Exhibit 10.2


 


Execution Copy


 


REGISTRATION
RIGHTS AGREEMENT


 


This REGISTRATION RIGHTS AGREEMENT (this “Agreement”),
dated as of December 15, 2008, is by and between BIOSANTE PHARMACEUTICALS
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 $25 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, in
accordance with its terms, 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 300,000 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 an initial registration statement on Form S-3 under the
Securities Act or such other form as deemed appropriate by counsel to the
Company and reasonably acceptable to the Investor for the registration for the
resale by the Investor of Registrable Securities in an amount not to exceed
19.99% of the shares of Common Stock outstanding on the date hereof (the “Registration
Statement”) for the registration for the resale by the Investor of Registrable
Securities in an amount not to exceed 19.99% of the shares of Common Stock
outstanding on the date hereof (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


 


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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 from (i) the
failure of the Investor to timely provide the Company with information
requested by the Company and necessary to complete the Registration Statement
in accordance with the requirements of the Securities Act or (ii) the
Commission’s disapproval of the structure of the transactions contemplated by
the Purchase Agreement, or (iii) events or circumstances that are not in
any way attributable to the Company.  In
the event of clause (ii) above, 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”), and provided that such failure to maintain effectiveness was
within the reasonable control of the Company, the Company shall pay on demand
to the Investor in immediately available funds into an account designated by
the Investor an amount equal to the product of (i) the total number of
Registrable Securities issued to the Investor under the Purchase Agreement
(which, for the avoidance of doubt, shall not include any Warrant Shares) and
owned by the Investor at any time during such Ineffective Period (and not
otherwise sold, hypothecated or transferred) and (ii) 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, that (A) the foregoing
payments shall not apply in respect of Registrable Securities (I) that are
otherwise freely tradable by the Investor, including pursuant to Rule 144
under the Securities Act (as such Rule may be amended from time to time, “Rule 144”)
or (II) if the Company offers to repurchase from the Investor such
Registrable Securities for a per share purchase price equal to the VWAP on the
Trading Day immediately preceding the day on which any such Ineffective Period
began and (B) unless otherwise required by any applicable federal and
state securities laws, 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 first Trading Day following the Settlement Date with
respect to such Shares and that the failure to supplement the Prospectus prior
to such time 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 or incorporate by reference in
the Registration Statement and which the Company has not


 


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disclosed,
or 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
affect 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 the filing of the Registration
Statement 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) one hundred percent (100%) if such
Blackout Notice is delivered prior to the fifth (5th) Trading Day following
such Settlement Date; (2) seventy-five percent (75%) 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) fifty percent (50%) 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, obtained by
subtracting the New VWAP from the Old VWAP; provided, however,
that no Blackout Amount shall be payable in respect of Registrable Securities (x) that
are otherwise freely tradable by the Investor, including under Rule 144,
during the Blackout Period or (y) if the Company offers to repurchase from
the Investor such Registrable Securities for a per share purchase price equal
to the VWAP on the Trading Day immediately preceding the day on which any such
Blackout Period began.  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”); provided that the Investor may
sell such Blackout Shares pursuant to an effective Registration Statement.


 


(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 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


 


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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. 
The Investor agrees that, so long as the Company makes the payments or
deliveries provided for in Sections 1.1(d) or 1.1(e), as applicable, the
Company’s failure to maintain the effectiveness, deferral or suspension of the
Registration Statement that triggered such payments or deliveries shall not
constitute a material breach or default of any obligation of the Company to the
Investor and such payments or deliveries shall constitute the Investor’s sole
remedies with respect thereto.


 


(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
Warrant Shares to be issued, sold and purchased under 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 is commercially
reasonable, 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 in all
material respects 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 first 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


 


4

















 


in
the Registration Statement and otherwise in compliance with applicable federal
and state securities laws.


 


(b)        The
Company shall deliver to the Investor and its counsel, in accordance with the
notice provisions of Section 4.8, such number of copies of the
Registration Statement, each amendment and supplement thereto (to the extent
related to the resale of the Registrable Securities and in each such case
including all exhibits thereto), the Prospectus (including each preliminary
prospectus, and in each case to the extent related to the resale of the
Registrable Securities) 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, to the Knowledge of the Company, 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 sale of the Registrable Securities by the Investor 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 sale of the Registrable Securities by the
Investor 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(d), 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 (i) shall make available to the Investor (and will deliver to the
Investor’s counsel), 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 (to the extent relevant to the resale of the Registrable
Securities) and (ii) will also make available for inspection by the
Investor and any attorney, accountant or other professional retained by the
Investor and reasonably acceptable to the Company (collectively, the “Inspectors”), 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 (x) the Company shall not be obligated to disclose any portion of the
Records consisting of either (A) material non public information or (B) confidential
information of a third party and (y) 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(e). 
Records that the Company determines, in good faith, to be


 


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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 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 or any Inspector 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 or any Inspector 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 in all material respects 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 (or shall have appointed) a transfer agent and registrar
for all of the Common Stock 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,
the NASDAQ Stock Market or FINRA 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, or incur any penalties under this
Agreement with respect to, any delays in obtaining or maintaining the
effectiveness of the Registration Statement caused by the Investor’s failure to
timely provide such information.


 


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(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.  Except as set forth in Section 10.1
of the Purchase Agreement, the Company shall pay all registration expenses
incurred in connection with the Registration Statement (the “Registration
Expenses”), including, without limitation: (a) all registration,
filing, securities exchange listing and fees required by the NASDAQ Stock
Market, (b) 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), (c) all of the Company’s word processing,
duplicating, printing, messenger and delivery expenses, (d) the Company’s
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), (e) the
fees and expenses incurred by the Company in connection with the listing of the
Registrable Securities, (f) 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), (g) 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 (h) premiums
and other costs of the Company for policies of insurance against liabilities of
the Company arising out of any public offering of the Registrable Securities
being registered, to the extent that the Company in its discretion elects to
obtain and maintain such insurance.  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
the holders of Registrable Securities 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


 


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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) (i) 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 or (ii) written confirmation of the
sale of Registrable Securities purchased in any specific Draw Down prior to the
filing of a supplement to the Prospectus to reflect such Draw Down (provided
the Company is in compliance with its covenants with respect to the filing of
such 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, the 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 duly authorized agents, and each Person or entity, if any, who controls the
Company 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 (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 the Securities Act, the Exchange Act or any other law
or legal


 


8

















 


requirement applicable to sales under the
Registration Statement, or (c) a written confirmation of the sale of
Registrable Securities purchased by the Investor in any specific Draw Down
prior to the filing of a supplement to the Prospectus to reflect such Draw Down
(provided the Company is in compliance with its covenants with respect to the
filing of such supplement).


 


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 9.2 of the Purchase
Agreement.


 


Section 3.3         Additional
Indemnification.  Indemnification
similar to that specified in the preceding paragraphs of this Article III
(with appropriate modifications) shall be given by the Company and the Investor
with respect to any required registration or other qualification of Registrable
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 the 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) if the Investor is guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) the Investor will not 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 the
Investor will be limited in amount to the proceeds received by the Investor
from sales of 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 (a) such
time that is two years following the termination of the Purchase Agreement, (b) such
time as all Registrable Securities issued prior to the termination of the
Purchase Agreement have ceased to be Registrable Securities, or (c) upon
the consummation of an “Excluded Merger or Sale” as defined in the
Warrant or an event described in the last sentence of Section 6(d) or
Section 6(e) of the Warrant. 
Notwithstanding the foregoing, Article


 


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III, Section 4.2, Section 4.7, Section 4.8,
Section 4.9, Section 4.10, Section 4.11 and Section 4.13
shall survive the termination of this Agreement.


 


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 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 Rule 144(c)(2) 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 capital 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.  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, with the prior written consent of the Company
and the Investor.  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.


 


10

















 


Section 4.7         Severability.  If 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, if the severance of such provision materially changes
the economic benefits of this Agreement to either party as such benefits are
anticipated as of the date hereof, then such party may terminate this Agreement
on five (5) business days prior written notice to the other party.  In such event, the Purchase Agreement will
terminate simultaneously with the termination of this Agreement.


 


Section 4.8         Notices.  All notices, demands, requests, consents,
approvals, and other communications required or permitted hereunder shall be
given in accordance with Section 10.4 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.


 


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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/ Antony Gardner-Hillman

  
	
   

  	
   

  	
  Antony Gardner-Hillman

  
	
   

  	
   

  	
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BIOSANTE PHARMACEUTICALS INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Phillip B. Donenberg

  
	
   

  	
   

  	
  Phillip B. Donenberg

  
	
   

  	
   

  	
  Chief
  Financial Officer, Treasurer and Secretary

  
				



 


[Signature Page to Common Stock Purchase
Agreement]