Exhibit 10.54

*** CERTAIN CONFIDENTIAL INFORMATION

CONTAINED IN THIS DOCUMENT

(INDICATED BY ASTERISKS) HAS BEEN

OMITTED AND FILED SEPARATELY WITH

THE SECURITIES AND EXCHANGE

COMMISSION PURSUANT TO A REQUEST FOR

CONFIDENTIAL TREATMENT UNDER 17

C.F.R. SECTIONS 200.80(B)(4), 200.83

AND 230.406.

EXCLUSIVE LICENSE AGREEMENT

BETWEEN

THE UNIVERSITY OF MISSOURI AND SANTARUS, INC.

This Exclusive License Agreement (“Agreement”) is effective as of the 26th day
of January 2001 (the “Effective Date”), by and between THE CURATORS OF THE
UNIVERSITY OF MISSOURI, a public corporation organized under the laws of
Missouri, having a principal place of business at 615 Locust Street Building,
Third Floor, Columbia, Missouri 65211-1400 (“the University”), and SANTARUS,
INC. (“Santarus”), a California corporation, having a principal place of
business at 12230 El Camino Real, Suite 300, San Diego, California 92130.

RECITALS

Whereas, certain discoveries useful for the administration of proton pump
inhibitors using pharmaceutically acceptable carriers were made in the course of
research under the direction of Dr. Jeffrey O. Phillips (“Dr. Phillips”) at the
University (the “Research”) and are claimed in the patents and patent
applications included in the Patent Rights (defined below);

Whereas, Santarus has requested a license of certain rights from the University
to commercialize Licensed Products (defined below) based on such discoveries;

Whereas, the University is willing to grant such license rights to Santarus; and

Whereas, the University hereby responds to the request of Santarus by granting
the following rights to Santarus so that the products and other benefits derived
from the Patent Rights can be enjoyed by the general public.

AGREEMENT

Now, therefore, in consideration of the representations and covenants set forth
herein, the payments made hereunder, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:

1. DEFINITIONS

Capitalized terms used but not elsewhere defined in this Agreement shall have
the meanings set forth below:

1.1 “AFFILIATE(s)” of either party to this Agreement means any entity which,
directly or indirectly, controls the party, is controlled by the party, or is
under common control with the party (“control” for these purposes being defined
as the actual, present capacity to elect a majority of the directors or
curators, as the case may be, of such entity, or if not, the power to direct at
least *** of the voting rights entitled to elect directors or curators);
provided, however, that in any country where the local law will not permit
foreign equity participation of a majority, then an “Affiliate” of Santarus will
include any company in which Santarus owns or controls, directly or indirectly,
the maximum percentage of such outstanding stock or voting rights permitted by
local law. Each reference to Santarus herein will be deemed to include its
Affiliates.

 

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1.2 “ANDA” means an Abbreviated New Drug Application filed with the FDA.

1.3 “COMBINATION PRODUCT” means any product which is a Licensed Product and
which also contains other product(s) or component(s) (“Other Product”), which
Other Product (i) is not a Licensed Product; (ii) the sale, use or import of
which, by itself, does not contribute to the infringement of the Patent Rights;
(iii) could be sold separately by Santarus; and (iv) enhances the market price
of the final Licensed Product(s) sold, used or imported by Santarus. ***

*** *** ***

1.4 “FDA” means the United States Food and Drug Administration.

1.5 “FIELD OF USE” means all uses within the Patent Rights.

1.6 “FIRST COMMERCIAL SALE” means the first sale of a Licensed Product in the
country in the Territory, such Licensed Product intended for administration to a
patient for a therapeutic use approved by the FDA or other similar regulatory
agency in a foreign country; provided, however, if approval by a similar
regulatory agency is not required in a particular foreign country, then such
approval shall not be an element of the definition of “First Commercial Sale.”

1.7 “FUNDED RESEARCH” has the meaning set forth in Section 4.16 (“Funded
Research”).

1.8 “IND” means an Investigational New Drug application filed with the FDA.

1.9 “JOINT VENTURE” means any separate entity established pursuant to an
agreement between a third party and Santarus to constitute a vehicle for a joint
business enterprise, in which the separate entity manufactures, uses, or sells
Licensed Products, or purchases or acquires Licensed Products from Santarus.

1.10 “LICENSED PRODUCT” shall mean any product that cannot be manufactured, used
or sold without (i) infringing one or more claims under the Patent Rights
(including the claims in pending applications) or (ii) using any part of the
Technical Information not otherwise includable within the Patent Rights.

1.11 “NDA” means a New Drug Application filed with the FDA.

 

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1.12 “NET SALES” means the amount invoiced as a result of the sale of Licensed
Products by Santarus, Joint Ventures, and sublicensees to independent third
parties for cash or other forms of consideration in accordance with generally
accepted accounting principles (“GAAP”) limited to the following deductions (if
not already deducted from the gross invoice price and at rates customary within
the industry): ***

***

***

***

1.13 “NON-OMEPRAZOLE LICENSED PRODUCT” means any Licensed Product other than an
Omeprazole Licensed Product.

1.14 “NOTICE OF DEFAULT” and “NOTICE OF TERMINATION” have the meanings set forth
in Article 8 (“Term and Termination; Resolution of Disputes”).

1.15 “OMEPRAZOLE LICENSED PRODUCT” means any Licensed Product that contains
Omeprazole.

1.16 “ORAL LIQUID” means a composition intended for oral administration to a
patient comprising any of (i) a liquid solution, (ii) a solid-in-liquid
suspension, and (iii) a powder or other solid formulation intended to be
reconstituted into a liquid solution or a solid-in-liquid suspension.

1.17 “PATENT METHOD” means any process or method covered by the claims of a
patent application or patent within Patent Rights or the use or practice of
which would constitute in a particular country, but for the license granted to
Santarus pursuant to this Agreement, an infringement of an unexpired claim of a
patent or pending claim of a patent application were it issued as a claim in a
patent within Patent Rights in that country in which the Patent Method is used
or practiced.

1.18 “PATENT RIGHTS” means all United States patents and patent applications and
foreign patents and patent applications, including any reissues,
re-examinations, extensions, substitutions, continuations, divisionals, and
continuation-in-part applications (only to the extent, however, that claims in
the continuation-in-part applications are enabled and specifically described in
the specification of the parent patent application), based on and including any
subject matter claimed in or covered by the United States patent applications
(a) set forth on Exhibit A hereto, and (b) which may be filed based on the
Results of Funded Research.

1.19 “DR. PHILLIPS” means Dr. Jeffrey 0. Phillips.

1.20 “PPI” means a proton pump inhibitor.

1.21 “PRIMARY COUNTRIES” shall mean the following: United States, Japan, United
Kingdom, France, Germany and Italy.

1.22 “PROPRIETARY INFORMATION” has the meaning set forth in Section 14.1.

 

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1.23 “RESEARCH” has the meaning set out in the first paragraph under “RECITALS.”

1.24 “TECHNICAL INFORMATION” means: the information which is described in the
Patent Rights; know-how, trade secrets, unpublished patent applications,
software, unpatented technology, technical information, statistical information
and analysis, biological materials, chemical reagents, preclinical and clinical
information (collectively, “Results”), which has been conceived and reduced to
practice in the conduct of the Research; and Results (including any patents
which may issue thereon) of the Funded Research.

1.25 “TERRITORY” means the world.

2. GRANT

2.1 LICENSE. Subject to the limitations set forth in this Agreement the
University hereby grants to Santarus an exclusive, world-wide license under the
Patent Rights, in the Field of Use, to make, have made, use, sell, have sold,
offer for sale, and import Licensed Products and to practice the Patent Method.
The license is exclusive for the life of the Patent Rights.

2.2 SUBLICENSE RIGHTS. The University also grants to Santarus the right to issue
sublicenses to third parties of the rights licensed to Santarus pursuant to this
Agreement, provided Santarus retains current exclusive rights thereto under this
Agreement. Such sublicenses will incorporate Santarus’ obligations to the
University, consistent with the terms and conditions of this Agreement, shall
obligate Santarus to pay to the University royalties with respect to sales of
Licensed Products by Santarus’ sublicensees in accordance with Article 4
(“Consideration”) hereof, and shall provide for the assignment to the University
of the sublicenses in the event of the termination of this Agreement.

2.3 SUBLICENSE OBLIGATIONS. Santarus will notify the University of each
sublicense granted hereunder and provide the University with a copy of each
sublicense upon request. Santarus will collect and pay all amounts due the
University from the sublicensees. Santarus will require the sublicensees to
provide Santarus with royalty reports in accordance with the provisions herein.

2.4 EFFECT OF TERMINATION ON SUBLICENSES. Upon termination of this Agreement for
any reason, any sublicenses will remain in full force and effect and will be
assigned to the University.

2.5 DISCLOSURE OF TECHNICAL INFORMATION. Upon execution of this Agreement, the
University shall make available to Santarus the Technical Information, to the
extent the University has not already done so. Santarus may use the Technical
Information as necessary to exploit the license granted to it hereunder.

2.6 RESERVATION OF RIGHTS. The University shall have the right throughout the
term of this Agreement to make and to use and to grant nonexclusive licenses to
make and to use, for internal research and educational purposes only, and not
for commercial purposes, the Patent Method, Patent Rights and Technical
Information. *** ***

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3. PUBLICATION AND USE OF TECHNICAL DATA

Nothing in this Agreement will be deemed to limit the right of the University to
publish any and all technical data resulting from any research performed by the
University relating to the Licensed Products and to make and use the Licensed
Products, Patent Method(s), and associated technology solely for educational and
research purposes. The foregoing notwithstanding, any publication and/or use of
the technical data must be delivered to Santarus at least forty-five (45) days
in advance of its submission for publication.

4. CONSIDERATION

4.1 INITIAL PAYMENT. On or before January 31, 2001, as a one-time, up-front
license fee, Santarus shall pay to the University the sum of one million dollars
($1,000,000) as consideration for entering into this Agreement and the licenses
granted hereunder.

4.2 MILESTONE PAYMENTS. Santarus shall make the following one-time milestone
payments to the University:

(a) One million dollars ($1,000,000) upon the submission of a NDA or ANDA to the
FDA for the first Licensed Product; and five million dollars ($5,000,000) upon
FDA approval of the NDA or ANDA for the first Licensed Product;

(b) ***

(c) ***

4.3 ADDITIONAL MILESTONE PAYMENTS. Santarus shall make the following one-time
payments to the University for the first time each of the following Net Sales
milestones for *** Licensed Products is achieved in a calendar year:

(a) Two million five hundred thousand dollars ($2,500,000) when such Net Sales
reach one hundred million dollars ($100,000,000).

(b) Seven million five hundred thousand dollars ($7,500,000) when such Net Sales
reach two hundred and fifty million dollars ($250,000,000).

(c) ***

(d) ***

(e) ***

 

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For the avoidance of doubt, in no event shall Santarus be required to make more
than one payment pursuant to each of a, b, c, d and e of this Section 4.3.

4.4 SANTARUS STOCK. Santarus agrees to issue to the University an aggregate of
five hundred seventy-five thousand (575,000) shares of Santarus common stock
upon the terms and conditions set forth in an agreement substantially in the
form of Exhibit B hereto.

4.5 EARNED ROYALTIES. As consideration for the rights and licenses granted to
Santarus, Santarus will pay to the University earned royalties on Net Sales of
(1) Omeprazole Licensed Products by Santarus or its sublicensees and
(2) Non-Omeprazole Licensed Products by Santarus, at the following rates:

4.5.1 The following royalty rates shall apply on total worldwide Net Sales of
Licensed Products sold in countries where there is at least one pending patent
application and/or existing patent within the Patent Rights:

(a) *** *** ***

(b) *** *** *** ***

(c) *** *** ***

The foregoing notwithstanding, in countries where it is generally known that
patent rights are not reasonably enforceable, if (i) a competitor sells a
product that otherwise infringes one or more of the issued or pending claims of
the Patent Rights; and (ii) the Net Sales of the Licensed Products are adversely
affected by such competition, then the royalty rate on all Net Sales of Licensed
Products in such country or countries shall be *** . Notwithstanding the
foregoing, if such competitor’s product no longer meets condition (ii) above,
then the royalty rates shall be restored to the higher rates set forth above in
this Section 4.5.1. For the avoidance of doubt, all such Net Sales in such
countries shall be included in the total and incremental Net Sales figures of
Sections 4.3 and 4.5.1 (a-c); provided, however, that Santarus is only obligated
to pay the lower royalty rate of *** for Net Sales arising from such countries.

 

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4.5.2 In countries where (i) there are no pending patent applications (either
PCT or nationalized) or existing patents within the Patent Rights, or (ii) there
is at least one pending patent application and/or existing patent within the
Patent Rights, but the Patent Rights are sub-licensed to others pursuant to
compulsory or mandatory sub-licensing at controlled royalty rates, thereby
resulting in sales of competitive products (which would infringe issued or
pending claims under the Patent Rights but for such compulsory or mandatory
sub-license) in such country, the royalty rates for Net Sales of Licensed
Products sold in such countries shall be ***. For the avoidance of doubt, Net
Sales arising from countries meeting condition (i) in this Section 4.5.2 shall
not be included in the total and incremental Net Sales figures of Sections 4.3
and 4.5.l(a-c), but Net Sales arising from countries meeting condition (ii) in
this Section 4.5.2 shall be included in the total and incremental Net Sales
figures of Sections 4.3 and 4.5.1(a-c). Notwithstanding the foregoing, Santarus
is only obligated to pay the lower royalty rate of *** for Net Sales arising
from countries meeting condition (ii). ***

***

***

***

4.6 ACCRUAL OF EARNED ROYALTIES. Earned royalties will accrue in each country
commencing with the First Commercial Sale of Licensed Products. Earned royalties
will be payable to the University when invoiced by Santarus and/or its
sublicensees. By way of example and not limitation, earned royalties will not
accrue on the delivery of sales samples or units used for clinical trials.

4.7 SUBLICENSE CONSIDERATION. If Santarus sublicenses some or all of its rights
under this Agreement with respect to Non-Omeprazole Licensed Products, within
*** days of Santarus’ receipt of any consideration with respect to such
Non-Omeprazole Licensed Product under any such sublicense, Santarus shall pay to
the University:

(a) Fifteen percent (15%) of sublicense fees and milestone payments, ***; and

(b) *** of sublicense royalties.

4.8 RIGHT OF OFFSET. In the event that Santarus and the University reasonably
determine that in any country any Licensed Product infringes upon the patent
rights of a third party, and Santarus obtains a license under such third party
rights, then, in lieu of any other right or remedy, Santarus shall have the
right to deduct from the royalties otherwise due and payable under Section 4.5
(“Earned Royalties”) arising from the sale of Licensed Products in such country,
the amount, up to a maximum of *** of the royalties otherwise payable, that
Santarus is obliged to pay under the third party license in order to obtain
rights from such third party in such country.

 

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4.9 COMBINATION PRODUCTS. In the event that a Licensed Product is also a
Combination Product, then the Net Sales on which earned royalties are payable by
the Licensee shall be calculated as hereinafter set forth. *** *** ***

4.10 TIMING OF PAYMENTS. Subject to the other terms and conditions of this
Agreement, including without limitation Sections 4.8 (“Right of Offset”) and 4.9
(“Combination Products”), payments owed by Santarus to the University pursuant
to Sections 4.2 (“Milestone Payments”), 4.3 (“Additional Milestone Payments”)
and 4.5 (“Earned Royalties”) which become payable with respect to, or as a
result of events occurring in, a particular calendar quarter will be paid to the
University no later than the due date of Santarus’ royalty ***

4.11 MULTIPLE PATENTS. For the avoidance of doubt, the parties hereby agree
that, notwithstanding how many patents or patent applications under the Patent
Rights being licensed under this Agreement are utilized for a single Licensed
Product, only one royalty will be earned on the sale of that Licensed Product.

4.12 CURRENCY. All monies due to the University will be payable in United States
dollars. When Licensed Products are sold for monies other than United States
dollars, the earned royalties *** *** *** If the transfer of or conversion into
US dollars of all currency is not lawful or possible, the payment of such part
of royalties that is necessary shall be made by the deposit thereof, in the
currency of the country where the sale was made on which the royalty was based,
to the credit and account of the University in any commercial bank or trust
company of Santarus’ choice located in that country. Prompt notice of any such
deposit will be given by Santarus to the University.

4.13 TAXES. Earned royalties and royalty milestone payments on Net Sales of
Licensed Products occurring in any country outside the United States may be
reduced by any taxes, fees, or other charges imposed by the government of such
country and actually paid by Santarus after deduction of all credits, deductions
and offsets to which Santarus is lawfully entitled.

 

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4.14 INVALIDITY OF PATENTS. In the event that any patent or any claim thereof
included within the Patent Rights is held invalid *** *** ***

4.15 REDUCTION IN ROYALTY RATE. In the event that no patent with respect to any
Patent Rights issues within *** of the filing date of any application(s)
therefor, then the royalty payable on the sale of Licensed Products shall be
reduced to the amounts determined in accordance with Section 4.5.2 herein. This
reduction shall apply prospectively only, and shall continue only until such
time, if ever, a patent covering such Patent Right is issued.

4.16 FUNDED RESEARCH. Pursuant to the terms of a research agreement to be
mutually agreed upon between Santarus and the University, Santarus shall pay to
the University *** period beginning with the first calendar quarter commencing
after the Effective Date, to support research to be conducted by or under the
supervision of Dr. Phillips with respect to the further development of Licensed
Products (such research, the “Funded Research”).

4.17 LATE PAYMENTS. In the event royalty payments, fees or patent prosecution
costs are not received by the University when due, Santarus will pay to the
University interest charges at a rate of *** per month. Such interest will be
calculated from the date payment was due until actually received by the
University. Acceptance by the University of any late payment interest from
Santarus under this Section 4.17 will in no way affect the provisions of
Section 16.2 herein.

5. DUE DILIGENCE

5.1 COMMERCIALLY REASONABLE EFFORTS. Santarus, upon execution of this Agreement,
will use commercially reasonable efforts to develop, manufacture, market and
sell Licensed Products in commercially reasonable quantities sufficient to meet
the market demands therefor in accordance with the Schedule of Events attached
as Exhibit C to this Agreement. Santarus shall promptly notify the University of
any material deviation from the Schedule of Events; provided, however, any such
notification shall not relieve Santarus of its due diligence obligations under
this Article 5.

5.2 BUSINESS JUDGMENT. Santarus will be entitled to exercise prudent and
reasonable business judgment in the manner in which it meets its due diligence
obligations hereunder. In no case, however, will Santarus be relieved of its
obligations to meet the due diligence provisions of this Article 5.

 

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5.3 GOVERNMENT APPROVALS. Santarus will obtain all necessary governmental
approvals in each country it chooses to manufacture, use, or sell Licensed
Products.

5.4 DILIGENCE. If Santarus is unable to fill the market demand for Licensed
Products in any of the Primary Countries during the period starting *** after
commencement of marketing of Licensed Products therein, then with respect to any
such Primary Country, the University will have the right and option to terminate
this Agreement or reduce the exclusive licenses granted to Santarus to
non-exclusive licenses in accordance with Section 5.5 (“Exercise of Rights”)
hereof. The exercise of this right and option by the University supersedes the
rights granted in Article 2 (“Grant”).

5.5 EXERCISE OF RIGHTS. To exercise either the right to terminate this Agreement
or reduce the exclusive licenses granted to Santarus to non-exclusive licenses
for lack of diligence required in this Article 5 (“Due Diligence”), the
University will give Santarus written notice of the deficiency. Santarus
thereafter will have *** to cure the deficiency and provide the University with
written notice of such cure. If Santarus has not cured the deficiency within the
*** period and has not provided written tangible evidence to the University
thereof, then the University may, at its option, terminate this Agreement or
reduce the exclusive licenses granted to Santarus to non-exclusive licenses by
giving written notice to Santarus. These notices will be subject to Article 13
(“Notices”).

6. PROGRESS AND ROYALTY REPORTS

6.1 ROYALTY REPORTS. Santarus will provide the University with quarterly royalty
reports on or before the earlier of *** days following the end of each calendar
quarter and (ii) *** days after Santarus’ receipt of all applicable information
concerning Net Sales of Licensed Products. Such quarterly reports will contain
sufficient detail to allow the University to verify the accuracy of the proper
and accurate calculation of payments due, and at a minimum will show:

(a) the date of First Commercial Sale of Licensed Products, on a
product-by-product in a country-by-country basis, by Santarus, its sublicensees
and Joint Ventures;

(b) the gross sales and Net Sales of Licensed Products sold on a
product-by-product in a country-by-country basis, by Santarus, its sublicensees
and Joint Ventures during the most recently completed calendar quarter;

(c) the number of Licensed Products sold or distributed on a product-by-product
in a country-by-country basis, by Santarus, its sublicensees and Joint Ventures;

(d) the royalties, in U.S. dollars, payable hereunder with respect to Net Sales;
and

(e) the exchange rates used, if any.

 

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6.2 NO SALES. If no sales of Licensed Products have been made during any
reporting period after the First Commercial Sale of a Licensed Product, then a
statement to this effect is required in the quarterly report required in
Section 6.1.

6.3 PROGRESS REPORTS. Concurrently with the royalty report due for the calendar
quarter ending December 31, Santarus shall deliver to the University a report on
the progress of the Licensed Products, which report shall include but not be
limited to reports of progress on research and development, regulatory
approvals, manufacturing, sublicensing, marketing and sales during the preceding
year as well as plans for the succeeding calendar year. Such progress report
shall also include any material deviations from the Schedule of Events attached
as Exhibit C.

7. BOOKS AND RECORDS

7.1 SANTARUS’ OBLIGATION. Santarus will keep books and records accurately
showing all Licensed Products manufactured, used, and/or sold under the terms of
this Agreement. Such books and records will be preserved for at least *** after
the date of the royalty payment to which they pertain and will be open to
inspection by representatives or agents of the University at reasonable times
not to exceed *** to determine the accuracy of the books and records and to
determine compliance by Santarus with the terms of this Agreement in accordance
with generally accepted accounting principles.

7.2 AUDIT EXPENSES. The fees and expenses of representatives of the University
performing such an examination will be borne by the University. However, if an
underpayment to the University in an amount in excess of *** for a particular
year is discovered, then the reasonable fees and expenses of such
representatives will be borne by Santarus.

8. TERM AND TERMINATION; RESOLUTION OF DISPUTES

8.1 TERM. Unless otherwise terminated by operation of law or by acts of the
parties in accordance with the terms of this Agreement, this Agreement will be
in force from the Effective Date and shall expire on a country-by-country basis,
on the date upon which the last to expire of the patents covering the Patent
Rights shall expire, or until the last patent application licensed under this
Agreement is abandoned. The foregoing notwithstanding, Santarus’ obligations
under Section 4.5.2 shall terminate on a country-by-country basis on the
fifteenth anniversary of the First Commercial Sale of Licensed Products in each
such country.

8.2 TERMINATION FOR CAUSE BY SANTARUS. If the University should violate or fail
to perform any material term or covenant of this Agreement, then Santarus may
give ninety (90) days’ written notice to the University setting forth the
alleged breach (“Notice of Default”). If the University should fail to cure such
alleged breach within such ninety (90) day period, then Santarus shall have the
right to terminate this Agreement by giving a second written notice to the
University of such termination (“Notice of Termination”) and this Agreement
shall terminate upon receipt of the Notice of Termination.

 

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8.3 TERMINATION FOR CAUSE BY THE UNIVERSITY. If Santarus should violate or fail
to perform any material term or covenant of this Agreement, then the University
may give ninety (90) days’ written notice to Santarus setting forth the alleged
breach (“Notice of Default”). If Santarus should fail to cure such alleged
breach within such ninety (90) day period, then the University shall have the
right to terminate this Agreement by giving a second written notice to Santarus
of such termination (“Notice of Termination”) and this Agreement shall terminate
upon receipt of the Notice of Termination.

8.4 DISCRETIONARY TERMINATION BY SANTARUS. Santarus will have the right at any
time to terminate this Agreement in whole or as to any portion of the Patent
Rights by giving notice in writing to the University. Such notice of termination
will be subject to Article 13 (“Notices”) and termination will be effective
sixty (60) days after the effective date thereof.

8.5 INSOLVENCY. Should Santarus become bankrupt or insolvent, or should the
business of Santarus be placed in the hands of a receiver, this Agreement shall
terminate at the option of the University. At least *** days prior to filing a
petition in bankruptcy, Santarus must inform the University of its intention to
file the petition or of another’s intention to file an involuntary petition in
bankruptcy. Further, failure to conform to this requirement shall be deemed a
material, pre-petition incurable breach.

8.6 RIGHTS IN DATA FOLLOWING TERMINATION. Following termination of this
Agreement by the University under Sections 8.3 or 8.5 hereof, or termination of
this Agreement by Santarus under Section 8.4 hereof, *** *** ***.

8.7 SURVIVAL. Any termination of this Agreement will not affect the rights and
obligations set forth in the following Articles:

Article 7 Books and Records

Article 8 Term and Termination; Resolution of Disputes

Article 9 Use of Names

Article 10 Limited Warranty

Article 12 Indemnification

 

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Article 14 Confidentiality

Article 16 Miscellaneous

8.8 EFFECT OF TERMINATION. Any termination of this Agreement shall not relieve
Santarus of its obligation to pay any monies due or owing at the time of such
termination and shall not relieve any obligations, of either party to the other
party, established prior to termination.

8.9 RESOLUTION OF DISPUTES. If Santarus and the University are unable to reach
agreement by negotiating in good faith concerning any matter under this
Agreement, or if any other dispute arises under this Agreement, the parties
agree to resolve the dispute themselves, and failing to do so, they agree that
any dispute remaining under the operation of this Agreement shall first be
subjected to a mediation process under the commercial rules of the American
Arbitration Association which shall be completed within *** days after
determination that an unresolved dispute has arisen. A dispute shall be deemed
to have arisen under this Agreement when either Santarus or the University gives
notice to the other party as provided in Article 13 (“Notices”). Such notice
shall set forth the nature of the unresolved dispute and request mediation
pursuant to this Section 8.9. The parties shall refrain from court proceedings
during the ninety-day period, or such longer period as the parties may agree in
writing.

8.10 RIGHT TO INSTITUTE LEGAL ACTIONS. Notwithstanding the termination
provisions of this Article 8 (“Term and Termination; Resolution of Disputes”),
the parties may, subject to Section 8.9 herein, institute any other legal action
or pursue any other remedy against the other party permitted by applicable law
if the other party does not substantially cure any breach or default of any
material obligation as provided herein.

8.11 DISPOSITION OF LICENSED PRODUCTS ON HAND UPON TERMINATION. Upon termination
of this Agreement, Santarus and its Joint Ventures and sublicensees will have
the right to sell all previously made or partially made Licensed Products within
a period of *** following the effective date of termination, provided, however,
that the sale of such Licensed Products will be subject to the terms of this
Agreement including, but not limited to the payment of royalties based on the
Net Sales of Licensed Products at the rates and at the times provided herein and
the rendering of reports in connection therewith.

9. USE OF NAMES

9.1 NO RIGHT TO USE NAME. Nothing contained in this Agreement will be construed
as conferring any right to use in advertising, publicity, or other promotional
activities any name, trade name, trademark, or other designation of either party
hereto by the other (including contraction, abbreviation or simulation of any of
the foregoing). Notwithstanding the foregoing, subject to prior reasonable
notice, either party may disclose and report that it has entered into this
Agreement with the other party. In addition, for the avoidance of doubt, the
parties agree that this Section does not prohibit Santarus from referencing the
University in scientific publications and business plans, and in the ordinary
course of business in

 

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communications with bankers, investors or others in order to obtain financing,
or with other third parties in negotiating future scientific or business
collaborations. In addition, for further avoidance of doubt, the parties agree
that this Section does not prohibit the University from referencing Santarus in
scientific publications and presentations and when required by law to disclose
such information.

10. LIMITED WARRANTY

10.1 LIMITED WARRANTY. The University hereby represents and warrants that:

(a) it has full right and power to enter into this Agreement;

(b) the University is the sole owner of all rights in the Patent Rights, and the
University has authority to license those rights under the terms and conditions
stated in this Agreement, as evidenced by the signature of the University’s duly
authorized representative on this Agreement;

(c) the University is not aware that the Patent Rights are subject to any liens
or encumbrances;

(d) the University has not granted licenses to the Patent Rights that would
restrict the license granted to Santarus under the Patent Rights; and

(e) there are no claims, judgments or settlements known to the University to be
paid by the University with respect to the Patent Rights, nor are there any
pending claims or litigation relating to the Patent Rights known to the
University.

10.2 NO OTHER WARRANTIES. THE UNIVERSITY MAKES NO OTHER WARRANTIES CONCERNING
THE PATENT RIGHTS OR TECHNICAL INFORMATION COVERED BY THIS AGREEMENT, INCLUDING
WITHOUT LIMITATION, ANY EXPRESS OR IMPLIED WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE AS TO PATENT RIGHTS, TECHNICAL INFORMATION OR
ANY LICENSED PRODUCT. THE UNIVERSITY MAKES NO WARRANTY OR REPRESENTATION AS TO
THE VALIDITY OR SCOPE OF THE PATENT RIGHTS, OR THAT ANY LICENSED PRODUCT WILL BE
FREE FROM AN INFRINGEMENT ON PATENTS OR OTHER INTELLECTUAL PROPERTY RIGHTS OF
THIRD PARTIES, OR THAT NO THIRD PARTIES ARE IN ANY WAY INFRINGING THE PATENT
RIGHTS OR TECHNICAL INFORMATION COVERED BY THIS AGREEMENT.

10.3 NO CONSEQUENTIAL DAMAGES. IN NO EVENT SHALL EITHER PARTY’S LIABILITY OF ANY
KIND INCLUDE ANY SPECIAL, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL LOSSES OR
DAMAGES, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

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11. PATENT MATTERS

11.1 PROSECUTION. The University will diligently prosecute and maintain the
United States and foreign patents comprising Patent Rights using ***. Both
parties hereto will keep this documentation in confidence in accordance with the
provisions of Article 14 (“Confidentiality”) herein. Counsel for the University
will take instructions only from the University. Notwithstanding the foregoing,
the University shall give due consideration to the requests of Santarus
concerning submissions of documents to government patent offices.

11.2 AMENDMENTS REQUESTED BY SANTARUS. The University will use all reasonable
efforts to amend any patent application to include claims requested by Santarus
and required to protect the Licensed Products contemplated to be sold or Patent
Method to be practiced under this Agreement. The foregoing shall not require the
University to narrow such claims if Santarus requests the University to do so.

11.3 EXTENSIONS. The University and Santarus will cooperate in applying for an
extension of the term of any patent included within Patent Rights, if
appropriate, under the Drug Price Competition and Patent Term Restoration Act of
1984. Santarus will prepare all such documents, and the University will execute
such documents and will take such additional action as Santarus may reasonably
request in connection therewith.

11.4 FOREIGN FILINGS. The University will, at the request of Santarus, file,
prosecute, and maintain patent applications and patents covered by Patent Rights
in foreign countries if available. Santarus must notify the University within
*** of the filing of the corresponding United States application of its decision
to request the University to file foreign counterpart patent applications. This
notice concerning foreign filing must be in writing and must identify the
countries desired. The absence of such a notice from Santarus to the University
within the *** period will be considered an election by Santarus not to request
the University to secure foreign patent rights on behalf of Santarus. The
University will have the right to file patent applications at its own expense in
any country Santarus has not included in its list of desired countries, and such
applications and resultant patents, if any, will not be included in the licenses
granted under this Agreement.

11.5 PROSECUTION EXPENSES. All reasonable costs of preparing, filing,
prosecuting and maintaining all United States and foreign patent applications
and all reasonable costs and fees relating to the preparation and filing of
patents covered by Patent Rights will be

 

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***

***

***. Santarus will reimburse the University for all such costs and charges, as a
separate payment apart from any royalties or other revenues owed by Santarus to
the University, within *** days following receipt of an itemized invoice from
the University for same. ***. Notwithstanding anything to the contrary in this
Section 11.5, Santarus shall have no obligation to reimburse any such costs to
the extent that any third party has reimbursed the University for such costs.

11.6 TERM OF OBLIGATION. The obligation of Santarus to underwrite and to pay
patent preparation, filing, prosecution, maintenance, and related costs will
continue for costs incurred until *** days after receipt by either party of a
notice of termination (“Notice of Termination”) of this Agreement or license
with respect to a particular patent or patent application within the Patent
Rights. Santarus will reimburse the University for all patent costs incurred
during the term of this Agreement and for *** days thereafter whether or not
invoices for such costs are received during the *** day period after receipt of
a Notice of Termination. Santarus may with respect to any particular patent
application or patent terminate its obligations in any or all designated
countries upon *** days written notice to the University. The University may
continue prosecution and/or maintenance of such application(s) or patent(s) at
its sole discretion and expense, provided, however, that Santarus will have no
further licenses with respect to such application(s) or patent(s) hereunder.

11.7 SMALL ENTITY STATUS. Santarus will notify the University of any change of
its status as a small entity (as defined by the United States Patent and
Trademark Office) and of the first sublicense granted to an entity that does not
qualify as a small entity as defined therein.

11.8 PATENT MARKING. Santarus will mark all Licensed Products made, used, or
sold under the terms of this Agreement, or their containers, in accordance with
the applicable patent marking laws.

11.9 EXPORT CONTROLS. The Patent Rights made available to Santarus hereunder may
be subject to export control under the Export Administration Regulations of the
United States Department of Commerce, or export control regulations of other
United States Government agencies including the Department of State and
Department of Treasury. Santarus agrees that it will not export the Patent
Rights, or the direct product thereof, directly or indirectly, to any countries
to which such export is now or hereafter becomes illegal under any such
regulations. The University neither represents that a license shall not be
required nor that, if required, it shall be issued.

11.10 INSTRUCTIONS TO COUNSEL. The University will give instructions to the
University’s patent counsel to forward all relevant patent prosecution
documentation covered in the Patent Rights to Santarus simultaneously when
forwarding such documentation to the

 

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University so long as this Agreement is active. Santarus may request that the
University supply estimates of patent expenses associated with the filing and
prosecution of foreign and United States patents in the Patent Rights, and the
University shall make reasonable efforts to supply such information to Santarus
on a timely basis. Santarus may also request estimates of such expenses from the
University’s patent counsel if Santarus desires to do so.

11.11 PATENT INFRINGEMENT. In the event that either party learns of the
substantial infringement of any patent licensed under this Agreement, such party
will call the attention of the other party thereto in writing and will provide
the other party with reasonable evidence of such infringement. Both parties to
this Agreement acknowledge that during the period and in a jurisdiction where
Santarus has exclusive rights under this Agreement, neither will notify a third
party of the infringement of any of Patent Rights without first obtaining
consent of the other party, which consent will not be unreasonably withheld.
Both parties will use their best efforts in cooperation with each other to
terminate such infringement without litigation.

11.12 SANTARUS ENFORCEMENT. Santarus shall have the right to prosecute in its
own name and at its own expense any infringement, offers to sell and importation
of Patent Rights, ***. In the event Santarus elects to bring suit in accordance
with this Section, the University may thereafter join such suit at its own
expense.

11.13 INFRINGEMENT EXPENSES. All recoveries will be allocated in the following
order: *** *** ***

11.14 SETTLEMENT. *** *** ***

 

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11.15 UNIVERSITY ENFORCEMENT. In the event that Santarus elects not to exercise
its right to prosecute an infringement of the Patent Rights pursuant to
Section 11.12 above, the University may do so at its own expense, ***.

11.16 COOPERATION. Each party will cooperate with the other in litigation
proceedings instituted hereunder ***.

12. INDEMNIFICATION

12.1 OBLIGATION. Santarus shall (and require its sublicensees and Joint Ventures
to) at all times during the term of this Agreement and thereafter, indemnify,
hold harmless, and defend the University, and its then current and former
Curators, officers, employees, and agents; *** against any and all claims,
suits, losses, damage, costs, fees, and expenses, including legal expenses and
reasonable attorneys’ fees, resulting from or arising out of the death of or
injury to any person or persons or out of any damage to property and against any
other claim, proceeding, demand, expense and liability of any kind whatsoever
resulting from the production, sale or use of the Patent Rights and Technical
Information or of any Patent Method or Licensed Products, or Santarus’ operation
under this Agreement or arising from any obligation of Santarus hereunder.

12.2 INSURANCE. Santarus shall during the term of this Agreement, carry
occurrence-based liability insurance with policy limits of at least five million
dollars ($5,000,000) per occurrence and ten million dollars ($10,000,000) annual
aggregate. Upon request, Santarus will provide the University with evidence of
such insurance. *** It is agreed that the insurance required to required in the
public interest, and that the University does not assume any liability for acts
of Santarus, its officers, agents, and employees, in connection with the
granting of this Agreement.

13. NOTICES

Any notice or payment required to be given to either party will be deemed to
have been properly given and to be effective:

13.1 on the date of delivery if delivered in person;

13.2 on the date of mailing if mailed by first-class certified mail, postage
paid; or

 

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13.3 on the date of mailing if mailed by any global express carrier service that
requires the recipient to sign the documents demonstrating the delivery of such
notice or payment;

to the respective addresses given below, or to another address as designated in
writing by the party changing its prior address.

 

In the case of Santarus:  

Santarus, Inc.

12230 El Camino Real, Suite 300

San Diego, CA 92130

Telephone: 858-350-7940

Facsimile: 858-350-7941

Attention: Gerald T. Proehl, President & COO

 

In the case of the University:  

Office of Technology & Special Projects

The University of Missouri-Columbia

615 Locust Street Building, Third Floor

Columbia, Missouri 65211-1400

Telephone: 573-882-2821

Facsimile: 573-882-1160

Attention: Thomas R. Sharpe, Ph.D.,

                 Executive Director

14. CONFIDENTIALITY

14.1 Santarus and the University respectively will treat and maintain the
proprietary business, patent prosecution, software, engineering drawings,
process and technical information, and other proprietary information
(“Proprietary Information”) of the other party in confidence using at least the
same degree of care as that party uses to protect its own proprietary
information of a like nature for a period from the date of disclosure until ***
years after the date of termination of this Agreement.

14.2 All Proprietary Information will be labeled or marked confidential or as
otherwise similarly appropriate by the disclosing party, or if the Proprietary
Information is orally or visually disclosed, it will be reduced to writing or
some other physically tangible form, marked and labeled as set forth above by
the disclosing party, and delivered to the receiving party within 30 days after
the oral or visual disclosure as a record of the disclosure and the confidential
nature thereof. Notwithstanding the foregoing, Santarus and the University may
use and disclose Proprietary Information to its employees, agents, consultants,
contractors, and, in the case of Santarus, its Joint Ventures and sublicensees,
provided that any such parties are bound by a like duty of confidentiality.

14.3 Nothing contained herein will in any way restrict or impair the right of
Santarus or the University to use, disclose, or otherwise deal with any
Proprietary Information:

 

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(a) that recipient can demonstrate by written records was previously known to
it;

(b) that is now, or becomes in the future, public knowledge other than through
acts or omissions of recipient;

(c) that is lawfully obtained without restrictions by recipient from sources
independent of the disclosing party;

(d) that is required to be disclosed to a governmental entity or agency in
connection with seeking any governmental or regulatory approval, or pursuant to
the lawful requirement or request of a governmental entity or agency; or

(e) is required by law to be disclosed.

14.4 Upon termination of this Agreement, Santarus and the University will
destroy or return to the disclosing party, at the disclosing party’s option,
proprietary information received from the other in its possession within fifteen
(15) days following the effective date of termination. Santarus and the
University will provide each other, within thirty (30) days following
termination, with a written notice that Proprietary Information has been
returned or destroyed. Each party may, however, retain one copy of Proprietary
Information for archival purposes in non-working files.

15. PROJECT TEAM

15.1 ESTABLISHMENT. The parties shall establish a project team consisting of
persons designated by Santarus and the University (the “Project Team”). The
Project Team shall meet *** in person or by telephone or other mutually agreed
upon method. The Project Team may also develop “sub-teams” comprising a smaller
number of Project Team members to discuss selected topics in more detail.

15.2 FUNCTIONS. The primary function of the Project Team is to guide the
preclinical and clinical development and the commercialization of the Licensed
Products. After each Project Team meeting, a Santarus member of the Project Team
will prepare a project report summarizing the meeting and distribute the report
to the Project Team members. The University members of the Project Team will
serve in an advisory capacity only.

16. MISCELLANEOUS

16.1 ASSIGNMENT. Neither party may assign any of its obligations or rights under
this Agreement without the other party’s prior, express, written consent, which
consent shall not be unreasonably withheld; provided, however, that either party
is free to assign any or all of its obligations under this Agreement to its
Affiliates; provided, further, Santarus may assign its rights and obligations
hereunder to any entity which succeeds to the business and assets of Santarus
*** of the outstanding voting securities of Santarus. Any other attempted
assignment is void. This Agreement shall be binding upon and shall inure to the
benefit of any permitted assigns. For the avoidance of doubt, Santarus shall not
be precluded from contracting with third parties for the manufacture of or
distribution of Licensed Products.

 

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16.2 WAIVER. It is agreed that no waiver by either party hereto of any breach or
default of any of the covenants or agreements herein set forth will be deemed a
waiver as to any subsequent and/or similar breach or default.

16.3 FORCE MAJEURE. The parties to this Agreement will be excused from any
performance required hereunder if such performance is rendered impossible or
unfeasible due to any acts of God, catastrophes, or other major events beyond
their reasonable control, including, without limitation, war, riot, and
insurrection; laws, proclamations, edicts, ordinances, or regulations; strikes,
lock-outs, or other serious labor disputes; and floods, fires, explosions, or
other natural disasters. However, any party to this Agreement will have the
right to terminate this Agreement upon *** prior written notice if either party
is unable to fulfill its obligations under this Agreement due to any of the
causes mentioned above and such inability continues for a period of ***. Notices
will be subject to Article 13 (“Notices”).

16.4 HEADINGS. The headings of the several sections are inserted for convenience
of reference only and are not intended to be a part of or to affect the meaning
or interpretation of this Agreement.

16.5 EFFECTIVENESS OF AGREEMENT. This Agreement will not be binding upon the
parties until it has been signed below on behalf of each party, in which event,
it will be effective as of the Effective Date.

16.6 AMENDMENT. No amendment or modification hereof will be valid or binding
upon the parties unless made in writing and signed on behalf of each party.

16.7 ENTIRE AGREEMENT. This Agreement embodies the entire understanding of the
parties and will supersede all previous communications, representations or
understandings, either oral or written, between the parties relating to the
subject matter hereof.

16.8 SEVERABILITY. In case any of the provisions contained in this Agreement are
held to be invalid, illegal, or unenforceable in any respect, such invalidity,
illegality, or unenforceability will not affect any other provisions hereof, but
this Agreement will be construed as if such invalid or illegal or unenforceable
provisions had never been contained herein.

16.9 JOINT PREPARATION. This Agreement has been negotiated and prepared jointly
by both parties and shall not be construed for or against any party but shall be
given a fair and reasonable construction in accordance with the intention of the
parties.

16.10 INDEPENDENT CONTRACTORS. The relationship between the parties is that of
independent contractors. The parties are not joint venturers, partners,
principal and agent, master and servant, employer and employee, and have no
other relationship other than independent contracting parties. Neither party
shall have power to bind or obligate each other in any manner, other than as is
expressly set forth in this Agreement.

 

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16.11 EMPLOYMENT OF INVENTOR. Santarus ***

16.12 COMPLIANCE WITH LAWS. Each party shall comply with all applicable federal,
state and local laws and regulations in connection with its activities pursuant
to this Agreement.

16.13 GOVERNING LAW. This Agreement will be interpreted and construed in
accordance with the laws of the State of ***, excluding any choice of law rules
that would direct the application of the laws of another jurisdiction, but the
scope and validity of any patent or patent application will be governed by the
applicable laws of the country of such patent or patent application.

IN WITNESS WHEREOF, both the University and Santarus have executed this
Agreement, in duplicate originals, by their respective officers hereunto duly
authorized, on the date and year hereinafter written.

 

THE CURATORS OF UNIVERSITY OF MISSOURI

    SANTARUS, INC.

By:

 

/s/ Thomas R. Sharpe

    By:  

/s/ Gerald T. Proehl

 

Thomas R. Sharpe, Ph.D.

      Gerald T. Proehl  

Executive Director, Office of Technology & Special Projects

     

President & Chief Operating Officer

Date: January 26, 2001

    Date: January 26, 2001

 

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EXHIBIT A

PATENTS AND PATENT APPLICATIONS LICENSED

 

Patent or Application No.

  

Type

  

Filing Date

  

Title

  

Inventor

  

Status

               5,840,737    Parent    July 15, 1996    Omeprazole Solution and
Method of Using Same    Phillips    Issued November 24, 1998 ***    ***    ***
   ***    ***    *** 09/481,207    U.S. CIP of 09/183,422    January 11, 2000   
Novel Substituted Benzimidazole Dosage Forms And Methods of Using Same   
Phillips    Pending ***    ***    ***    ***    ***    *** ***    ***    ***   
***    ***    *** Unassigned    U.S. CIP of 09/481,207    Expected January or
February, 2001    Novel Substituted Benzimidazole Dosage Forms And Methods of
Using Same    Phillips    Not Yet Filed

 

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EXHIBIT B

STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT (the “Agreement”) is made as of January 26, 2001
(the “Effective Date”) by and between Santarus, Inc., a California corporation
(the “Corporation”), and The Curators of the University of Missouri, a public
corporation organized under the laws of Missouri (“University”).

WITNESSETH:

WHEREAS, the Corporation and University have entered into an Exclusive License
Agreement dated January 26, 2001 (the “License Agreement”) pursuant to which
Corporation agreed to issue certain shares of Common Stock of the Corporation to
University; and

WHEREAS, the Corporation and University now wish to set forth the terms and
conditions of the issuance of such Common Stock.

NOW, THEREFORE, IT IS AGREED between the parties as follows:

1. Issuance of Stock. University is hereby acquiring from the Corporation and
the Corporation is hereby issuing to University, at a price $0.05 per share (the
“Original Issue Price”), Five Hundred Seventy-Five Thousand (575,000) shares of
the Corporation’s Common Stock (the “Stock”). University’s payment of the
purchase price for the Stock is hereby acknowledged by the Corporation as a
result of University’s execution of the License Agreement and the grant to the
Corporation of certain license rights thereunder.

2. Stock Restriction and Registration Rights Agreement. Concurrently with their
execution of this Agreement, the University and the Corporation are entering
into a Stock Restriction and Registration Rights Agreement of even date in the
form attached hereto as Exhibit I (“Restriction Agreement”) and the University
shall hold the Stock subject to the terms thereof.

3. Representations and Warranties of the Corporation. The Corporation hereby
represents and warrants to the University as follows:

(a) Organization and Standing; Articles and By-Laws. The Corporation is a
corporation duly organized, validly existing and in good standing under the laws
of the State of California and has all requisite corporate power and authority
to carry on its businesses as now conducted and as proposed to be conducted. The
Corporation is qualified or licensed to do business as a foreign corporation in
all jurisdictions where such qualification or licensing is required, except
where the failure to so qualify would not have a material adverse effect upon
the Corporation.

(b) Corporate Power. The Corporation has now all requisite corporate power to
enter into this Agreement and the Restriction Agreement and to sell and issue
the Stock. This Agreement and the Restriction Agreement are valid and binding
obligations of the Corporation enforceable in accordance with their terms,
except as the same may be limited by bankruptcy,insolvency, moratorium, and
other laws of general application affecting the enforcement of creditors’
rights.

 

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(c) Subsidiaries. The Corporation does not control, directly or indirectly, any
other corporation, association or business entity.

(d) Capitalization. The authorized capital stock of the Corporation is
15,000,000 shares of Common Stock, of which 4,313,249 shares are outstanding,
and 10,000,000 shares of Preferred Stock. 620,000 shares of Preferred Stock have
been designated Series A Preferred Stock, all of which are issued and
outstanding, and 5,326,000 shares of Preferred Stock have been designated Series
B Preferred Stock, 5,276,000 of which are issued and outstanding. All such
issued and outstanding shares have been duly authorized and validly issued, are
fully paid and nonassessable, and were issued in compliance with all applicable
state and federal laws concerning the issuance of securities.

(e) Authorization.

(i) Corporate Action. All corporate action on the part of the Corporation, its
officers, directors and shareholders necessary for the sale and issuance of the
Stock and the performance of the Corporation’s obligations hereunder and under
the Restriction Agreement has been taken.

(ii) Valid Issuance. The Stock, when issued in compliance with the provisions of
this Agreement, will be duly authorized, validly issued, fully paid and
nonassessable and will be free of any liens or encumbrances caused or created by
the Corporation; provided, however, the Stock is subject to restrictions on
transfer as set forth herein and in the Restriction Agreement, and as may be
required by future changes in such laws.

(f) No Preemptive Rights. Except as provided in the Restriction Agreement, no
person has any right of first refusal or any preemptive rights in connection
with the issuance of the Stock other than the preemptive rights of the holders
of the Corporation’s Series B Preferred Stock which have been expressly waived
in connection with the issuance of the Stock.

(g) Offering. Subject in part to the truth and accuracy of the University’s
representations set forth in Section 4 of this Agreement, the offer, sale and
issuance of the Stock as contemplated by this Agreement are exempt from the
registration requirements of any applicable state and federal securities laws,
and neither the Corporation nor any authorized agent acting on its behalf will
take any action hereafter that would cause the loss of such exemption.

(h) Compliance with Other Instruments. The execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated hereby
will not result in any violation of the Corporation’s Articles of Incorporation
or Bylaws, or in any material respect of any instrument, judgment, order, writ,
decree or contract to which the Corporation is a party or by which it is bound,
or of any provision of any federal or state statute, rule or regulation
applicable to the Corporation or be in conflict with or constitute, with or
without the passage of time and giving of notice, either a default under any
such provision, instrument, judgment, order, writ, decree or contract or an
event that results in the creation of any lien, charge or encumbrance upon any
assets of the Corporation or the suspension, revocation, impairment, forfeiture
or nonrenewal of any material permit, license, authorization or approval
applicable to the Corporation, its business or operations or any of its assets
or properties.

 

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4. Representations, Warranties and Covenants of the University. University
hereby agrees, represents, warrants and covenants follows:

(a) University is acquiring the Stock solely for its own account for investment
and not with a view to, or for resale in connection with, any distribution
thereof within the meaning of the Securities Act of 1933 as amended (the “Act”).
Except as contemplated in Section 4(f)(ii) hereof, University further represents
that it does not have any present intention of selling, offering to sell or
otherwise disposing of or distributing the Stock or any portion thereof; and
that the entire legal and beneficial interest of the Stock it is purchasing is
being purchased for, and will be held for the account of, University only and
neither in whole nor in part for any other person.

(b) University is aware of the Corporation’s business affairs and financial
condition and has acquired sufficient information about the Corporation to reach
an informed and knowledgeable decision to acquire the Stock. University further
represents and warrants that it has discussed the Corporation and its plans,
operations and financial condition with its officers, has received all such
information as it deems necessary and appropriate to enable it to evaluate the
financial risk inherent in making an investment in the Stock and has received
satisfactory information concerning the business and financial condition of the
Corporation in response to all inquiries in respect thereof.

(c) University realizes that its acquisition of the Stock will be a highly
speculative investment, and it is able, without impairing its financial
condition, to hold the Stock for an indefinite period of time.

(d) The Corporation has disclosed to University that:

(i) The issuance of the Stock has not been registered under the Act, and the
Stock must be held indefinitely unless a transfer of it is subsequently
registered under the Act or an exemption from such registration is available,
and that the Corporation is under no obligation to register the Stock;

(ii) The Corporation will make a notation in its records of the aforementioned
restrictions on transfer and legends.

(e) University is aware of the provisions of Rule 144, promulgated under the
Act, which, in substance, permits limited public resale of “restricted
securities” acquired, directly or indirectly, from the issuer thereof (or an
affiliate of such issuer), in a non-public offering subject to the satisfaction
of certain conditions, including among other things: the resale occurring not
less than one year from the date University has purchased and paid for the
Stock; the availability of certain public information concerning the
Corporation; the sale being through a broker in an unsolicited “broker’s
transaction” or in a transaction directly with a market maker (as said term is
defined under the Securities Exchange Act of 1934); and that any sale of the
Stock may be made by it only in limited amounts during any three-month period
not exceeding specified limitations. University further represents that it
understands that at the time it wishes to sell the

 

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Stock there may be no public market upon which to make such a sale, and that,
even if such a public market then exists, the Corporation may not be satisfying
the current public information requirements of Rule 144, and that, in such
event, it would be precluded from selling the Stock under Rule 144 even if the
one-year minimum holding period had been satisfied. University represents that
it understands that in the event all of the requirements of Rule 144 are not
satisfied, registration under the Act or compliance with an exemption from
registration will be required; and that, notwithstanding the fact that Rule 144
is not exclusive, the staff of the SEC has expressed its opinion that persons
proposing to sell private placement securities other than in a registered
offering and otherwise than pursuant to Rule 144 will have a substantial burden
of proof in establishing that an exemption from registration is available for
such offers or sales, and that such persons and their respective brokers who
participate in such transactions do so at their own risk.

(f) Without in any way limiting University’s representations and warranties set
forth above, University further agrees that it shall in no event make any
disposition of all or any portion of the Stock which it is purchasing unless and
until:

(i) There is then in effect a registration statement under the Act covering such
proposed disposition and such disposition is made in accordance with said
Registration Statement; or

(ii) University transfers all or any portion of the Stock subject to the
Restriction Agreement to an affiliate or employee of the University, which is
expressly permitted hereunder; or

(iii) University shall have (1) notified the Corporation of the proposed
disposition and furnished the Corporation with a detailed statement of the
circumstances surrounding the proposed disposition, and (2) furnished the
Corporation with an opinion of its own counsel to the effect that such
disposition will not require registration of such shares under the Act, and such
opinion of its counsel shall have been concurred in by counsel for the
Corporation and the Corporation shall have advised University of such
concurrence.

5. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be an original, but all of which together shall constitute
one instrument.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

 

THE CURATORS OF UNIVERSITY OF MISSOURI     SANTARUS, INC. By:  

 

    By:  

 

  Thomas R. Sharpe       Gerald T. Proehl  

Executive Director Office of Technology

& Special Projects

Address:  615 Locust Street Building

Third Floor

Columbia, MO 65211-1400

     

President & COO

Address: 12230 El Camino Real

Suite 300

San Diego, CA 92130

Date: January 26, 2001     Date: January 26, 2001

 

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EXHIBIT I

STOCK RESTRICTION AND REGISTRATION RIGHTS AGREEMENT

THIS STOCK RESTRICTION AND REGISTRATION RIGHTS AGREEMENT is made as of
January 26, 2001 the (“Effective Date”) by and between Santarus, Inc., a
California corporation (the “Corporation”), and The Curators of the University
of Missouri, a public corporation organized under the laws of Missouri (the
“University”). All capitalized terms used herein and not otherwise defined shall
have the same meaning given to such terms in the Stock Purchase Agreement of
even date between the Corporation and the University (“Stock Purchase
Agreement”) and the Exclusive License Agreement dated of even date between the
Corporation and the University (“License Agreement”).

WHEREAS, under the terms of the Stock Purchase Agreement and in partial
consideration for the University’s execution of the License Agreement, the
Corporation has issued the Stock to the University.

WHEREAS, the Corporation and the University have agreed that the Stock will be
held subject to the terms of this Stock Restriction and Registration Rights
Agreement.

NOW, THEREFORE, IT IS AGREED between the parties as follows:

1. Unvested Share Repurchase Option. In the event of the termination of the
License Agreement by the Corporation pursuant to Section 8.2 thereof, the
Corporation shall have the right to reacquire the shares of the Stock which have
not vested pursuant to the provisions of this Section 1 (“Unvested Shares”)
under the terms and subject to the conditions set forth in this Section 1 (the
“Unvested Share Repurchase Option”).

1.1. Vesting of Shares. The term “Initial Vesting Date” shall mean the Effective
Date. The shares of Stock will vest (the “Vested Shares”) on the dates and/or
upon the occurrence of the events set forth below:

 

Date

                 

Number of Shares Vested

On the Initial Vesting Date

      ***    shares of Stock

Upon

      ***       ***    shares of Stock       ***             ***            

Upon

      ***       ***    shares of Stock       ***             ***            

 

*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.

 

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The foregoing notwithstanding, all shares of the Stock shall become fully vested
effective upon termination of the License Agreement by the University pursuant
to Section 8.3 thereof or by the Corporation pursuant to Section 8.4 thereof.

1.2. Exercise of Unvested Share Repurchase Option. The Corporation may exercise
the Unvested Share Repurchase Option by written notice to University within
ninety (90) days after the Corporation’s termination of the License Agreement
pursuant to Section 8.2 thereof.

1.3. Payment for Shares and Return of Shares. Payment by the Corporation to
University shall be made in cash within sixty (60) days after the date of the
mailing of the written notice of exercise of the Unvested Share Repurchase
Option. The purchase price per share being purchased by the Corporation shall be
an amount equal to the Original Issue Price, as adjusted for stock splits, stock
dividends, recapitalizations and the like after the date hereof. Within thirty
(30) days after payment by the Corporation, University shall deliver to the
Corporation a certificate for the shares which the Corporation has purchased.

1.4. Legends. The Corporation may at any time place a legend or legends
referencing the Unvested Share Repurchase Option on any certificates for shares
subject to the Unvested Share Repurchase Option. Upon request of the University
at any time that any Unvested Shares have vested, the Corporation will remove
such legend from the applicable certificates.

2. Stock Dividends. etc. If, from time to time, there is any stock dividend,
stock split or other change in the character or amount of any of the outstanding
stock of the Corporation, then in such event any and all new substituted or
additional securities to which University is entitled by reason of University’s
ownership of Unvested Shares acquired pursuant to this Agreement shall be
considered Stock and shall be an adjustment to the number of shares set forth in
Section 1.1 above to which such shares relate, shall be subject to vesting in
accordance with Section 1.1 and shall be immediately subject to the Unvested
Share Repurchase Option with the same force and effect as the shares subject to
the Unvested Share Repurchase Option immediately before such event in accordance
with the provisions set forth in Section 1.1 above.

3. Right of First Refusal. University cannot transfer, assign or otherwise
dispose of, voluntarily or involuntarily, any Unvested Shares or any interest in
those shares. Before any Vested Shares registered in the name of University may
be sold or transferred (including transfer by operation of law) other than a
transfer to an affiliate or employee of the University (a “Permitted
Transferee”) which transfer shall be expressly subject to this Agreement, such
shares shall first be offered to the Corporation, which will have the right to
purchase all, but not less than all, of the Vested Shares proposed to be
transferred (“Right of First Refusal”), in the following manner:

3.1. University shall first give written notice (the “Transfer Notice”) of any
proposed transfer other than to a Permitted Transferee to the Corporation. The
Transfer Notice shall name the proposed transferee, state the number of shares
of Stock to be transferred, and if the transfer is voluntary, the price per
share and all other terms of the offer. The Transfer Notice shall be signed by
University and the prospective transferee and must constitute a binding
agreement for the transfer of the Stock subject only to the Right of First
Refusal.

 

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3.2. Within thirty (30) days of delivery of University’s notice of a proposed
voluntary transfer, the Corporation shall determine the bona fide nature of the
proposed voluntary transfer and give University written notice of its
determination. If the proposed transfer is deemed to be bona fide, the remaining
subsections of this section shall apply to the sale. If the proposed transfer is
deemed not to be bona fide, University will be responsible for providing
additional information to the Corporation to show the bona fide nature of the
proposed transfer and no Stock will be transferred on the books of the
Corporation until the Corporation has approved the proposed transfer as bona
fide.

3.3. If the Corporation fails to exercise in full the Right of First Refusal
within thirty (30) days from the later of the date the Transfer Notice is
delivered to the Corporation or thirty (30) days after the date the transfer is
determined to be bona fide (if University is required to provide additional
information as provided in Section 3.2 above), University may, not later than
one hundred twenty (120) days following delivery to the Corporation of the
Transfer Notice, conclude a transfer of the shares of Stock subject to the
Transfer Notice on the terms and conditions described in the Transfer Notice.
Any proposed transfer on terms and conditions different from those described in
the Transfer Notice, as well as any subsequent proposed transfer by University,
shall again be subject to the Right of First Refusal and shall require
compliance by University with the procedure described in this Section 3. If the
Corporation exercises the Right of First Refusal, the parties shall consummate
the sale of shares of Stock on the terms set forth in the Transfer Notice by the
later of sixty (60) days after the delivery of the Transfer Notice to the
Corporation or thirty (30) days after the date the transfer is determined to be
bona fide (if University is required to provide additional information as
provided in Section 3.2 above); provided, however, in the event the Transfer
Notice provides for the payment for the shares of Stock other than in cash, the
Corporation shall have the option of paying for the shares of Stock by the
discounted cash equivalent of the consideration described in the Transfer Notice
as reasonably determined by University and the Corporation.

3.4. The foregoing notwithstanding, University may sell or otherwise assign,
with or without consideration, any shares of Stock to any Permitted Transferee
who shall thereafter be bound by the provisions of this Agreement.

3.5. All transferees of shares of Stock or any interest therein including any
Permitted Transferee other than the Corporation shall be required as a condition
of such transfer to agree in writing (in a form satisfactory to the Corporation)
that they will receive and hold such shares of Stock or interests subject to the
provisions of this Agreement, including the Right of First Refusal and upon
thereby becoming a party to this Agreement shall have all of the rights of the
University under this Agreement with respect to such shares.

3.6. The Right of First Refusal shall terminate at such time as a public market
exists for the Corporation’s Common Stock (or any other stock issued by the
Corporation, or any successor, in exchange for the Stock). For the purpose of
this Agreement, a “public market” shall be deemed to exist if (a) such stock is
listed on a national securities exchange (as that term is used in the Securities
Exchange Act of 1934) or (b) such stock is traded on the over-the-counter market
and prices therefore are published daily on business days in a recognized
financial journal.

 

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4. Legends. All certificates representing any shares of Stock subject to the
provisions of this Agreement shall have endorsed thereon the following legends:

4.1. “THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A RIGHT OF FIRST
REFUSAL AS SET FORTH IN AN AGREEMENT EXECUTED BY THE REGISTERED HOLDER, OR HIS
OR ITS PREDECESSOR IN INTEREST, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL
OFFICE OF THIS CORPORATION.”

4.2. “THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE. NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH
RULE 144 UNDER THE ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE
HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT
SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION
AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.”

4.3. For Unvested Shares only subject to Section 1.4 above, the certificates
shall have the following additional legend:

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A REPURCHASE OPTION
AS SET FORTH IN AN AGREEMENT EXECUTED BY THE REGISTERED HOLDER, OR HIS OR ITS
PREDECESSOR IN INTEREST, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF
THIS CORPORATION.”

5. Registration.

5.1. Definitions. As used in this Section 5:

(a) The terms “register”, “registered” and “registration” refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and the declaration or ordering of the
effectiveness of such registration statement;

(b) The term “Registrable Securities” means: (i) the Stock, and (ii) any other
shares of the Corporation’s stock issued as a dividend or other distribution
with respect to, or in exchange for or in replacement of, the Stock;

(c) The term “Holder” means any holder of outstanding Registrable Securities who
acquired such Registrable Securities in a transaction or series of transactions
not involving any registered public offering;

 

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5.2. Corporation Registration.

(a) Notice of Registration. If at any time or from time to time, the Corporation
shall determine to register any of its securities, either for its own account or
the account of a security holder or holders (other than a registration relating
solely to employee stock option or purchase plans or relating solely to an SEC
Rule 145 transaction or to debt securities), the Corporation will:

(i) promptly give to each Holder written notice thereof; and

(ii) include in such registration (and any related qualification under state
securities laws or other compliance), and in any underwriting involved therein,
all the Registrable Securities specified in a written request or requests,
received within twenty (20) days after such written notice from the Corporation,
by any Holder or Holders, except as set forth in Section 5.2(b) below.

(b) Underwriting. If the registration of which the Corporation gives notice is
for a registered public offering involving an underwriting, the Corporation
shall so advise the Holders as a part of the written notice given pursuant to
Section 5.2(a)(i). In such event the right of any Holder to registration
pursuant to this Section 5.2 shall be conditioned upon the inclusion of such
Holder’s Registrable Securities in the underwriting. All Holders proposing to
distribute their securities shall (together with the Corporation and other
holders distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by the Corporation. Notwithstanding any other
provision of this Section 5.2, if the underwriter determines that marketing
factors require a limitation of the number of securities to be included in the
registration, the underwriter may cause to be excluded some or all of the
Registrable Securities on a pro rata basis based on the total number of the
Registrable Securities held by the Holders and shall have no obligation to limit
or reduce the inclusion of other securities (other than Registrable Securities)
entitled to registration held by other persons or organizations selling
securities pursuant to registration rights granted them by the Corporation. The
Corporation shall advise all Holders of Registrable Securities which would
otherwise be registered and underwritten pursuant hereto of any such
limitations, and the number of shares of Registrable Securities that may be
included in the registration. If any Holder disapproves of the terms of any such
underwriting, it may elect to withdraw therefrom by written notice to the
Corporation and the underwriter. Any securities excluded or withdrawn from such
underwriting shall not be transferred prior to 90 days after the effective date
of the registration statement for such underwriting, or such shorter period as
the underwriter may require.

5.3. Expenses of Registration. All expenses incurred in connection with any
registration, qualification or compliance pursuant to this Section 5, including
all registration, filing and qualification fees, printing expenses, fees and
disbursements of counsel for the Corporation, and expenses of any special audits
incidental to such registration, shall be borne by the Corporation; provided,
however, the Corporation shall not be required to pay underwriters’ discounts,
commissions, or stock transfer taxes relating to Registrable Securities or the
fees of any counsel retained by the Holders.

 

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5.4. Registration Procedures. In the case of each registration, qualification or
compliance effected by the Corporation pursuant to Section 5, the Corporation
will keep each Holder participating therein advised in writing as to the
initiation of each registration, qualification and compliance and as to the
completion thereof. At its expense the Corporation will:

(a) keep such registration, qualification or compliance pursuant to Section 5.2,
effective for a period of three months or until the Holder or Holders have
completed the distribution described in the registration statement relating
thereto, whichever first occurs; and

(b) furnish such number of prospectuses and other documents incident thereto as
a Holder from time to time may reasonably request.

5.5. Indemnification.

(a) The Corporation will indemnify each Holder of Registrable Securities, each
of its officers, directors and partners, and each person controlling such
Holder, with respect to which registration, qualification or compliance has been
effected pursuant to this Section 5, against all claims, losses, damages, costs,
expenses and liabilities whatsoever (or actions in respect thereof) arising out
of or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any registration statement, prospectus, offering circular or
other documents (including any related registration, statement, notification or
the like) incident to any such registration, qualification or compliance, or
based on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any violation by the Corporation of the Securities Act or any
state securities law or of any rule or regulation promulgated under the
Securities Act or any state securities law applicable to the Corporation and
relating to action or inaction required of the Corporation in connection with
any such registration, qualification or compliance, and will reimburse each such
Holder, each of its officers and directors, and each person controlling such
Holder, for any legal and any other expenses reasonably incurred in connection
with investigating or defending any such claim, loss, damage, cost, expense,
liability or action, provided that the Corporation will not be liable in any
such case to the extent that any such claim, loss, damage, cost, expense, or
liability arises out of or is based on any untrue statement or omission based
upon written information furnished to the Corporation by an instrument duly
executed by any such Holder and stated to be specifically for use therein.

(b) Each Holder will, if Registrable Securities held by or issuable to such
Holder are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Corporation, each
of its directors and officers who sign such registration statement, each
underwriter, if any, of the Corporation’s securities covered by such a
registration statement, each person who controls the Corporation within the
meaning of the Securities Act, and each other Holder, each of such other
Holder’s officers and directors and each person controlling such other Holder,
against all claims, losses, damages, costs, expenses and liabilities whatsoever
(or actions in respect thereof) arising out of or based on any untrue statement
(or alleged untrue statement) of a material fact contained in any such
registration statement, prospectus, offering circular or other documents
(including any related registration

 

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statement, notification or the like) incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse the Corporation, such
other Holders, such directors, officers, persons or underwriters for any legal
or any other expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, cost, expense, liability or action, in
each case to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information furnished to the
Corporation by an instrument duly executed by such Holder and stated to be
specifically for use therein; provided, however, that the foregoing indemnity
agreement is subject to the condition that, insofar as it relates to any such
untrue statement (or alleged untrue statement) or omission (or alleged omission)
made in the preliminary prospectus but eliminated or remedied in the amended
prospectus on file with the SEC at the time the registration statement becomes
effective or the amended prospectus filed with the SEC pursuant to Rule 424(b)
(the “Final Prospectus”), such indemnity agreement shall not inure to the
benefit of any underwriter or any Holder, if there is no underwriter, if a copy
of the Final Prospectus was furnished to the person or entity asserting the
loss, liability, claim or damage at or prior to the time such action is required
by the Securities Act; and provided further, the total amount for which any
Holder shall be liable under this Section 5.5 shall not in any event exceed the
aggregate proceeds received by such Holder from the sale of Registrable
Securities held by such Holder in such registration.

(c) Each party entitled to indemnification under this Section 5.5 (the
“Indemnified Party”) shall give notice to the party required to provide
indemnification (the “Indemnifying Party”) promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party’s expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Section 5. No Indemnifying Party, in the defense of
any such claim or litigation, shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation. If any such Indemnified Party shall have been
advised by counsel chosen by it that there may be one or more legal defenses
available to such Indemnified Party which are different from or additional to
those available to the Indemnifying Party, the Indemnifying Party shall not have
the right to assume the defense of such action on behalf of such Indemnified
Party and will reimburse such Indemnified Party and any person controlling such
Indemnified Party for the reasonable fees and expenses of any counsel retained
by the Indemnified Party, it being understood that the Indemnifying Party shall
not, in connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys for such Indemnified Party or controlling person,
which firm shall be designated in writing by the Indemnified Party to the
Indemnifying Party.

 

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5.6. Information by Holder. The Holder or Holders of Registrable Securities
included in any registration shall furnish to the Corporation such information
regarding such Holder or Holders and the distribution proposed by such Holder or
Holders as the Corporation may request in writing and as shall be required in
connection with any registration, qualification or compliance referred to in
this Section 5.

5.7. Sale Without Registration. If at the time of any transfer (other than a
transfer not involving a change in beneficial ownership or other than to a
Permitted Transferee) of any Registrable Securities, such Registrable Securities
shall not be registered under the Securities Act, the Corporation may require,
as a condition of allowing such transfer, that the Holder or transferee furnish
to the Corporation (a) such information as is necessary in order to establish
that such transfer may be made without registration under the Securities Act;
and (b) at the expense of the Holder or transferee, an opinion by legal counsel
designated by such Holder or transferee and satisfactory to the Corporation,
satisfactory in form and substance to the Corporation, to the effect that such
transfer may be made without registration under such Act; provided that nothing
contained in this Section 5 shall relieve the Corporation from complying with
any request for registration, qualification or compliance made pursuant to the
other provisions of this Section 5.

5.8. Rule 144 Reporting. With a view to making available to the Holders the
benefits of certain rules and regulations of the U.S. Securities and Exchange
Commission (“SEC”) which may permit the sale of the Registrable Securities to
the public without registration, the Corporation agrees to:

(a) make and keep public information available, as those terms are understood
and defined in SEC Rule 144, at all times after ninety days after the effective
date of the first registration filed by the Corporation which involves a sale of
securities of the Corporation to the general public;

(b) file with the SEC in a timely manner all reports and other documents
required of the Corporation under the Securities Act and the Securities Exchange
Act of 1934, as amended (the “Securities Exchange Act”);

(c) furnish to Holders so long as Holders own any Registrable Securities
forthwith upon request a written statement by the Corporation that it has
complied with the reporting requirements of said Rule 144 (at any time after
ninety days after the effective date of said first registration statement filed
by the Corporation) and of the Securities Act and the Securities Exchange Act
(at any time after it has become subject to such reporting requirements), a copy
of the most recent annual or quarterly report of the Corporation, and such other
reports and documents so filed by the Corporation as may be reasonably requested
in availing Holders of any rule or regulation of the SEC permitting the selling
of any such securities without registration.

5.9. Transfer of Registration Rights. The fights to cause the Corporation to
register securities granted by the Corporation under Section 5.2, may be
assigned by any Holder to a transferee or assignee, provided that such transfer
must otherwise be effected in accordance with applicable securities laws and
provided further that the Corporation is given written notice by such Holder at
the time of or within a reasonable time after said transfer, stating the name
and address of said transferee or assignee and identifying the securities with
respect to which such registration rights are being assigned.

 

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5.10. “Market Stand-Off’ Agreement. Each Holder hereby agrees that, during the
period of duration specified by the Corporation and an underwriter of common
stock or other securities of the Corporation (such period shall not exceed one
hundred eighty days), following the effective date of a registration statement
of the Corporation filed under the Securities Act, it shall not, to the extent
requested by the Corporation and such underwriter, directly or indirectly sell,
offer to sell, contract to sell (including, without limitation, any short sale),
grant any option to purchase or otherwise transfer or dispose of (other than to
donees who agree to be similarly bound) any securities of the Corporation held
by it at any time during such period except common stock included in such
registration; provided, however, that such agreement shall not be required
unless all officers and directors of the Corporation and all other persons with
registration rights (whether or not pursuant to this Agreement) or purchasing
common stock of the Corporation enter into similar agreements.

In order to enforce the foregoing covenant, the Corporation may impose
stop-transfer instructions with respect to the Registrable Securities of each
Holder (and the shares of securities of every other person subject to the
foregoing restriction) until the end of such period.

5.11. Expiration of Rights. All registration rights shall expire and not apply
to any Holder upon the earlier of seven years from the Corporation’s initial
public offering or the date such Holder is eligible to sell in a three-month
period pursuant to SEC Rule 144 all Registrable Securities held by such Holder.

6. Miscellaneous.

6.1. Waivers and Amendments. With the written consent of the record holders of
at least a majority of the Registrable Securities, the obligations of the
Corporation and the rights of the Holders under this Agreement may be waived or
amended (either generally or in a particular instance); provided, however, that
no such waiver or amendment shall reduce the aforesaid proportion of Registrable
Securities, the holders of which are required to consent to any waiver or
supplemental agreement, without the consent of the record holders of all of the
Registrable Securities. Upon the effectuation of each such waiver or amendment,
the Corporation shall promptly give written notice thereof to the record holders
of the Registrable Securities who have not previously consented thereto in
writing. Except to the extent provided in this subsection 6.1, this Agreement or
any provision hereof may be amended, waived, discharged or terminated only by a
statement in writing signed by the party against which enforcement of the
amendment, waiver, discharge or termination is sought.

6.2. Governing Law. This Agreement shall be governed in all respects by the laws
of the State of California as such laws are applied to agreements between
California residents entered into and to be performed entirely within
California.

 

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6.3. Successors and Assigns. Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.

6.4. Entire Agreement. This Agreement and the Stock Purchase Agreement
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof and thereof and they supersede, merge and
render void every other prior written and/or oral understanding or agreement
among or between the parties hereto.

6.5. Notices. etc. All notices and other communications required or permitted
hereunder shall be in writing and shall be delivered personally, mailed by first
class mail, postage prepaid, or delivered by courier or overnight delivery,
addressed (a) if to the University, at its address set forth in the Stock
Purchase Agreement, or at such other address as the University shall have
furnished to the Corporation in writing or (b) if to the Corporation, at its
address set forth in the Stock Purchase Agreement, or at such other address as
the Corporation shall have furnished to the University in writing. Notices that
are mailed shall be deemed received five (5) days after deposit in the United
States mail. Notices sent by courier or overnight delivery shall be deemed
received two (days) after they have been so sent.

6.6. Severability. In case any provision of this Agreement shall be found by a
court of law to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions of this Agreement shall not in any
way be affected or impaired thereby.

6.7. Titles and Subtitles. The titles of the sections and subsections of this
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.

6.8. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be an original, but all of which together shall constitute
one instrument.

6.9. Delays or Omissions. No delay or omission to exercise any right, power or
remedy accruing to the Corporation or to any holder of any securities issued or
to be issued hereunder shall impair any such right, power or remedy of the
Corporation or such holder, nor shall it be construed to be a waiver of any
breach or default under this Agreement, or an acquiescence therein, or of or in
any similar breach or default thereafter occurring; nor shall any delay or
omission to exercise any right, power or remedy or any waiver of any single
breach or default be deemed a waiver of any other right, power or remedy or
breach or default theretofore or thereafter occurring. All remedies, either
under this Agreement, or by law otherwise afforded to the Corporation or any
holder, shall be cumulative and not alternative.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.

 

SANTARUS, INC.     THE CURATORS OF UNIVERSITY OF MISSOURI By:  

 

    By:  

 

 

Gerald T. Proehl

      Thomas R. Sharpe   President & COO      

Executive Director Office of Technology

& Special Projects

 

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EXHIBIT C

Schedule of Events

OMEPRAZOLE SODIUM BICARBONATE-IMMEDIATE RELEASE

DEVELOPMENT PLAN

 

Jan. 26, 2001    Sign definitive licensing agreement Qtr 1 2001    Transfer IND
   Develop formulation alternatives, place on stability    Identify and select
contract manufacturing organization for omeprazole active pharmaceutical
ingredient Qtr 2 2001    Identify and select contract manufacturing organization
for drug product    Begin sublicense negotiations with other PPI company(s) Qtr
3 2001    Determine optimal formulation    Manufacture three (3) pilot
biobatches, place on stability    Establish analytical lab for quality control
   Begin negotiations with pharmaceutical company on co-promotion Qtr 4 2001   
Begin manufacture of NDA/ANDA lots, place on stability Qtr 1 2002    Complete
pharmacokinetic/pharmacodynamic study    Prepare NDA or ANDA submission    Begin
stress ulcer prophylaxis trial Qtr 3 2002    *** Qtr 1 2003    *** Qtr 2 2003   
*** Qtr 1 2004    *** Qtr 2 2004    ***

 

*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.

 

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