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EXHIBIT 4.2




REGISTRATION RIGHTS AGREEMENT




REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of November 7, 2007, by and between
MIDDLEBROOK PHARMACEUTICALS, INC., a Delaware corporation (the “Company”), and DEERFIELD PRIVATE
DESIGN FUND, L.P. (“Deerfield Design”), DEERFIELD PRIVATE DESIGN INTERNATIONAL, L.P. (“Deerfield
Design International”), DEERFIELD SPECIAL SITUATIONS FUND, L.P. (“Deerfield Special Situations”),
DEERFIELD SPECIAL SITUATIONS FUND INTERNATIONAL LIMITED (“Deerfield Special Situations
International”).



WHEREAS:




A. In connection with the Asset Purchase Agreement by and between the parties hereto of even date
herewith (the “Purchase Agreement”), the Company has agreed, upon the terms and subject to the
conditions contained therein, to issue and sell to the Buyer a Warrant in the amount described in
the Purchase Agreement, where the Warrant is exercisable into shares of the Company’s common stock,
par value $0.01 per share (the “Common Stock”), upon the terms and conditions and subject
to the limitations and conditions set forth in the Warrant, all subject to the terms and conditions
of the Purchase Agreement; and



B. To induce the Buyer to execute and deliver the Purchase Agreement, the Company has agreed to
provide certain registration rights under the Securities Act of 1933, as amended, and the rules and
regulations thereunder, or any similar successor statute (collectively, the “Securities Act”), and
applicable state securities laws,



NOW, THEREFORE, In consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Buyer hereby agree as follows:



1. DEFINITIONS.




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



(i) “Buyer” means the purchaser of Warrant pursuant to the Purchase Agreement specified on the
signature page hereof, and any transferee or assignee who agrees to become bound by the provisions
of this Agreement in accordance with Section 10 hereof.



(ii) “Filing Deadline,” for each Registration Statement required to be filed hereunder, shall mean
a date that is twenty (20) calendar days following the date the Warrant is issued.



(iii) “Registration Deadline” shall mean the earlier of (i) the date that is ninety (90) days after
the date that the Registration Statement is actually filed or (ii) the date that is ninety (90)
days after the Filing Deadline.



(iv) “Warrant(s)” means the warrants issued by the Company pursuant to the Purchase Agreement.



(v) “Register,” “Registered,” and “Registration” refer to a registration effected by preparing and
filing a Registration Statement or Statements in compliance with the Securities Act and pursuant to
Rule 415 under the Securities Act or any successor rule providing for offering securities on a
continuous basis, and the declaration or ordering of effectiveness of such Registration Statement
by the United States Securities and Exchange Commission (the “SEC”).



(vi) “Registrable Securities,” for a given Registration, means (a) the Warrant, (b) any shares of
Common Stock (the “Warrant Shares”) issued or issuable upon exercise of or otherwise pursuant to
the Warrant, (c) any shares of capital stock issued or issuable as a dividend on or in exchange for
or otherwise with respect to any of the foregoing, (d) any additional shares of Common Stock
issuable in connection with any anti-dilution provisions in the Warrant (without giving effect to
any limitations on exercise set forth in the Warrant), (e) any other warrants or shares of common
stock issued pursuant to the terms of the Purchase Agreement, the Warrant or this Registration
Rights Agreement, and (f) any securities issued or issuable upon any stock split, dividend or other
distribution, recapitalization or similar event with respect to the foregoing.



 









 





(vii) “Registration Statement(s)” means a registration statement(s) of the Company under the
Securities Act required to be filed hereunder.



2. REGISTRATION.




a. MANDATORY REGISTRATION. Following the issuance of the Warrant pursuant to the Purchase
Agreement, the Company shall prepare, and, on or prior to the applicable Filing Deadline (as
defined above) file with the SEC a Registration Statement (the “Mandatory Registration Statement”)
on Form S-3 (or, if Form S-3 is not then available, on such form of Registration Statement as is
then available to effect a registration of the Registrable Securities, subject to the consent of
the Buyer, which consent will not be unreasonably withheld) covering the resale of the Registrable
Securities issued on the applicable Issuance Date (as defined below) which Registration Statement,
to the extent allowable under the Securities Act and the rules and regulations promulgated
thereunder (including Rule 416), shall state that such Registration Statement also covers such
indeterminate number of additional shares of Common Stock as may become issuable upon exercise of
or otherwise pursuant to the Warrant to prevent dilution resulting from stock splits, stock
dividends or similar transactions. The Warrant and the number of shares of Common Stock initially
included in such Registration Statement shall be no less than the Warrant issued on the Issuance
Date (as defined herein) and the aggregate number of Warrant Shares that are then issuable upon
exercise of or otherwise pursuant to the Warrant issued on the Issuance Date, without regard to any
limitation on the Buyer’s ability to exercise the Warrant, respectively. The Company acknowledges
that the number of shares initially included in the Registration Statement represents a good faith
estimate of the maximum number of shares issuable upon exercise of or otherwise pursuant to the
Warrant issued on the Issuance Date and shall be amended if not sufficient. The Registration
Statement (and each amendment or supplement thereto, and each request for acceleration of
effectiveness thereof) shall be provided to (and subject to the approval of) the Buyer and its
counsel prior to its filing or other submission.



b. PIGGY-BACK REGISTRATIONS. If at any time prior to the expiration of the Registration Period (as
hereinafter defined) the Company shall determine to file with the SEC a Registration Statement
relating to an offering for its own account or the account of others under the Securities Act of
any of its equity securities (other than on Form S-4 or Form S-8 or their then equivalents relating
to equity securities to be issued solely in connection with any acquisition of any entity or
business or equity securities issuable in connection with stock option or other employee benefit
plans), the Company shall send to Buyer written notice of such determination and, if within fifteen
(15) days after the effective date of such notice, the Buyer shall so request in writing, the
Company shall include in such Registration Statement all or any part of the Registrable Securities
the Buyer requests to be registered, except that if, in connection with any underwritten public
offering for the account of the Company, the managing underwriter(s) thereof shall impose a
limitation on the number of Registrable Securities which may be included in the Registration
Statement because, in such underwriter(s)’ judgment, marketing or other factors dictate such
limitation is necessary to facilitate public distribution, then the Company shall be obligated to
include in such Registration Statement only such limited portion of the Registrable Securities with
respect to which the Buyer has requested inclusion hereunder as the underwriter shall permit;



PROVIDED, HOWEVER, that the Company shall not exclude any Registrable Securities unless the Company
has first excluded all outstanding securities, the holders of which are not entitled by contract to
inclusion of such securities in such Registration Statement or are not entitled to pro rata
inclusion with the Registrable Securities; and



PROVIDED, FURTHER, HOWEVER, that, after giving effect to the immediately preceding proviso, any
exclusion of Registrable Securities shall be made pro rata with holders of other securities having
the contractual right to include such securities in the Registration Statement other than holders
of securities entitled to inclusion of their securities in such Registration Statement by reason of
demand registration rights. No right to registration of Registrable Securities under this Section
2(b) shall be construed to limit any registration required under Section 2(a) hereof. If an
offering in connection with which the Buyer is entitled to registration under this Section 2(b) is
an underwritten offering, then the Buyer shall, unless otherwise agreed by the Company, offer and
sell such Registrable Securities in an underwritten offering using the same underwriter or
underwriters and, subject to the provisions of this Agreement, on the same terms and conditions as
other shares of Common Stock included in such underwritten offering. Notwithstanding anything to
the contrary set forth herein, the registration rights of the Buyer pursuant to this Section 2(b)
shall only be available in the event the Company fails to timely file, obtain effectiveness or



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maintain effectiveness of any Registration Statement to be filed pursuant to Section 2(a) in
accordance with the
terms of this Agreement.



3. OBLIGATIONS OF THE COMPANY. In connection with the registration of the Registrable Securities,
the Company shall have the following obligations:



a. The Company shall prepare promptly, and file with the SEC as soon as practicable after the date
that the Warrant is issued under the Purchase Agreement (an “Issuance Date”) (but no later than the
Filing Deadline), a Registration Statement with respect to the number of Registrable Securities
provided in Section 2(a), and thereafter use its best efforts to cause each such Registration
Statement relating to Registrable Securities to become effective as soon as possible after such
filing, but in any event shall cause each such Registration Statement relating to Registrable
Securities to become effective no later than the Registration Deadline, and shall keep the
Registration Statement current and effective pursuant to Rule 415 at all times until such date as
is the earlier of (i) the date on which all of the Registrable Securities for such Registration
Statement have been sold and (ii) the date on which all of the Registrable Securities for such
Registration Statement (in the opinion of counsel to the Buyer) may be immediately sold to the
public without registration or restriction (including without limitation as to volume by each
holder thereof) under the Securities Act (the “Registration Period”), which Registration Statement
(including any amendments or supplements thereto and prospectuses contained therein) shall not
contain any untrue statement of a material fact or omit to state a material fact required to be
stated therein, or necessary to make the statements therein not misleading.



b. The Company shall prepare and file with the SEC such amendments (including post-effective
amendments) and supplements to the Registration Statement and the prospectus used in connection
with the Registration Statement as may be necessary to keep the Registration Statement current and
effective at all times during the Registration Period, and, during such period, comply with the
provisions of the Securities Act with respect to the disposition of all Registrable Securities of
the Company covered by the Registration Statement until such time as all of such Registrable
Securities have been disposed of in accordance with the intended methods of disposition by the
seller or sellers thereof as set forth in the Registration Statement. In the event that on any
Trading Day (as defined below) (the “Registration Trigger Date”) the number of shares available
under the Registration Statements filed pursuant to this Agreement is insufficient to cover all of
the Registrable Securities issued or issuable upon exercise of or otherwise pursuant to the
Warrant, without giving effect to any limitations on the Buyer’ ability to exercise the Warrant,
the Company shall amend the Registration Statements, or file a new Registration Statement (on the
short form available therefore, if applicable), or both, so as to cover the total number of
Registrable Securities so issued or issuable (without giving effect to any limitations on exercise
contained in the Warrant or limitations on conversion or exercise) as of the Registration Trigger
Date as soon as practicable, but in any event within twenty (20) days after the Registration
Trigger Date (based on the Exercise Price (as defined in the Warrant) of the Warrant, and other
relevant factors on which the Company reasonably elects to rely). The Company shall use its best
efforts to cause such amendment and/or new Registration Statement to become effective as soon as
practicable following the filing thereof, but in any event the Company shall cause such amendment
and/or new Registration Statement to become effective within sixty (60) days of the Registration
Trigger Date or as promptly as practicable in the event the Company is required to increase its
authorized shares. “Trading Day” shall mean any day on which the Common Sock is traded for any
period on the NASDAQ Global Market, or on the principal securities exchange or other securities
market on which the Common Stock is then being traded.



c. The Company shall furnish to the Buyer and its legal counsel (i) promptly after the same is
prepared and publicly distributed, filed with the SEC, or received by the Company, one copy of the
Registration Statement and any amendment thereto, each preliminary prospectus and prospectus and
each amendment or supplement thereto, and, in the case of a Registration Statement referred to in
Section 2(a), each letter written by or on behalf of the Company to the SEC or the staff of the
SEC, and each item of correspondence from the SEC or the staff of the SEC, in each case relating to
such Registration Statement (other than any portion of any thereof which contains information for
which the Company has sought confidential treatment), and (ii) such number of copies of a
prospectus, including a preliminary prospectus, and all amendments and supplements thereto and such
other documents as the Buyer may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by the Buyer. The Company will immediately notify the Buyer by
facsimile of the effectiveness of each Registration Statement or any post-effective amendment. The
Company will promptly respond to any and all comments received from the SEC, with a view towards
causing each Registration Statement or any amendment thereto to be declared effective by the



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SEC as
soon as practicable and shall file an acceleration request as soon as practicable, but no later
than three (3)business days, following the resolution or clearance of all SEC comments or, if applicable,
following notification by the SEC that any such Registration Statement or any amendment thereto
will not be subject to review.



d. The Company shall use best efforts to (i) register and qualify the Registrable Securities
covered by the Registration Statements under such other securities or “blue sky” laws of such
jurisdictions in the United States as the Buyer shall reasonably request, (ii) prepare and file in
those jurisdictions such amendments (including post-effective amendments) and supplements to such
registrations and qualifications as may be necessary to maintain the effectiveness thereof during
the Registration Period, (iii) take such other actions as may be necessary to maintain such
registrations and qualifications in effect at all times during the Registration Period, and (iv)
take all other actions reasonably necessary or advisable to qualify the Registrable Securities for
sale in such jurisdictions.



e. As promptly as practicable after becoming aware of such event, the Company shall notify the
Buyer of the happening of any event, of which the Company has knowledge, as a result of which the
prospectus included in the Registration Statement, as then in effect, includes an untrue statement
of a material fact or omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and use its best efforts promptly to prepare a
supplement or amendment to the Registration Statement to correct such untrue statement or omission,
and deliver such number of copies of such supplement or amendment to the Buyer as the Buyer may
reasonably request.



f. The Company shall use its best efforts to prevent the issuance of any stop order or other
suspension of effectiveness of the Registration Statement, and, if such an order is issued, to
obtain the withdrawal of such order and to notify the Buyer who holds Registrable Securities being
sold (or, in the event of an underwritten offering, the managing underwriters) of the issuance of
such order and the resolution thereof.



g. The Company shall permit a single firm of counsel designated by the Buyer to review such
Registration Statement and all amendments and supplements thereto, at Buyer’s own cost, three
business days prior to their filing with the SEC and will not file any document in a form to which
such counsel reasonably objects and will not request acceleration of such Registration Statement
without prior notice to such counsel.



h. The Company shall hold in confidence and not make any disclosure of information concerning the
Buyer provided to the Company unless (i) disclosure of such information is necessary to comply with
federal or state securities laws, (ii) the disclosure of such information is necessary to avoid or
correct a misstatement or omission in any Registration Statement, (iii) the release of such
information is ordered pursuant to a subpoena or other order from a court or governmental body of
competent jurisdiction, or (iv) such information has been made generally available to the public
other than by disclosure in violation of this or any other agreement. The Company agrees that it
shall, upon learning that disclosure of such information concerning the Buyer is sought in or by a
court or governmental body of competent jurisdiction or through other means, give prompt notice to
the Buyer prior to making such disclosure, and allow the Buyer, at its expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order for, such information.



i. The Company shall use its best efforts to cause all the Registrable Securities covered by the
Registration Statement to be listed on each securities exchange on which securities of the same
class or series issued by the Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange, and, if listed on a national
exchange, to arrange for at least two market makers to register with the National Association of
Securities Dealers, Inc. (“NASD”) as such with respect to such Registrable Securities.



j. The Company shall provide a transfer agent and registrar, which may be a single entity, for the
Registrable Securities not later than the effective date of the Registration Statement.



k. The Company shall cooperate with the Buyer who holds Registrable Securities being offered and
the managing underwriter or underwriters with respect to a Registration Statement, if any, to
facilitate the timely preparation and delivery of certificates (not bearing any restrictive
legends) representing Registrable Securities to be offered pursuant to such Registration Statement
and enable such certificates to be in such denominations or amounts, as the case may be, as the
managing underwriter or underwriters, if any, or the Buyer may reasonably request and registered in
such names as the managing underwriter or underwriters, if any, or the Buyer may request, and,
within



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three (3) business days after a Registration Statement which includes Registrable Securities
is ordered effective by
the SEC, the Company shall deliver, and shall cause legal counsel selected by the Company to
deliver, to the transfer agent for the Registrable Securities (with copies to the Buyer) an
appropriate instruction and an opinion of such counsel in the form required by the transfer agent
in order to issue the Registrable Securities free of restrictive legends.



l. At the request of the Buyer, the Company shall prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to a Registration Statement and any
prospectus used in connection with the Registration Statement as may be necessary in order to
change the plan of distribution set forth in such Registration Statement.



m. The Company shall not, and shall not agree to, allow the holders of any securities of the
Company to include any of their securities in a Registration Statement under Section 2(a) hereof or
any amendment or supplement thereto under Section 3(b) hereof without the consent of the Buyer,
except for such holders to whom the Company has previously granted such participation rights. In
addition, the Company shall not offer any securities for its own account or the account of others
in a Registration Statement under Section 2(a) hereof or any amendment or supplement thereto under
Section 3(b) hereof without the consent of the Buyer.



n. The Company shall take all other reasonable actions necessary to expedite and facilitate
disposition by the Buyer of Registrable Securities pursuant to a Registration Statement.



o. The Company shall comply with all applicable laws related to a Registration Statement and
offering and sale of securities and all applicable rules and regulations of governmental
authorities in connection therewith (including without limitation the Securities Act and the
Exchange Act and the rules and regulations promulgated by the SEC).



p. NASD Rule 2710 Filing; Broker Compensation. If required by the National Association of
Securities Dealers, Inc. Corporate Financing Department, the Company shall promptly effect a filing
with the NASD pursuant to NASD Rule 2710 with respect to the public offering contemplated by
resales of securities under the Registration Statement (an “Issuer Filing”), and pay the filing fee
required by such Issuer Filing. The Company shall use commercially reasonable efforts to pursue the
Issuer Filing until the NASD issues a letter confirming that it does not object to the terms of the
offering contemplated by the Registration Statement.



4. OBLIGATIONS OF THE BUYER. In connection with the registration of the Registrable Securities, the
Buyer shall have the following obligations:



a. It shall be a condition precedent to the obligations of the Company to complete the registration
pursuant to this Agreement with respect to the Registrable Securities of the Buyer that the Buyer
shall furnish to the Company such information regarding itself, the Registrable Securities held by
it and the intended method of disposition of the Registrable Securities held by it as shall be
reasonably required to effect the registration of such Registrable Securities and shall execute
such documents in connection with such registration as the Company may reasonably request. At least
five (5) business days prior to the first anticipated filing date of the Registration Statement,
the Company shall notify the Buyer of the information the Company requires from each Buyer.



b. The Buyer, by the Buyer’s acceptance of the Registrable Securities, agrees to cooperate with the
Company as reasonably requested by the Company in connection with the preparation and filing of a
Registration Statement hereunder, unless the Buyer has notified the Company in writing of the
Buyer’s election to exclude all of the Buyer’s Registrable Securities from such Registration
Statement.



c. In the event of an underwritten offering pursuant to Section 2(b) in which any Registrable
Securities are to be included, the Buyer agrees to enter into and perform the Buyer’s obligations
under an underwriting agreement, in usual and customary form, including, without limitation,
customary indemnification and contribution obligations, with the managing underwriter of such
offering and take such other actions as are reasonably required in order to expedite or facilitate
the disposition of the Registrable Securities, unless the Buyer has notified the Company in writing
of the Buyer’s election to exclude all of the Buyer’s Registrable Securities from such Registration
Statement.



d. The Buyer agrees that, upon receipt of any notice from the Company of the happening of any event
of the kind



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described in Section 3(e) or 3(f), the Buyer will immediately discontinue disposition
of Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities until the Buyer’s
receipt of the copies of the supplemented or amended prospectus contemplated by Section 3(e) or
3(f) and, if so directed by the Company, the Buyer shall 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
Buyer’s possession, of the prospectus covering such Registrable Securities current at the time of
receipt of such notice.



5. REGISTRATION FAILURE. In the event of a Registration Failure (as defined in the Warrant), the
Buyer shall be entitled to Failure Payments (as defined in the Warrant) and such other rights as
set forth in the Warrant.



6. EXPENSES OF REGISTRATION. All reasonable expenses, other than underwriting discounts and
commissions, incurred in connection with registrations, filings or qualifications pursuant to
Sections 2 and 3, including, without limitation, all registration, listing and qualification fees,
printers and accounting fees, and the fees and disbursements of counsel for the Company shall be
borne by the Company.



7. INDEMNIFICATION. In the event any Registrable Securities are included in a Registration
Statement under this Agreement:



a. The Company will indemnify, hold harmless and defend (i) the Buyer, (ii) the directors,
officers, partners, managers, members, employees, agents and each person who controls any Buyer
within the meaning of the Securities Act or the Exchange Act, if any, (iii) any underwriter (as
defined in the Securities Act) for the Buyer in connection with an underwritten offering pursuant
to Section 2(b) hereof, and (iv) the directors, officers, partners, employees and each person who
controls any such underwriter within the meaning of the Securities Act or the Exchange Act, if any
(each, an “Indemnified Person”), against any joint or several losses, claims, damages, liabilities
or expenses (collectively, together with actions, proceedings or inquiries by any regulatory or
self-regulatory organization, whether commenced or threatened, in respect thereof, “Claims”) to
which any of them may become subject insofar as such Claims arise out of or are based upon: (i) any
untrue statement or alleged untrue statement of a material fact in a Registration Statement or the
omission or alleged omission to state therein a material fact required to be stated or necessary to
make the statements therein not misleading; (ii) any untrue statement or alleged untrue statement
of a material fact contained in any preliminary prospectus if used prior to the effective date of
such Registration Statement, or contained in the final prospectus (as amended or supplemented, if
the Company files any amendment thereof or supplement thereto with the SEC) or the omission or
alleged omission to state therein any material fact necessary to make the statements made therein,
in light of the circumstances under which the statements therein were made, not misleading; or
(iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act,
any other law, including, without limitation, any state securities law, or any rule or regulation
thereunder relating to the offer or sale of the Registrable Securities (the matters in the
foregoing clauses (i) through (iii) being, collectively, “Violations”). The Company shall reimburse
the Indemnified Person, promptly as such expenses are incurred and are due and payable, for any
reasonable legal fees or other reasonable expenses incurred by them in connection with
investigating or defending any such Claim. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 7(a) shall not apply to a Claim
arising out of or based upon a Violation to the extent that such Violation occurs in reliance upon
and in conformity with information furnished in writing to the Company by any Indemnified Person
for use in connection with the preparation of such Registration Statement or any such amendment
thereof or supplement thereto. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of the Indemnified Person and shall survive the transfer of
the Registrable Securities by the Buyer pursuant to Section 10.



b. Promptly after receipt by an Indemnified Person under this Section 7 of notice of the
commencement of any action (including any governmental action), such Indemnified Person shall, if a
Claim in respect thereof is to be made against the Company under this Section 7, deliver to the
Company a written notice of the commencement thereof, and the Company shall have the right to
participate in, and, to the extent the Company so desires, to assume control of the defense thereof
with counsel mutually satisfactory to the Company and the Indemnified Person, as the case may be.



PROVIDED, HOWEVER, that an Indemnified Person shall have the right to retain its own counsel with
the reasonable fees and expenses to be paid by the Company, if, in the reasonable opinion of
counsel for the Buyer, the representation by such counsel of the Indemnified Person and the Company
would be inappropriate due to actual or



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potential differing interests between such Indemnified
Person and any other party represented by such counsel in
such proceeding. The Company shall pay for only one separate legal counsel for the Indemnified
Persons, and such legal counsel shall be selected by Buyer. The failure to deliver written notice
to the Company within a reasonable time of the commencement of any such action shall not relieve
the Company of any liability to the Indemnified Person under this Section 7, except to the extent
that the Company is actually prejudiced in its ability to defend such action. The indemnification
required by this Section 7 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as such expense, loss, damage or liability is incurred and
is due and payable.



d. To the extent permitted by law, the Buyer will indemnify, hold harmless and defend (i) the
Company, and (ii) the directors, officers, partners, managers, members, employees, or agents of the
Company, if any (each, a “Company Indemnified Person”), against any losses, claims, damages or
liabilities to which the Company or any Company Indemnified Person may become subject to, under the
Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereto) arise out of or are based upon any untrue or alleged untrue statement of any
material fact contained in a Registration Statement or any preliminary prospectus or final
prospectus, relating thereto or in any amendments or supplements to a Registration Statement or any
such preliminary prospectus or final prospectus, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent and only to the extent that
such untrue statement or alleged untrue statement or omission or alleged omission (i) was made in a
Registration Statement, in any preliminary prospectus or final prospectus relating thereto or in
any amendments or supplements to a Registration Statement or any such preliminary prospectus or
final prospectus, and was furnished by the Buyer expressly for use in connection with a
Registration Statement, or any preliminary prospectus or final prospectus, or (ii) was corrected in
any subsequent amendment or supplement to the Registration Statement or prospectus (whether
preliminary or final) that was delivered to the Buyer before the pertinent sale or sales by the
Buyer, such corrected amendment or supplement to the Registration Statement or prospectus was not
delivered to the purchaser and the timely delivery of such amendment or supplement would have
constituted a complete defense to the claim asserted; and the Buyer will reimburse any legal or
other expenses reasonably incurred by the Company or any Company Indemnified Party in connection
with investigating or defending any such loss, claim, damage, liability or action.



8. CONTRIBUTION. To the extent any indemnification by the Company is prohibited or limited by law,
the Company agrees to make the maximum contribution with respect to any amounts for which it would
otherwise be liable under Section 7 to the fullest extent permitted by law, based upon a
comparative fault standard.



9. REPORTS UNDER THE 1934 ACT. With a view to making available to the Buyer the benefits of Rule
144 promulgated under the Securities Act or any other similar rule or regulation of the SEC that
may at any time permit the Buyer to sell securities of the Company to the public without
registration the Company agrees to:



a. make and keep public information available, as those terms are understood and defined in Rule
144;



b. file with the SEC in a timely manner all reports and other documents required of the Company
under the Securities Act and the Exchange Act so long as the Company remains subject to such
requirements and the filing of such reports and other documents is required for the applicable
provisions of Rule 144; and



c. furnish to the Buyer so long as the Buyer owns Registrable Securities, promptly upon request,
(i) a written statement by the Company that it has complied with the reporting requirements of the
Securities Act and the Exchange Act as required for applicable provisions of Rule 144, (ii) a copy
of the most recent annual or quarterly report of the Company and such other reports and documents
so filed by the Company, and (iii) such other information as may be reasonably requested to permit
the Buyers to sell such securities pursuant to Rule 144 without registration.



10. ASSIGNMENT OF REGISTRATION RIGHTS. The rights under this Agreement shall be automatically
assignable by the Buyers to any transferee of all or any portion of the Registrable Securities if:
(i) the Buyer agrees in writing with the transferee or assignee to assign such rights, and a copy
of such agreement is furnished to the Company within a reasonable time after such assignment, (ii)
the Company is, within a reasonable time after such transfer or assignment, furnished with written
notice of (a) the name and address of such transferee or assignee, and



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(b) the securities with
respect to which such registration rights are being transferred or assigned, and (iii) at or before
the time the Company receives the written notice contemplated by clause (ii) of this sentence, the
transferee or assignee agrees in writing with the Company to be bound by all of the provisions
contained herein. [In the event that the Buyer transfers all or any portion of its Registrable
Securities pursuant to this Section, the Company shall have at least ten (10) days to file any
amendments or supplements necessary to keep the Registration Statement current and effective
pursuant to Rule 415, and the commencement date of any Event of Failure (as defined in the Warrant)
or Event of Default (as defined in the Warrant) under the Warrant caused thereby will be extended
by ten (10) days.]



11. AMENDMENT OF REGISTRATION RIGHTS. Provisions of this Agreement may be amended and the
observance thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with written consent of the Company and the Buyer (to the
extent such Buyer still owns Registrable Securities). Any amendment or waiver effected in
accordance with this Section 11 shall be binding upon the Buyer and the Company.



12. MISCELLANEOUS.




a. A person or entity is deemed to be a holder of Registrable Securities whenever such person or
entity owns of record or beneficially through a “street name” holder such Registrable Securities.
If the Company receives conflicting instructions, notices or elections from two or more persons or
entities with respect to the same Registrable Securities, the Company shall act upon the basis of
instructions, notice or election received from the registered owner of such Registrable Securities.



b. Any notices required or permitted to be given under the terms hereof shall be sent by certified
or registered mail (return receipt requested) or delivered personally or by courier (including a
recognized overnight delivery service) or by facsimile and shall be effective five days after being
placed in the mail, if mailed by regular United States mail, or upon receipt, if delivered
personally or by courier (including a recognized overnight delivery service) or by facsimile, in
each case addressed to a party. The addresses for such communications shall be:



If to the Company:




MiddleBrook Pharmaceuticals, Inc.

20425 Seneca Meadows Parkway

Germantown, MD 20876

Fax: (301) 944-6700

Attn: Edward M. Rudnic




With copy to:

Dewey & LeBoeuf LLP

1301 Avenue of the Americas

New York, New York 10019

Fax: (212) 359-6333

Attn: Frederick W. Kanner




If to a Buyer:




c/o Deerfield Capital, L.P.

780 Third Avenue, 37th Floor

New York, New York 10017

Fax: (212) 599-1248

Attn: Alexander Karnal




With a copy to:




Katten Muchin Rosenman LLP

575 Madison Avenue

New York, New York 10022




Fax: (212) 940-8776




Attn: Elliot Press, Esq.



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Each party shall provide notice to the other party of any change in address.



c. Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay
by a party in exercising such right or remedy, shall not operate as a waiver thereof.



d. Governing Law. All questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by and construed and enforced in accordance with
the internal laws of the State of New York, without regard to the principles of conflicts of law
thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement (whether brought against a party
hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall
be commenced exclusively in the state and federal courts sitting in the City of New York. Each
party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts
sitting in the City of New York, borough of Manhattan for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that such suit, action or
proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby
irrevocably waives personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight
delivery (with evidence of delivery) to such party at the address in effect for notices to it under
this Agreement and agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve
process in any other manner permitted by law. The parties hereby waive all rights to a trial by
jury. If either party shall commence an action or proceeding to enforce any provisions of the this
Agreement, then the prevailing party in such action or proceeding shall be reimbursed by the other
party for its reasonable attorneys’ fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such action or proceeding.



e. This Agreement, the Warrant and the Purchase Agreement (including all schedules and exhibits
thereto) constitute the entire agreement among the parties hereto with respect to the subject
matter hereof and thereof. There are no restrictions, promises, warranties or undertakings, other
than those set forth or referred to herein and therein. This Agreement, the Warrant and the
Purchase Agreement supersede all prior agreements and understandings among the parties hereto with
respect to the subject matter hereof and thereof.



f. Subject to the requirements of Section 10 hereof, this Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties hereto.



g. The headings in this Agreement are for convenience of reference only and shall not limit or
otherwise affect the meaning hereof.



h. This Agreement may be executed in two or more counterparts, each of which shall be deemed an
original but all of which shall constitute one and the same agreement. This Agreement, once
executed by a party, may be delivered to the other party hereto by facsimile transmission of a copy
of this Agreement bearing the signature of the party so delivering this Agreement.



i. Each party shall do and perform, or cause to be done and performed, all such further acts and
things, and shall execute and deliver all such other agreements, certificates, instruments and
documents, as the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.



j. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable
harm to the Buyer by vitiating the intent and purpose of the transactions contemplated hereby.
Accordingly, the Company acknowledges that the remedy at law for breach of its obligations
hereunder will be inadequate and agrees, in the event of a breach or threatened breach by the
Company of any of the provisions hereunder, that the Buyer shall be



9









 






entitled, in addition to all
other available remedies in law or in equity, to an injunction or injunctions to prevent or
cure breaches of the provisions of this Agreement and to enforce specifically the terms and
provisions hereof, without the necessity of showing economic loss and without any bond or other
security being required.



k. The language used in this Agreement will be deemed to be the language chosen by the parties to
express their mutual intent, and no rules of strict construction will be applied against any party.



l. In the event that any provision of this Agreement is invalid or unenforceable under any
applicable statute or rule of law, then such provision shall be deemed inoperative to the extent
that it may conflict therewith and shall be deemed modified to conform with such statute or rule of
law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect
the validity or enforceability of any other provision hereof.



m. In the event a Buyer shall sell or otherwise transfer any of such holder’s Registrable
Securities, each transferee shall be allocated a pro rata portion of the number of Registrable
Securities included in a Registration Statement for such transferor.



n. There shall be no oral modifications or amendments to this Agreement. This Agreement may be
modified or amended only in writing.



Remainder of page left intentionally blank.




Signature page follows.




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IN WITNESS WHEREOF, the undersigned Buyer and the Company have caused this Agreement to be duly
executed as of the 7th day of November, 2007.



	 	 	 	 	 	 	 	 	 	 	 
	COMPANY:	 	 	 	BUYER:	 	 
	MIDDLEBROOK PHARMACEUTICALS, INC.	 	 	 	DEERFIELD PRIVATE DESIGN FUND, L.P.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Edward M. Rudnic
	 	 	 	By:
	 	/s/ James Flynn	 	 
	 

	 	 

Name: Edward M. Rudnic, Ph.D.
	 	 	 	 	 	 

Name: James Flynn
	 	 
	 

	 	Title: President and Chief
Executive Officer
	 	 	 	 	 	Title: General Partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	DEERFIELD PRIVATE DESIGN INTERNATIONAL, L.P.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ James Flynn	 	 
	 

	 	 	 	 	 	 	 	 

Name: James Flynn
	 	 
	 

	 	 	 	 	 	 	 	Title: General Partner	 	 
	 
	 	 	 	 	 	 	DEERFIELD SPECIAL SITUATIONS FUND, L.P.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ James Flynn	 	 
	 

	 	 	 	 	 	 	 	 

Name: James Flynn
	 	 
	 

	 	 	 	 	 	 	 	Title: General Partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	DEERFIELD SPECIAL SITUATIONS FUND	 	 
	 	 	 	 	 	 	INTERNATIONAL LIMITED	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ James Flynn	 	 
	 

	 	 	 	 	 	 	 	 

Name: James Flynn
	 	 
	 

	 	 	 	 	 	 	 	Title: General Partner	 	 







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