exv4w2



 






Exhibit 4.2




REGISTRATION RIGHTS AGREEMENT




     This REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of February 3, 2006,
is by and between SANTARUS, INC. (the “Company”) and KINGSBRIDGE CAPITAL LIMITED (the
“Investor”).



     WHEREAS, the Company and the Investor have entered into that certain Common Stock Purchase
Agreement, dated as of the date hereof (the “Purchase Agreement”), pursuant to which the
Company may issue, from time to time, to the Investor up to $75 million worth of shares of Common
Stock as provided for therein;



     WHEREAS, pursuant to the terms of, and in partial consideration for the Investor entering
into, the Purchase Agreement, the Company has issued to the Investor a warrant, exercisable from
time to time within five (5) years following the six-month anniversary of the date of issuance (the
“Warrant”) for the purchase of an aggregate of up to 365,000 shares of Common Stock at a
price specified in such Warrant;



     WHEREAS, pursuant to the terms of, and in partial consideration for, the Investor’s agreement
to enter into the Purchase Agreement, the Company has agreed to provide the Investor with certain
registration rights with respect to the Registrable Securities (as defined in the Purchase
Agreement) as set forth herein;



     NOW, THEREFORE, in consideration of the premises, the representations, warranties, covenants
and agreements contained herein, in the Warrant, and in the Purchase Agreement, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, intending
to be legally bound hereby, the parties hereto agree as follows (capitalized terms used herein and
not defined herein shall have the respective meanings ascribed to them in the Purchase Agreement):



ARTICLE I

REGISTRATION RIGHTS




     Section 1.1. Registration Statement.



     (a) Filing of the Registration Statement. Upon the terms and subject to the
conditions set forth in this Agreement, the Company shall file with the Commission within sixty
(60) calendar days after the Closing Date a registration statement on Form S-3 under the Securities
Act or such other form as deemed appropriate by counsel to the Company for the registration for the
resale by the Investor of the Registrable Securities (the “Registration Statement”).



     (b) Effectiveness of the Registration Statement. The Company shall use commercially
reasonable efforts (i) to have the Registration Statement declared effective by the Commission as
soon as reasonably practicable, but in any event no later than one hundred eighty (180) calendar
days after the Closing Date and (ii) to ensure that the Registration Statement remains in effect
throughout the term of this Agreement as set forth in Section 4.2, subject to the terms and
conditions of this Agreement.



     (c) Regulatory Disapproval. The contemplated effective date for the Registration
Statement as described in Section 1.1(b) shall be extended without default or liquidated damages
hereunder or under the Purchase Agreement in the event that the Company’s failure to obtain the
effectiveness of the Registration Statement on a timely basis results solely from the Commission’s
disapproval of the structure of the transactions contemplated by the Purchase Agreement. In such
event, the parties agree to cooperate with one another in good faith to arrive at a resolution
acceptable to the Commission.



 









 





     (d) Failure to Maintain Effectiveness of Registration Statement. In the event the
Company fails to maintain the effectiveness of the Registration Statement (or the Prospectus)
throughout the period set forth in Section 4.2, other than temporary suspensions as set forth in
Section 1.1(e) and the Investor holds any Registrable Securities at any time during the period of
such ineffectiveness (an “Ineffective Period”), the Company shall pay to the Investor in
immediately available funds into an account designated by the Investor an amount equal to the
product of (x) the total number of Registrable Securities issued to the Investor under the Purchase
Agreement and owned by the Investor at any time during such Ineffective Period and (y) the result,
if greater than zero, obtained by subtracting the VWAP on the Trading Day immediately following the
last day of such Ineffective Period from the VWAP on the Trading Day immediately preceding the day
on which any such Ineffective Period began; provided, however, (i) that the
foregoing payments shall not apply in respect of Registrable Securities that are otherwise freely
tradable by the Investor and (ii) that the Company shall be under no obligation to supplement the
Prospectus to reflect the issuance of any Shares pursuant to a Draw Down at any time prior to the
day following the Settlement Date with respect to such Shares and that the failure to supplement
the Prospectus prior to such time period shall not be deemed a failure to maintain the
effectiveness of the Registration Statement (or Prospectus) for purposes of this Agreement
(including this Section 1.1(d)).



     (e) Deferral or Suspension During a Blackout Period. Notwithstanding the provisions
of Section 1.1(d), if in the good faith judgment of the Company, following consultation with legal
counsel, it would be detrimental to the Company or its stockholders for the Registration Statement
to be filed or for resales of Registrable Securities to be made pursuant to the Registration
Statement due to (i) the existence of a material development or potential material development
involving the Company that the Company would be obligated to disclose in the Registration
Statement, which disclosure would be premature or otherwise inadvisable at such time or would have
a Material Adverse Effect on the Company or its stockholders, or (ii) a filing of a
Company-initiated registration of any class of its equity securities, which, in the good faith
judgment of the Company, would adversely effect or require premature disclosure of the filing of
such Company-initiated registration (notice thereof, a “Blackout Notice”), the Company
shall have the right to (A) immediately defer such filing for a period of not more than sixty (60)
days beyond the date by which such Registration Statement was otherwise required hereunder to be
filed or (B) suspend use of such Registration Statement for a period of not more than thirty (30)
days (any such deferral or suspension period, a “Blackout Period”). The Investor
acknowledges that it would be seriously detrimental to the Company and its stockholders for such
Registration Statement to be filed (or remain in effect) during a Blackout Period and therefore
essential to defer such filing (or suspend the use thereof) during such Blackout Period and agrees
to cease any disposition of the Registrable Securities during such Blackout Period. The Company
may not utilize any of its rights under this Section 1.1(e) to defer the filing of a Registration
Statement (or suspend its effectiveness) more than six (6) times in any twelve (12) month period.
In the event that, within fifteen (15) Trading Days following any Settlement Date, the Company
gives a Blackout Notice to the Investor and the VWAP on the Trading Day immediately preceding such
Blackout Period (“Old VWAP”) is greater than the VWAP on the first Trading Day following
such Blackout Period that the Investor may sell its Registrable Securities pursuant to an effective
Registration Statement (“New VWAP”), then the Company shall pay to the Investor, by wire
transfer of immediately available funds to an account designated by the Investor, the “Blackout
Amount.” For the purposes of this Agreement, Blackout Amount means a percentage equal to: (1)
seventy-five percent (75%) if such Blackout Notice is delivered prior to the fifth (5th)
Trading Day following such Settlement Date; (2) fifty percent (50%) if such Blackout Notice is
delivered on or after the fifth (5th) Trading Day following such Settlement Date, but
prior to the tenth (10th) Trading Day following such Settlement Date; (3) twenty-five
percent (25%) if such Blackout Notice is delivered on or after the tenth (10th) Trading
Day following such Settlement Date, but prior to the fifteenth (15th) Trading Day
following such Settlement Date; and (4) zero percent (0%) thereafter of: the product of (i) the
number of Registrable Securities purchased by the Investor pursuant to the most recent Draw Down
and actually held by the Investor immediately prior to the Blackout Period and (ii) the result, if
greater than zero,



2









 




obtained by subtracting the New VWAP from the Old VWAP. For any Blackout Period in respect of
which a Blackout Amount becomes due and payable, rather than paying the Blackout Amount, the
Company may at is sole discretion, issue to the Investor shares of Common Stock with an aggregate
market value determined as of the first Trading Day following such Blackout Period equal to the
Blackout Amount (“Blackout Shares”).




     (f) Liquidated Damages. The Company and the Investor hereto acknowledge and agree
that the amounts payable under Sections 1.1(d) and 1.1(e) and the Blackout Shares, if any,
deliverable under Section 1.1(e) above shall constitute liquidated damages and not penalties. The
parties further acknowledge that (i) the amount of loss or damages likely to be incurred by the
Investor is incapable or is difficult to precisely estimate, (ii) the amounts specified in such
subsections bear a reasonable proportion and are not plainly or grossly disproportionate to the
probable loss likely to be incurred in connection with any failure by the Company to obtain or
maintain the effectiveness of the Registration Statement, (iii) one of the reasons for the Company
and the Investor reaching an agreement as to such amounts was the uncertainty and cost of
litigation regarding the question of actual damages, and (iv) the Company and the Investor are
sophisticated business parties and have been represented by sophisticated and able legal and
financial counsel and negotiated this Agreement at arm’s length.



     (g) Additional Registration Statements. In the event and to the extent that the
Registration Statement fails to register a sufficient amount of Common Stock necessary for the
Company to issue and sell to the Investor and the Investor to purchase from the Company all of the
Registrable Securities to be issued, sold and purchased under the Purchase Agreement and the
Warrant, the Company shall, upon a timetable mutually agreeable to both the Company and the
Investor, prepare and file with the Commission an additional registration statement or statements
in order to effectuate the purpose of this Agreement, the Purchase Agreement, and the Warrant.



ARTICLE II

REGISTRATION PROCEDURES




     Section 2.1. Filings; Information. The Company shall effect the registration with
respect to the sale of the Registrable Securities by the Investor in accordance with the intended
methods of disposition thereof. Without limiting the foregoing, the Company in each such case will
do the following as expeditiously as possible, but in no event later than the deadline, if any,
prescribed therefor in this Agreement:



     (a) Subject to Section 1.1(e), the Company shall (i) prepare and file with the Commission the
Registration Statement; (ii) use commercially reasonable efforts to cause such filed Registration
Statement to become and to remain effective (pursuant to Rule 415 under the Securities Act or
otherwise); (iii) prepare and file with the Commission such amendments and supplements to the
Registration Statement and the Prospectus used in connection therewith as may be necessary to keep
such Registration Statement effective for the time period prescribed by Section 4.2 and in order to
effectuate the purpose of this Agreement, the Purchase Agreement, and the Warrant; and (iv) comply
with the provisions of the Securities Act with respect to the disposition of all securities covered
by such Registration Statement during such period in accordance with the intended methods of
disposition by the Investor set forth in such Registration Statement; provided,
however, that the Company shall be under no obligation to supplement the Prospectus to
reflect the issuance of any Shares pursuant to a Draw Down at any time prior to the Trading Day
following the Settlement Date with respect to such Shares; and; provided further,
that the Investor shall be responsible for the delivery of the Prospectus to the Persons
to whom the Investor sells the Shares and the Warrant Shares, and the Investor agrees to dispose of
Registrable Securities in compliance with the plan of distribution described in the Registration
Statement and otherwise in compliance with applicable federal and state securities laws.



3









 





     (b) Three (3) Trading Days prior to filing the Registration Statement or Prospectus, or any
amendment or supplement thereto (excluding amendments deemed to result from the filing of documents
incorporated by reference therein, and excluding supplements to the Registration Statement for
which consent of or notice to the Investor is not required pursuant to Section 6.12 of the Purchase
Agreement), the Company shall deliver to the Investor and to counsel representing the Investor, in
accordance with the notice provisions of Section 4.8, copies of the Registration Statement,
Prospectus and/or any amendments or supplements thereto as proposed to be filed, together with
exhibits thereto, which documents will be subject to review by the Investor and such counsel, and
thereafter deliver to the Investor and such counsel, in accordance with the notice provisions of
Section 4.8, such number of copies of the Registration Statement, each amendment and supplement
thereto (in each case including all exhibits thereto), the Prospectus (including each preliminary
prospectus) and such other documents or information as the Investor or counsel may reasonably
request in order to facilitate the disposition of the Registrable Securities, provided, however,
that to the extent reasonably practicable, such delivery may be accomplished via electronic means.



     (c) After the filing of the Registration Statement, the Company shall promptly notify the
Investor of any stop order issued or threatened by the Commission in connection therewith and take
all commercially reasonable actions required to prevent the entry of such stop order or to remove
it if entered.



     (d) The Company shall use commercially reasonable efforts to (i) register or qualify the
Registrable Securities under such other securities or blue sky laws of each jurisdiction in the
United States as the Investor may reasonably (in light of its intended plan of distribution)
request, and (ii) cause the Registrable Securities to be registered with or approved by such other
governmental agencies or authorities in the United States as may be necessary by virtue of the
business and operations of the Company and do any and all other customary acts and things that may
be reasonably necessary or advisable to enable the Investor to consummate the disposition of the
Registrable Securities; provided, however, that the Company will not be required to
qualify generally to do business in any jurisdiction where it would not otherwise be required to
qualify but for this Section 2.1(e), subject itself to taxation in any such jurisdiction, consent
or subject itself to general service of process in any such jurisdiction, change any existing
business practices, benefit plans or outstanding securities or amend or otherwise modify the
Charter or Bylaws.



     (e) The Company shall make available to the Investor (and will deliver to Investor’s counsel),
(A) subject to restrictions imposed by the United States federal government or any agency or
instrumentality thereof, copies of all public correspondence between the Commission and the Company
concerning the Registration Statement and will also make available for inspection by the Investor
and any attorney, accountant or other professional retained by the Investor (collectively, the
“Inspectors”), (B) upon reasonable advance notice during normal business hours all
financial and other records, pertinent corporate documents and properties of the Company
(collectively, the “Records”) as shall be reasonably necessary to enable them to exercise
their due diligence responsibility, and cause the Company’s officers and employees to supply all
information reasonably requested by any Inspectors in connection with the Registration Statement;
provided, however, that any such Inspectors must agree in writing for the benefit
of the Company not to use or disclose any such Records except as provided in this Section 2.1(f).
Records that the Company determines, in good faith, to be confidential and that it notifies the
Inspectors are confidential shall not be disclosed by the Inspectors unless the disclosure or
release of such Records is requested or required pursuant to oral questions, interrogatories,
requests for information or documents or a subpoena or other order from a court of competent
jurisdiction or other judicial or governmental process; provided, however, that
prior to any disclosure or release pursuant to the immediately preceding clause, the Inspectors
shall provide the Company with prompt notice of any such request or requirement so that the Company
may seek an appropriate protective order or waive such Inspectors’ obligation not to



4









 




disclose such Records; and, provided, further, that if failing the entry of a
protective order or the waiver by the Company permitting the disclosure or release of such Records,
the Inspectors, upon advice of counsel, are compelled to disclose such Records, the Inspectors may
disclose that portion of the Records that counsel has advised the Inspectors that the Inspectors
are compelled to disclose; provided, however, that upon any such required
disclosure, such Inspector shall use his or her best efforts to obtain reasonable assurances that
confidential treatment will be afforded such information. The Investor agrees that information
obtained by it solely as a result of such inspections (not including any information obtained from
a third party who, insofar as is known to the Investor after reasonable inquiry, is not prohibited
from providing such information by a contractual, legal or fiduciary obligation to the Company)
shall be deemed confidential and shall not be used for any purposes other than as indicated above
or by it as the basis for any market transactions in the securities of the Company or its
affiliates unless and until such information is made generally available to the public. The
Investor further agrees that it will, upon learning that disclosure of such Records is sought in a
court of competent jurisdiction, give notice to the Company and allow the Company, at its expense,
to undertake appropriate action to prevent disclosure of the Records deemed confidential.




     (f) The Company shall otherwise comply with all applicable rules and regulations of the
Commission, including, without limitation, compliance with applicable reporting requirements under
the Exchange Act.



     (g) The Company shall appoint a transfer agent and registrar for all of the Registrable
Securities covered by such Registration Statement not later than the effective date of such
Registration Statement.



     (h) The Investor shall cooperate with the Company, as reasonably requested by the Company, in
connection with the preparation and filing of any Registration Statement hereunder. The Company
may require the Investor to promptly furnish in writing to the Company such information as may be
required in connection with such registration including, without limitation, all such information
as may be requested by the Commission or the NASD or any state securities commission and all such
information regarding the Investor, the Registrable Securities held by the Investor and the
intended method of disposition of the Registrable Securities. The Investor agrees to provide such
information requested in connection with such registration within five (5) business days after
receiving such written request and the Company shall not be responsible for any delays in obtaining
or maintaining the effectiveness of the Registration Statement caused by the Investor’s failure to
timely provide such information.



     (i) Upon receipt of a Blackout Notice from the Company, the Investor shall immediately
discontinue disposition of Registrable Securities pursuant to the Registration Statement covering
such Registrable Securities until (i) the Company advises the Investor that the Blackout Period has
terminated and (ii) the Investor receives copies of a supplemented or amended prospectus, if
necessary. If so directed by the Company, the Investor will deliver to the Company (at the expense
of the Company) or destroy (and deliver to the Company a certificate of destruction) all copies in
the Investor’s possession (other than a limited number of file copies) of the prospectus covering
such Registrable Securities that is current at the time of receipt of such notice.



     Section 2.2. Registration Expenses. The Company shall pay all registration expenses
incurred in connection with the Registration Statement (the “Registration Expenses”),
including, without limitation: (i) all registration, filing, securities exchange listing and fees
required by the National Association of Securities Dealers, (ii) all registration, filing,
qualification and other fees and expenses of compliance with securities or blue sky laws (including
reasonable fees and disbursements of counsel in connection with blue sky qualifications of the
Registrable Securities), (iii) all word processing, duplicating, printing, messenger and delivery
expenses, (iv) the Company’s internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting



5









 




duties), (v) the fees and expenses incurred by the Company in connection with the listing of
the Registrable Securities, (vi) reasonable fees and disbursements of counsel for the Company and
customary fees and expenses for independent certified public accountants retained by the Company
(including the expenses of any special audits or comfort letters or costs associated with the
delivery by independent certified public accountants of such special audit(s) or comfort letter(s),
(vii) the fees and expenses of any special experts retained by the Company in connection with such
registration and amendments and supplements to the Registration Statement and Prospectus and (viii)
premiums and other costs of the Company for policies of insurance against liabilities arising out
of any public offering of the Registrable Securities being registered. Any fees and disbursements
of underwriters, broker-dealers or investment bankers, including without limitation underwriting
fees, discounts, transfer taxes or commissions, and any other fees or expenses (including legal
fees and expenses) if any, attributable to the sale of Registrable Securities, shall be payable by
each holder of Registrable Securities pro rata on the basis of the number of Registrable Securities
of each such holder that are included in a registration under this Agreement.




ARTICLE III

INDEMNIFICATION




     Section 3.1. Indemnification. The Company agrees to indemnify and hold harmless the
Investor, its partners, affiliates, officers, directors, employees and duly authorized agents, and
each Person or entity, if any, who controls the Investor within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, together with the partners, affiliates, officers,
directors, employees and duly authorized agents of such controlling Person or entity (collectively,
the “Controlling Persons”), from and against any loss, claim, damage, liability, costs and
expenses (including, without limitation, reasonable attorneys’ fees and disbursements and costs and
expenses of investigating and defending any such claim) (collectively, “Damages”), joint or
several, and any action or proceeding in respect thereof to which the Investor, its partners,
affiliates, officers, directors, employees and duly authorized agents, and any Controlling Person,
may become subject under the Securities Act or otherwise, as incurred, insofar as such Damages (or
actions or proceedings in respect thereof) arise out of, or are based upon, any untrue statement or
alleged untrue statement of a material fact contained in any Registration Statement, or in any
preliminary prospectus, final prospectus, summary prospectus, amendment or supplement relating to
the Registrable Securities or arises out of, or are based upon, any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make the statements
therein under the circumstances not misleading, and shall reimburse the Investor, its partners,
affiliates, officers, directors, employees and duly authorized agents, and each such Controlling
Person, for any legal and other expenses reasonably incurred by the Investor, its partners,
affiliates, officers, directors, employees and duly authorized agents, or any such Controlling
Person, as incurred, in investigating or defending or preparing to defend against any such Damages
or actions or proceedings; provided, however, that the Company shall not be liable
to the extent that any such Damages arise out of the Investor’s (or any other indemnified Person’s)
failure to send or give a copy of the final prospectus or supplement (as then amended or
supplemented) to the persons asserting an untrue statement or alleged untrue statement or omission
or alleged omission at or prior to the written confirmation of the sale of Registrable Securities
to such person if such statement or omission was corrected in such final prospectus or supplement;
provided, further, that the Company shall not be liable to the extent that any such
Damages arise out of or are based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in such Registration Statement, or any such preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by or on behalf of the Investor or any other person
who participates as an underwriter in the offering or sale of such securities, in either case,
specifically stating that it is for use in the preparation thereof. In connection with any
Registration Statement with respect to which the Investor is participating, such Investor will
indemnify and hold harmless, to the same extent and in the same manner as set forth in the
preceding paragraph, the Company, each of its partners, affiliates, officers, directors, employees
and



6









 




duly authorized agents of such controlling Person (each a “Company Indemnified
Person”) against any Damages to which any Company Indemnified Person may become subject under
the Securities Act, the Exchange Act or otherwise, insofar as such Damages arise out of or are
based upon (a) any untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement, or in any preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement relating to the Registrable Securities or arise out of, or are based upon,
any omission or alleged omission to state therein a material fact required to be stated therein or
necessary to make the statements therein under the circumstances not misleading to the extent that
such violation occurs in reliance upon and in conformity with written information furnished to the
Company by the Investor or on behalf of the Investor expressly for use in connection with such
Registration Statement or (b) any failure by the Investor to comply with prospectus delivery
requirements of the Securities Act, the Exchange Act or any other law or legal requirement
applicable to sales under the Registration Statement.




     Section 3.2. Conduct of Indemnification Proceedings. All claims for indemnification
under Section 3.1 shall be asserted and resolved in accordance with the provisions of Section 9.02
of the Purchase Agreement.



     Section 3.3. Additional Indemnification. Indemnification similar to that specified in
the preceding paragraphs of this Article 3 (with appropriate modifications) shall be given by the
Company and the Investor with respect to any required registration or other qualification of
securities under any federal or state law or regulation of any governmental authority other than
the Securities Act. The provisions of this Article III shall be in addition to any other rights to
indemnification, contribution or other remedies which an Indemnified Party or a Company Indemnified
Person may have pursuant to law, equity, contract or otherwise.



     To the extent that any indemnification provided for herein is prohibited or limited by law,
the indemnifying party will make the maximum contribution with respect to any amounts for which it
would otherwise be liable under this Article III to the fullest extent permitted by law. However,
(a) no contribution will be made under circumstances where maker of such contribution would not
have been required to indemnify the indemnified party under the fault standards set forth in this
Article III, (b) no seller of Registrable Securities guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any
Person who is not guilty of such fraudulent misrepresentation, and (c) contribution (together with
any indemnification obligations under this Agreement) by any seller of Registrable Securities will
be limited in amount to the proceeds received by such seller from the sale of such Registrable
Securities.



ARTICLE IV

MISCELLANEOUS




     Section 4.1. No Outstanding Registration Rights. Except as otherwise disclosed in
accordance with the Purchase Agreement or in the Commission Documents, the Company represents and
warrants to the Investor that there is not in effect on the date hereof any agreement by the
Company pursuant to which any holders of securities of the Company have a right to cause the
Company to register or qualify such securities under the Securities Act or any securities or blue
sky laws of any jurisdiction.



     Section 4.2. Term. The registration rights provided to the holders of Registrable
Securities hereunder, and the Company’s obligation to keep the Registration Statement effective,
shall terminate at the earlier of (i) such time that is two years following the termination of the
Purchase Agreement, (ii) such time as all Registrable Securities have been issued and have ceased
to be Registrable Securities, or (iii) upon the consummation of an “Excluded Merger or Sale” as
defined in the Warrant.
Notwithstanding the foregoing, paragraph (d) of Section 1.1, Article III, Section 4.7, Section
4.8, Section 4.9, Section 4.10 and Section 4.13 shall survive the termination of this Agreement.



7









 





     Section 4.3. Rule 144. The Company will, at its expense, promptly take such action as
holders of Registrable Securities may reasonably request to enable such holders of Registrable
Securities to sell Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by (a) Rule 144 under the Securities Act (“Rule
144”), as such Rule may be amended from time to time, or (b) any similar rule or regulation
hereafter adopted by the Commission. If at any time the Company is not required to file such
reports, it will, at its expense, forthwith upon the written request of any holder of Registrable
Securities, make available adequate current public information with respect to the Company within
the meaning of paragraph (c)(2) of Rule 144 or such other information as necessary to permit sales
pursuant to Rule 144. Upon the request of the Investor, the Company will deliver to the Investor a
written statement, signed by the Company’s principal financial officer, as to whether it has
complied with such requirements.



     Section 4.4. Certificate. The Company will, at its expense, forthwith upon the
request of any holder of Registrable Securities, deliver to such holder a certificate, signed by
the Company’s principal financial officer, stating (a) the Company’s name, address and telephone
number (including area code), (b) the Company’s Internal Revenue Service identification number, (c)
the Company’s Commission file number, (d) the number of shares of each class of Stock outstanding
as shown by the most recent report or statement published by the Company, and (e) whether the
Company has filed the reports required to be filed under the Exchange Act for a period of at least
ninety (90) days prior to the date of such certificate and in addition has filed the most recent
annual report required to be filed thereunder.



     Section 4.5. Amendment And Modification. Any provision of this Agreement may be
waived, provided that such waiver is set forth in a writing executed by both parties to this
Agreement. The provisions of this Agreement, including the provisions of this sentence, may be
amended, modified or supplemented, and waivers or consents to departures from the provisions hereof
may be given, only with the written consent of the Investor and the Company. No course of dealing
between or among any Person having any interest in this Agreement will be deemed effective to
modify, amend or discharge any part of this Agreement or any rights or obligations of any person
under or by reason of this Agreement.



     Section 4.6. Successors and Assigns; Entire Agreement. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. The Company may assign this Agreement at any time in
connection with a sale or acquisition of the Company, whether by merger, consolidation, sale of all
or substantially all of the Company’s assets, or similar transaction, without the consent of the
Investor, provided that the successor or acquiring Person or entity agrees in writing to assume all
of the Company’s rights and obligations under this Agreement. The Investor may assign its rights
and obligations under this Agreement only with the prior written consent of the Company, and any
purported assignment by the Investor absent the Company’s consent shall be null and void. This
Agreement, together with the Purchase Agreement and the Warrant sets forth the entire agreement and
understanding between the parties as to the subject matter hereof and merges and supersedes all
prior discussions, agreements and understandings of any and every nature among them.



     Section 4.7. Severability. In the event that any provision of this Agreement becomes
or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this
Agreement shall continue in full force and effect without said provision; provided that such
severability shall be ineffective if it materially changes the economic benefit of this Agreement
to any party hereto.



8









 





     Section 4.8. Notices. All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be given in accordance with Section 10.04 of
the Purchase Agreement.



     Section 4.9. Governing Law; Dispute Resolution. This Agreement shall be construed
under the laws of the State of New York.



     Section 4.10. Headings. The headings in this Agreement are for convenience of
reference only and shall not constitute a part of this Agreement, nor shall they affect their
meaning, construction or effect.



     Section 4.11. Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be deemed to be an original instrument and all of which together shall
constitute one and the same instrument.



     Section 4.12. Further Assurances. Each party shall cooperate and take such action as
may be reasonably requested by another party in order to carry out the provisions and purposes of
this Agreement and the transactions contemplated hereby.



     Section 4.13. Absence of Presumption. This Agreement shall be construed without
regard to any presumption or rule requiring construction or interpretation against the party
drafting or causing any instrument to be drafted.


[Remainder of this page intentionally left blank]

9









 









     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by the
undersigned, thereunto duly authorized, as of the date first set forth above.



	 	 	 	 	 
	 	 	KINGSBRIDGE CAPITAL LIMITED
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Maria O’Donoghue
	 

	 	 	 	 
	 

	 	 	 	Maria O’Donoghue

Director
	 
	 	 	 	 
	 	 	SANTARUS, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Gerald T. Proehl
	 

	 	 	 	 
	 

	 	 	 	Gerald T. Proehl

President and Chief Executive Officer







10