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                                                                   EXHIBIT 10.17


                              EMPLOYMENT AGREEMENT

      THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into by and
between Santarus, Inc., a Delaware corporation (the "Company"), and Warren E.
Hall ("Executive"), and shall be effective as of the date on which the Company's
Registration Statement on Form S-1 filed with respect to the Company's initial
public offering becomes effective (the "Effective Date").

      WHEREAS, the Company desires to employ Executive, and Executive desires to
be employed by the Company, on the terms and subject to the conditions set forth
herein; and

      NOW, THEREFORE, in consideration of the mutual promises herein contained,
the parties agree as follows:

      1. Definitions. As used in this Agreement, the following terms shall have
the following meanings:

            (a) Board. "Board" means the Board of Directors of the Company.

            (b) Bonus. "Bonus" means an amount equal to the average of the
bonuses awarded to Executive for each of the three (3) fiscal years prior to the
date of termination, or such lesser number of years as may be applicable if
Executive has not been employed for three (3) full years on the date of
termination. For purposes of determining Executive's "Bonus," to the extent
Executive received no bonus in a year due to a failure to meet the applicable
performance objectives, such year will still be taken into account (using zero
(0) as the applicable bonus) in determining Executive's "Bonus" for purposes of
Section 4. If any portion of the bonuses awarded to Executive consisted of
securities or other property, the fair market value thereof shall be determined
in good faith by the Board.

            (c) Cause. "Cause" means any of the following:

                  (i) the commission of an act of fraud, embezzlement or
dishonesty by Executive that has a material adverse impact on the Company or any
successor or affiliate thereof;

                  (ii) a conviction of, or plea of "guilty" or "no contest" to,
a felony by Executive;

                  (iii) any unauthorized use or disclosure by Executive of
confidential information or trade secrets of the Company or any successor or
affiliate thereof that has a material adverse impact on any such entity;

                  (iv) Executive's gross negligence, insubordination or material
violation of any duty of loyalty to the Company or any other material misconduct
on the part of Executive;
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                  (v) Executive's ongoing and repeated failure or refusal to
perform or neglect of Executive's duties as required by this Agreement, which
failure, refusal or neglect continues for fifteen (15) days following
Executive's receipt of written notice from the Board or the CEO stating with
specificity the nature of such failure, refusal or neglect; or

                  (vi) Executive's breach of any material provision of this
Agreement;

provided, however, that prior to the determination that "Cause" under this
Section 1(c) has occurred, the Company shall (w) provide to Executive in
writing, in reasonable detail, the reasons for the determination that such
"Cause" exists, (x) other than with respect to clause (v) above which specifies
the applicable period of time for Executive to remedy his or her breach, afford
Executive a reasonable opportunity to remedy any such breach, (y) provide the
Executive an opportunity to be heard prior to the final decision to terminate
the Executive's employment hereunder for such "Cause" and (z) make any decision
that such "Cause" exists in good faith.

            The foregoing definition shall not in any way preclude or restrict
the right of the Company or any successor or affiliate thereof to discharge or
dismiss Executive for any other acts or omissions, but such other acts or
omissions shall not be deemed, for purposes of this Agreement, to constitute
grounds for termination for Cause.

            (d) Change of Control. "Change of Control" means and includes each
of the following:

                  (i) the acquisition, directly or indirectly, by any "person"
or "group" (as those terms are defined in Sections 3(a)(9), 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
rules thereunder) of "beneficial ownership" (as determined pursuant to Rule
13d-3 under the Exchange Act) of securities entitled to vote generally in the
election of directors ("voting securities") of the Company that represent fifty
percent (50%) or more of the combined voting power of the Company's then
outstanding voting securities, other than:

                        (A) an acquisition by a trustee or other fiduciary
      holding securities under any employee benefit plan (or related trust)
      sponsored or maintained by the Company or any person controlled by the
      Company or by any employee benefit plan (or related trust) sponsored or
      maintained by the Company or any person controlled by the Company, or

                        (B) an acquisition of voting securities by the Company
      or a corporation owned, directly or indirectly by the stockholders of the
      Company in substantially the same proportions as their ownership of the
      stock of the Company;

            Notwithstanding the foregoing, the following event shall not
constitute an "acquisition" by any person or group for purposes of this Section
1(d): an acquisition of the Company's securities by the Company that causes the
Company's voting securities beneficially owned by a person or group to represent
fifty percent (50%) or more of the combined voting power of the Company's then
outstanding voting securities; provided, however, that if a person or group
shall become the beneficial owner of fifty percent (50%) or more of the combined


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voting power of the Company's then outstanding voting securities by reason of
share acquisitions by the Company as described above and shall, after such share
acquisitions by the Company, become the beneficial owner of any additional
voting securities of the Company, then such acquisition shall constitute a
Change of Control; or

                  (ii) during any period of two (2) consecutive years,
individuals who, at the beginning of such period, constitute the Board together
with any new director(s) (other than a director designated by a person who shall
have entered into an agreement with the Company to effect a transaction
described in clauses (i) or (iii) of this Section 1(d)) whose election by the
Board or nomination for election by the Company's stockholders was approved by a
vote of at least two-thirds (2/3) of the directors then still in office who
either were directors at the beginning of the two (2) year period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof; or

                  (iii) the consummation by the Company (whether directly
involving the Company or indirectly involving the Company through one or more
intermediaries) of (x) a merger, consolidation, reorganization, or business
combination or (y) a sale or other disposition of all or substantially all of
the Company's assets or (z) the acquisition of assets or stock of another
entity, in each case other than a transaction:

                        (A) which results in the Company's voting securities
      outstanding immediately before the transaction continuing to represent
      (either by remaining outstanding or by being converted into voting
      securities of the Company or the person that, as a result of the
      transaction, controls, directly or indirectly, the Company or owns,
      directly or indirectly, all or substantially all of the Company's assets
      or otherwise succeeds to the business of the Company (the Company or such
      person, the "Successor Entity") directly or indirectly, at least a
      majority of the combined voting power of the Successor Entity's
      outstanding voting securities immediately after the transaction, and

                        (B) after which no person or group beneficially owns
      voting securities representing fifty percent (50%) or more of the combined
      voting power of the Successor Entity; provided, however, that no person or
      group shall be treated for purposes of this clause (B) as beneficially
      owning fifty percent (50%) or more of combined voting power of the
      Successor Entity solely as a result of the voting power held in the
      Company prior to the consummation of the transaction; or

                  (iv) the Company's stockholders approve a liquidation or
dissolution of the Company.


            (e) Good Reason. "Good Reason" means Executive's voluntary
resignation following any one or more of the following that is effected without
Executive's written consent:

                  (i) the relocation of the office of Executive more than fifty
(50) miles from Executive's principal place of employment as of the Effective
Date or to a location outside of San Diego County;


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                  (ii) a change in Executive's position that materially reduces
his or her duties or responsibilities;

                  (iii) a reduction in Executive's base salary or target bonus
as an employee of the Company, other than pursuant to a Company-wide reduction
of base salaries and target bonuses for employees of the Company generally; or

                  (iv) the Company's breach of any material provision of this
Agreement; provided, that Executive shall (w) provide to the Company in writing,
in reasonable detail, notice of such breach and (x) afford the Company a
reasonable opportunity to remedy any such breach.

            (f) Permanent Disability. Executive's "Permanent Disability" shall
be deemed to have occurred if Executive shall become physically or mentally
incapacitated or disabled or otherwise unable fully to discharge his or her
duties hereunder for a period of ninety (90) consecutive calendar days or for
one hundred twenty (120) calendar days in any one hundred eighty (180)
calendar-day period. The existence of Executive's Permanent Disability shall be
determined by the Company on the advice of a physician chosen by the Company and
the Company reserves the right to have the Executive examined by a physician
chosen by the Company at the Company's expense.

            (g) Stock Awards. "Stock Awards" means all stock options, restricted
stock and such other awards granted pursuant to the Company's stock option and
equity incentive award plans or agreements and any shares of stock issued upon
exercise thereof.

      2. Services to Be Rendered.

            (a) Duties and Responsibilities. Executive shall serve as Senior
Vice President, Manufacturing and Product Development of the Company. In the
performance of such duties, Executive shall report directly to the CEO and shall
be subject to the direction of the CEO and to such limits upon Executive's
authority as the Board or the CEO may from time to time impose. Executive hereby
consents to serve as an officer and/or director of the Company or any subsidiary
or affiliate thereof without any additional salary or compensation, if so
requested by the Board. Executive shall be employed by the Company on a full
time basis. Executive's primary place of work shall be the Company's facility in
San Diego, California, or such other location within San Diego County as may be
designated by the CEO from time to time. Executive shall also render services at
such other places within or outside the United States as the CEO may direct from
time to time, however, Executive's primary place of work shall not be relocated
more than fifty (50) miles from his or her primary place of work as of the
Effective Date or outside San Diego County without Executive's prior consent.
Executive shall be subject to and comply with the policies and procedures
generally applicable to senior executives of the Company to the extent the same
are not inconsistent with any term of this Agreement.

            (b) Exclusive Services. Executive shall at all times faithfully,
industriously and to the best of his or her ability, experience and talent
perform to the satisfaction of the Board and the CEO all of the duties that may
be assigned to Executive hereunder and shall devote substantially all of his or
her productive time and efforts to the performance of such


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duties. Subject to the terms of the Employee Confidentiality and Invention
Assignment Agreement referred to in Section 5(b), this shall not preclude
Executive from devoting time to personal and family investments or serving on
community and civic boards, or participating in industry associations, provided
such activities do not interfere with his or her duties to the Company, as
determined in good faith by the CEO. Executive agrees that he or she will not
join any boards, other than community and civic boards (which do not interfere
with his or her duties to the Company), without the prior approval of the CEO.

      3. Compensation and Benefits. The Company shall pay or provide, as the
case may be, to the Executive the compensation and other benefits and rights set
forth in this Section 3.

            (a) Base Salary. The Company shall pay to Executive a base salary of
$227,575 per year, payable in accordance with the Company's usual pay practices
(and in any event no less frequently than monthly). Executive's base salary
shall be subject to review annually by and at the sole discretion of the
Compensation Committee of the Board.

            (b) Bonus. Executive shall participate in any Management Incentive
Compensation Plan adopted by the Company or in such other bonus plan as the
Board may approve for the senior executives of the Company.

            (c) Benefits. Executive shall be entitled to participate in benefits
under the Company's benefit plans and arrangements, including, without
limitation, any employee benefit plan or arrangement made available in the
future by the Company to its senior executives, subject to and on a basis
consistent with the terms, conditions and overall administration of such plans
and arrangements. The Company shall have the right to amend or delete any such
benefit plan or arrangement made available by the Company to its senior
executives and not otherwise specifically provided for herein.

            (d) Expenses. The Company shall reimburse Executive for reasonable
out-of-pocket expenses incurred in connection with the performance of his or her
duties hereunder, subject to (i) such policies as the Company may from time to
time establish, and (ii) Executive furnishing the Company with evidence in the
form of receipts satisfactory to the Company substantiating the claimed
expenditures.

            (e) Paid Time Off. Executive shall be entitled to such periods of
paid time off ("PTO") each year as provided under the Company's PTO policy and
as otherwise provided for senior executive officers, but in no event shall
Executive be entitled to less than four (4) weeks of PTO.

            (f) Equity Plans. Executive shall be entitled to participate in any
equity or other employee benefit plan that is generally available to senior
executive officers, as distinguished from general management, of the Company.
Except as otherwise provided in this Agreement, Executive's participation in and
benefits under any such plan shall be on the terms and subject to the conditions
specified in the governing document of the particular plan.

            (g) Acceleration Upon a Change of Control. Subject to any additional
acceleration of exercisability described in Sections 4(b), (c) and (d) below, in
connection with a


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Change of Control (as defined in Section 1 above), the vesting and
exercisability of fifty percent (50%) of Executive's outstanding Stock Awards
shall be automatically accelerated. The foregoing provision is hereby deemed to
be a part of each such Stock Award and to supersede any less favorable provision
in any agreement or plan regarding such Stock Award.

      4. Termination and Severance. Executive shall be entitled to receive
benefits upon termination of employment only as set forth in this Section 4:

            (a) At-Will Employment; Termination. The Company and Executive
acknowledge that Executive's employment is and shall continue to be at-will, as
defined under applicable law, and that Executive's employment with the Company
may be terminated by either party at any time for any or no reason, with or
without notice. If Executive's employment terminates for any reason, Executive
shall not be entitled to any payments, benefits, damages, award or compensation
other than as provided in this Agreement. Executive's employment under this
Agreement shall be terminated immediately on the death of Executive.

            (b) Termination by Death. If Executive's employment is terminated by
death, Executive's estate shall be entitled to receive (i) Executive's fully
earned but unpaid base salary, through the date of death at the rate then in
effect, plus all other amounts to which Executive is entitled under any
compensation plan or practice of the Company at the time of Executive's death,
(ii) Executive's annual base salary as in effect immediately prior to the date
of death, payable over the twelve (12) month period commencing on the date of
death in equal monthly installments, (iii) an amount equal to Executive's Bonus
for the year in which Executive's death occurs prorated for the period during
such year Executive was employed prior to his or her death, payable over the
twelve (12) month period commencing on the date of death in equal monthly
installments, and (iv) for the period beginning on the date of death and ending
on the date which is twelve (12) full months following the date of death, the
Company shall pay for and provide Executive's dependents with healthcare and
life insurance benefits coverage to the extent such dependents were receiving
such benefits prior to the date of Executive's death, including, if necessary,
paying the costs associated with continuation coverage pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"). In
addition, if Executive's employment is terminated by death, the vesting and/or
exercisability of Executive's outstanding Stock Awards shall be automatically
accelerated on the date of death as to the number of shares that would vest over
the twelve (12) months following Executive's death under the applicable vesting
schedules had Executive remained continuously employed by the Company during
such period. Except as otherwise provided above with respect to accelerated
vesting, if Executive's employment is terminated by death, the provisions of the
award agreements governing Executive's Stock Awards regarding the exercisability
of such Stock Awards following Executive's death shall apply.

            (c) Termination for Permanent Disability. If Executive's employment
is terminated by the Company for Permanent Disability, Executive shall be
entitled to receive (i) Executive's fully earned but unpaid base salary, through
the date of termination at the rate then in effect, plus all other amounts to
which Executive is entitled under any compensation plan or practice of the
Company at the time such payments are due, (ii) Executive's annual base salary
as in effect immediately prior to the date of termination, payable over the
twelve (12) month period


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commencing on the date of termination in equal monthly installments, (iii) an
amount equal to Executive's Bonus for the year in which the date of termination
occurs prorated for the period during such year Executive was employed prior to
the date of termination, payable over the twelve (12) month period commencing on
the date of termination in equal monthly installments, and (iv) for the period
beginning on the date of termination and ending on the date which is twelve (12)
full months following the date of termination (or, if earlier, the date on which
Executive accepts employment with another employer that provides comparable
benefits in terms of cost and scope of coverage), the Company shall pay for and
provide Executive and his or her dependents with healthcare and life insurance
benefits which are substantially the same as the benefits provided to Executive
immediately prior to the date of termination, including, if necessary, paying
the costs associated with continuation coverage pursuant to COBRA. In addition,
if Executive's employment is terminated by the Company for Permanent Disability,
the vesting and/or exercisability of Executive's outstanding Stock Awards shall
be automatically accelerated on the date of termination as to the number of
shares that would vest over the twelve (12) months following Executive's date of
termination under the applicable vesting schedules had Executive remained
continuously employed by the Company during such period. Except as otherwise
provided above with respect to accelerated vesting, if Executive's employment is
terminated by Permanent Disability, the provisions of the award agreements
governing Executive's Stock Awards regarding the exercisability of such Stock
Awards following Executive's disability shall apply.

            (d) Termination without Cause or for Good Reason.

                  (i) Termination Apart From Change of Control. If Executive's
employment is terminated by the Company without Cause or by Executive for Good
Reason more than three (3) months prior to a Change of Control or more than
twelve (12) months following a Change of Control, Executive shall be entitled to
receive, in lieu of any severance benefits to which Executive may otherwise be
entitled under any severance plan or program of the Company, the benefits
provided below:

                        (A) the Company shall pay to Executive his or her fully
      earned but unpaid base salary, when due, through the date of termination
      at the rate then in effect, plus all other amounts to which Executive is
      entitled under any compensation plan or practice of the Company at the
      time of termination;

                        (B) Executive shall be entitled to receive severance pay
      in an amount equal to the sum of:

                              (1) Executive's base salary as in effect
            immediately prior to the date of termination for the twelve (12)
            month period following the date of termination, payable over the
            twelve (12) month period commencing on the date of termination in
            equal monthly installments, plus

                              (2) an amount equal to Executive's Bonus for the
            year in which the date of termination occurs prorated for the period
            during such year Executive was employed prior to the date of


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            termination, payable over the twelve (12) month period commencing on
            the date of termination in equal monthly installments;

                        (C) The vesting and/or exercisability of each of
      Executive's outstanding Stock Awards shall be automatically accelerated on
      the date of termination as to the number of Stock Awards that would vest
      over the twelve (12) month period following the date of termination had
      Executive remained continuously employed by the Company during such
      period;

                        (D) for the period beginning on the date of termination
      and ending on the date which is twelve (12) full months following the date
      of termination (or, if earlier, the date on which Executive accepts
      employment with another employer that provides comparable benefits in
      terms of cost and scope of coverage), the Company shall pay for and
      provide Executive and his or her dependents with healthcare and life
      insurance benefits which are substantially the same as the benefits
      provided to Executive immediately prior to the date of termination,
      including, if necessary, paying the costs associated with continuation
      coverage pursuant to COBRA; and

                        (E) Executive shall be entitled to executive-level
      outplacement services at the Company's expense, not to exceed $15,000.
      Such services shall be provided by a firm selected by Executive from a
      list compiled by the Company.

                  (ii) Termination In Connection With Change of Control. If
Executive's employment is terminated by the Company without Cause or by
Executive for Good Reason within three (3) months prior to or twelve (12) months
following a Change of Control, Executive shall be entitled to receive, in lieu
of any severance benefits to which Executive may otherwise be entitled under any
severance plan or program of the Company, the benefits provided below:

                        (A) the Company shall pay to Executive his or her fully
      earned but unpaid base salary, when due, through the date of termination
      at the rate then in effect, plus all other amounts to which Executive is
      entitled under any compensation plan or practice of the Company at the
      time of termination;

                        (B) Executive shall be entitled to receive severance pay
      in an amount equal to the sum of:

                              (1) Executive's base salary as in effect
            immediately prior to date of termination for the twelve (12) month
            period following the date of termination, payable, at Executive's
            option, either over the twelve (12) month period commencing on the
            date of termination in equal monthly installments or in a lump sum
            within thirty (30) days following the consummation of the Change of
            Control, plus

                              (2) an amount equal to Executive's Bonus for the
            year in which the date of termination occurs prorated for the period
            during such year Executive was employed prior to the date of


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            termination, payable, at Executive's option, either over the twelve
            (12) month period commencing on the date of termination in equal
            monthly installments or in a lump sum within thirty (30) days
            following the consummation of the Change of Control;

                        (C) The vesting and/or exercisability of all of
      Executive's outstanding unvested Stock Awards shall be automatically
      accelerated on the date of termination;

                        (D) for the period beginning on the date of termination
      and ending on the date which is twelve (12) full months following the date
      of termination (or, if earlier, the date on which Executive accepts
      employment with another employer that provides comparable benefits in
      terms of cost and scope of coverage), the Company shall pay for and
      provide Executive and his or her dependents with healthcare and life
      insurance benefits which are substantially the same as the benefits
      provided to Executive immediately prior to the date of termination,
      including, if necessary, paying the costs associated with continuation
      coverage pursuant to COBRA;

                        (E) Executive shall be entitled to executive-level
      outplacement services at the Company's expense, not to exceed $15,000.
      Such services shall be provided by a firm selected by Executive from a
      list compiled by the Company; and

                        (F) The payments and benefits provided for in this
      Section 4(d)(ii) shall only be payable in the event Executive's employment
      is terminated by the Company without Cause or by Executive for Good Reason
      within three (3) months prior to or twelve (12) months following a Change
      of Control. If Executive's employment is terminated by the Company without
      Cause or by Executive for Good Reason prior to a Change of Control and
      such Change of Control is not consummated within three (3) months
      following such termination, then Executive shall receive the payments and
      benefits described in Section 4(d)(i) and shall not be eligible to receive
      any of the payments and benefits described in this Section 4(d)(ii).

            (e) Termination for Cause or Voluntary Resignation Without Good
Reason. If Executive's employment is terminated by the Company for Cause or by
Executive without Good Reason (other than as a result of Executive's death or
Permanent Disability), the Company shall not have any other or further
obligations to Executive under this Agreement (including any financial
obligations) except that Executive shall be entitled to receive (i) Executive's
fully earned but unpaid base salary, through the date of termination at the rate
then in effect, and (ii) all other amounts or benefits to which Executive is
entitled under any compensation, retirement or benefit plan or practice of the
Company at the time of termination in accordance with the terms of such plans or
practices, including, without limitation, any continuation of benefits required
by COBRA or applicable law. In addition, if Executive's employment is terminated
by the Company for Cause or by Executive without Good Reason (other than as a
result of Executive's death or Permanent Disability), all vesting of Executive's
unvested Stock Awards previously granted to him or her by the Company shall
cease and none of such unvested Stock Awards shall be exercisable following the
date of such termination. The foregoing shall be in addition to, and not in lieu
of, any and all other rights and remedies which may be available to the Company
under the circumstances, whether at law or in equity.


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            (f) Release. As a condition to the Executive's receipt of any
post-termination benefits described in this Agreement, Executive shall execute a
Release (the "Release") in a form reasonably acceptable to the Company. Such
Release shall specifically relate to all of Executive's rights and claims in
existence at the time of such execution, including any claims related to
Executive's employment by the Company and his or her termination of employment,
and shall exclude any continuing obligations the Company may have to Executive
following the date of termination under this Agreement or any other agreement
providing for obligations to survive Executive's termination of employment.

            (g) Exclusive Remedy. Except as otherwise expressly required by law
(e.g., COBRA) or as specifically provided herein, all of the Executive's rights
to salary, severance, benefits, bonuses and other amounts hereunder (if any)
accruing after the termination of Executive's employment shall cease upon such
termination. In the event of a termination of Executive's employment with the
Company, the Executive's sole remedy shall be to receive the payments and
benefits described in this Section 4. In addition, Executive acknowledges and
agrees that he or she is not entitled to any reimbursement by the Company for
any taxes payable by Executive as a result of the payments and benefits received
by Executive pursuant to this Section 4, including, without limitation, any
excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended.

            (h) No Mitigation. Executive shall not be required to mitigate the
amount of any payment provided for in this Section 4 by seeking other employment
or otherwise, nor shall the amount of any payment or benefit provided for in
this Section 4 be reduced by any compensation earned by Executive as the result
of employment by another employer or self-employment or by retirement benefits;
provided, however, that loans, advances or other amounts owed by Executive to
the Company may be offset by the Company against amounts payable to Executive
under this Section 4; provided, further, that, as provided in Sections 4(c) or
(d), Executive's right to continued healthcare and life insurance benefits
following his or her termination of employment will terminate on the date on
which he or she accepts employment with another employer that provides
comparable benefits in terms of cost and scope of coverage.

            (i) Return of the Company's Property. If Executive's employment is
terminated for any reason, the Company shall have the right, at its option, to
require Executive to vacate his or her offices prior to or on the effective date
of termination and to cease all activities on the Company's behalf. Upon the
termination of his or her employment in any manner, as a condition to the
Executive's receipt of any post-termination benefits described in this
Agreement, Executive shall immediately surrender to the Company all lists, books
and records of, or in connection with, the Company's business, and all other
property belonging to the Company, it being distinctly understood that all such
lists, books and records, and other documents, are the property of the Company.
Executive shall deliver to the Company a signed statement certifying compliance
with this Section 4(i) prior to the receipt of any post-termination benefits
described in this Agreement.

            (j) Waiver of the Company's Liability. Executive recognizes that his
or her employment is subject to termination with or without Cause for any reason
and therefore Executive agrees that Executive shall hold the Company harmless
from and against any and all


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liabilities, losses, damages, costs and expenses, including but not limited to,
court costs and reasonable attorneys' fees, which Executive may incur as a
result of the termination of Executive's employment. Executive further agrees
that Executive shall bring no claim or cause of action against the Company for
damages or injunctive relieve based on a wrongful termination of employment.
Executive agrees that the sole liability of the Company to Executive upon
termination of this Agreement shall be that determined by this Section 4. In the
event this covenant is more restrictive than permitted by laws of the
jurisdiction in which the Company seeks enforcement thereof, this covenant shall
be limited to the extent permitted by law.

      5.    Certain Covenants.

            (a) Noncompetition. Except as may otherwise be approved by the
Board, during the term of Executive's employment, Executive shall not have any
ownership interest (of record or beneficial) in, or have any interest as an
employee, salesman, consultant, officer or director in, or otherwise aid or
assist in any manner, any firm, corporation, partnership, proprietorship or
other business that engages in any county, city or part thereof in the United
States and/or any foreign country in a business which competes directly or
indirectly (as determined by the Board) with the Company's business in such
county, city or part thereof, so long as the Company, or any successor in
interest of the Company to the business and goodwill of the Company, remains
engaged in such business in such county, city or part thereof or continues to
solicit customers or potential customers therein; provided, however, that
Executive may own, directly or indirectly, solely as an investment, securities
of any entity which are traded on any national securities exchange if Executive
(x) is not a controlling person of, or a member of a group which controls, such
entity; or (y) does not, directly or indirectly, own one percent (1%) or more of
any class of securities of any such entity.

            (b) Confidential Information. Executive and the Company have entered
into the Company's standard employee confidentiality and invention assignment
agreement (the "Employee Confidentiality and Invention Assignment Agreement").
Executive agrees to perform each and every obligation of Executive therein
contained.

            (c) Solicitation of Employees. Executive shall not during the term
of Executive's employment and for the applicable severance period for which
Executive receives severance benefits following any termination hereof pursuant
to Section 4(c) or (d) above (regardless of whether Executive elects payment of
severance amounts payable thereunder in a lump sum) (the "Restricted Period"),
directly or indirectly, solicit or encourage to leave the employment of the
Company or any of its affiliates, any employee of the Company or any of its
affiliates.

            (d) Rights and Remedies Upon Breach. If Executive breaches or
threatens to commit a breach of any of the provisions of this Section 5 (the
"Restrictive Covenants"), the Company shall have the following rights and
remedies, each of which rights and remedies shall be independent of the other
and severally enforceable, and all of which rights and remedies shall be in
addition to, and not in lieu of, any other rights and remedies available to the
Company under law or in equity:


                                       11
<PAGE>
                  (i) Specific Performance. The right and remedy to have the
Restrictive Covenants specifically enforced by any court having equity
jurisdiction, all without the need to post a bond or any other security or to
prove any amount of actual damage or that money damages would not provide an
adequate remedy, it being acknowledged and agreed that any such breach or
threatened breach will cause irreparable injury to the Company and that money
damages will not provide adequate remedy to the Company; and

                  (ii) Accounting and Indemnification. The right and remedy to
require Executive (i) to account for and pay over to the Company all
compensation, profits, monies, accruals, increments or other benefits derived or
received by Executive or any associated party deriving such benefits as a result
of any such breach of the Restrictive Covenants; and (ii) to indemnify the
Company against any other losses, damages (including special and consequential
damages), costs and expenses, including actual attorneys' fees and court costs,
which may be incurred by them and which result from or arise out of any such
breach or threatened breach of the Restrictive Covenants.

            (e) Severability of Covenants/Blue Pencilling. If any court
determines that any of the Restrictive Covenants, or any part thereof, is
invalid or unenforceable, the remainder of the Restrictive Covenants shall not
thereby be affected and shall be given full effect, without regard to the
invalid portions. If any court determines that any of the Restrictive Covenants,
or any part thereof, are unenforceable because of the duration of such provision
or the area covered thereby, such court shall have the power to reduce the
duration or area of such provision and, in its reduced form, such provision
shall then be enforceable and shall be enforced. Executive hereby waives any and
all right to attack the validity of the Restrictive Covenants on the grounds of
the breadth of their geographic scope or the length of their term.

            (f) Enforceability in Jurisdictions. The Company and Executive
intend to and do hereby confer jurisdiction to enforce the Restrictive Covenants
upon the courts of any jurisdiction within the geographical scope of such
covenants. If the courts of any one or more of such jurisdictions hold the
Restrictive Covenants wholly unenforceable by reason of the breadth of such
scope or otherwise, it is the intention of the Company and Executive that such
determination not bar or in any way affect the right of the Company to the
relief provided above in the courts of any other jurisdiction within the
geographical scope of such covenants, as to breaches of such covenants in such
other respective jurisdictions, such covenants as they relate to each
jurisdiction being, for this purpose, severable into diverse and independent
covenants.

            (g) Definitions. For purposes of this Section 5, the term "Company"
means not only Santarus, Inc., but also any company, partnership or entity
which, directly or indirectly, controls, is controlled by or is under common
control with Santarus, Inc.

      6. Insurance. The Company shall have the right to take out life, health,
accident, "key-man" or other insurance covering Executive, in the name of the
Company and at the Company's expense in any amount deemed appropriate by the
Company. Executive shall assist the Company in obtaining such insurance,
including, without limitation, submitting to any required examinations and
providing information and data required by insurance companies.


                                       12
<PAGE>
      7. Arbitration. Except as provided in Section 5, any claim or controversy
arising out of or relating to this Agreement shall be settled by arbitration in
San Diego, California, in accordance with the Commercial Arbitration Rules of
the American Arbitration Association, and judgment on the award rendered by the
arbitrator may be entered in any court having jurisdiction. Each party shall
select one arbitrator and the two arbitrators so chosen will select a third
arbitrator who shall act as the sole arbitrator of any dispute. Each party shall
pay the fees of its own attorneys, the expenses of its witnesses and all other
expenses connected with presenting its case; however, Executive and the Company
agree that, except as may be prohibited by law, the arbitrator may, in his or
her discretion, award reasonable attorneys' fees to the prevailing party. Other
costs of the arbitration, including the cost of any record or transcripts of the
arbitration, administrative fees, the fee of the sole arbitrator, and all other
fees and costs, shall be borne by the Company.

      8. General Relationship. Executive shall be considered an employee of the
Company within the meaning of all federal, state and local laws and regulations
including, but not limited to, laws and regulations governing unemployment
insurance, workers' compensation, industrial accident, labor and taxes.

      9. Miscellaneous.

            (a) Modification; Prior Claims. This Agreement sets forth the entire
understanding of the parties with respect to the subject matter hereof,
supersedes all existing agreements between them concerning such subject matter,
and may be modified only by a written instrument duly executed by each party.

            (b) Assignment; Assumption by Successor. The rights of the Company
under this Agreement may, without the consent of Executive, be assigned by the
Company, in its sole and unfettered discretion, to any person, firm, corporation
or other business entity which at any time, whether by purchase, merger or
otherwise, directly or indirectly, acquires all or substantially all of the
assets or business of the Company. The Company will require any successor
(whether direct or indirect, by purchase, merger or otherwise) to all or
substantially all of the business or assets of the Company expressly to assume
and to agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession had taken
place; provided, however, that no such assumption shall relieve the Company of
its obligations hereunder. As used in this Agreement, the "Company" shall mean
the Company as hereinbefore defined and any successor to its business and/or
assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law or otherwise.


            (c) Survival. The covenants, agreements, representations and
warranties contained in or made in Sections 4, 5, 7 and 9 of this Agreement
shall survive any termination of Executive's employment.

            (d) Third-Party Beneficiaries. This Agreement does not create, and
shall not be construed as creating, any rights enforceable by any person not a
party to this Agreement.


                                       13
<PAGE>
            (e) Waiver. The failure of either party hereto at any time to
enforce performance by the other party of any provision of this Agreement shall
in no way affect such party's rights thereafter to enforce the same, nor shall
the waiver by either party of any breach of any provision hereof be deemed to be
a waiver by such party of any other breach of the same or any other provision
hereof.

            (f)   Section Headings.  The headings of the several sections
in this Agreement are inserted solely for the convenience of the parties
and are not a part of and are not intended to govern, limit or aid in the
construction of any term or provision hereof.

            (g) Notices. All notices, requests and other communications
hereunder shall be in writing and shall be delivered by courier or other means
of personal service (including by means of a nationally recognized courier
service or professional messenger service), or sent by telex or telecopy or
mailed first class, postage prepaid, by certified mail, return receipt
requested, in all cases, addressed to:

            If to the Company or the Board:

            Santarus, Inc.
            10590 West Ocean Air Drive
            Suite 200
            San Diego, CA 92130
            Attention:  Legal Affairs Department

            If to Executive:

            Warren E. Hall
            12929 Via Esperia
            Del Mar, CA 92014

All notices, requests and other communications shall be deemed given on the date
of actual receipt or delivery as evidenced by written receipt, acknowledgement
or other evidence of actual receipt or delivery to the address. In case of
service by telecopy, a copy of such notice shall be personally delivered or sent
by registered or certified mail, in the manner set forth above, within three
business days thereafter. Any party hereto may from time to time by notice in
writing served as set forth above designate a different address or a different
or additional person to which all such notices or communications thereafter are
to be given.

            (h) Severability. All Sections, clauses and covenants contained in
this Agreement are severable, and in the event any of them shall be held to be
invalid by any court, this Agreement shall be interpreted as if such invalid
Sections, clauses or covenants were not contained herein.

            (i) Governing Law and Venue. This Agreement is to be governed by and
construed in accordance with the laws of the State of California applicable to
contracts made and to be performed wholly within such State, and without regard
to the conflicts of laws principles thereof. Except as provided in Sections 5
and 7, any suit brought hereon shall be brought in the state or federal courts
sitting in San Diego, California, the parties hereto hereby


                                       14
<PAGE>
waiving any claim or defense that such forum is not convenient or proper. Each
party hereby agrees that any such court shall have in personam jurisdiction over
it and consents to service of process in any manner authorized by California
law.

            (j) Non-transferability of Interest. None of the rights of Executive
to receive any form of compensation payable pursuant to this Agreement shall be
assignable or transferable except through a testamentary disposition or by the
laws of descent and distribution upon the death of Executive. Any attempted
assignment, transfer, conveyance, or other disposition (other than as aforesaid)
of any interest in the rights of Executive to receive any form of compensation
to be made by the Company pursuant to this Agreement shall be void.

            (k) Gender. Where the context so requires, the use of the masculine
gender shall include the feminine and/or neuter genders and the singular shall
include the plural, and vice versa, and the word "person" shall include any
corporation, firm, partnership or other form of association.

            (l) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement.

            (m) Acceleration of Stock Awards. For purposes of this Agreement, to
the extent the vesting and/or exercisability of any of Executive's outstanding
Stock Awards and/or the lapsing of any restrictions with respect to Stock Awards
that Executive holds shall be accelerated pursuant to this Agreement, if any
Stock Award had previously been partially exercised such that an unexercised
portion of the Stock Award still remains outstanding as of the date of such
acceleration, the vesting acceleration provisions of this Agreement shall be
applied to the total number of shares subject to such Award that consist of (i)
then unvested exercised shares that were previously acquired upon the partial
exercise of such Stock Award, plus (ii) the remaining unexercised portion of the
Stock Award. The acceleration of vesting shall be first applied toward the
unvested previously exercised shares such that no unexercised shares shall vest
on an accelerated basis in accordance with the provisions of this Agreement
unless and until all of the unvested exercised shares subject to such Stock
Award have first vested. In addition, the acceleration of vesting shall be
applied to each Stock Award individually.

            (n) Construction. The language in all parts of this Agreement shall
in all cases be construed simply, according to its fair meaning, and not
strictly for or against any of the parties hereto. Without limitation, there
shall be no presumption against any party on the ground that such party was
responsible for drafting this Agreement or any part thereof.

            (o) Withholding and other Deductions. All compensation payable to
Executive hereunder shall be subject to such deductions as the Company is from
time to time required to make pursuant to law, governmental regulation or order.

                            (Signature Page Follows)


                                       15
<PAGE>
      IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.

                                    SANTARUS, INC.



                                    By:    /s/ Gerald T. Proehl
                                          --------------------------------------
                                          Gerald T. Proehl
                                          President and Chief Executive Officer


                                     /s/ Warren E. Hall
                                    --------------------------------------------
                                    Warren E. Hall