EXHIBIT 4.2
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (this "Agreement"),
dated as of January 7, 1999, between Columbia Laboratories, Inc., a
Delaware corporation with principal executive offices located at 0000
Xxxxxxxxx 000 Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxx 00000 (the
"Company"), and each of the purchasers named on the signature pages
hereto (herein referred to individually as a "Purchaser" and
collectively as the "Purchasers").
W I T N E S S E T H:
WHEREAS, the Purchasers desire to purchase from
Company, and the Company desires to issue and sell to the Purchasers,
upon the terms and subject to the conditions of this Agreement, (i)
shares of Series C Convertible Preferred Stock, $.01 par value (the
"Series C Preferred Stock"), having the rights, preferences and
privileges set forth in the Certificate of Designations, Preferences
and Rights hereto as EXHIBIT A (the "Certificate of Designations") and
(ii) Warrants to purchase up to an aggregate of 173,600 shares of
Common Stock (as defined below), having the terms and conditions and
being in the form attached hereto as EXHIBIT B (the "Warrants"); and
WHEREAS, upon the terms and subject to the conditions
set forth in the Certificate of Designations, the Series C Preferred
Stock is convertible into shares of the Company's common stock, $.01
par value ("Common Stock").
WHEREAS, contemporaneously with the execution and
delivery of this Agreement, the parties hereto are executing and
delivering a Registration Rights Agreement substantially in the form
attached hereto as EXHIBIT C (the "Registration Rights Agreement")
pursuant to which the Company has agreed to provide certain
registration rights under the Securities Act of 1933 and the rules and
regulations promulgated thereunder, and applicable state securities
laws.
NOW THEREFORE, in consideration of the premises and
the mutual covenants contained herein, the parties hereto, intending to
be legally bound, hereby agree as follows:
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ARTICLE I.
PURCHASE AND SALE OF SERIES C PREFERRED STOCK
I.1. TRANSACTION. The Purchasers hereby agree to
purchase from the Company, and the Company has offered and hereby
agrees to issue and sell to the Purchasers, the number of shares of
Series C Preferred Stock and the number of Warrants set forth opposite
the names of each Purchaser on the signature pages hereto.
I.2. PURCHASE PRICE; FORM OF PAYMENT. The aggregate
purchase price for the Series C Preferred Stock and Warrants to be
purchased by the Purchasers hereunder shall be U.S. $4,960,000. At the
Closing referred to in Section 1.3 below, each Purchaser (other than
Xxxxxxx X. Xxxxxxx and Xxxxxx X. Xxxxx) (the "Cash Purchasers") shall
pay in cash the purchase price set forth next to the name of such
Purchaser on the signature pages hereto (the "Cash Purchase Price").
The Cash Purchase Price shall be paid by wire transfer of immediately
available funds to the Company in accordance with the Company's wire
instructions set forth below. At the Closing, Xxxxxxx X. Xxxxxxx and
Xxxxxx X. Xxxxx (the "Note Purchasers"), in lieu of paying the Cash
Purchase Price, shall each deliver to the Company a duly executed
promissory note (the "Promissory Note") in the aggregate principal
amount set forth next to the name of such Note Purchaser on the
signature pages hereto. Simultaneously against receipt by the Company
of the Cash Purchase Price by the Cash Purchasers and the Promissory
Note by the Note Purchasers, the Company shall deliver to each
Purchaser (i) the stock certificates evidencing the number of shares of
Series C Preferred Stock purchased by each Purchaser as set forth next
to the name of such Purchaser on the signature pages hereto, and (ii)
the number of Warrants purchased by each Purchaser as set forth next to
the name of such Purchaser on the signature pages hereto, in each case
duly executed on behalf of the Company and registered in the name of
each Purchaser.
I.3. CLOSING. The closing (the "Closing") of the
issuance and sale of the Series C Preferred Stock shall be January 27,
1999 or such other date as shall be mutually agreed upon in writing
(the "Closing Date") and shall occur at the offices of Weil, Gotshal &
Xxxxxx LLP, or at such other place mutually agreeable to the parties
hereto.
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I.4. METHOD OF PAYMENT. Payment of the Cash Purchase
Price shall be made by wire transfer of immediately available funds to:
First Union National Bank
00000 Xxxxxxxx Xxxx.
Xxxxxxxx, XX 00000
Bank ABA Number: 000000000
Account Number: 2090001613844
Account Holder: Columbia Laboratories, Inc.
I.5. DELIVERY INSTRUCTIONS. The Series C Preferred
Stock and the Warrants shall be delivered by the Company to the
Purchasers pursuant to Section 1.2. hereof on a
"delivery-against-payment basis" at the Closing.
ARTICLE II.
PURCHASERS' REPRESENTATIONS, WARRANTIES; ACCESS
TO INFORMATION; INDEPENDENT INVESTIGATION.
Each Purchaser represents and warrants to and
covenants and agrees with the Company as follows:
II.1. Each Purchaser is purchasing the Series C
Preferred Stock, the Warrants, the Common Stock issuable upon exercise
of the Warrants (the "Warrant Shares") and the Shares of Common Stock
issuable upon conversion of the Series C Preferred Stock (the
"Conversion Shares" and, collectively with the Series C Preferred
Stock, the Warrants and the Warrant Shares, the "Securities") for its
own account, for investment purposes only and not with a view towards
or in connection with the public sale or distribution thereof in
violation of the provisions of the Securities Act of 1933, as amended
(the "Securities Act").
II.2. Each Purchaser is (i) an "accredited investor"
within the meaning of Rule 501 of Regulation D under the Securities
Act, (ii) experienced in making investments of the kind contemplated by
this Agreement, (iii) capable, by reason of its business and financial
experience, of evaluating the relative merits and risks of an
investment in the Securities, and (iv) able to afford the loss of its
investment in the Securities.
II.3. Each Purchaser understands that the Securities
are being offered and sold by the Company in reliance on an exemption
from the registration requirements
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of the Securities Act and equivalent state securities and "blue sky"
laws, and that the Company is relying upon the accuracy of, and each
Purchasers' compliance with, the Purchasers' representations,
warranties and covenants set forth in this Agreement to determine the
availability of such exemption and the eligibility of each Purchaser to
purchase the Securities. Each Purchaser further understands that the
Series C Preferred Stock and Conversion Shares may not be transferred
or resold without (a) registration under the Securities Act and any
applicable state securities laws, or (b) an exemption from the
requirements of the Securities Act and applicable state securities
laws.
II.4. Each Purchaser understands that an exemption
from such registration is not presently available pursuant to Rule 144
promulgated under the Securities Act by the Commission and that in any
event no Purchaser may sell any securities pursuant to Rule 144 prior
to the expiration of a one-year period after such Purchaser has
acquired the securities. Each Purchaser understands that any sales
pursuant to Rule 144 may only be made in full compliance with the
provisions of Rule 144.
II.5. Each Purchaser has been furnished with or
provided access to all materials relating to the business, financial
position and results of operations of the Company, including the risk
factors relating to the Company and its business set forth in EXHIBIT D
hereto (the "Risk Factors") and all other materials requested by the
Purchasers to enable them to make an informed investment decision with
respect to the Securities.
II.6. Each Purchaser acknowledges that the Company's
Annual Report on Form 10-KSB for the fiscal year ended December 31,
1997 and all other reports and documents heretofore filed by the
Company with the Securities and Exchange Commission (the "Commission")
pursuant to the Securities Act and the Securities Exchange Act of 1934,
as amended (the "Exchange Act") since December 31, 1997 (collectively
the "Commission Filings") have been made available to such Purchaser
for such Purchaser's review.
II.7. Each Purchaser acknowledges that in making its
decision to purchase the Securities it has relied on its own
investigation of the Company and been given an opportunity to ask
questions of and to receive answers from the Company's executive
officers, directors and management personnel concerning the terms and
conditions of the private placement of the Securities by the Company.
II.8. Each Purchaser understands that the
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Securities have not been approved or disapproved by the Commission or
any state securities commission and that the foregoing authorities have
not reviewed any documents or instruments in connection with the offer
and sale to it of the Securities and have not confirmed or determined
the adequacy or accuracy of any such documents or instruments.
II.9. Each Purchaser has the requisite power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly and
validly authorized, executed and delivered by each Purchaser and is a
valid and binding agreement of each Purchaser enforceable against it in
accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally.
II.10. Neither the Purchasers nor any of their
affiliates nor any person acting on its or their behalf has the
intention of entering, or will enter into, any put option, short
position or other similar instrument or position with respect to the
Common Stock and neither the Purchasers nor any of their affiliates nor
any person acting on its or their behalf will use at any time shares of
Common Stock acquired pursuant to this Agreement or the Certificate of
Designations to settle any put option, short position or other similar
instrument or position that may have been entered into prior to the
execution of this Agreement.
ARTICLE III.
COMPANY'S REPRESENTATIONS
The Company represents and warrants to the Purchasers
that:
III.1. CAPITALIZATION. As of the date hereof, the
authorized capital stock of the Company is as set forth on SCHEDULE
3.1. All of the issued and outstanding shares of capital stock set
forth on SCHEDULE 3.1 have been validly issued and are fully paid and
non-assessable. The Series C Preferred Stock has been duly and validly
authorized for issuance by the Company pursuant to this Agreement, and
when issued by the Company pursuant hereto, will be duly and validly
issued, fully paid and non-assessable and will be free of any
preemptive or similar rights. The Conversion Shares and Warrant Shares
have been duly and validly authorized and reserved for issuance by the
Company and, when issued by the Company upon conversion of, or in lieu
of
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accrued dividends on, the Series C Preferred Stock, or on exercise
of the Warrants, will be duly and validly issued, fully paid and
non-assessable. Except as set forth on SCHEDULE 3.1 or in the
Commission Filings there are no options, warrants, subscription, "call"
or other similar rights to acquire the Common Stock that have been
issued or granted to any person.
III.2. ORGANIZATION. Each of the Company and its
subsidiaries is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation
or organization and each is duly qualified as a foreign corporation in
all jurisdictions in which the failure to so qualify would have a
material adverse effect on the business, properties, condition
(financial or otherwise) or results of operations of the Company and
its subsidiaries taken as a whole or on the consummation of any of the
transactions contemplated by this Agreement (a "Material Adverse
Effect").
III.3. AUTHORIZED SHARES. The Company has duly and
validly authorized and reserved for issuance shares of Common Stock
sufficient in number for the conversion, of the shares of Series C
Preferred Stock issued to the Purchasers hereunder (assuming for
purposes of this Section 3.3 a Conversion Price (as defined in the
Certificate of Designations) of $2.80) and the exercise of 173,600
Warrants. The Company understands and acknowledges the potentially
dilutive effect to the Common Stock of the issuance of the Conversion
Shares and Warrant Shares upon conversion of the Series C Preferred
Stock and exercise of the Warrants. The Company further acknowledges
that its obligation to issue Conversion Stock upon conversion of the
Series C Preferred Stock and Warrant Shares upon exercise of the
Warrants in accordance with this Agreement, the Certificate of
Designations and the Warrants is absolute and unconditional regardless
of the dilutive effect that such issuance may have on the ownership
interests of other stockholders of the Company.
III.4. AUTHORITY; VALIDITY AND ENFORCEABILITY. The
Company has the requisite corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated
hereby. The execution, delivery and performance by the Company of this
Agreement and the consummation by the Company of the transactions
contemplated hereby (including without limitation the filing of the
Certificate of Designations, the issuance of the Series C Preferred
Stock, the Warrants and the issuance and reservation for issuance of
the Conversion Shares and Warrant Shares), has been duly authorized by
all requisite
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corporate action on the part of the Company. This Agreement has been
duly executed and delivered by the Company and (assuming the due
authorization, execution and delivery by the other parties hereto)
constitutes a valid and binding obligation of the Company enforceable
against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and remedies
generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith
and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).
III.5. NON-CONTRAVENTION. The execution and delivery
by the Company of this Agreement and the consummation by the Company of
the transactions contemplated hereby do not and will not conflict with
or result in a breach by the Company of any of the terms or provisions
of, or constitute a default (or an event which, with notice, lapse of
time or both, would constitute a default), and there is not currently
outstanding any uncured breach or default under (i) the certificate of
incorporation or by-laws of the Company, or (ii) any indenture,
mortgage, deed of trust or other material agreement or instrument to
which the Company is a party or by which its properties or assets are
bound, or any law, rule, regulation, decree, judgment or order of any
court or public or governmental authority having jurisdiction over the
Company or any of the Company's properties or assets, except as to (ii)
above such conflict, breach or default which would not have a Material
Adverse Effect.
III.6. ABSENCE OF CERTAIN CHANGES. Since December 31,
1997, except as disclosed in the Commission Filings there has not
occurred any change, event or development in the business, financial
condition, prospects or results of operations of the Company, and there
has not existed any condition having or reasonably likely to have, a
Material Adverse Effect.
III.7. ABSENCE OF LITIGATION. Except as disclosed in
the Commission Filings, there is no action, suit, claim, proceeding,
inquiry or investigation pending or, to the Company's knowledge,
threatened, by or before any court or public or governmental authority,
nor does the Company have knowledge of any facts or circumstances which
would reasonably be likely to give rise to any such action, suit,
claim, inquiry, proceeding or investigation, which, if determined
adversely to the Company or any of its subsidiaries, would have a
Material Adverse Effect.
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III.8. FINANCIAL STATEMENTS; NO UNDISCLOSED LIABILITIES. Each
of the financial statements included in the Commission Filings complied
in all material respects with the rules and regulations of the
Commission with respect thereto as in effect at the time of filing,
have been prepared in accordance with United States General Accepted
Accounting Principles ("GAAP") (subject, in the case of the interim
financial statements, to normal year end adjustments and the absence of
footnotes) and in conformity with the practices consistently applied by
the Company without modification of the accounting principles used in
the preparation thereof, and fairly presents in all material respects
the financial position, results of operations and cash flows of the
Company as at the dates and for the periods indicated.
III.9. SECURITIES LAW MATTERS. Assuming the accuracy
of the representations and warranties of the Purchasers set forth in
Article II hereof, the offer and sale by the Company of the Securities
is exempt from the registration and prospectus delivery requirements of
the Securities Act and the rules and regulations of the Commission
thereunder. No form of general solicitation or advertising has been
used or authorized by the Company or any of its officers, directors or
Affiliates in connection with the offer or sale of the Series C
Preferred Stock (and the Conversion Shares) as contemplated by this
Agreement or any other agreement to which the Company is a party.
III.10. INTERNAL CONTROLS AND PROCEDURES. The Company
maintains accurate books and records and internal accounting controls
which provide reasonable assurance that (i) all transactions to which
the Company is a party or by which its properties are bound are
executed with management's authorization; (ii) the reported
accountability of the Company's assets is compared with existing assets
at regular intervals; (iii) access to the Company's assets is permitted
only in accordance with management's authorization; and (iv) all
transactions to which the Company is a party or by which its properties
are bound are recorded as necessary to permit preparation of the
financial statements of the Company in accordance with U.S. generally
accepted accounting principles.
III.11. COMMISSION FILINGS. None of the Commission
Filings contained at the time they were filed any untrue statement of a
material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements made therein, in
light of the circumstances under which they were made, not misleading.
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III.12. ABSENCE OF CERTAIN CHANGES. Except as
disclosed in the Commission Filings, since December 31, 1997 there has
not occurred any change, event or development in the business,
financial condition, prospects or results of operations of the Company
or its subsidiaries, and there has not existed any condition having or
reasonably likely to have, a Material Adverse Effect.
III.13. FILINGS, CONSENTS AND APPROVALS. The Company
is not required to obtain any consent, authorization, or make any
filing with, Federal, state, local or other governmental authority in
connection with the issuance and sale of the Series C Preferred Stock
and the Warrants, other than (i) the filing of the Certificate of
Designations with the Secretary of State of Delaware, (ii) the filings
required pursuant to Section 4.2, (iii) the filing of the Registration
Statement with the Securities and Exchange Commission meeting the
requirements set forth in the Registration Rights Agreement, (iv) the
application(s) to the American Stock Exchange for the listing of the
Conversion Shares and Warrant Shares for trading on the American Stock
Exchange (and with any other national securities exchange or market on
which the Common Stock is then listed), and (v) in all other cases
where the failure to obtain such consent, waiver, authorization or
order, or to give such notice or make such filing or registration could
not have or result in, individually or in the aggregate, a Material
Adverse Effect.
III.14. COMPLIANCE WITH LAWS; PERMITS. The Company is
in compliance with all laws, rules, regulations, codes, ordinances and
statutes applicable to them or to the conduct of their respective
businesses, except for such non-compliance which would not have a
Material Adverse Effect. The Company possesses all permits, approvals,
authorizations, licenses, certificates and consents from all public and
governmental authorities which are necessary to conduct its business,
except for those the absence of which would not have a Material Adverse
Effect.
III.15. PATENTS AND TRADEMARKS. The Company has, or
has the rights to use, all patents, patent applications, trademarks,
trademark applications, licenses and rights which are necessary or
material for use in connection with its business, except where the
failure to have any such rights would not have a Material Adverse
Effect.
ARTICLE IV.
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CERTAIN COVENANTS AND ACKNOWLEDGMENTS.
IV.1. RESTRICTIVE LEGEND. The Purchasers acknowledge
and agree that, upon issuance pursuant to this Agreement, the
Securities (and any shares of Common Stock issued in conversion of the
Series C Preferred Stock, in lieu of dividends on the Series C
Preferred Stock and on exercise of the Warrants) shall have endorsed
thereon a legend in substantially the following form (and a
stop-transfer order may be placed against transfer of the Series C
Preferred Stock and the Conversion Shares):
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR THE SECURITIES LAWS OF
ANY STATE, AND ARE BEING OFFERED, SOLD OR
OTHERWISE TRANSFERRED PURSUANT TO AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND SUCH LAWS. THESE
SECURITIES MAY NOT BE SOLD OR TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT OR SUCH OTHER LAWS IN RESPECT OF WHICH
THE COMPANY HAS RECEIVED AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY TO SUCH
EFFECT."
IV.2. FILINGS. The Company shall make all necessary
SEC and "blue sky" filings required to be made by the Company in
connection with the sale and issuance of the Securities to the
Purchasers and, upon request, shall promptly provide a copy thereof to
the Purchasers after such filing.
IV.3. USE OF PROCEEDS. The Company shall use the
proceeds from the sale of the Securities (excluding amounts paid by the
Company for legal fees in connection with such sale) for general
corporate and working capital purposes.
IV.4. LISTING. The Company shall use its best
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efforts to maintain its listing of the Common Stock on the American
Stock Exchange or such other principal national securities exchange on
which the Common Stock may be then listed.
IV.5. RESERVED CONVERSION SHARES. The Company at all
times from and after the date hereof shall have a sufficient number of
shares of Common Stock duly and validly authorized and reserved for
issuance to satisfy the conversion (pursuant to the Certificate of
Designations), in full, of 4,960 Shares of Series C Preferred Stock
issued to the Purchasers hereunder (assuming for purposes of this
Section 4.5, a Conversion Price (as defined in the Certificate of
Designations) of $2.80) and the exercise in full of all of the Warrants
issued to the Purchasers hereunder.
IV.6. RIGHT OF FIRST REFUSAL. If, during the period
ending 120 days after the Closing Date (the "Right of First Refusal
Period"), the Company should propose (the "Proposal") to issue Common
Stock or securities convertible into Common Stock (the "Right of First
Refusal Securities") at a price less than the Current Market Price (as
defined in the Certificate of Designations), the Company shall be
obligated to offer the Purchasers an opportunity to purchase all, but
not less than all, of the shares of Common Stock included in the
Proposal on the terms set forth in the Proposal (the "Offer"), and the
Purchasers shall have the right, but not the obligation, to accept such
Offer on such terms. The Purchasers shall have ten (10) business days
to accept or reject any such Offer following written notice to the
Purchasers that the Company proposes to issue any Right of First
Refusal Securities on the terms set forth in the Proposal, which shall
accompany the notice. If the Purchaser shall fail to notify the Company
in writing of its intention to exercise its Right of First Refusal
within such time period, the Company may effect the sale of securities
on substantially the terms set forth in the Proposal. Notwithstanding
the foregoing, the Purchasers shall have no rights under this paragraph
4.6. in respect of Common Stock or any other securities of the Company
issuable (i) upon the exercise or conversion of options, warrants or
other rights to purchase securities of the Company outstanding as of
the date hereof, (ii) to officers, directors or employees of the
Company or any of its subsidiaries under any stock option or similar
plan heretofore or hereafter adopted by the Company and approved by its
stockholders.
IV.7. NO ISSUANCE OF SERIES C PREFERRED STOCK. As
long as any shares of Series C Preferred Stock are outstanding the
Company shall not issue any shares of Series
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C Preferred Stock to any person or entity other than the Purchasers, or
to Xxxxx X. Xxxxx, Xxxxx Partners, L.P. and Windsor Partners, L.P.,
without the prior written consent of the Purchasers, which consent
shall not be unreasonably withheld.
ARTICLE V.
TRANSFER AGENT INSTRUCTIONS.
V.1. The Company agrees that it will provide its
transfer agent with customary stop transfer instructions to enable it
to issue certificates, registered in the name of each of the Purchasers
or its respective nominee(s), for the Conversion Shares or the Warrant
Shares in such amounts as may be specified from time to time by such
Purchaser to the Company upon conversion of the Series C Preferred
Stock and the exercise of the Warrants, in all cases in accordance with
the terms of the Certificate of Designations or the Warrants, as the
case may be. Nothing contained in this Section 5.1. shall affect in any
way any of the Purchasers' obligations to comply with all applicable
securities laws upon resale of such Common Stock. If, at any time, any
of the Purchasers provides the Company with an opinion of counsel
reasonably satisfactory to the Company that registration of the resale
by such Purchaser of such Common Stock is not required under the
Securities Act and that the removal of restrictive legends is permitted
under applicable law, the Company shall permit the transfer of such
Common Stock and, promptly instruct the Company's transfer agent to
issue one or more certificates for Common Stock without any restrictive
legends endorsed thereon.
V.2. Each of the Purchasers is permitted to (i)
exercise its right to convert the Series C Preferred Stock in
accordance with the terms of conversion set forth in the Certificate of
Designations and (ii) exercise its right to purchase shares of Common
Stock pursuant to exercise of the Warrants in accordance with the
applicable terms of the Warrants.
ARTICLE VI.
CONDITIONS
VI.1.CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The obligation of the Company hereunder to issue and sell the Series C
Preferred Stock and the Warrants to each Purchaser at the Closing is
subject to the satisfaction, at or before the Closing Date, of each of
the
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following conditions, provided that these conditions are for the
Company's sole benefit and may be waived by the Company at any time in
its sole discretion by providing each Purchaser with prior written
notice thereof:
(i) Each Purchaser shall have executed each of this
Agreement and the Registration Rights Agreement and delivered the same
to the Company.
(ii) The Certificate of Designations shall have been
filed with the Secretary of State of the State of Delaware.
(iii) Each Cash Purchaser shall have delivered to the
Company the Cash Purchase Price for the Preferred Shares being
purchased by such Purchaser at the Closing by wire transfer of
immediately available funds pursuant to the wire instructions provided
by the Company and each Note Purchaser shall have delivered to the
Company the Promissory Note in accordance with Section 1.2 hereof.
(iv) No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of
competent jurisdiction which prohibits the consummation of any of the
transactions contemplated by this Agreement or the Registration Rights
Agreement.
(v) The accuracy in all material respects on the
Closing Date of the representations and warranties of the Purchasers
contained in this Agreement as if made on the Closing Date (except for
representations and warranties which, by their express terms, speak as
of and relate to a specified date, in which case such accuracy shall be
measured as of such specified date).
VI.2.CONDITIONS TO THE PURCHASERS' OBLIGATION TO
PURCHASE. The obligations of each Purchaser to purchase the Series C
Preferred Stock and the Warrants at the Closing is subject to the
satisfaction, at or before the Closing Date, of each of the following
conditions, provided that these conditions are for the Purchasers' sole
benefit and may be waived by the Purchasers at any time in its sole
discretion by providing the Company with prior written notice thereof:
(i) The Company shall have executed each of this
Agreement and the Registration Rights Agreement, and delivered the same
to each Purchaser.
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(ii) The Certificate of Designations shall have been
filed with the Secretary of State of the State of Delaware, and a copy
of the Certificate of Designations that has been certified by such
Secretary of State shall have been delivered to each of the Purchasers.
(iii) No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of
competent jurisdiction which prohibits the consummation of any of the
transactions contemplated by this Agreement or the Registration Rights
Agreement.
(iv) The Purchasers shall have received the opinion
of Weil, Gotshal & Xxxxxx LLP dated as of the Closing Date in
substantially the form of EXHIBIT E attached hereto (the "Company
Opinion").
(v) The Company shall have executed and delivered to
the Purchasers the Warrants and the stock certificates for the Series C
Preferred Stock being purchased by each of the Purchasers at the
Closing.
(vi) The accuracy in all material respects on the
Closing Date of the representations and warranties of the Company
contained in this Agreement as if made on the Closing Date (except for
representations and warranties which, by their express terms, speak as
of and relate to a specified date, in which case such accuracy shall be
measured as of such specified date).
ARTICLE VII.
SURVIVAL; INDEMNIFICATION.
VII.1. The representations, warranties and covenants
made by each of the Company and the Purchasers in this Agreement shall
survive for two (2) years following the Closing. In the event of a
breach or violation of any of such representations, warranties or
covenants, the party to whom such representations, warranties or
covenants have been made shall have all rights and remedies for such
breach or violation available to it under the provisions of this
Agreement or otherwise, whether at law or in equity, irrespective of
any investigation made by or on behalf of such party on or prior to the
Closing Date.
VII.2. The Company hereby agrees to indemnify and
hold harmless the Purchasers, their Affiliates and their respective
officers, directors, partners and members
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(collectively, the "Purchaser Indemnitees"), from and against any and
all losses, claims, damages, judgments, penalties, liabilities and
deficiencies (collectively, "Losses"), and agrees to reimburse the
Purchaser Indemnitees for all out-of-pocket expenses (including the
reasonable and documented fees and expenses of legal counsel), in each
case promptly as incurred by the Purchaser Indemnitees and to the
extent arising out of or in connection with:
(a) any misrepresentation, omission of fact or
breach of any of the Company's
representations or warranties contained in
this Agreement, the annexes, schedules or
exhibits hereto or any instrument, agreement
or certificate entered into or delivered by
the Company pursuant to or in connection
with this Agreement; or
(b) any failure by the Company to perform in any
material respect any of its covenants,
agreements, undertakings or obligations set
forth in this Agreement, or any instrument,
agreement or certificate entered into or
delivered by the Company pursuant to or in
connection with this Agreement.
The Company shall be liable to a Purchaser Indemnitee
under this Section 7.2 only to the extent of, in the aggregate, the
lesser of (i) the amount of any such loss, claim, damage or liability
or (ii) the portion of the Purchase Price received by the Company from
such Purchaser in connection with the purchase of the Series C
Preferred Stock hereunder.
VII.3. Each Purchaser hereby agrees to indemnify and
hold harmless the Company, its Affiliates and their respective
officers, directors, partners and members (collectively, the "Company
Indemnitees"), from and against any and all Losses, and agrees to
reimburse the Company Indemnitees for all out-of-pocket expenses
(including the fees and expenses of legal counsel), in each case
promptly as incurred by the Company Indemnitees, to the extent arising
out of or in connection with:
(a) any misrepresentation, omission of fact, or
breach of any of such Purchaser's
representations or warranties contained in
this Agreement, the annexes, schedules or
exhibits hereto or any instrument, agreement
or certificate entered into or delivered by
such Purchaser pursuant to this Agreement;
or
15
(b) any failure by such Purchaser to perform in
any material respect any of its covenants,
agreements, undertakings or obligations set
forth in this Agreement or any instrument,
certificate or agreement entered into or
delivered by such Purchaser pursuant to this
Agreement.
A Purchaser shall be liable to the Company
Indemnitees under this Section 7.3 only to the extent of, in the
aggregate, the lesser of (i) the amount of any such loss, claim, damage
or liability or (ii) the portion of the Purchase Price received by the
Company from such Purchaser in connection with the purchase of the
Series C Preferred Stock hereunder.
VII.4. Promptly after receipt by either party hereto
seeking indemnification pursuant to this Article VII (an "Indemnified
Party") of written notice of any investigation, claim, proceeding or
other action in respect of which indemnification is being sought (each,
a "Claim"), the Indemnified Party promptly shall notify the party
against whom indemnification pursuant to this Article VI is being
sought (the "Indemnifying Party") of the commencement thereof; but the
omission to so notify the Indemnifying Party shall not relieve it from
any liability that it otherwise may have to the Indemnified Party,
except to the extent that the Indemnifying Party is materially
prejudiced and forfeits substantive rights and defenses by reason of
such failure. In connection with any Claim as to which both the
Indemnifying Party and the Indemnified Party are parties, the
Indemnifying Party shall be entitled to assume the defense thereof.
Notwithstanding the assumption of the defense of any Claim by the
Indemnifying Party, the Indemnified Party shall have the right to
employ one separate legal counsel and to participate in the defense of
such Claim, and the Indemnifying Party shall bear the reasonable fees,
out-of-pocket costs and expenses of one such separate legal counsel to
the Indemnified Party if (and only if): (x) the Indemnifying Party
shall have agreed to pay such fees, out-of-pocket costs and expenses,
(y) representation of the Indemnified Party and the Indemnifying Party
by the same legal counsel would not be appropriate due to actual or, as
reasonably determined by legal counsel to the Indemnified Party,
potentially differing interests between such parties in the conduct of
the defense of such Claim, or if there may be legal defenses available
to the Indemnified Party that are in addition to or disparate from
those available to the Indemnifying Party, or (z) the Indemnifying
Party shall have failed to employ
16
legal counsel reasonably satisfactory to the Indemnified Party within a
reasonable period of time after notice of the commencement of such
Claim. If the Indemnified Party employs separate legal counsel in
circumstances other than as described in clauses (x), (y) or (z) above,
the fees, costs and expenses of such legal counsel shall be borne
exclusively by the Indemnified Party. In no event shall the
Indemnifying Party be liable for the fees and expenses of more than one
firm of legal counsel for the Indemnified Party. The Indemnifying Party
shall not, without the prior written consent of the Indemnified Party
(which consent shall not unreasonably be withheld), settle or
compromise any Claim or consent to the entry of any judgment that does
not include an unconditional release of the Indemnified Party from all
liabilities with respect to such Claim or judgment.
17
VII.5. In the event one party hereunder should have a
claim for indemnification that does not involve a claim or demand being
asserted by a third party, the Indemnified Party promptly shall deliver
notice of such claim to the Indemnifying Party. If the Indemnified
Party disputes the claim, such dispute shall be resolved by mutual
agreement of the Indemnified Party and the Indemnifying Party or by
binding arbitration conducted in accordance with the procedures and
rules of the American Arbitration Association. Judgment upon any award
rendered by any arbitrators may be entered in any court having
competent jurisdiction thereof.
ARTICLE VIII.
GOVERNING LAW: MISCELLANEOUS.
This Agreement shall be governed by and interpreted
in accordance with the laws of the State of New York, without regard to
the conflicts of law principles of such state. Each of the parties
consents to the jurisdiction of the federal courts whose districts
encompass any part of the City of New York or the state courts of the
State of New York sitting in the City of New York in connection with
any dispute arising under this Agreement and hereby waives, to the
maximum extent permitted by law, any objection, including any objection
based on FORUM NON conveniens, to the bringing of any such proceeding
in such jurisdictions. A facsimile transmission to the Company of a
Purchaser's signature on this Agreement, upon execution hereof by the
Company and delivery to such Purchaser by facsimile transmission or
otherwise, shall be legal and binding on the Company and such
Purchaser. This Agreement may be signed in one or more counterparts,
each of which shall be deemed an original. The headings of this
Agreement are for convenience of reference and shall not form part of,
or affect the interpretation of, this Agreement. If any provision of
this Agreement shall be invalid or unenforceable in any jurisdiction,
such invalidity or unenforceability shall not affect the validity or
enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement in any other jurisdiction. This
Agreement may be amended only by an instrument in writing signed by the
party to be charged with enforcement. Any provision of this Agreement
may be waived only by an instrument in writing signed by the party
against whom enforcement of the waiver is sought. This Agreement
supersedes all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof.
18
ARTICLE IX.
NOTICES.
Except as may be otherwise provided herein, any
notice or other communication or delivery required or permitted
hereunder shall be in writing and shall be delivered personally or sent
by certified mail, postage prepaid, or by a nationally recognized
overnight courier service, and shall be deemed given when so delivered
personally or by overnight courier service, or, if mailed, three (3)
days after the date of deposit in the United States mails, as follows:
(1) if to the Company, to:
COLUMBIA LABORATORIES, INC.
0000 Xxxxxxxxx 000 Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx
With a copy to:
WEIL, GOTSHAL & XXXXXX LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq. or
Xxxxxxx Nissan, Esq.
(2) if to any Purchaser, at the most current
address as provided by such Purchaser to the
Company in accordance with the provisions of
this Article IX, which address shall
initially be the address set forth next to
such Purchaser's name on the signature pages
hereto.
The Company or any Purchaser may change its address for notice by
providing notice pursuant to this Article IX.
19
ARTICLE X.
CONFIDENTIALITY.
The Company and each of the Purchasers agree to keep
confidential and not to disclose to or use for the benefit of any third
party the terms of this Agreement or any other information which at any
time is communicated by the other party as being confidential without
the prior written approval of the other party; provided, however, that
this provision shall not apply to information which, at the time of
disclosure, is already part of the public domain (except by breach of
this Agreement) and information which is required to be disclosed by
law (including, without limitation, pursuant to Item 10 of Rule 601 of
Regulation S-K under the Securities Act and the Exchange Act) or by
subpoena or order of any court or governmental agency.
ARTICLE XI.
ASSIGNMENT.
This Agreement shall not be assignable by either of
the parties hereto prior to the Closing without the prior written
consent of the other party, and any attempted assignment contrary to
the provisions hereby shall be null and void.
20
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement as of the date first above written.
COLUMBIA LABORATORIES, INC.
By:
--------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President -
Chief Financial Officer
ACHIEVE FUND, L.P.
By:
--------------------------------
Name:
Title:
Number of Shares of Series C
Preferred Stock to be purchased by
you - 250; Number of Warrants -
8,750; Aggregate Purchase Price -
$250,000.
c/o Xxxxxxx Xxxxxxxx
0000 Xx. Xxxxxx Xxxx.
Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx
(000) 000-0000
VMR XXXXXXXXX XX
By:
--------------------------------
Name:
Title:
Number of Shares of Series C
Preferred Stock to be purchased by
you - 600; Number of Warrants -
21,000; Aggregate Purchase Price -
$600,000.
c/o Value Management Research
Xx Xxxxxxxxxx
Xxxx Xxxx
00000 Xxxxxxxxxx
Xxxxxxx
011-49-61-968800-0
Fax: 000-00-00-000000-00
ARIES TRADING LTD
By:
--------------------------------
Name:
Title:
Number of Shares of Series C
Preferred Stock to be purchased by
you - 200; Number of Warrants -
7,000; Aggregate Purchase Price -
$200,000.
c/o Lexington Shipping &
Trading Corp.
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxxxxx
(000) 000-0000
NARRAGANSETT CAPITAL
PARTNERS, LP
By:
--------------------------------
Name:
Title:
Number of Shares of Series C
Preferred Stock to be purchased by
you - 100; Number of Warrants -
3,500; Aggregate Purchase Price -
$100,000.
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
(000) 000-0000
DERWENT LIMITED
By:
--------------------------------
Name:
Title:
Number of Shares of
Series C Preferred Stock
to be purchased by you -
1,000; Number of Warrants -
35,000; Aggregate Purchase
Price - $1,000,000.
00 Xxxxxxxxx Xxxx
Xxxxxx XX00 0XX
Attention: Xxxxx X. Xxxxxxx
011-44-171-730-3403
Fax: 000-00-000-000-0000
----------------------------------
Xxxxx X. Xxxxxxxxxxx
Number of Shares of Series C
Preferred Stock to be purchased by
you - 250; Number of Warrants -
8,750; Aggregate Purchase Price -
$250,000.
c/o Lexington Shipping & Trading
Corp.
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
(000) 000-0000
--------------------------------
Xxxxx Xxx
Number of Shares of Series C
Preferred Stock to be purchased by
you - 250; Number of Warrants -
8,750; Aggregate Purchase Price -
$250,000.
Xxx Xxxxxxxxx'x Xxxxx
Xxxxxxx, XX 00000
(000) 000-0000
--------------------------------
Xxxxxxx Xxxxxx
Number of Shares of Series C
Preferred Stock to be purchased by
you - 500; Number of Warrants -
17,500; Aggregate Purchase Price -
$500,000.
0000 Xxxxx Xxxxx Xxxx.
Xxxx Xxxxx, XX 00000
(000) 000-0000
--------------------------------
Xxxxxxxxxxx Xxxxxxxxxxx
Number of Shares of Series C
Preferred Stock to be purchased by
you - 50; Number of Warrants -
1,750; Aggregate Purchase Price -
$50,000.
c/o Xxxxxxxx Xxxx
000 Xxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
(000) 000-0000
--------------------------------
Xxxx Xxxxxx
Number of Shares of Series C
Preferred Stock to be purchased by
you - 60; Number of Warrants -
2,100; Aggregate Purchase Price -
$60,000.
c/o Lazard Freres
00 Xxxxxxxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
(000) 000-0000
--------------------------------
Xxxxx Van Der Tuuk
Number of Shares of Series C
Preferred Stock to be purchased by
you - 100; Number of Warrants -
3,500; Aggregate Purchase Price -
$100,000.
c/o MidAmerica Merchandising
000 Xxxx 0xx Xxxxxx
Xxxxxx Xxxx, XX 00000
(000) 000-0000
--------------------------------
Xxxxxxx Xxxxxx
Number of Shares of Series C
Preferred Stock to be purchased by
you - 100; Number of Warrants -
3,500; Aggregate Purchase Price -
$100,000.
c/o TC Management
000 Xxxx Xxxxxx
Xxxxx 000
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxxx
(000) 000-0000
--------------------------------
Xxxx Xxxxxx
Number of Shares of Series C
Preferred Stock to be purchased by
you - 100; Number of Warrants -
3,500; Aggregate Purchase Price -
$100,000.
Xxxxxx Management Company
000 Xxxx Xxxxxx Xxx.
0xx Xxxxx
Xxxxxxxxx, XX 00000
(000) 000-0000
--------------------------------
Xxxxxxx X. Xxxxxxx
Number of Shares of Series C
Preferred Stock to be purchased by
you - 250; Number of Warrants -
8,750; Aggregate Purchase Price -
$250,000.
c/o Columbia Laboratories, Inc.
0000 XX 000 Xxxxxx
Xxxxxxxx, XX 00000
(000) 000-0000
--------------------------------
Xxxxxx X. Xxxxx
Number of Shares of Series C
Preferred Stock to be purchased by
you - 350; Number of Warrants -
12,250; Aggregate Purchase Price -
$350,000.
c/o Columbia Laboratories, Inc.
0000 XX 000xx Xxxxxx
Xxxxxxxx, XX 00000
(000) 000-0000
--------------------------------
Xxxxxxxx Family Trust
Number of Shares of Series C
Preferred Stock to be purchased by
you - 350; Number of Warrants -
12,250; Aggregate Purchase Price -
$350,000.
c/o Xxxxxxx Xxxxxxxx
0000 Xx. Xxxxxx Xxxx.
Xxxxx 000
Xxxxxxxxx, XX 00000
(000) 000-0000
--------------------------------
Xxxxx Xxxxxx
Number of Shares of Series C
Preferred Stock to be purchased by
you - 50; Number of Warrants -
1,750; Aggregate Purchase Price -
$50,000.
c/o Continental Kraft Corporation
000 Xxxxxxx Xxxxxxxxxx
Xxxxxxx, XX 00000
(000) 000-0000
--------------------------------
JUPITER PARTNERS
By:
-----------------------------
Name:
Title:
Number of Shares of Series C
Preferred Stock to be purchased by
you - 150; Number of Warrants -
5,250; Aggregate Purchase Price -
$150,000.
c/o Bryan & Xxxxxxx
000 Xxxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
(000) 000-0000
--------------------------------
Xxxxxx X. Xxxxxx
Number of Shares of Series C
Preferred Stock to be purchased by
you - 50; Number of Warrants -
1,750; Aggregate Purchase Price -
$50,000.
Venture Growth Associates
0000 Xxxx Xxxxxxxx Xxxx
Xxxxx 000
Xxxx Xxxx, XX 00000
--------------------------------
Xxxxx X. Xxxxxxx
Number of Shares of Series C
Preferred Stock to be purchased by
you - 100; Number of Warrants -
3,500; Aggregate Purchase Price -
$100,000.
Venture Growth Associates
0000 Xxxx Xxxxxxxx Xxxx
Xxxxx 000
Xxxx Xxxx, XX 00000
--------------------------------
Xxxxxx Xxxxxxx
Number of Shares of Series C
Preferred Stock to be purchased by
you - 100; Number of Warrants -
3,500; Aggregate Purchase Price -
$100,000.
c/x Xxxxxxxx/Xxxxxxx
Investments LLC
0000 Xxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
(000) 000-0000
