Exhibit 10.38**AMENDED AND RESTATED EMPLOYMENT AGREEMENT**     THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is entered into byand between Santarus, Inc., a Delaware corporation (the “Company”), and Warren E. Hall(“Executive”), and shall be effective as of December 5, 2007.     WHEREAS, the Company and Executive desire to further amend and restate that certain EmploymentAgreement between the Executive and the Company (the “Original Agreement”), dated as ofMarch 31, 2004 (the “Effective Date”).     NOW, THEREFORE, in consideration of the mutual promises herein contained, the parties agree asfollows:     1. Definitions. As used in this Agreement, the following terms shall have thefollowing meanings:          (a) Board. “Board” means the Board of Directors of the Company.          (b) Bonus. “Bonus” means an amount equal to the average of the bonusesawarded to Executive for each of the three (3) fiscal years prior to the date of termination, orsuch lesser number of years as may be applicable if Executive has not been employed for three (3)full years on the date of termination. For purposes of determining Executive’s “Bonus,” to theextent Executive received no bonus in a year due to a failure to meet the applicable performanceobjectives, such year will still be taken into account (using zero (0) as the applicable bonus) indetermining Executive’s “Bonus” for purposes of Section 4. If any portion of the bonuses awardedto Executive consisted of securities or other property, the fair market value thereof shall bedetermined in good faith by the Board.          (c) Cause. “Cause” means any of the following:               (i) the commission of an act of fraud, embezzlement or dishonesty by Executive that has amaterial adverse impact on the Company or any successor or affiliate thereof;               (ii) a conviction of, or plea of “guilty” or “no contest” to, a felony by Executive;               (iii) any unauthorized use or disclosure by Executive of confidential information or tradesecrets of the Company or any successor or affiliate thereof that has a material adverse impact onany such entity;               (iv) Executive’s gross negligence, insubordination or material violation of any duty ofloyalty to the Company or any other material misconduct on the part of Executive;               (v) Executive’s ongoing and repeated failure or refusal to perform or neglect of Executive’sduties as required by this Agreement, which failure, refusal or neglect
 

 
continues for fifteen (15) days following Executive’s receipt of written notice from the Boardor the CEO stating with specificity the nature of such failure, refusal or neglect; or               (vi) Executive’s breach of any material provision of this Agreement;provided, however, that prior to the determination that “Cause” under this Section1(c) has occurred, the Company shall (w) provide to Executive in writing, in reasonable detail, thereasons for the determination that such “Cause” exists, (x) other than with respect to clause (v)above which specifies the applicable period of time for Executive to remedy his or her breach,afford Executive a reasonable opportunity to remedy any such breach, (y) provide the Executive anopportunity to be heard prior to the final decision to terminate the Executive’s employmenthereunder for such “Cause” and (z) make any decision that such “Cause” exists in good faith.          The foregoing definition shall not in any way preclude or restrict the right of the Company orany successor or affiliate thereof to discharge or dismiss Executive for any other acts oromissions, but such other acts or omissions shall not be deemed, for purposes of this Agreement, toconstitute grounds for termination for Cause.          (d) Change of Control. “Change of Control” means and includes each of thefollowing:               (i) the acquisition, directly or indirectly, by any “person” or “group” (as those terms aredefined in Sections 3(a)(9), 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended(the “Exchange Act”), and the rules thereunder) of “beneficial ownership” (as determinedpursuant to Rule 13d-3 under the Exchange Act) of securities entitled to vote generally in theelection of directors (“voting securities”) of the Company that represent fifty percent(50%) or more of the combined voting power of the Company’s then outstanding voting securities,other than:               (A) an acquisition by a trustee or other fiduciary holding securities under anyemployee benefit plan (or related trust) sponsored or maintained by the Company or anyperson controlled by the Company or by any employee benefit plan (or related trust)sponsored or maintained by the Company or any person controlled by the Company, or               (B) an acquisition of voting securities by the Company or a corporation owned, directlyor indirectly by the stockholders of the Company in substantially the same proportions astheir ownership of the stock of the Company;          Notwithstanding the foregoing, the following event shall not constitute an “acquisition” byany person or group for purposes of this Section 1(d): an acquisition of the Company’s securitiesby the Company that causes the Company’s voting securities beneficially owned by a person or groupto represent fifty percent (50%) or more of the combined voting power of the Company’s thenoutstanding voting securities; provided, however, that if a person or group shallbecome the beneficial owner of fifty percent (50%) or more of the combined voting power of theCompany’s then outstanding voting securities by reason of share acquisitions by the Company asdescribed above and shall, after such share acquisitions by the
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Company, become the beneficial owner of any additional voting securities of the Company, then suchacquisition shall constitute a Change of Control; or               (ii) during any period of two (2) consecutive years, individuals who, at the beginning of suchperiod, constitute the Board together with any new director(s) (other than a director designated bya person who shall have entered into an agreement with the Company to effect a transactiondescribed in clauses (i) or (iii) of this Section 1(d)) whose election by the Board or nominationfor election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3) ofthe directors then still in office who either were directors at the beginning of the two (2) yearperiod or whose election or nomination for election was previously so approved, cease for anyreason to constitute a majority thereof; or               (iii) the consummation by the Company (whether directly involving the Company or indirectlyinvolving the Company through one or more intermediaries) of (x) a merger, consolidation,reorganization, or business combination or (y) a sale or other disposition of all or substantiallyall of the Company’s assets or (z) the acquisition of assets or stock of another entity, in eachcase other than a transaction:               (A) which results in the Company’s voting securities outstanding immediately before thetransaction continuing to represent (either by remaining outstanding or by being convertedinto voting securities of the Company or the person that, as a result of the transaction,controls, directly or indirectly, the Company or owns, directly or indirectly, all orsubstantially all of the Company’s assets or otherwise succeeds to the business of theCompany (the Company or such person, the “Successor Entity”)), directly orindirectly, at least a majority of the combined voting power of the Successor Entity’soutstanding voting securities immediately after the transaction, and               (B) after which no person or group beneficially owns voting securities representingfifty percent (50%) or more of the combined voting power of the Successor Entity;provided, however, that no person or group shall be treated for purposes ofthis clause (B) as beneficially owning fifty percent (50%) or more of combined voting powerof the Successor Entity solely as a result of the voting power held in the Company prior tothe consummation of the transaction; or               (iv) the Company’s stockholders approve a liquidation or dissolution of the Company.          (e) Code. “Code” means the Internal Revenue Code of 1986, as amended fromtime to time, and the Treasury Regulations and other interpretive guidance issued thereunder.          (f) Good Reason. “Good Reason” means Executive’s voluntary resignationfollowing any one or more of the following that is effected without Executive’s written consent:               (i) the relocation of the office of Executive more than fifty (50) miles from Executive’sprincipal place of employment as of the Effective Date or to a location outside of San DiegoCounty;
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               (ii) a change in Executive’s position that materially reduces his or her duties orresponsibilities;               (iii) a reduction in Executive’s base salary or target bonus as an employee of the Company,other than pursuant to a Company-wide reduction of base salaries and target bonuses for employeesof the Company generally; or               (iv) the Company’s breach of any material provision of this Agreement; provided, thatExecutive shall (w) provide to the Company in writing, in reasonable detail, notice of such breachand (x) afford the Company a reasonable opportunity to remedy any such breach.          (g) Permanent Disability. Executive’s “Permanent Disability” shall be deemedto have occurred if Executive shall become physically or mentally incapacitated or disabled orotherwise unable fully to discharge his or her duties hereunder for a period of ninety (90)consecutive calendar days or for one hundred twenty (120) calendar days in any one hundred eighty(180) calendar-day period. The existence of Executive’s Permanent Disability shall be determinedby the Company on the advice of a physician chosen by the Company and the Company reserves theright to have the Executive examined by a physician chosen by the Company at the Company’s expense.          (h) Stock Awards. “Stock Awards” means all stock options, restricted stockand such other awards granted pursuant to the Company’s stock option and equity incentive awardplans or agreements and any shares of stock issued upon exercise thereof.     2. Services to Be Rendered.          (a) Duties and Responsibilities. Executive shall serve as the Senior Vice President,Manufacturing and Product Development of the Company. In the performance of such duties, Executiveshall report directly to the CEO and shall be subject to the direction of the CEO and to suchlimits upon Executive’s authority as the Board or the CEO may from time to time impose. Executivehereby consents to serve as an officer and/or director of the Company or any subsidiary oraffiliate thereof without any additional salary or compensation, if so requested by the Board.Executive shall be employed by the Company on a full time basis. Executive’s primary place of workshall be the Company’s facility in San Diego, California, or such other location within San DiegoCounty as may be designated by the CEO from time to time. Executive shall also render services atsuch other places within or outside the United States as the CEO may direct from time to time,however, Executive’s primary place of work shall not be relocated more than fifty (50) miles fromhis or her primary place of work as of the Effective Date or outside San Diego County withoutExecutive’s prior consent. Executive shall be subject to and comply with the policies andprocedures generally applicable to senior executives of the Company to the extent the same are notinconsistent with any term of this Agreement.          (b) Exclusive Services. Executive shall at all times faithfully, industriously and tothe best of his or her ability, experience and talent perform to the satisfaction of the Board andthe CEO all of the duties that may be assigned to Executive hereunder and shall
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devote substantially all of his or her productive time and efforts to the performance of suchduties. Subject to the terms of the Employee Confidentiality and Invention Assignment Agreementreferred to in Section 5(b), this shall not preclude Executive from devoting time to personal andfamily investments or serving on community and civic boards, or participating in industryassociations, provided such activities do not interfere with his or her duties to the Company, asdetermined in good faith by the CEO. Executive agrees that he or she will not join any boards,other than community and civic boards (which do not interfere with his or her duties to theCompany), without the prior approval of the CEO.     3. Compensation and Benefits. The Company shall pay or provide, as the case may be,to the Executive the compensation and other benefits and rights set forth in this Section 3.          (a) Base Salary. The Company shall pay to Executive a base salary of $266,206 peryear, payable in accordance with the Company’s usual pay practices (and in any event no lessfrequently than monthly). Executive’s base salary shall be subject to review annually by and atthe sole discretion of the Compensation Committee of the Board.          (b) Bonus. Executive shall participate in any Management Incentive Compensation Planadopted by the Company or in such other bonus plan as the Board may approve for the seniorexecutives of the Company.          (c) Benefits. Executive shall be entitled to participate in benefits under theCompany’s benefit plans and arrangements, including, without limitation, any employee benefit planor arrangement made available in the future by the Company to its senior executives, subject to andon a basis consistent with the terms, conditions and overall administration of such plans andarrangements. The Company shall have the right to amend or delete any such benefit plan orarrangement made available by the Company to its senior executives and not otherwise specificallyprovided for herein.          (d) Expenses. The Company shall reimburse Executive for reasonable out-of-pocketexpenses incurred in connection with the performance of his or her duties hereunder, subject to (i)such policies as the Company may from time to time establish, and (ii) Executive furnishing theCompany with evidence in the form of receipts satisfactory to the Company substantiating theclaimed expenditures.          (e) Paid Time Off. Executive shall be entitled to such periods of paid time off(“PTO”) each year as provided under the Company’s PTO policy and as otherwise provided forsenior executive officers, but in no event shall Executive be entitled to less than four (4) weeksof PTO.          (f) Equity Plans. Executive shall be entitled to participate in any equity or otheremployee benefit plan that is generally available to senior executive officers, as distinguishedfrom general management, of the Company. Except as otherwise provided in this Agreement,Executive’s participation in and benefits under any such plan shall be on the terms and subject tothe conditions specified in the governing document of the particular plan.
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          (g) Acceleration Upon a Change of Control. Subject to any additional acceleration ofexercisability described in Sections 4(b), (c) and (d) below, in connection with a Change ofControl (as defined in Section 1 above), the vesting and exercisability of fifty percent (50%) ofExecutive’s outstanding Stock Awards shall be automatically accelerated. The foregoing provisionis hereby deemed to be a part of each such Stock Award and to supersede any less favorableprovision in any agreement or plan regarding such Stock Award.     4. Termination and Severance. Executive shall be entitled to receive benefits upontermination of employment only as set forth in this Section 4:          (a) At-Will Employment; Termination. The Company and Executive acknowledge thatExecutive’s employment is and shall continue to be at-will, as defined under applicable law, andthat Executive’s employment with the Company may be terminated by either party at any time for anyor no reason, with or without notice. If Executive’s employment terminates for any reason,Executive shall not be entitled to any payments, benefits, damages, award or compensation otherthan as provided in this Agreement. Executive’s employment under this Agreement shall beterminated immediately on the death of Executive.          (b) Termination by Death. If Executive’s employment is terminated by death,Executive’s estate shall be entitled to receive (i) Executive’s fully earned but unpaid basesalary, through the date of death at the rate then in effect, plus all other amounts to whichExecutive is entitled under any compensation plan or practice of the Company at the time ofExecutive’s death, (ii) an amount equal to Executive’s annual base salary as in effect immediatelyprior to the date of death, payable in a lump sum as soon as administratively practicable but inany event no later than two and one-half (2 1/2) months following Executive’s death, (iii) an amountequal to Executive’s Bonus for the year in which Executive’s death occurs prorated for the periodduring such year Executive was employed prior to his or her death, payable in a lump sum as soon asadministratively practicable but in any event no later than two and one-half (2 1/2) months followingExecutive’s death, and (iv) for the period beginning on the date of death and ending on the datewhich is twelve (12) full months following the date of death, the Company shall pay for and provideExecutive’s dependents with healthcare and life insurance benefits coverage to the extent suchdependents were receiving such benefits prior to the date of Executive’s death, including, ifnecessary, paying the costs associated with continuation coverage pursuant to the ConsolidatedOmnibus Budget Reconciliation Act of 1985, as amended (“COBRA”). In addition, ifExecutive’s employment is terminated by death, the vesting and/or exercisability of Executive’soutstanding Stock Awards shall be automatically accelerated on the date of death as to the numberof shares that would vest over the twelve (12) months following Executive’s death under theapplicable vesting schedules had Executive remained continuously employed by the Company duringsuch period. Except as otherwise provided above with respect to accelerated vesting, ifExecutive’s employment is terminated by death, the provisions of the award agreements governingExecutive’s Stock Awards regarding the exercisability of such Stock Awards following Executive’sdeath shall apply.          (c) Termination for Permanent Disability. If Executive’s employment is terminated bythe Company for Permanent Disability, Executive shall be entitled to receive (i) Executive’s fullyearned but unpaid base salary, through the date of termination at the rate then in
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effect, plus all other amounts to which Executive is entitled under any compensation plan orpractice of the Company at the time such payments are due, (ii) an amount equal to Executive’sannual base salary as in effect immediately prior to the date of termination, payable in a lump sumas soon as administratively practicable but in any event no later than two and one-half (2 1/2)months following the date of termination, (iii) an amount equal to Executive’s Bonus for the yearin which the date of termination occurs prorated for the period during such year Executive wasemployed prior to the date of termination, payable in a lump sum as soon as administrativelypracticable but in any event no later than two and one-half (2 1/2) months following the date oftermination, and (iv) for the period beginning on the date of termination and ending on the datewhich is twelve (12) full months following the date of termination (or, if earlier, the date onwhich Executive accepts employment with another employer that provides comparable benefits in termsof cost and scope of coverage), the Company shall pay for and provide Executive and his or herdependents with healthcare and life insurance benefits which are substantially the same as thebenefits provided to Executive immediately prior to the date of termination, including, ifnecessary, paying the costs associated with continuation coverage pursuant to COBRA. In addition,if Executive’s employment is terminated by the Company for Permanent Disability, the vesting and/orexercisability of Executive’s outstanding Stock Awards shall be automatically accelerated on thedate of termination as to the number of shares that would vest over the twelve (12) monthsfollowing Executive’s date of termination under the applicable vesting schedules had Executiveremained continuously employed by the Company during such period. Except as otherwise providedabove with respect to accelerated vesting, if Executive’s employment is terminated by PermanentDisability, the provisions of the award agreements governing Executive’s Stock Awards regarding theexercisability of such Stock Awards following Executive’s disability shall apply.          (d) Termination without Cause or for Good Reason.               (i) Termination Apart From Change of Control. If Executive’s employment is terminatedby the Company without Cause or by Executive for Good Reason more than three (3) months prior to aChange of Control or more than twelve (12) months following a Change of Control, Executive shall beentitled to receive, in lieu of any severance benefits to which Executive may otherwise be entitledunder any severance plan or program of the Company, the benefits provided below:               (A) the Company shall pay to Executive his or her fully earned but unpaid base salary,when due, through the date of termination at the rate then in effect, plus all other amountsto which Executive is entitled under any compensation plan or practice of the Company at thetime of termination;               (B) Executive shall be entitled to receive severance pay in an amount equal to the sumof:               (1) Executive’s base salary as in effect immediately prior to the dateof termination for the twelve (12) month period following the date oftermination, payable in a lump sum as soon as administratively practicablebut in any event no later than two and one-half (2 1/2) months following thedate of termination, plus
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               (2) an amount equal to Executive’s Bonus for the year in which the dateof termination occurs prorated for the period during such year Executive wasemployed prior to the date of termination, payable in a lump sum as soon asadministratively practicable but in any event no later than two and one-half(2 1/2) months following the date of termination;               (C) The vesting and/or exercisability of each of Executive’s outstanding Stock Awardsshall be automatically accelerated on the date of termination as to the number of StockAwards that would vest over the twelve (12) month period following the date of terminationhad Executive remained continuously employed by the Company during such period;               (D) for the period beginning on the date of termination and ending on the date which istwelve (12) full months following the date of termination (or, if earlier, the date on whichExecutive accepts employment with another employer that provides comparable benefits interms of cost and scope of coverage), the Company shall pay for and provide Executive andhis or her dependents with healthcare and life insurance benefits which are substantiallythe same as the benefits provided to Executive immediately prior to the date of termination,including, if necessary, paying the costs associated with continuation coverage pursuant toCOBRA; and               (E) Executive shall be entitled to executive-level outplacement services at theCompany’s expense, not to exceed $15,000. Such services shall be provided by a firmselected by Executive from a list compiled by the Company.               (ii) Termination In Connection With Change of Control. If Executive’s employment isterminated by the Company without Cause or by Executive for Good Reason within three (3) monthsprior to or twelve (12) months following a Change of Control, Executive shall be entitled toreceive, in lieu of any severance benefits to which Executive may otherwise be entitled under anyseverance plan or program of the Company, the benefits provided below:               (A) the Company shall pay to Executive his or her fully earned but unpaid base salary,when due, through the date of termination at the rate then in effect, plus all other amountsto which Executive is entitled under any compensation plan or practice of the Company at thetime of termination;               (B) Executive shall be entitled to receive severance pay in an amount equal to the sumof:               (1) Executive’s base salary as in effect immediately prior to the date oftermination for the twelve (12) month period following the date of termination,payable in a lump sum as soon as administratively practicable but in any event nolater than two and one-half (2 1/2) months following the date of termination (or, inthe event the date of termination precedes the consummation of a Change of Control,with respect to those amounts the payment of which is not
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administratively practicable by the foregoing date because it is not yet knownwhether a Change of Control will occur within three (3) months following the date oftermination, such amounts shall be paid as soon as administratively practicable butin any event no later than two and one-half (2 1/2) months following the consummationof the Change of Control), plus               (2) an amount equal to Executive’s Bonus for the year in which the date oftermination occurs prorated for the period during such year Executive was employedprior to the date of termination, payable in a lump sum as soon as administrativelypracticable but in any event no later than two and one-half (2 1/2) months followingthe date of termination (or, in the event the date of termination precedes theconsummation of a Change of Control, with respect to those amounts the payment ofwhich is not administratively practicable by the foregoing date because it is notyet known whether a Change of Control will occur within three (3) months followingthe date of termination, such amounts shall be paid as soon as administrativelypracticable but in any event no later than two and one-half (2 1/2) months followingthe consummation of the Change of Control);               (C) The vesting and/or exercisability of all of Executive’s outstanding unvested StockAwards shall be automatically accelerated on the date of termination;               (D) for the period beginning on the date of termination and ending on the date which istwelve (12) full months following the date of termination (or, if earlier, the date on whichExecutive accepts employment with another employer that provides comparable benefits interms of cost and scope of coverage), the Company shall pay for and provide Executive andhis or her dependents with healthcare and life insurance benefits which are substantiallythe same as the benefits provided to Executive immediately prior to the date of termination,including, if necessary, paying the costs associated with continuation coverage pursuant toCOBRA;               (E) Executive shall be entitled to executive-level outplacement services at theCompany’s expense, not to exceed $15,000. Such services shall be provided by a firmselected by Executive from a list compiled by the Company; and               (F) The payments and benefits provided for in this Section 4(d)(ii) shall only bepayable in the event Executive’s employment is terminated by the Company without Cause or byExecutive for Good Reason within three (3) months prior to or twelve (12) months following aChange of Control. If Executive’s employment is terminated by the Company without Cause orby Executive for Good Reason prior to a Change of Control and such Change of Control is notconsummated within three (3) months following such termination, then Executive shall receivethe payments and benefits described in Section 4(d)(i) and shall not be eligible to receiveany of the payments and benefits described in this Section 4(d)(ii).          (e) Termination for Cause or Voluntary Resignation Without Good Reason. IfExecutive’s employment is terminated by the Company for Cause or by Executive without Good
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Reason (other than as a result of Executive’s death or Permanent Disability), the Companyshall not have any other or further obligations to Executive under this Agreement (including anyfinancial obligations) except that Executive shall be entitled to receive (i) Executive’s fullyearned but unpaid base salary, through the date of termination at the rate then in effect, and (ii)all other amounts or benefits to which Executive is entitled under any compensation, retirement orbenefit plan or practice of the Company at the time of termination in accordance with the terms ofsuch plans or practices, including, without limitation, any continuation of benefits required byCOBRA or applicable law. In addition, if Executive’s employment is terminated by the Company forCause or by Executive without Good Reason (other than as a result of Executive’s death or PermanentDisability), all vesting of Executive’s unvested Stock Awards previously granted to him or her bythe Company shall cease and none of such unvested Stock Awards shall be exercisable following thedate of such termination. The foregoing shall be in addition to, and not in lieu of, any and allother rights and remedies which may be available to the Company under the circumstances, whether atlaw or in equity.          (f) Release. As a condition to the Executive’s receipt of any post-terminationbenefits described in this Agreement, Executive shall execute a Release (the “Release”)within ninety (90) days following termination of employment in a form reasonably acceptable to theCompany. Such Release shall specifically relate to all of Executive’s rights and claims inexistence at the time of such execution, including any claims related to Executive’s employment bythe Company and his or her termination of employment, and shall exclude any continuing obligationsthe Company may have to Executive following the date of termination under this Agreement or anyother agreement providing for obligations to survive Executive’s termination of employment.          (g) Delay of Payments. Notwithstanding anything to the contrary in this Section 4,however, to the extent required to avoid adverse tax consequences to Executive under Section 409Aof the Code, if Executive is deemed to be a “specified employee” for purposes of Section409A(a)(2)(B) of the Code, Executive agrees that the payments due to him or her under this Section4 in connection with a termination of employment that would otherwise have been payable at any timeduring the six-month period immediately following such termination of employment shall not be paidprior to, and shall instead be payable in a lump sum as soon as practicable following, theexpiration of such six-month period. In the event of Executive’s death during such six-monthperiod, upon provision to the Company of and failure to revoke a signed general release of allclaims against the Company and its affiliates in a form reasonably acceptable to the Company,Executive’s estate will receive the severance benefits described in this Agreement.          (h) Exclusive Remedy. Except as otherwise expressly required by law (e.g., COBRA) oras specifically provided herein, all of the Executive’s rights to salary, severance, benefits,bonuses and other amounts hereunder (if any) accruing after the termination of Executive’semployment shall cease upon such termination. In the event of a termination of Executive’semployment with the Company, the Executive’s sole remedy shall be to receive the payments andbenefits described in this Section 4. In addition, Executive acknowledges and agrees that he orshe is not entitled to any reimbursement by the Company for any taxes payable by Executive as aresult of the payments and benefits received by Executive pursuant to this Section 4, including,without limitation, any excise tax imposed by Section 4999 of the Code.
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          (i) No Mitigation. Executive shall not be required to mitigate the amount of anypayment provided for in this Section 4 by seeking other employment or otherwise, nor shall theamount of any payment or benefit provided for in this Section 4 be reduced by any compensationearned by Executive as the result of employment by another employer or self-employment or byretirement benefits; provided, however, that loans, advances or other amounts owedby Executive to the Company may be offset by the Company against amounts payable to Executive underthis Section 4; provided, further, that, as provided in Sections 4(c) or (d),Executive’s right to continued healthcare and life insurance benefits following his or hertermination of employment will terminate on the date on which he or she accepts employment withanother employer that provides comparable benefits in terms of cost and scope of coverage.          (j) Return of the Company’s Property. If Executive’s employment is terminated for anyreason, the Company shall have the right, at its option, to require Executive to vacate his or heroffices prior to or on the effective date of termination and to cease all activities on theCompany’s behalf. Upon the termination of his or her employment in any manner, as a condition tothe Executive’s receipt of any post-termination benefits described in this Agreement, Executiveshall immediately surrender to the Company all lists, books and records of, or in connection with,the Company’s business, and all other property belonging to the Company, it being distinctlyunderstood that all such lists, books and records, and other documents, are the property of theCompany. Executive shall deliver to the Company a signed statement certifying compliance with thisSection 4(j) prior to the receipt of any post-termination benefits described in this Agreement.          (k) Waiver of the Company’s Liability. Executive recognizes that his or heremployment is subject to termination with or without Cause for any reason and therefore Executiveagrees that Executive shall hold the Company harmless from and against any and all liabilities,losses, damages, costs and expenses, including but not limited to, court costs and reasonableattorneys’ fees, which Executive may incur as a result of the termination of Executive’semployment. Executive further agrees that Executive shall bring no claim or cause of actionagainst the Company for damages or injunctive relieve based on a wrongful termination ofemployment. Executive agrees that the sole liability of the Company to Executive upon terminationof this Agreement shall be that determined by this Section 4. In the event this covenant is morerestrictive than permitted by laws of the jurisdiction in which the Company seeks enforcementthereof, this covenant shall be limited to the extent permitted by law.     5. Certain Covenants.          (a) Noncompetition. Except as may otherwise be approved by the Board, during the termof Executive’s employment, Executive shall not have any ownership interest (of record orbeneficial) in, or have any interest as an employee, salesman, consultant, officer or director in,or otherwise aid or assist in any manner, any firm, corporation, partnership, proprietorship orother business that engages in any county, city or part thereof in the United States and/or anyforeign country in a business which competes directly or indirectly (as determined by the Board)with the Company’s business in such county, city or part thereof, so long as the Company, or anysuccessor in interest of the Company to the business and goodwill
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of the Company, remains engaged in such business in such county, city or part thereof orcontinues to solicit customers or potential customers therein; provided, however,that Executive may own, directly or indirectly, solely as an investment, securities of any entitywhich are traded on any national securities exchange if Executive (x) is not a controlling personof, or a member of a group which controls, such entity; or (y) does not, directly or indirectly,own one percent (1%) or more of any class of securities of any such entity.          (b) Confidential Information. Executive and the Company have entered into theCompany’s standard employee confidentiality and invention assignment agreement (the “EmployeeConfidentiality and Invention Assignment Agreement”). Executive agrees to perform each andevery obligation of Executive therein contained.          (c) Solicitation of Employees. Executive shall not during the term of Executive’semployment and for the applicable severance period for which Executive receives severance benefitsfollowing any termination hereof pursuant to Section 4(c) or (d) above (regardless of whetherExecutive receives such severance benefits in a lump sum payment) (the “RestrictedPeriod”), directly or indirectly, solicit or encourage to leave the employment of the Companyor any of its affiliates, any employee of the Company or any of its affiliates.          (d) Rights and Remedies Upon Breach. If Executive breaches or threatens to commit abreach of any of the provisions of this Section 5 (the “Restrictive Covenants”), theCompany shall have the following rights and remedies, each of which rights and remedies shall beindependent of the other and severally enforceable, and all of which rights and remedies shall bein addition to, and not in lieu of, any other rights and remedies available to the Company underlaw or in equity:               (i) Specific Performance. The right and remedy to have the Restrictive Covenantsspecifically enforced by any court having equity jurisdiction, all without the need to post a bondor any other security or to prove any amount of actual damage or that money damages would notprovide an adequate remedy, it being acknowledged and agreed that any such breach or threatenedbreach will cause irreparable injury to the Company and that money damages will not provideadequate remedy to the Company; and               (ii) Accounting and Indemnification. The right and remedy to require Executive (i) toaccount for and pay over to the Company all compensation, profits, monies, accruals, increments orother benefits derived or received by Executive or any associated party deriving such benefits as aresult of any such breach of the Restrictive Covenants; and (ii) to indemnify the Company againstany other losses, damages (including special and consequential damages), costs and expenses,including actual attorneys’ fees and court costs, which may be incurred by them and which resultfrom or arise out of any such breach or threatened breach of the Restrictive Covenants.          (e) Severability of Covenants/Blue Pencilling. If any court determines that any ofthe Restrictive Covenants, or any part thereof, is invalid or unenforceable, the remainder of theRestrictive Covenants shall not thereby be affected and shall be given full effect, without regardto the invalid portions. If any court determines that any of the Restrictive Covenants, or anypart thereof, are unenforceable because of the duration of such provision or the area
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covered thereby, such court shall have the power to reduce the duration or area of suchprovision and, in its reduced form, such provision shall then be enforceable and shall be enforced.Executive hereby waives any and all right to attack the validity of the Restrictive Covenants onthe grounds of the breadth of their geographic scope or the length of their term.          (f) Enforceability in Jurisdictions. The Company and Executive intend to and dohereby confer jurisdiction to enforce the Restrictive Covenants upon the courts of any jurisdictionwithin the geographical scope of such covenants. If the courts of any one or more of suchjurisdictions hold the Restrictive Covenants wholly unenforceable by reason of the breadth of suchscope or otherwise, it is the intention of the Company and Executive that such determination notbar or in any way affect the right of the Company to the relief provided above in the courts of anyother jurisdiction within the geographical scope of such covenants, as to breaches of suchcovenants in such other respective jurisdictions, such covenants as they relate to eachjurisdiction being, for this purpose, severable into diverse and independent covenants.          (g) Definitions. For purposes of this Section 5, the term “Company” means notonly Santarus, Inc., but also any company, partnership or entity which, directly or indirectly,controls, is controlled by or is under common control with Santarus, Inc.     6. Insurance. The Company shall have the right to take out life, health, accident,“key-man” or other insurance covering Executive, in the name of the Company and at the Company’sexpense in any amount deemed appropriate by the Company. Executive shall assist the Company inobtaining such insurance, including, without limitation, submitting to any required examinationsand providing information and data required by insurance companies.     7. Arbitration. Except as provided in Section 5, any claim or controversy arising outof or relating to this Agreement shall be settled by arbitration in San Diego, California, inaccordance with the Commercial Arbitration Rules of the American Arbitration Association, andjudgment on the award rendered by the arbitrator may be entered in any court having jurisdiction.Each party shall select one arbitrator and the two arbitrators so chosen will select a thirdarbitrator who shall act as the sole arbitrator of any dispute. Each party shall pay the fees ofits own attorneys, the expenses of its witnesses and all other expenses connected with presentingits case; however, Executive and the Company agree that, except as may be prohibited bylaw, the arbitrator may, in his or her discretion, award reasonable attorneys’ fees to theprevailing party. Other costs of the arbitration, including the cost of any record or transcriptsof the arbitration, administrative fees, the fee of the sole arbitrator, and all other fees andcosts, shall be borne by the Company.     8. General Relationship. Executive shall be considered an employee of the Companywithin the meaning of all federal, state and local laws and regulations including, but not limitedto, laws and regulations governing unemployment insurance, workers’ compensation, industrialaccident, labor and taxes.
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     9. Miscellaneous.          (a) Modification; Prior Claims. This Agreement sets forth the entire understanding ofthe parties with respect to the subject matter hereof, supersedes all existing agreements betweenthem concerning such subject matter, including, without limitation, the Original Agreement, and maybe modified only by a written instrument duly executed by each party.          (b) Assignment; Assumption by Successor. The rights of the Company under thisAgreement may, without the consent of Executive, be assigned by the Company, in its sole andunfettered discretion, to any person, firm, corporation or other business entity which at any time,whether by purchase, merger or otherwise, directly or indirectly, acquires all or substantially allof the assets or business of the Company. The Company will require any successor (whether director indirect, by purchase, merger or otherwise) to all or substantially all of the business orassets of the Company expressly to assume and to agree to perform this Agreement in the same mannerand to the same extent that the Company would be required to perform it if no such succession hadtaken place; provided, however, that no such assumption shall relieve the Companyof its obligations hereunder. As used in this Agreement, the “Company” shall mean theCompany as hereinbefore defined and any successor to its business and/or assets as aforesaid whichassumes and agrees to perform this Agreement by operation of law or otherwise.          (c) Survival. The covenants, agreements, representations and warranties contained inor made in Sections 4, 5, 7 and 9 of this Agreement shall survive any termination of Executive’semployment.          (d) Third-Party Beneficiaries. This Agreement does not create, and shall not beconstrued as creating, any rights enforceable by any person not a party to this Agreement.          (e) Waiver. The failure of either party hereto at any time to enforce performance bythe other party of any provision of this Agreement shall in no way affect such party’s rightsthereafter to enforce the same, nor shall the waiver by either party of any breach of any provisionhereof be deemed to be a waiver by such party of any other breach of the same or any otherprovision hereof.          (f) Section Headings. The headings of the several sections in this Agreement areinserted solely for the convenience of the parties and are not a part of and are not intended togovern, limit or aid in the construction of any term or provision hereof.          (g) Notices. All notices, requests and other communications hereunder shall be inwriting and shall be delivered by courier or other means of personal service (including by means ofa nationally recognized courier service or professional messenger service), or sent by telex ortelecopy or mailed first class, postage prepaid, by certified mail, return receipt requested, inall cases, addressed to:
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If to the Company or the Board:Santarus, Inc.