions of Others. The knowledge and/or actions, or failure to act, of
any director, officer, agent or employee of the Enterprise shall not be imputed
to Indemnitee for purposes of determining the right to indemnification under
this Agreement.
     9. Remedies of Indemnitee.
     (a) Application. This Section 9 shall apply in the event of a Dispute. For
purposes of this article, “Dispute” shall mean any of the following events:
     (1) a determination is made pursuant to Section 7 of this Agreement that
Indemnitee is not entitled to indemnification under this Agreement;
     (2) advancement of Expenses is not timely made pursuant to Section 6 of
this Agreement;
     (3) if the determination of entitlement to be made pursuant to Section 7(b)
of this Agreement is to be made by the Board and the Board has not made such
determination within 60 days after receipt by the Company of the request for
indemnification;
     (4) if the determination of entitlement to be made pursuant to Section 7(b)
of this Agreement is to be made by Independent Counsel and Independent Counsel
has not made such determination within 90 days after receipt by the Company of
the request for indemnification;
     (5) payment of indemnification is not made pursuant to Section 4(e) of this
Agreement within 10 days after receipt by the Company of a written request
therefor; or
     (6) payment of indemnification is not made within 10 days after a
determination has been made that Indemnitee is entitled to indemnification or
such determination is deemed to have been made pursuant to Section 7 of this
Agreement.

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     (b) Adjudication. In the event of a Dispute, Indemnitee shall be entitled
to an adjudication in an appropriate court in the State of Delaware, or in any
other court of competent jurisdiction, of Indemnitee’s entitlement to such
indemnification or advancement of Expenses. Alternatively, Indemnitee, at
Indemnitee’s option, may seek an award in arbitration to be conducted by a
single arbitrator pursuant to the rules of the American Arbitration Association.
Indemnitee shall commence such proceeding seeking an adjudication or an award in
arbitration within 180 days following the date on which Indemnitee first has the
right to commence such proceeding pursuant to this Section 9(b). The Company
shall not oppose Indemnitee’s right to seek any such adjudication or award in
arbitration.
     (c) De Novo Review. In the event that a determination shall have been made
pursuant to Section 7 of this Agreement that Indemnitee is not entitled to
indemnification, any judicial proceeding or arbitration commenced pursuant to
this Section 9 shall be conducted in all respects as a de novo trial, or
arbitration, on the merits, and Indemnitee shall not be prejudiced by reason of
that adverse determination. In any such proceeding or arbitration, the Company
shall have the burden of proving that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be.
     (d) Company Bound. If a determination shall have been made or deemed to
have been made pursuant to Section 7 of this Agreement that Indemnitee is
entitled to indemnification, the Company shall be bound by such determination in
any judicial proceeding or arbitration absent (i) a misstatement by Indemnitee
of a material fact, or an omission of a material fact necessary to make
Indemnitee’s statement not materially misleading in connection with the request
for indemnification or (ii) a prohibition of such indemnification under
applicable law.
     (e) Procedures Valid. The Company shall be precluded from asserting in any
judicial proceeding or arbitration commenced pursuant to this Section 9 that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all of the provisions of this Agreement.
     (f) Expenses of Adjudication. In the event that Indemnitee, pursuant to
this Section 9, seeks a judicial adjudication of or an award in arbitration to
enforce Indemnitee’s rights under, or to recover damages for breach of, this
Agreement, Indemnitee shall be entitled to recover from the Company, and shall
be indemnified by the Company against, any and all expenses (of the types
described in the definition of Expenses in this Agreement) actually and
reasonably incurred by Indemnitee in such adjudication or arbitration, but only
if Indemnitee prevails therein. If it shall be determined in such adjudication
or arbitration that Indemnitee is entitled to receive part but not all of the
indemnification or advancement of expenses sought, the expenses incurred by
Indemnitee in connection with such adjudication or arbitration shall be
appropriately prorated.

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     10. Non-exclusivity, Insurance, Subrogation.
     (a) Non-Exclusivity. The rights of indemnification and to receive
advancement of Expenses as provided by this Agreement shall not be deemed
exclusive of any other rights to which Indemnitee may at any time be entitled
under applicable law, the Certificate of Incorporation, the Bylaws, any
agreement, a vote of stockholders or a resolution of directors, or otherwise. No
amendment, alteration, rescission or replacement of this Agreement or any
provision hereof shall be effective as to Indemnitee with respect to any action
taken or omitted by such Indemnitee in Indemnitee’s Corporate Status prior to
such amendment, alteration, rescission or replacement.
     (b) Insurance. The Company may maintain an insurance policy or policies
against liability arising out of this Agreement or otherwise.
     (c) Subrogation. In the event of any payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all papers required and take all
action necessary to secure such rights, including execution of such documents as
are necessary to enable the Company to bring suit to enforce such rights.
     (d) No Duplicative Payment. The Company shall not be liable under this
Agreement to make any payment of amounts otherwise indemnifiable hereunder if
and to the extent that Indemnitee has otherwise actually received such payment
under any insurance policy, contract, agreement or otherwise.
     11. Miscellaneous Provisions.
     (a) Entire Agreement. This Agreement contains the entire understanding
between the parties hereto with respect to the subject matter hereof and
supersedes any prior understandings, agreements or representations, written or
oral, relating to the subject matter hereof.
     (b) Counterparts. This Agreement may be executed in separate counterparts,
each of which will be an original and all of which taken together shall
constitute one and the same agreement, and any party hereto may execute this
Agreement by signing any such counterpart.
     (c) Severability. Whenever possible, each provision of this Agreement shall
be interpreted in such a 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 under any applicable law or rule, the validity, legality and
enforceability of the other provision of this Agreement will not be affected or
impaired thereby.
     (d) Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective heirs, personal
representatives and successors and assigns.

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     (e) Modification, Amendment, Waiver or Termination. No provision of this
Agreement may be modified, amended, waived or terminated except by an instrument
in writing signed by the parties to this Agreement. No course of dealing between
the parties will modify, amend, waive or terminate any provision of this
Agreement or any rights or obligations of any party under or by reason of this
Agreement.
     (f) Notices. All notices, consents, requests, instructions, approvals or
other communications provided for herein shall be in writing and delivered by
personal delivery, overnight courier, mail, electronic facsimile or e-mail
addressed to the receiving party at the address set forth herein. All such
communications shall be effective when received.
If to the Company:
Ryuji Ueno, M.D., Ph.D., Ph.D.
Chief Executive Officer, Chief Scientific Officer and
Chair of the Board of Directors
c/o Sucampo Pharmaceuticals, Inc.
4520 East-West Highway
Suite 300
Bethesda, MD 20814
If to the Indemnitee:
Andrew J. Ferrara
34 1/2 Beacon Street, Unit 5N
Boston, MA 02108
     Any party may change the address set forth above by notice to each other
party given as provided herein.
     (g) Headings. The headings and any table of contents contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.
     (h) Governing Law. ALL MATTERS RELATING TO THE INTERPRETATION,
CONSTRUCTION, VALIDITY AND ENFORCEMENT OF THIS AGREEMENT SHALL BE GOVERNED BY
THE INTERNAL LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE
OF LAW PROVISIONS THEREOF.
     (i) Third-Party Benefit. Nothing in this Agreement, express or implied, is
intended to confer upon any other person any rights, remedies, obligations or
liabilities of any nature whatsoever.
     (j) Jurisdiction and Venue. THIS AGREEMENT MAY BE ENFORCED IN ANY FEDERAL
COURT OR STATE COURT SITTING IN DELAWARE,

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AND EACH PARTY CONSENTS TO THE JURISDICTION AND VENUE OF ANY SUCH COURT AND
WAIVES ANY ARGUMENT THAT VENUE IN SUCH FORUM IS NOT CONVENIENT. IF ANY PARTY
COMMENCES ANY ACTION UNDER ANY TORT OR CONTRACT THEORY ARISING DIRECTLY OR
INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS AGREEMENT IN ANOTHER
JURISDICTION OR VENUE, ANY OTHER PARTY TO THIS AGREEMENT SHALL HAVE THE OPTION
OF TRANSFERRING THE CASE TO THE ABOVE-DESCRIBED VENUE OR JURISDICTION OR, IF
SUCH TRANSFER CANNOT BE ACCOMPLISHED, TO HAVE SUCH CASE DISMISSED WITHOUT
PREJUDICE.
     (k) Remedies. The parties agree that money damages may not be an adequate
remedy for any breach of the provisions of this Agreement and that any party
may, in its discretion, apply to any court of law or equity of competent
jurisdiction for specific performance and injunctive relief in order to enforce
or prevent any violations this Agreement, and any party against whom such
proceeding is brought hereby waives the claim or defense that such party has an
adequate remedy at law and agrees not to raise the defense that the other party
has an adequate remedy at law.
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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth in the first paragraph.

            SUCAMPO PHARMACEUTICALS, INC.
      By:   /s/ MARIAM E. MORRIS         Name:   Mariam E. Morris        Its:
Chief Financial Officer     

            Print Name Andrew J. Ferrara          /s/ ANDREW J. FERRARA  
Indemnitee

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