SECURITIES PURCHASE AGREEMENT
This
Securities
Purchase Agreement
(this
“Agreement”),
dated
as of March 10, 2006, is made by and among Columbia
Laboratories, Inc.,
a
Delaware corporation (the “Company”),
and
the Purchasers listed on Exhibit
A
hereto,
together with their permitted transferees (each, a “Purchaser”
and
collectively, the “Purchasers”).
Recitals:
A. The
Company and the Purchasers are executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by Section
4(2) of the Securities Act and/or Regulation D under the Securities
Act.
B. The
Purchasers desire to purchase, and the Company desires to sell, upon the terms
and conditions stated in this Agreement, up to a maximum of $30,010,008.80
of
Common Stock and warrants to purchase Common Stock of the Company.
C. The
capitalized terms used herein and not otherwise defined have the meanings given
them in Article 7.
AGREEMENT
In
consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged, the Company and the Purchasers (severally and not jointly)
hereby agree as follows:
ARTICLE
1
PURCHASE
AND SALE OF SECURITIES
1.1 Purchase
and Sale of Securities.
At the
Closing, the Company will issue and sell to each Purchaser, and each Purchaser
will, severally and not jointly, purchase from the Company the number of shares
of Common Stock (the “Shares”)
and the
number of warrants (the “Warrants”)
to
purchase shares of Common Stock set forth opposite such Purchaser’s name on
Exhibit
A hereto
(the Shares and Warrants referred to collectively as the “Securities”).
The
purchase price for each Security shall be $4.04 (the “Purchase
Price”),
which
represents a 10% discount from $4.49 (the “Closing
Bid Price”),
the
closing bid price of the Common Stock as reported on Nasdaq (symbol “CBRX”),
as the
4:00 p.m., EST, closing bid price on March 10, 2006. For each one Share
purchased by a Purchaser, such Purchaser shall receive a Warrant to purchase
0.25 of a share of Common Stock at an exercise price per share equal to $5.39,
which represents 120% of the Closing Bid Price, pursuant to a Warrant
substantially in the form attached as Exhibit
B
hereto.
1.2 Payment.
At the
Closing, each Purchaser will pay the aggregate Purchase Price set forth opposite
its name on Exhibit
A hereto
by
wire transfer of immediately available funds in accordance with wire
instructions provided by the Company to the Purchasers prior to the Closing.
The
Company will instruct its transfer agent to deliver to each Purchaser at the
Closing a certificate evidencing the number of Shares set forth on Exhibit
A
in the
name of such Purchaser, and will deliver to each Purchaser Warrants to purchase
the number of Warrant Shares set forth on Exhibit
A
in the
name of such Purchaser, against delivery of the aggregate Purchase Price on
the
Closing Date.
1.3 Closing
Date. The
closing of the transaction contemplated by this Agreement will take place on
March 13, 2006 (the “Closing
Date”)
and the
closing (the “Closing”)
will be
held at the offices of Xxxx Xxxxxxx LLP, 425 Park Avenue, New York, New York,
or
at such other time and place as shall be agreed upon by the Company and the
Purchasers hereunder of a majority in interest of the Securities.
ARTICLE
2
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
Except
as
specifically contemplated by this Agreement, the Company hereby represents
and
warrants to the Purchasers that:
2.1 Organization
and Qualification.
The
Company is duly incorporated, validly existing and in good standing under the
laws of the State of Delaware, with full corporate power and authority to
conduct its business as currently conducted as disclosed in the SEC Documents.
The Company is duly qualified to do business and is in good standing in every
jurisdiction in which the nature of the business conducted by it or property
owned by it makes such qualification necessary, except where the failure to
be
so qualified or in good standing, as the case may be, would not reasonably
be
expected to have a Material Adverse Effect.
2.2 Authorization;
Enforcement.
The
Company has all requisite corporate power and authority to enter into and to
perform its obligations under this Agreement, to consummate the transactions
contemplated hereby and to issue the Securities in accordance with the terms
hereof. The execution, delivery and performance of this Agreement and the
Warrants by the Company and the consummation by it of the transactions
contemplated hereby (including the issuance of the Securities) have been duly
authorized by the Company’s Board of Directors and no further consent or
authorization of the Company, its Board of Directors, or its stockholders is
required. This Agreement has been and the Warrants, at the Closing, will be
duly
executed by the Company and constitutes a legal, valid and binding obligation
of
the Company, enforceable against the Company in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or moratorium or similar laws affecting creditors’ and
contracting parties’ rights generally, and except as enforceability may be
subject to general principles of equity and except as rights to indemnity and
contribution may be limited by state or federal securities laws or public policy
underlying such laws.
2
2.3 Capitalization. The
authorized capital stock of the Company, as of March 6, 2006, consisted of
(i)
100,000,000 shares of Common Stock, of which 41,754,784 shares were issued
and
outstanding, (ii) 151,000 shares of Series A Convertible Preferred Stock, par
value $0.01 per share, none of which were issued or outstanding, (iii) 150,000
shares of Series B Convertible Preferred Stock, par value $0.01 per share,
of
which 130 shares were issued and outstanding, (iv) 6,660 shares of Series C
Convertible Preferred Stock, par value $0.01 per share, of which 3,250 shares
were issued and outstanding, (v) 100,000 shares of Series D Junior Participating
Preferred Stock, none of which were issued or outstanding and (vi) 100,000
shares of Series E Convertible Preferred Stock, par value $0.01 per share,
of
which 69,000 shares were issued and outstanding (clauses (ii) through (vi),
collectively, the “Preferred
Stock”).
All of
the issued and outstanding shares of Common Stock and Preferred Stock have
been
duly authorized, validly issued and are fully paid and nonassessable. Options
to
purchase an aggregate of 5,739,500 shares of Common Stock were outstanding
as of
March 6, 2006. Except
as
disclosed in or contemplated by the SEC Documents, the Company does not have
outstanding any options to purchase, or any preemptive rights or other rights
to
subscribe for or to purchase, any securities or obligations convertible into,
or
any contracts or commitments to issue or sell, shares of its capital stock
or
any such options, rights, convertible securities or obligations other than
(i)
options granted under the Company’s stock option plans, (ii) pursuant to the
Preferred Stock, (iii) pursuant to warrants exercisable for 725,000 shares
of
Common Stock as of March 6, 2006 and (iv) pursuant to the Investment and Royalty
Agreement, dated as of March 5, 2003, between the Company and PharmaBio
Development Inc. The Company’s Restated Certificate of Incorporation (as
amended, the “Certificate
of Incorporation”),
as in
effect on the date hereof, and the Company’s Bylaws (the “Bylaws”)
as in
effect on the date hereof, are each filed as exhibits to the SEC Documents
or
will be filed as exhibits to the Company’s Annual Report on Form 10-K for its
fiscal year ended December 31, 2005.
2.4 Issuance
of Securities.
The
Shares and all of the shares of Common Stock issuable upon exercise of the
Warrants (the “Warrant
Shares”)
are
duly authorized and, upon issuance in accordance with the terms of this
Agreement (and in case of the Warrant Shares, the Warrants), will be validly
issued, fully paid and non-assessable and will not be subject to preemptive
rights or other similar rights of stockholders of the Company.
2.5 No
Conflicts; Government Consents and Permits.
(a) The
execution, delivery and performance of this Agreement and the Warrants by the
Company and the consummation by the Company of the transactions contemplated
hereby and thereby (including the issuance of the Securities) will not (i)
conflict with or result in a violation of any provision of its Certificate
of
Incorporation or Bylaws or require the approval of the Company’s stockholders,
(ii) violate or conflict with, or result in a breach of any provision of, or
constitute a default under, any agreement, indenture or instrument to which
the
Company is a party or (iii) result in a violation of any law, rule, regulation,
order, judgment or decree (including United States federal and state securities
laws and regulations and regulations of any self-regulatory organizations to
which the Company or its securities are subject) applicable to the Company,
except in the case of clauses (ii) and (iii) only, for such conflicts, breaches,
defaults and violations as would not reasonably be expected to have a Material
Adverse Effect.
(b) The
Company is not required to obtain any consent, authorization or order of, or
make any filing or registration with, any court or governmental agency or any
regulatory or self regulatory agency in order for it to execute, deliver or
perform any of its obligations under this Agreement in accordance with the
terms
hereof, or to issue and sell the Securities in accordance with the terms hereof
other than such as have been made or obtained, and except for the registration
of the Shares and Warrant Shares under the Securities Act pursuant to Section
6
hereof, any filings required to be made under federal or state securities laws,
and any required filings or notifications regarding the issuance or listing
of
additional shares with Nasdaq.
3
(c) The
Company has all franchises,
permits, licenses and any similar authority necessary
for the conduct of its business as now being conducted by it, except for such
franchise, permit, license or similar authority, the lack of which would not
reasonably be expected to have a Material Adverse Effect. The Company has not
received any written notice of any proceeding relating to revocation or
modification of any such franchise, permit, license or similar authority except
where such revocation or modification would not reasonably be expected to have
a
Material Adverse Effect.
2.6 SEC
Documents, Financial Statements.
The
Company has timely filed all reports, schedules, forms, statements and other
documents required to be filed by it with the SEC since January 1, 2005,
pursuant to the reporting requirements of the Exchange Act (all of the foregoing
filed prior to the date hereof and all exhibits included therein and financial
statements and schedules thereto and documents (other than exhibits)
incorporated by reference therein, being hereinafter referred to herein as
the
“SEC
Documents”).
As of
their respective dates, the SEC Documents complied as to form in all material
respects with the requirements of the Exchange Act and the rules and regulations
of the SEC promulgated thereunder applicable to the SEC Documents, and none
of
the SEC Documents, at the time they were filed with the SEC, contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein,
in
light of the circumstances under which they were made, not misleading. The
Financial Statements and the related notes have been prepared in accordance
with
accounting principles generally accepted in the United States, consistently
applied, during the periods involved (except (i) as may be otherwise indicated
in the Financial Statements or the notes thereto, or (ii) in the case of
unaudited interim statements, to the extent they may not include footnotes,
may
be condensed or summary statements or may conform to the SEC’s rules and
instructions for Reports on Form 10-Q) and fairly present in all material
respects the consolidated financial position of the Company as of the dates
thereof and the consolidated results of its operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
and
recurring year-end audit adjustments). All
material agreements that were required to be filed as exhibits to the SEC
Documents under Item 601 of Regulation S-K (collectively, the “Material
Agreements”)
to
which the Company or any Subsidiary of the Company is a party, or the property
or assets of the Company or any Subsidiary of the Company are subject, have
been
filed as exhibits to the SEC Documents. To the Company’s knowledge, all Material
Agreements are valid and enforceable against
the Company in accordance with their respective terms, except (i) as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or moratorium or similar laws affecting creditors’ and
contracting parties’ rights generally, and (ii) as enforceability may be subject
to general principles of equity and except as rights to indemnity and
contribution may be limited by state or federal securities laws or public policy
underlying such laws. The Company is not in breach of or default under any
of
the Material Agreements, and to the Company's knowledge, no other party to
a
Material Agreement is in breach of or default under such Material Agreement,
except in each case, for such breaches or defaults as would not reasonably
be
expected to have a Material Adverse Effect. The Company has not received a
notice of termination of any of the Material Agreements.
4
2.7 Disclosure
Controls and Procedures.
Except
as disclosed in the SEC Documents, the Company has established and maintains
disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) that are effective in all material respects to ensure
that material information relating to the Company, including any consolidated
Subsidiaries, that is required to be disclosed by the Company in the reports
that it files or submits under the Exchange Act is made known to its chief
executive officer and chief financial officer by others within those entities.
The Company’s certifying officers have evaluated the effectiveness of the
Company’s controls and procedures as of the end of the period covered by the
most recently filed quarterly or annual periodic report under the Exchange
Act
(such date, the “Evaluation
Date”).
The
Company presented in its most recently filed quarterly or annual periodic report
under the Exchange Act the conclusions of the certifying officers about the
effectiveness of the disclosure controls and procedures based on their
evaluations as of the Evaluation Date. Since the Evaluation Date, there have
been no significant changes in the Company’s internal control over financial
reporting identified in connection with such evaluation that occurred during
the
Company’s last fiscal quarter that has materially affected, or is reasonably
likely to materially affect, the Company’s internal control over financial
reporting.
2.8 Accounting
Controls.
Except
as disclosed in the SEC Documents, the Company maintains a system of accounting
controls sufficient to provide reasonable assurances that (i) transactions
are executed in accordance with management’s general or specific authorization,
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting principles
as applied in the United States and to maintain accountability for assets,
(iii)
access to assets is permitted only in accordance with management’s general or
specific authorization, and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action
is
taken with respect to any differences.
2.9 Absence
of Litigation.
As of
the date hereof, there is no action, suit, proceeding or investigation before
or
by any court, public board, government agency, self-regulatory organization
or
body pending or, to the Company’s knowledge, threatened against the Company that
if determined adversely to the Company would reasonably be expected to have
a
Material Adverse Effect. To the knowledge of the Company, there has not been
and
there is not pending any investigation by the SEC involving the Company or
any
current or former director or officer of the Company. The Company has not
received any stop order or other order suspending the effectiveness of any
registration statement filed by the Company under the Exchange Act or the
Securities Act and, to the Company’s knowledge, the SEC has not issued any such
order.
2.10 Intellectual
Property Rights.
To the
Company’s knowledge, the Company owns or possesses, or believes it can obtain on
reasonable terms, licenses or sufficient rights to use all patents, patent
applications, patent rights, inventions, know-how, trade secrets, trademarks,
trademark applications, service marks, service names, trade names and copyrights
necessary to enable it to conduct its business in all material respects as
conducted as of the date hereof (the “Intellectual
Property”),
except
for such Intellectual Property, the inability to use would not have a Material
Adverse Effect. To the Company’s knowledge, the Company has not infringed the
intellectual property rights of third parties and no third party, to the
Company’s knowledge, is infringing the Intellectual Property, in each case,
which could reasonably be expected to result in a Material Adverse Effect.
Except as disclosed in the SEC Documents, there are no material options,
licenses or agreements relating to the Intellectual Property, nor is the Company
bound by or a party to any material options, licenses or agreements relating
to
the patents, patent applications, patent rights, inventions, know-how, trade
secrets, trademarks, trademark applications, service marks, service names,
trade
names or copyrights of any other person or entity. As of the date hereof, there
is no material claim or action or proceeding pending or, to the Company’s
knowledge, threatened that challenges the right of the Company with respect
to
any Intellectual Property.
5
2.11 Placement
Agent.
The
Company has taken no action that would give rise to any claim by any person
for
brokerage commissions, placement agent’s fees or similar payments relating to
this Agreement or the transactions contemplated hereby, except for dealings
with
the Placement Agent, whose commissions and fees will be paid by the
Company.
2.12 Investment
Company.
The
Company is not and, after giving effect to the offering and sale of the
Securities, will not be an “investment company” as such term is defined in the
Investment Company Act of 1940, as amended (the “Investment
Company Act”).
The
Company shall conduct its business in a manner so that it will not become
subject to the Investment Company Act.
2.13 No
Material
Adverse Change.
Since
September 30, 2005, except as described or referred to in the SEC Documents
and
except for cash expenditures in the ordinary course of business, there has
not
been any Material Adverse Effect. Since September 30, 2005, (i) there has not
been any dividend or distribution of any kind declared, set aside for payment,
paid or made by the Company on any class of capital stock, (ii) the Company
has
not sustained any material loss or interference with the Company’s business from
fire, explosion, flood or other calamity, whether or not covered by insurance,
or from any labor disturbance or dispute or any action, order or decree of
any
court or arbitrator or governmental or regulatory authority, and (iii) the
Company has not incurred any material liabilities except in the ordinary course
of business and except for liabilities arising from or in connection with this
Agreement and the Warrants.
2.14 Nasdaq
National Market.
The
issued and outstanding shares of Common Stock are listed on Nasdaq, and, to
the
Company’s knowledge, there are no proceedings to revoke or suspend such listing.
The Company is in compliance in all material respects with the requirements
of
Nasdaq for continued listing of the Common Stock thereon and any other Nasdaq
listing and maintenance requirements.
2.15 Acknowledgment
Regarding Purchasers’ Purchase of Securities. The
Company acknowledges and agrees that each of the Purchasers is acting solely
in
the capacity of an arm’s length purchaser with respect to this Agreement and the
transactions contemplated hereby. The Company further acknowledges that no
Purchaser is acting as a financial advisor or fiduciary of the Company (or
in
any similar capacity with respect to the Company) with respect to this Agreement
and the transactions contemplated hereby and any advice given by any Purchaser
or any of their respective representatives or agents to the Company in
connection with this Agreement and the transactions contemplated hereby is
merely incidental to such Purchaser’s purchase of the Securities. The Company
further represents to each Purchaser that the Company’s decision to enter into
this Agreement has been based on the independent evaluation of the transactions
contemplated hereby by the Company and its representatives.
6
2.16 Accountants.
Xxxxxxxxx
Xxxxx Xxxxxxx LLP,
who
will express their opinion with respect to the audited financial statements
and
schedules to be included as a part of the Registration Statement prior to the
filing of the Registration Statement, are independent accountants as required
by
the Securities Act.
2.17 Insurance.
The
Company is insured by insurers of recognized financial responsibility against
such losses and risks and in such amounts as the Company believes are prudent
and customary for a company (i) in the businesses and location in which the
Company is engaged, (ii) with the resources of the Company and (iii) at a
similar stage of development as the Company. The Company has not received any
written notice that the Company will not be able to renew its existing insurance
coverage as and when such coverage expires. The Company believes it will be
able
to obtain similar coverage at reasonable cost from similar insurers as may
be
necessary to continue its business.
2.18 Foreign
Corrupt Practices.
Since
January 1, 2005, neither the Company, nor to the Company’s knowledge, any
director, officer, agent, employee or other person acting on behalf of the
Company has, in the course of its actions for, or on behalf of, the Company
(i) used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expenses relating to political activity; (ii)
made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; (iii) violated or is
in violation of in any material respect any provision of the U.S. Foreign
Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful bribe,
rebate, payoff, influence payment, kickback or other unlawful payment to any
foreign or domestic government official or employee.
2.19 Private
Placement.
Neither
the Company nor any of its Subsidiaries, nor any person acting on its or their
behalf, has, directly or indirectly, made any offers or sales of any security
or
solicited any offers to buy any security, under any circumstances that would
require registration of the Securities under the Securities Act.
2.20 No
Registration Rights.
No
person has the right to (i) prohibit the Company from filing the Registration
Statement or (ii) other than as disclosed in the SEC Documents, require the
Company to register any securities for sale under the Securities Act by reason
of the filing of the Registration Statement. The granting and performance of
the
registration rights under this Agreement will not violate or conflict with,
or
result in a breach of any provision of, or constitute a default under, any
agreement, indenture or instrument to which the Company is a party.
2.21 Taxes.
The
Company has filed (or has obtained an extension of time within which to file)
all necessary federal, state and foreign income and franchise tax returns and
has paid all taxes shown as due on such tax returns, except where the failure
to
so file or the failure to so pay would not reasonably be expected to have a
Material Adverse Effect.
2.22 Real
and Personal Property. The
Company has good and marketable title to, or has valid rights to lease or
otherwise use, all items of real and personal property that are material to
the
business of the Company free and clear of all liens, encumbrances, claims and
defects and imperfections of title except those that (i) do not materially
interfere with the use of such property by the Company or (ii) would not
reasonably be expected to have a Material Adverse Effect.
7
2.23 Application
of Takeover Protections.
The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby will not impose any restriction on any
Purchaser, or create in any party (including any current stockholder of the
Company) any rights, under any share acquisition, business combination, poison
pill (including any distribution under a rights agreement), or other similar
anti-takeover provisions under the Company’s charter documents or the laws of
its state of incorporation.
2.24 No
Manipulation of Stock. The
Company has not taken, nor will it take, directly or indirectly any action
designed to stabilize or manipulate of the price of the Common Stock or any
security of the Company to facilitate the sale or resale of any of the
Shares.
2.25 Related
Party Transactions.
Since
September 30, 2005, except with respect to the transactions (i) that are not
required to be disclosed and (ii) contemplated hereby to the extent an affiliate
of any director purchases Securities hereunder, all transactions that have
occurred between or among the Company, on the one hand, and any of its officers
or directors, or any affiliate or affiliates of any such officer or director,
on
the other hand, prior to the date hereof have been disclosed in the SEC
Documents.
ARTICLE
3
PURCHASER’S
REPRESENTATIONS AND WARRANTIES
Each
Purchaser represents and warrants to the Company, severally and not jointly,
with respect to itself and its purchase hereunder, that:
3.1 Investment
Purpose; Status. The
Purchaser is an “accredited investor” as such term is defined in Rule 501(a) of
the Securities Act. The Purchaser is purchasing the Securities for its own
account and not with a present view toward the public sale or distribution
thereof and has no intention of selling or distributing any of such Securities
or any arrangement or understanding with any other persons regarding the sale
or
distribution of such Securities except in accordance with the provisions of
Article 6 and except as would not result in a violation of the Securities Act;
provided,
however,
that by
making the representations herein, such Purchaser does not agree to hold any
of
the Securities for any minimum or other specific term and reserves the right
to
dispose of the Securities at any time in accordance with or pursuant to a
registration statement or an exemption under the Securities Act. The Purchaser
will not, directly or indirectly, offer, sell, pledge, transfer or otherwise
dispose of (or solicit any offers to buy, purchase or otherwise acquire or
take
a pledge of) any of the Securities except in accordance with the provisions
of
Article 6 or pursuant to and in accordance with the Securities Act.
3.2 Questionnaire.
The
Investor Questionnaire (the “Investor
Questionnaire”)
submitted by Purchaser to the Company in connection with its purchase of the
Securities was accurate and correct when delivered and is accurate and correct
as of the date hereof.
8
3.3 Reliance
on Exemptions.
The
Purchaser understands that the Securities are being offered and sold to it
in
reliance upon specific exemptions from the registration requirements of United
States federal and state securities laws and that the Company is relying upon
the truth and accuracy of, and the Purchaser’s compliance with, the
representations, warranties, agreements, acknowledgments and understandings
of
the Purchaser set forth herein in order to determine the availability of such
exemptions and the eligibility of the Purchaser to acquire the
Securities.
3.4 Acknowledgement
of Risk.
(a) The
Purchaser acknowledges and understands that its investment in the Securities
involves a significant degree of risk, including, without limitation,
(i) the Company remains a development stage business with limited operating
history and requires substantial funds in addition to the proceeds from the
sale
of the Securities; (ii) an investment in the Company is speculative, and
only Purchasers who can afford the loss of their entire investment should
consider investing in the Company and the Securities; (iii) the Purchaser
may not be able to liquidate its investment; (iv) transferability of the
Securities is extremely limited; (v) in the event of a disposition of the
Securities, the Purchaser could sustain the loss of its entire investment;
and
(vi) the Company has not paid any dividends on its Common Stock since January
1,
2001, and does not anticipate the payment of dividends in the foreseeable
future. Such risks are more fully set forth in the SEC Documents;
(b) The
Purchaser is able to bear the economic risk of holding
the Securities for an indefinite period, and has knowledge and experience in
financial and business matters such that it is capable of evaluating the risks
of the investment in the Securities; and
(c) The
Purchaser has, in connection with the Purchaser’s decision to purchase
Securities, not relied upon any representations or other information (whether
oral or written) other than as set forth in the representations
and warranties of the Company contained herein, and the Purchaser has, with
respect to all matters relating to this Agreement and the offer and sale of
the
Securities, relied solely upon the advice of such Purchaser’s own counsel and
has not relied upon or consulted any counsel to the Placement Agent or counsel
to the Company.
3.5 Governmental
Review.
The
Purchaser understands that no United States federal or state agency or any
other
government or governmental agency has passed upon or made any recommendation
or
endorsement of the Securities or an investment therein.
3.6 Transfer
or Resale.
The
Purchaser understands that:
(a) the
Securities have not been and are not being registered under the Securities
Act
(other than as contemplated in Article 6) or any applicable state securities
laws and, consequently, the Purchaser may have to bear the risk of owning the
Securities for an indefinite period of time because the Securities may not
be
transferred unless (i) the resale of the Securities is registered pursuant
to an
effective registration statement under the Securities Act, as contemplated
in
Article 6; (ii) the Purchaser has delivered to the Company an opinion of counsel
(in form, substance and scope reasonably acceptable to the Company) to the
effect that the Securities to be sold or transferred may be sold or transferred
pursuant to an exemption from such registration; or (iii) the Securities
are sold or transferred pursuant to Rule 144;
9
(b) any
sale
of the Securities made in reliance on Rule 144 may be made only in accordance
with the terms of Rule 144 and, if Rule 144 is not applicable, any resale of
the
Securities under circumstances in which the seller (or the person through whom
the sale is made) may be deemed to be an underwriter (as that term is defined
in
the Securities Act) may require compliance with some other exemption under
the
Securities Act or the rules and regulations of the SEC thereunder; and
(c) except
as
set forth in Article 6, neither the Company nor any other person is under any
obligation to register the resale of the Shares or the Warrant Shares under
the
Securities Act or any state securities laws or to comply with the terms and
conditions of any exemption thereunder.
3.7 Legends.
(a) The
Purchaser understands the certificates representing the Securities will bear
a
restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of the certificates for such
Securities):
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OF
THE
UNITED STATES. THE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS,
OR
UNLESS OFFERED, SOLD, PLEDGED, HYPOTHECATED OR TRANSFERRED PURSUANT TO AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS. THE
COMPANY SHALL BE ENTITLED TO REQUIRE AN OPINION OF COUNSEL SATISFACTORY TO
THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED TO THE EXTENT THAT SUCH OPINION
IS REQUIRED PURSUANT TO THAT CERTAIN SECURITIES PURCHASE AGREEMENT UNDER WHICH
THE SECURITIES WERE ISSUED.
(b) The
Purchaser may request that the Company remove, and the Company agrees to
authorize the removal of any legend from the Shares and Warrant Shares following
any sale of the Shares or Warrant Shares pursuant to an effective Registration
Statement or Rule 144 or when the Shares or Warrant Shares may be sold under
Rule 144(k).
3.8 Authorization;
Enforcement.
The
Purchaser is duly organized, validly existing and in good standing under the
laws of its jurisdiction of formation, and has the requisite power and authority
to enter into this Agreement and to consummate the transactions contemplated
hereby. The Purchaser has taken all necessary action to authorize the execution,
delivery and performance of this Agreement. Upon the execution and delivery
of
this Agreement, this Agreement shall constitute a valid and binding obligation
of the Purchaser enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ and contracting
parties’ rights generally and except as enforceability may be subject to general
principles of equity and except as rights to indemnity and contribution may
be
limited by state or federal securities laws or public policy underlying such
laws.
10
3.9 Residency.
The
Purchaser is a resident of the jurisdiction set forth immediately below such
Purchaser’s name on the signature pages hereto.
3.10 No
Short Sales.
Between
the time the Purchaser learned about the Offering and the public announcement
of
the Offering, the Purchaser has not engaged in any short sales or similar
transactions with respect to the Common Stock, nor has the Purchaser, directly
or indirectly, knowingly caused any Person to engage in any short sales or
similar transactions with respect to the Common Stock.
3.11 Acknowledgements
Regarding Placement Agent. The
Purchaser acknowledges that the Placement Agent is acting as the exclusive
placement agent on a “best efforts” basis for the Securities being offered
hereby and will be compensated by the Company for acting in such capacity.
The
Purchaser represents that (i) the Purchaser was contacted regarding the sale
of
the Securities by the Placement Agent (or an authorized agent or representative
thereof) with whom the Purchaser entered into a confidentiality agreement and
(ii) no Securities were offered or sold to it by means of any form of general
solicitation or general advertising.
ARTICLE
4
COVENANTS
4.1 Reporting
Status.
The
Company’s Common Stock is registered under Section 12 of the Exchange Act.
During the Registration Period, the Company agrees to use commercially
reasonable efforts to timely file with the SEC all reports required to be filed
by the Company under the Exchange Act, and the Company will not terminate its
status as an issuer required to file reports under the Exchange Act even if
the
Exchange Act or the rules and regulations thereunder would permit such
termination.
4.2 Expenses.
The
Company and each Purchaser is liable for, and each will pay, its own expenses
incurred in connection with the negotiation, preparation, execution and delivery
of this Agreement, including, without limitation, attorneys’ and consultants’
fees and expenses.
4.3 Financial
Information.
The
Company will use commercially reasonable efforts to cause the financial
statements of the Company included in any documents filed with the SEC (i)
to be
prepared in accordance with accounting principles generally accepted in the
United States, consistently applied (except (x) as may be otherwise indicated
in
such financial statements or the notes thereto, or (y) in the case of unaudited
interim statements, to the extent they may not include footnotes, may be
condensed or summary statements or may conform to the SEC’s rules and
instructions for Reports on Form 10-Q), and (ii) to fairly present in all
material respects the consolidated financial position of the Company and
consolidated results of its operations and cash flows as of, and for the periods
covered by, such financial statements (subject, in the case of unaudited
statements, to normal and recurring year-end audit adjustments).
11
4.4 Securities
Laws Disclosure; Publicity. On
or
before 9:30 a.m., New York local time, on March 13, 2006 the Company shall
issue
a press release announcing the signing of this Agreement and describing the
material terms of the transactions contemplated by this Agreement. On or before
the fourth business day following the Closing, the Company shall file a Current
Report on Form 8-K with the SEC describing the terms of the transactions
contemplated by this Agreement and including as an exhibit to such Current
Report on Form 8-K this Agreement, in the form required by the Exchange Act.
The
Company shall not otherwise publicly disclose the name of any Purchaser, or
include the name of any Purchaser in any filing with the Commission (other
than
the Registration Statement and any exhibits to filings made in respect of this
transaction in accordance with periodic filing requirements under the Exchange
Act) or any regulatory agency, without the prior written consent of such
Purchaser, except to the extent such disclosure is required by law, regulations
or the rules of any securities exchange, in which case the Company shall provide
the Purchasers with prior notice of such disclosure.
4.5 Sales
by Purchasers.
Each
Purchaser will sell any Securities and Warrant Shares held by it in compliance
with applicable prospectus delivery requirements, if any, or otherwise in
compliance with the requirements for an exemption from registration under the
Securities Act and the rules and regulations promulgated thereunder. No
Purchaser will make any sale, transfer or other disposition of the Securities
in
violation of federal or state securities laws.
4.6 Reservation
of Common Stock.
The
Company shall reserve and keep available at all times during which the Warrants
remain exercisable, free of preemptive rights, a sufficient number of shares
of
Common Stock for the purpose of enabling the Company to issue Warrant Shares
pursuant to this Agreement.
ARTICLE
5
CONDITIONS
TO CLOSING
5.1 Conditions
to Obligations of the Company.
The
Company’s obligation to complete the purchase and sale of the Securities and
deliver such stock certificate(s) and Warrants to each Purchaser is subject
to
the fulfillment or waiver as of the Closing Date of the following
conditions:
(a) Receipt
of Funds.
The
Company shall have received immediately available funds in the full amount
of
the purchase price for the Securities being purchased hereunder as set forth
opposite such Purchaser’s name on Exhibit
A hereto.
(b) Representations
and Warranties.
The
representations and warranties made by each Purchaser in Article 3 which
are
qualified as to materiality must be true and correct as written and the
representations and warranties of each Purchaser contained in this Agreement
which are not qualified as to materiality must be true and correct in all
material respects as of the Closing Date except to the extent that the
representations and warranties relate to an earlier date in which case the
representations and warranties must be true and correct as written or true
and
correct in all material respects, as the case may be, as of the earlier
date.
12
(c) Covenants.
All
covenants, agreements and conditions contained in this Agreement to be performed
by the Purchasers on or prior to the Closing Date shall have been performed
or
complied with in all material respects.
(d) Blue
Sky.
The
Company shall have obtained all necessary blue sky law permits and
qualifications, or secured exemptions therefrom, required by any state for
the
offer and sale of the Securities.
(e) Nasdaq
Qualification.
The
Shares to be issued shall be duly authorized for listing by Nasdaq, subject
to
official notice of issuance, to the extent required by the rules of Nasdaq.
(f) Absence
of Litigation.
No
proceeding challenging this Agreement or the transactions contemplated hereby,
or seeking to prohibit, alter, prevent or materially delay the Closing, shall
have been instituted or be pending before any court, arbitrator, governmental
body, agency or official.
(g) No
Governmental Prohibition.
The
sale of the Securities by the Company shall not be prohibited by any law or
governmental order or regulation.
(h) Minimum
Aggregate Investment.
The
Company shall have received at the Closing at least $20.0 million of aggregate
proceeds from the sale of Securities hereunder.
5.2 Conditions
to Purchasers’ Obligations at the Closing.
Each
Purchaser’s obligation to complete the purchase and sale of the Securities is
subject to the fulfillment or waiver as of the Closing Date of the following
conditions:
(a) Representations
and Warranties.
The
representations and warranties made by the Company in Article 2 which
are
qualified as to materiality must be true and correct as written and the
representations and warranties of the Company contained in this Agreement which
are not qualified as to materiality must be true and correct in all material
respects as of the Closing Date except to the extent that the representations
and warranties relate to an earlier date in which case the representations
and
warranties must be true and correct as written or true and correct in all
material respects, as the case may be, as of the earlier date.
(b) Covenants.
All
covenants, agreements and conditions contained in this Agreement to be performed
by the Company on or prior to the Closing Date shall have been performed or
complied with in all material respects.
(c) Blue
Sky.
The
Company shall have obtained all necessary blue sky law permits and
qualifications, or secured exemptions therefrom, required by any state or
foreign or other jurisdiction for the offer and sale of the Shares.
(d) Legal
Opinion.
The
Company shall have delivered to such Purchaser an opinion, dated as of the
Closing Date, from Xxxx Xxxxxxx LLP, counsel to the Company, in substantially
the form attached hereto as Exhibit
C hereto.
13
(e) Transfer
Agent Instructions.
The
Company shall have delivered to its transfer agent irrevocable instructions
to
issue to such Purchaser or in such nominee name(s) as designated by such
Purchaser in writing such number of Shares set forth opposite such Purchaser’s
name on Exhibit
A
hereto
or, if requested by the Purchaser, one or more certificates representing such
Shares.
(f) Nasdaq
Qualification.
The
Shares shall be duly authorized for listing by Nasdaq, subject to official
notice of issuance, to the extent required by the rules of Nasdaq.
(g) Absence
of Litigation.
No
proceeding challenging this Agreement or the transactions contemplated hereby,
or seeking to prohibit, alter, prevent or materially delay the Closing, shall
have been instituted or be pending before any court, arbitrator, governmental
body, agency or official.
(h) No
Governmental Prohibition.
The
sale of the Shares by the Company shall not be prohibited by any law or
governmental order or regulation.
ARTICLE
6
REGISTRATION
RIGHTS
6.1 The
Company shall use commercially reasonable efforts to file, as soon as reasonably
practicable, but in no event later than 30 days
after the Closing Date (the “Filing
Date”),
a
registration statement (the “Registration
Statement”)
with
the SEC covering the resale of the Registrable Securities, and effect the
registration, qualifications or compliances (including, without limitation,
the
execution of any required undertaking to file post-effective amendments,
appropriate qualifications or exemptions under applicable blue sky or other
state securities laws and appropriate compliance with applicable securities
laws, requirements or regulations) of the Shares and the Warrant Shares as
promptly as possible after the filing thereof, but in any event prior to the
date which is 120 days after the Closing Date. The Registration Statement will
be on Form S-3; provided,
that if
Form S-3 is not available for use by the Company on the Filing Date, then the
Registration Statement will be on such form as is then available.
6.2 All
Registration Expenses incurred in connection with any registration,
qualification, exemption or compliance pursuant to Section 6.1 shall be borne
by
the Company. All Selling Expenses relating to the sale of securities registered
by or on behalf of Holders shall be borne by such Holders pro rata on the basis
of the number of securities so registered.
14
6.3 The
Company further agrees that, in the event that the Registration Statement (i)
has not been filed with the SEC within 30 days after the Closing Date, (ii)
has
not been declared effective by the SEC within 120 days after the Closing Date,
or (iii) after the Registration Statement is declared effective by the SEC,
is
suspended by the Company or ceases to remain continuously effective during
the
Registration Period as to all Registrable Securities for which it is required
to
be effective, other than, in each case, within the time period(s) permitted
by
Section 6.7(b) (each such event referred to in clauses (i), (ii) and (iii),
(a
“Registration
Default”)),
for
all or part of any thirty-day period (a “Penalty
Period”)
during
which the Registration Default remains uncured (which initial thirty-day period
shall commence on the fifth Business Day after the date of such Registration
Default if such Registration Default has not been cured by such date), the
Company shall pay to each Purchaser 1% of such Purchaser’s aggregate purchase
price of his or her Securities for each Penalty Period during which the
Registration Default remains uncured; provided,
however,
that if
a Purchaser fails to provide the Company with any information that is required
to be provided in the Registration Statement with respect to such Purchaser
as
set forth herein, then the commencement of the Penalty Period described above
shall be extended until two Business Days following the date of receipt by
the
Company of such required information; and
provided, further,
that in
no event shall the Company be required hereunder to pay to any Purchaser
pursuant to this Agreement an aggregate amount that exceeds 6.0% of the
aggregate Purchase Price paid by such Purchaser for such Purchaser’s Securities.
The Company shall deliver said cash payment to the Purchaser by the fifth
Business Day after the end of such Penalty Period. If the Company fails to
pay
said cash payment to the Purchasers in full by the fifth Business Day after
the
end of such Penalty Period, the Company will pay interest thereon at a rate
of
10.0% per annum (or such lesser maximum amount that is permitted to be paid
by
applicable law) to the Purchasers, accruing daily from the date such liquidated
damages are due until such amounts, plus all such interest thereon, are paid
in
full. For
the
avoidance of doubt, the parties hereto agree that the payments set forth in
this
Section 6.3 relate solely to the Shares to be issued under this Agreement and
not to the Warrants or Warrant Shares issuable hereunder, in respect of which
no
damages under this Section 6.3 will be payable by the Company. The provisions
of
this Section 6.3 are the Purchasers’ exclusive remedy for any Registration
Default.
6.4 In
the
case of the registration, qualification, exemption or compliance effected by
the
Company pursuant to this Agreement, the Company shall, upon reasonable request,
inform each Holder as to the status of such registration, qualification,
exemption and compliance. At its expense, during the Registration Period, the
Company shall:
(a) except
for such times as the Company is permitted hereunder to suspend the use of
the
prospectus forming part of the Registration Statement, use commercially
reasonable efforts to keep such registration, and any qualification, exemption
or compliance under state securities laws which the Company determines to
obtain, continuously effective with respect to a Holder, and to keep such
Registration Statement free of any material misstatements or omissions, until
the earlier of the following: (i) the second anniversary of the Closing Date
or
(ii) the date all Shares and Warrant Shares held by such Holder may be sold
under Rule 144 during any 90 day period. The period of time during which the
Company is required hereunder to keep the Registration Statement effective
is
referred to herein as the “Registration
Period.”
(b) advise
the Holders within five Business Days:
(i) when
the
Registration Statement or any amendment thereto has been filed with the SEC
and
when the Registration Statement or any post-effective amendment thereto has
become effective;
(ii) of
any
request by the SEC for amendments or supplements to the Registration Statement
or the prospectus included therein;
15
(iii) of
the
issuance by the SEC of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for such
purpose;
(iv) of
the
receipt by the Company of any notification with respect to the suspension of
the
qualification of the Registrable Securities included therein for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; and
(v) of
the
occurrence of any event that requires the making of any changes in the
Registration Statement or the prospectus so that, as of such date, the
Registration Statement and the prospectus, as applicable, do not contain an
untrue statement of material fact, and do not omit to state a material fact
required to be stated therein or necessary to make the statements therein (in
the case of the prospectus, in the light of the circumstances under which they
were made) not misleading;
(c) use
commercially reasonable efforts to obtain the withdrawal of any order suspending
the effectiveness of any Registration Statement as soon as reasonably
practicable;
(d) if
a
Holder so requests in writing, promptly furnish to each such Holder, without
charge, at least one copy of such Registration Statement and any post-effective
amendment thereto, including financial statements and schedules, and, if
explicitly requested, all exhibits in the form filed with the SEC (other than
those exhibits available via XXXXX);
(e) during
the Registration Period, promptly deliver to each such Holder, without charge,
as many copies of the prospectus included in such Registration Statement and
any
amendment or supplement thereto as such Holder may reasonably request in
writing; and the Company consents to the use, consistent with the provisions
hereof, of the prospectus or any amendment or supplement thereto by each of
the
selling Holders of Registrable Securities in connection with the offering and
sale of the Registrable Securities covered by the prospectus or any amendment
or
supplement thereto;
(f) during
the Registration Period, if a Holder so requests in writing, deliver to each
Holder, without charge, (i) one copy of the following documents, other than
those documents available via XXXXX: (A) its annual report to its stockholders,
if any (which annual report shall contain financial statements audited in
accordance with generally accepted accounting principles in the United States
of
America by an independent registered public accounting firm of recognized
standing), (B) if not included in substance in its annual report to
stockholders, its annual report on Form 10-K (or similar form), (C) its
definitive proxy statement with respect to its annual meeting of stockholders,
(D) each of its quarterly report(s) on Form 10-Q (or similar form), and (E)
a
copy of the full Registration Statement (the foregoing, in each case, excluding
exhibits); and (ii) if explicitly requested, all exhibits excluded by the
parenthetical to the immediately preceding clause (E);
(g) prior
to
any public offering of Registrable Securities pursuant to any Registration
Statement, promptly take such actions as may be necessary to register or qualify
or obtain an exemption for offer and sale under the securities or blue sky
laws
of such United States jurisdictions as any such Holders reasonably request
in
writing, provided that the Company shall not for any such purpose be required
to
qualify generally to transact business as a foreign corporation in any
jurisdiction where it is not so qualified or to consent to general service
of
process in any such jurisdiction, and do any and all other acts or things
reasonably necessary or advisable to enable the offer and sale in such
jurisdictions of the Registrable Securities covered by such Registration
Statement;
16
(h)
upon the
occurrence of any event contemplated by Section 6.4(b)(v) above, except for
such
times as the Company is permitted hereunder to suspend the use of the prospectus
forming part of the Registration Statement, the Company shall use commercially
reasonable efforts to as soon as reasonably practicable prepare a post-effective
amendment to the Registration Statement or a supplement to the related
prospectus, or file any other required document so that, as thereafter delivered
to purchasers of the Registrable Securities included therein, the prospectus
will not include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(i) otherwise
use commercially reasonable efforts to comply in all material respects with
all
applicable rules and regulations of the SEC which could affect the sale of
the
Registrable Securities;
(j) use
commercially reasonable efforts to cause all Registrable Securities to be listed
on each securities exchange or market, if any, on which equity securities issued
by the Company have been listed;
(k) use
commercially reasonable efforts to take all other steps necessary to effect
the
registration of the Registrable Securities contemplated hereby and to enable
the
Holders to sell Registrable Securities under Rule 144; and
(l) if
a
Holder so requests in writing, permit a single counsel for the Purchasers
designated by Holders of a majority of the Registrable Securities to review
the
Registration Statement and all amendments and supplements thereto, within two
Business Days prior to the filing thereof with the Commission;
provided
that, in
the case of clause (l) above, the Company shall not be required (A) to delay
the
filing of the Registration Statement or any amendment or supplement thereto
to
incorporate any comments to the Registration Statement or any amendment or
supplement thereto by or on behalf of a Holder if such comments would require
or
result in a delay in the filing of such Registration Statement, amendment or
supplement, as the case may be, or (B) to provide, and shall not provide, any
Purchaser or its representatives with material, non-public information unless
such Purchaser agrees to receive such information and enters into a written
confidentiality agreement with the Company in a form reasonably acceptable
to
the Company.
6.5 The
Holders shall have no right to take any action to restrain, enjoin or otherwise
delay any registration pursuant to Section 6.1 hereof as a result of any
controversy that may arise with respect to the interpretation or implementation
of this Agreement.
17
6.6 i)
To the
extent permitted by law, the Company shall indemnify each Holder and each person
controlling such Holder within the meaning of Section 15 of the Securities
Act,
with respect to which any registration that has been effected pursuant to this
Agreement, against all claims, losses, damages and liabilities (or action in
respect thereof), including any of the foregoing incurred in settlement of
any
litigation, commenced or threatened (subject to Section 6.6(c) below), arising
out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in the Registration Statement, prospectus or any
amendment or supplement thereof, or based on any omission (or alleged omission)
to state therein a material fact required to be stated therein or necessary
to
make the statements therein not misleading (in case of any prospectus, in light
of the circumstances in which they were made), or any violation by the Company
of any rule or regulation promulgated under the Securities Act applicable to
the
Company and relating to any action or inaction required of the Company in
connection with any such registration, qualification or compliance, and will
reimburse each Holder and each person controlling such Holder, for reasonable
legal and other out-of-pocket expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action
as
incurred; provided that the Company will not be liable in any such case to
the
extent that any untrue statement or omission or allegation thereof is made
in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of such Holder specifically for use in preparation
of
such Registration Statement, prospectus, amendment or supplement; provided
further
that the
Company will not be liable in any such case where the claim, loss, damage or
liability arises out of or is related to the failure of such Holder to comply
with the covenants and agreements contained in this Agreement respecting sales
of Registrable Securities, and except that the foregoing indemnity agreement
is
subject to the condition that, insofar as it relates to any such untrue
statement or alleged untrue statement or omission or alleged omission made
in
the preliminary prospectus but eliminated or remedied in the amended prospectus
on file with the SEC at the time the Registration Statement becomes effective
or
in the amended prospectus filed with the SEC pursuant to Rule 424(b) or in
the
prospectus subject to completion under Rule 424 of the Securities Act, which
together meet the requirements of Section 10(a) of the Securities Act (the
“Final
Prospectus”),
such
indemnity shall not inure to the benefit of any such Holder or any such
controlling person, if a copy of the Final Prospectus furnished by the Company
to the Holder for delivery was not furnished to the person or entity asserting
the loss, liability, claim or damage at or prior to the time such furnishing
is
required by the Securities Act and the Final Prospectus would have cured the
defect giving rise to such loss, liability, claim or damage.
(b) Each
Holder will severally, and not jointly, indemnify the Company, each of its
directors and officers, and each person who controls the Company within the
meaning of Section 15 of the Securities Act, against all claims, losses,
damages and liabilities (or actions in respect thereof), including any of the
foregoing incurred in settlement of any litigation, commenced or threatened
(subject to Section 6.6(c) below), arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in the
Registration Statement, prospectus, or any amendment or supplement thereof,
or
based on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading (in case of any prospectus, in light of the circumstances in which
they were made), and will reimburse the Company, such directors and officers,
and each person controlling the Company for reasonable legal and any other
expenses reasonably incurred in connection with investigating or defending
any
such claim, loss, damage, liability or action as incurred, in each case to
the
extent, but only to the extent, that such untrue statement or omission or
allegation thereof is made in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Holder specifically
for use in preparation of the Registration Statement, prospectus, amendment
or
supplement. Notwithstanding the foregoing, a Holder’s aggregate liability
pursuant to this subsection (b) and subsection (d) shall be limited to the
net
amount received by the Holder from the sale of the Registrable Securities
pursuant to the Registration Statement.
18
(c) Each
party entitled to indemnification under this Section 6.6 (the “Indemnified
Party”)
shall
give notice to the party required to provide indemnification (the “Indemnifying
Party”)
promptly after such Indemnified Party has actual knowledge of any claim as
to
which indemnity may be sought, and shall permit the Indemnifying Party (at
its
expense) to assume the defense of any such claim or any litigation resulting
therefrom, provided that counsel for the Indemnifying Party, who shall conduct
the defense of such claim or litigation, shall be approved by the Indemnified
Party (whose approval shall not unreasonably be withheld), and the Indemnified
Party may participate in such defense at such Indemnified Party’s expense, and
provided further that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
under this Agreement, except to the extent such failure is materially
prejudicial to the Indemnifying Party in defending such claim or litigation.
An
Indemnifying Party shall not be liable for any settlement of an action or claim
effected without its written consent (which consent will not be unreasonably
withheld). No Indemnifying Party, in its defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent
to
entry of any judgment or enter into any settlement which does not include as
an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim
or
litigation.
(d) If
the
indemnification provided for in this Section 6.6 is held by a court of competent
jurisdiction to be unavailable to an Indemnified Party with respect to any
loss,
liability, claim, damage or expense referred to therein, then the Indemnifying
Party, in lieu of indemnifying such Indemnified Party thereunder, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such loss, liability, claim, damage or expense in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party on the
one
hand and of the Indemnified Party on the other in connection with the statements
or omissions which resulted in such loss, liability, claim, damage or expense
as
well as any other relevant equitable considerations. The relative fault of
the
Indemnifying Party and of the Indemnified Party shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission to state a material fact relates to information
supplied by the Indemnifying Party or by the Indemnified Party and the parties’
relative intent, knowledge, access to information and opportunity to correct
or
prevent such statement or omission.
6.7 (a)
Each
Holder agrees that, upon receipt of any notice from the Company of the happening
of any event requiring the preparation of a supplement or amendment to a
prospectus relating to Registrable Securities so that, as thereafter delivered
to the Holders, such prospectus shall not contain an untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, each Holder will
forthwith discontinue disposition of Registrable Securities pursuant to the
Registration Statement and prospectus contemplated by Section 6.1 until its
receipt of copies of the supplemented or amended prospectus from the Company
and, if so directed by the Company, each Holder shall deliver to the Company
all
copies, other than permanent file copies then in such Holder’s possession, of
the prospectus covering such Registrable Securities current at the time of
receipt of such notice.
19
(b) Notwithstanding
anything in this Agreement to the contrary, if the Company shall notify the
Holders participating in a registration that the Board of Directors of the
Company has made the good faith determination (i) that continued use by
such Holders of the Registration Statement for purposes of effecting offers
or
sales of Shares or Warrant Shares pursuant thereto would require, under the
Securities Act, premature disclosure in the Registration Statement (or the
prospectus relating thereto) of material, nonpublic information concerning
the
Company, its business or prospects or any proposed material transaction
involving the Company, (ii) that such premature disclosure would be
materially adverse to the Company, its business or prospects or any such
proposed material transaction or would make the successful consummation by
the
Company of any such material transaction significantly less likely and
(iii) that it is therefore desirable to suspend the use by such Holders of
such Registration Statement (and the prospectus relating thereto) for purposes
of effecting offers or sales of Shares and Warrant Shares pursuant thereto,
then
the right of such Holders to use the Registration Statement (and the prospectus
relating thereto) for purposes of effecting offers or sales of Shares and
Warrant Shares pursuant thereto shall be suspended. Notwithstanding the
foregoing, the Company shall not under any circumstances be entitled to exercise
its right to suspend the use of the Registration Statement on more than three
occasions during any 12-month period or for more than 20 days per such occasion.
Each Holder hereby covenants and agrees that it will not sell any Shares or
Warrant Shares pursuant to the Registration Statement during the periods the
Registration Statement is withdrawn or the ability to sell thereunder is
suspended as set forth in this Section 6.7(b).
(c) As
a
condition to the inclusion of its Registrable Securities, each Holder shall
furnish to the Company such information regarding such Holder and the
distribution proposed by such Holder as the Company may reasonably request
in
writing, including completing an Investor Questionnaire in the form provided
by
the Company, or as shall be required in connection with any registration
referred to in this Article 6.
(d) Each
Holder hereby covenants with the Company (i) not to make any sale of the
Registrable Securities without effectively causing the prospectus delivery
requirements under the Securities Act to be satisfied, and (ii) if such
Registrable Securities are to be sold by any method or in any transaction other
than on a national securities exchange, Nasdaq or in the over-the-counter
market, in privately negotiated transactions, or in a combination of such
methods, to notify the Company at least five Business Days prior to the date
on
which the Holder first offers to sell any such Registrable
Securities.
(e) Each
Holder acknowledges and agrees that the Registrable Securities sold pursuant
to
the Registration Statement are not transferable on the books of the Company
unless the stock certificate submitted to the transfer agent evidencing such
Registrable Securities is accompanied by a certificate reasonably satisfactory
to the Company to the effect that (i) the Registrable Securities have been
sold
in accordance with such Registration Statement and (ii) the requirement of
delivering a current prospectus has been satisfied.
20
(f) Each
Holder agrees not to take any action with respect to any distribution deemed
to
be made pursuant to such Registration Statement which would constitute a
violation of Regulation M under the Exchange Act or any other applicable rule,
regulation or law.
(g) At
the
end of the Registration Period the Holders shall discontinue sales of shares
pursuant to such Registration Statement upon receipt of notice from the Company
of its intention to remove from registration the shares covered by such
Registration Statement which remain unsold, and such Holders shall notify the
Company of the number of shares registered which remain unsold immediately
upon
receipt of such notice from the Company.
6.8 With
a
view to making available to the Holders the benefits of certain rules and
regulations of the SEC which at any time permit the sale of the Registrable
Securities to the public without registration, so long as the Holders still
own
Registrable Securities, the Company shall use commercially reasonable efforts
to:
(a) make
and
keep public information available, as those terms are understood and defined
in
Rule 144 under the Securities Act, at all times;
(b) file
with
the SEC in a timely manner all reports and other documents required of the
Company under the Exchange Act; and
(c) so
long
as a Holder owns any Registrable Securities, furnish to such Holder, upon any
reasonable request, a written statement by the Company as to its compliance
with
Rule 144 under the Securities Act, and of the Exchange Act, a copy of the most
recent annual or quarterly report of the Company, and such other reports and
documents of the Company as such Holder may reasonably request in availing
itself of any rule or regulation of the SEC allowing a Holder to sell any such
securities without registration.
6.9 The
rights to cause the Company to register Registrable Securities granted to the
Holders by the Company under Section 6.1 may be assigned by a Holder in
connection with a transfer by such Holder of all or a portion of its Registrable
Securities, provided,
however,
that
such transfer must be made at least ten days prior to the Filing Date and that
(i) such transfer must otherwise be effected in accordance with applicable
securities laws; (ii) such Holder gives prior written notice to the Company
at
least ten days prior to the Filing Date; and (iii) such transferee agrees in
writing to comply with the terms and provisions of this Agreement, has provided
the Company with a completed Investor Questionnaire in such form as is
reasonably requested by the Company, and such transfer is otherwise in
compliance with this Agreement. Except as specifically permitted by this Section
6.9, the rights of a Holder with respect to Registrable Securities as set out
herein shall not be transferable to any other Person, and any attempted transfer
shall cause all rights of such Holder therein to be forfeited.
6.10 The
rights of the Holders under any provision of this Article 6 may be waived
(either generally or in a particular instance, either retroactively or
prospectively and either for a specified period of time or indefinitely) or
amended by an instrument in writing signed by Holders of at least a majority
of
the number of Registrable Securities; provided, that any rights of the Holders
relating to payment obligations of the Company may only be waived or amended
by
an instrument in writing signed by all Holders.
21
ARTICLE
7
DEFINITIONS
As
used
herein, the following capitalized terms have the following
meanings:
7.1 “Affiliate”
means,
with respect to any Person (as defined below), any other Person controlling,
controlled by or under direct or indirect common control with such Person (for
the purposes of this definition “control,”
when
used with respect to any specified Person, shall mean the power to direct the
management and policies of such person, directly or indirectly, whether through
ownership of voting securities, by contract or otherwise; and the terms
“controlling”
and
“controlled”
shall
have meanings correlative to the foregoing).
7.2 “Business
Day”
means a
day Monday through Friday on which banks are generally open for business in
New
York City.
7.3 “Bylaws”
has
the
meaning set forth in Section 2.3.
7.4 “Certificate
of Incorporation”
has the
meaning set forth in Section 2.3.
7.5 “Closing”
has the
meaning set forth in Section 1.3.
7.6 “Closing
Date”
has the
meaning set forth in Section 1.3.
7.7 “Common
Stock”
means
the common stock, par value $0.01 per share, of the Company.
7.8 “Company”
means
Columbia Laboratories, Inc.
7.9 “Exchange
Act”
means
the Securities Exchange Act of 1934, as amended.
7.10 “Filing
Date”
has the
meaning set forth in Section 6.1.
7.11 “Final
Prospectus”
has the
meaning set forth in Section 6.6(a).
7.12 “Financial
Statements”
means
the
financial statements of the Company included in the SEC Documents.
7.13 “Holder”
means
any Purchaser for so long as such Purchaser holds Registrable Securities, or
any
person to whom the rights under Article 6 have been transferred in accordance
with Section 6.9 hereof.
7.14 “Indemnified
Party”
has the
meaning set forth in Section 6.6(c).
7.15 “Indemnifying
Party”
has the
meaning set forth in Section 6.6(c).
7.16 “Intellectual
Property”
has the
meaning set forth in Section 2.10.
22
7.17 “Material
Adverse Effect”
means a
material adverse effect on (a) the business, operations, assets or financial
condition of the Company, taken as a whole, or (b) the ability of the Company
to
perform its obligations pursuant to the transactions contemplated by this
Agreement.
7.18 “Nasdaq”
means
The Nasdaq National Market or any successor thereto.
7.19 “Offering”
means
the private placement of the Company’s Securities contemplated by this
Agreement.
7.20 “Penalty
Period” has
the
meaning set forth in Section 6.3.
7.21 “Person”
means
any person, individual, corporation, limited liability company, partnership,
trust or other nongovernmental entity or any governmental agency, court,
authority or other body (whether foreign, federal, state, local or
otherwise).
7.22 “Placement
Agent”
means
Banc of America Securities LLC.
7.23 “Purchasers”
mean the
Purchasers whose names are set forth on the signature pages of this Agreement,
and their permitted transferees.
7.24 “Purchase
Price”
has the
meaning set forth in Section 1.1.
7.25 The
terms
“register,” “registered”
and
“registration”
refer to
the registration effected by preparing and filing a registration statement
in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
7.26 “Registrable
Securities”
means
(i) the Shares and (ii) the Warrant Shares; provided,
however,
that
securities shall only be treated as Registrable Securities if and only for
so
long as they (A) have not been disposed of pursuant to a registration statement
declared effective by the SEC, (B) have not been sold in a transaction exempt
from the registration and prospectus delivery requirements of the Securities
Act
so that all transfer restrictions and restrictive legends with respect thereto
are removed upon the consummation of such sale or (C) are held by a Holder
or a permitted transferee pursuant to Section 6.9.
7.27 “Registration
Default” has
the
meaning set forth in Section 6.3.
7.28 “Registration
Expenses”
means
all expenses incurred by the Company in complying with Section 6.1 hereof,
including, without limitation, all registration, qualification and filing fees,
printing expenses, escrow fees, fees and expenses of counsel for the Company,
blue sky fees and expenses and the expense of any special audits incident to
or
required by any such registration (but, for the avoidance of doubt, excluding
the fees of legal counsel for any Holder).
7.29 “Registration
Statement”
has the
meaning set forth in Section 6.1.
7.30 “Registration
Period”
has the
meaning set forth in Section 6.4(a).
23
7.31 “Rule
144”
means
Rule 144 promulgated under the Securities Act, or any successor
rule.
7.32 “SEC”
means
the United States Securities and Exchange Commission.
7.33 “SEC
Documents”
has the
meaning set forth in Section 2.6.
7.34 “Securities”
has the
meaning set forth in Section 1.1.
7.35 “Securities
Act”
means
the Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute.
7.36 “Selling
Expenses”
means
all selling commissions applicable to the sale of Registrable Securities and
all
fees and expenses of legal counsel for any Holder.
7.37 “Shares”
has the
meaning set forth in Section 1.1.
7.38 “Subsidiary”
of
any
person shall mean any corporation, partnership, limited liability company,
joint
venture or other legal entity of which such Person (either above or through
or
together with any other subsidiary) owns, directly or indirectly, more than
50%
of the stock or other equity interests the holders of which are generally
entitled to vote for the election of the board of directors or other governing
body of such corporation or other legal entity.
7.39 “Warrant
Shares”
has the
meaning set forth in Section 2.4.
7.40 “Warrants”
has the
meaning set forth in Section 1.1.
ARTICLE
8
GOVERNING
LAW; MISCELLANEOUS
8.1 Governing
Law; Jurisdiction.
This
Agreement will be governed by and interpreted in accordance with the laws of
the
State of New York without regard to the principles of conflict of laws.
8.2 Counterparts;
Signatures by Facsimile.
This
Agreement may be executed in two or more counterparts, all of which are
considered one and the same agreement and will become effective when
counterparts have been signed by each party and delivered to the other parties.
This Agreement, once executed by a party, may be delivered to the other parties
hereto by facsimile transmission of a copy of this Agreement bearing the
signature of the party so delivering this Agreement.
8.3 Headings.
The
headings of this Agreement are for convenience of reference only, are not part
of this Agreement and do not affect its interpretation.
8.4 Severability.
If
any
provision of this Agreement is invalid or unenforceable under any applicable
statute or rule of law, then such provision will be deemed modified in order
to
conform with such statute or rule of law. Any provision hereof that may prove
invalid or unenforceable under any law will not affect the validity or
enforceability of any other provision hereof.
24
8.5 Entire
Agreement; Amendments.
This
Agreement (including all schedules and exhibits hereto) and any confidentiality
agreement entered into between the Company and a Purchaser (which
confidentiality agreement shall continue to be in full force and effect)
constitute the entire agreement among the parties hereto with respect to the
subject matter hereof and thereof. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
or
therein. This Agreement supersedes all prior agreements and understandings
among
the parties hereto with respect to the subject matter hereof. This Agreement
and
any provision hereof may be changed, waived, discharged or terminated only
by an
instrument in writing signed by the Company and Purchasers holding a majority
of
the Registrable Securities. Any amendment or waiver effected in accordance
with
this Section 8.5 shall be binding upon each holder of any Securities purchased
under this Agreement at the time outstanding (including securities into which
such Securities are convertible and for which such Securities are exercisable),
each future holder of all such securities, and the Company.
8.6 Notices.
All
notices required or permitted hereunder shall be in writing and shall be deemed
effectively given: (a) upon personal delivery to the party to be notified,
(b) when sent by confirmed email, telex or facsimile if sent during normal
business hours of the recipient, if not, then on the next business day,
(c) five days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (d) one business day after
deposit with a nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt. The addresses for such
communications are:
|
If
to the Company:
|
Columbia
Laboratories, Inc.
|
|
000
Xxxxxxxxxx Xxxxxxx
|
|
|
Xxxxxxxxxx,
Xxx Xxxxxx 00000
|
|
|
Telecopier
No.: (000) 000-0000
|
|
|
Telephone
No.: (000) 000-0000
|
|
|
Attention:
General Counsel
|
|
|
With
a copy to:
|
Xxxx
Xxxxxxx LLP
|
|
000
Xxxx Xxxxxx
|
|
|
Xxx
Xxxx, Xxx Xxxx 00000
|
|
|
Telecopier
No.: (000) 000-0000
|
|
|
Telephone
No.: (000) 000-0000
|
|
|
Attention:
Xxxx X. Xxxxxx, Esq.
|
If
to a
Purchaser: To the address set forth immediately below such Purchaser’s name on
the signature pages hereto. Each party will provide ten days’ advance written
notice to the other parties of any change in its address.
8.7 Successors
and Assigns.
This
Agreement is binding upon and inures to the benefit of the parties and their
successors and permitted assigns. The Company will not assign this Agreement
or
any rights or obligations hereunder without the prior written consent of the
Purchasers, and no Purchaser may assign this Agreement or any rights or
obligations hereunder without the prior written consent of the Company, except
as permitted in accordance with Section 6.9 hereof.
25
8.8 Third
Party Beneficiaries.
This
Agreement is intended for the benefit of the parties hereto, their respective
permitted successors and assigns and the Placement Agent, and is not for the
benefit of, nor may any provision hereof be enforced by, any other
person.
8.9 Further
Assurances.
Each
party will do and perform, or cause to be done and performed, all such further
acts and things, and will execute and deliver all other agreements,
certificates, instruments and documents, as another party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement
and the consummation of the transactions contemplated hereby.
8.10 No Strict
Construction. The
language used in this Agreement is deemed to be the language chosen by the
parties to express their mutual intent, and no rules of strict construction
will
be applied against any party.
8.11 Equitable
Relief.
The
Company recognizes that, if it fails to perform or discharge any of its
obligations under this Agreement, any remedy at law may prove to be inadequate
relief to the Purchasers. The Company therefore agrees that the Purchasers
are
entitled to seek temporary and permanent injunctive relief in any such case.
Each Purchaser also recognizes that, if it fails to perform or discharge any
of
its obligations under this Agreement, any remedy at law may prove to be
inadequate relief to the Company. Each Purchaser therefore agrees that the
Company is entitled to seek temporary and permanent injunctive relief in any
such case
8.12 Survival
of Representations and Warranties. Notwithstanding
any investigation made by any party to this Agreement, all representations
and
warranties made by the Company and the Purchasers herein shall survive for
a
period of one year following the date hereof, except for Sections 2.1, 2.2,
2.3,
2.11 and 2.19 which representations and warranties shall survive the Closing
until the lapse of the statute of limitations.
8.13 Independent
Nature of Purchasers' Obligations and Rights. The
obligations of each Purchaser under this Agreement are several and not joint
with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser under this Agreement. Nothing contained herein and no action taken
by
any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers
as
a partnership, an association, a joint venture or any other kind of entity,
or
create a presumption that the Purchasers are in any way acting in concert or
as
a group, or are deemed affiliates (as such term is defined under the Exchange
Act) with respect to such obligations or the transactions contemplated by this
Agreement. Each Purchaser shall be entitled to independently protect and enforce
its rights, including without limitation the rights arising out of this
Agreement, and it shall not be necessary for any other Purchaser to be joined
as
an additional party in any proceeding for such purpose.
[Signature
Page Follows]
26
In
Witness Whereof, the
undersigned Purchasers and the Company have caused this Agreement to be duly
executed as of the date first above written.
COLUMBIA
LABORATORIES, INC.
By:
/s/
Xxxxxx X. Mills________________
Name:
Xxxxxx X. Xxxxx
Title:
President and Chief Executive Officer
Purchaser
Xxxxx
Partners, LP_______________
(investor
name)
By:
/s/________
_______________
(signature)
____________________________
(print
name and title)
Address:
_____________________
___________________
___________________
Facsimile:
____________________
Purchaser
Xxxxx
Bros. Investments, L.P.
(investor
name)
By:
Xxxxx
Bros. Capital, L.P., General Partner
By:
Xxxxx
Bros. Capital (GP), LLC, General Partner
By:
Xxxxx
Xxxxx, Ph.D., Managing Member
By
/s/
Xxxxx
Xxxxx
(signature)
(print
name and title)
Xxxxx
Bros. Investments, II L.P.
(investor
name)
By:
Xxxxx
Bros. Capital, L.P., General Partner
By:
Xxxxx
Bros. Capital (GP), LLC, General Partner
By:
Xxxxx
Xxxxx, Ph.D., Managing Member
By
/s/
Xxxxx
Xxxxx
(signature)
(print
name and title)
Xxxxx
Biotech Fund I, L.P.
(investor
name)
By:
Xxxxx
Biotech Capital, L.P., General Partner
By:
Xxxxx
Biotech Capital (GP), LLC, General
Partner
By:
Xxxxx
Xxxxx, Ph.D., Managing Member
By
/s/
Xxxxx
Xxxxx
(signature)
(print
name and title)
Xxxxx
Biotech Fund II, L.P.
(investor
name)
By:
Xxxxx
Biotech Capital II, L.P., General Partner
By:
Xxxxx
Biotech Capital II (GP), LLC, General
Partner
By:
Xxxxx
Xxxxx, Ph.D., Managing Member
By
/s/
Xxxxx
Xxxxx
(signature)
(print
name and title)
Xxxxx
Biotech Fund II (Z), L.P.
(investor
name)
By:
Xxxxx
Biotech Capital II (Z), L.P., General
Partner
By:
Xxxxx
Bros. Capital II (Z) (GP), LLC, General
Partner
By:
Xxxxx
Xxxxx, Ph.D., Managing Member
By
/s/
Xxxxx
Xxxxx
(signature)
(print
name and title)
Xxxxx
Biotech Fund III, L.P.
(investor
name)
By:
Xxxxx
Biotech Capital III, L.P., General Partner
By:
Xxxxx
Biotech Capital III (GP), LLC, General
Partner
By:
Xxxxx
Xxxxx, Ph.D., Managing Member
By
/s/
Xxxxx
Xxxxx
(signature)
(print
name and title)
Xxxxx
Biotech Fund III (Z), L.P.
(investor
name)
By:
Xxxxx
Biotech Capital III (Z), L.P., General
Partner
By:
Xxxxx
Biotech Capital III (Z) (G), LLC,
General
Partner
By:
Xxxxx
Xxxxx, Ph.D., Managing Member
By
/s/
Xxxxx
Xxxxx
(signature)
(print
name and title)
14159,
L.P.
(investor
name)
By:
14159
Capital, L.P., General Partner
By:
14159
Capital (GP), LLC, General Partner
By:
Xxxxx
Xxxxx, Ph.D., Managing Member
By
/s/
Xxxxx
Xxxxx
(signature)
(print
name and title)
Purchaser
Harvest
Offshore Investors
Ltd.
(investor
name)
By:
/s/
Xxxx
Xxxxxx
(signature)
Xxxx
Xxxxxx,
Principal
(print
name and title)
Address:
000
Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx
Xxxx, XX
00000
Facsimile:
(000)
000-0000
Purchaser
New
Americans
LLC
(investor
name)
By:
/s/
Xxxx
Xxxxxx
(signature)
Xxxx
Xxxxxx,
Principal
(print
name and title)
Address:
000
Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx
Xxxx, XX
00000
Facsimile:
(000)
000-0000
Purchaser
Harvest
Capital
LP
(investor
name)
By:
/s/
Xxxx
Xxxxxx
(signature)
Xxxx
Xxxxxx,
Principal
(print
name and title)
Address:
000
Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx
Xxxx, XX
00000
Facsimile:
(000)
000-0000
SECURITIES
PURCHASE AGREEMENT SIGNATURE PAGE
Purchaser
CL
Harvest
LLC
(investor
name)
By:
/s/
Xxxx
Xxxxxx
(signature)
Xxxx
Xxxxxx,
Principal
(print
name and title)
Address:
000
Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx
Xxxx, XX
00000
Facsimile:
(000)
000-0000
SECURITIES
PURCHASE AGREEMENT SIGNATURE PAGE
Purchaser
Harvest
AA Capital
LP
(investor
name)
By:
/s/
Xxxx
Xxxxxx
(signature)
Xxxx
Xxxxxx,
Principal
(print
name and title)
Address:
000
Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx
Xxxx, XX
00000
Facsimile:
(000)
000-0000
SECURITIES
PURCHASE AGREEMENT SIGNATURE PAGE
Purchaser
TE
Harvest Portfolio
Ltd.
(investor
name)
By:
/s/
Xxxx
Xxxxxx
(signature)
Xxxx
Xxxxxx,
Principal
(print
name and title)
Address:
000
Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx
Xxxx, XX
00000
Facsimile:
(000)
000-0000
SECURITIES
PURCHASE AGREEMENT SIGNATURE PAGE
Purchaser
Domain
Public Equity Partners
L.P.
by
Domain Public Equity Partners LLC
(investor
name)
By:
/s/
Xxxxxx
Xxxxxxx
(signature)
Xxxxxx
Xxxxxxx, Managing
Member
(print
name and title)
Address:
Xxx
Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx,
XX
00000
Facsimile:
(000)
000-0000
SECURITIES
PURCHASE AGREEMENT SIGNATURE PAGE
Purchaser
Castlerock
Partners,
L.P.
(investor
name)
By:
/s/
Xxxxx Xxxxxx
Burden
(signature)
Xxxxx
Xxxxxx Burden, CFO of the General Partner
(print
name and title)
Address:
c/o
CastleRock
Management
000
Xxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx, XX
00000
Facsimile:
(000)
000-0000
SECURITIES
PURCHASE AGREEMENT SIGNATURE PAGE
Purchaser
Castlerock
Partners II,
L.P.
(investor
name)
By:
/s/
Xxxxx Xxxxxx
Burden
(signature)
Xxxxx
Xxxxxx Burden, CFO of the General Partner
(print
name and title)
Address:
c/o
CastleRock
Management
000
Xxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx, XX
00000
Facsimile:
(000)
000-0000
SECURITIES
PURCHASE AGREEMENT SIGNATURE PAGE
Purchaser
CastleRock
Fund,
Ltd.
(investor
name)
By:
/s/
Xxxxx Xxxxxx
Burden
(signature)
Xxxxx
Xxxxxx Burden, CFO of the Investment Adviser
(print
name and title)
Address:
c/o
CastleRock
Management
000
Xxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx, XX
00000
Facsimile:
(000)
000-0000
SECURITIES
PURCHASE AGREEMENT SIGNATURE PAGE
Purchaser
Bermuda
Partners,
L.P.
(investor
name)
By:
/s/
Xxxxx Xxxxxx
Burden
(signature)
Xxxxx
Xxxxxx Burden, CFO of the Investment Adviser
(print
name and title)
Address:
c/o
Castlerock
Management
000
Xxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx, XX
00000
Facsimile:
(000)
000-0000
SECURITIES
PURCHASE AGREEMENT SIGNATURE PAGE
Purchaser
CastleRock
Asset Management, Inc. for HFR HE Sytematic Master Trust
(investor
name)
By:
/s/
Xxxxx Xxxxxx
Burden
(signature)
Xxxxx
Xxxxxx Burden,
CFO
(print
name and title)
Address:
c/o
CastleRock
Management
000
Xxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx, XX
00000
Facsimile:
(000)
000-0000
SECURITIES
PURCHASE AGREEMENT SIGNATURE PAGE
Purchaser
Xxxxxx
Family Partners
II
(investor
name)
By:
/s/
Xxxx X.
Xxxxxx
(signature)
Xxxx
X. Xxxxxx, General
Partner
(print
name and title)
Address:
000
Xxxxxxxxxxx Xxx. Xx.
Xxxxxxxxxx
Xxxxx, XX 00000
Facsimile:
(000)
000-0000
SECURITIES
PURCHASE AGREEMENT SIGNATURE PAGE
Purchaser
Xxxxxx
Partners
(investor
name)
By:
/s/
Xxxx X.
Xxxxxx
(signature)
Xxxx
X. Xxxxxx, General
Partner
(print
name and title)
Address:
000
Xxxxxxxxxxx Xxx. Xx.
Xxxxxxxxxx
Xxxxx, XX 00000
Facsimile:
(000)
000-0000
SECURITIES
PURCHASE AGREEMENT SIGNATURE PAGE
Purchaser
Royal
Bank of Canada
By
its
Agent: RBC Capital Markets Corporation
(investor
name)
By:
/s/
Xxxxxx X.
Xxxxx
(signature)
Xxxxxx
X. Xxxxx, Managing
Director
(print
name and title)
By:
/s/
Xxxxx
Xxxxxxxx
(signature)
Xxxxx
Xxxxxxxx, Director and Senior Counsel
(print
name and title)
Address:
Xxx
Xxxxxxx
Xxxxx
000
Xxxxxxxx
Xxx
Xxxx, XX
00000
Facsimile:
(000)
000-0000
SECURITIES
PURCHASE AGREEMENT SIGNATURE PAGE
Purchaser
Iroquois
Master Fund
Ltd.
(investor
name)
By:
/s/
Xxxxxx
Xxxxxxxxx
(signature)
Xxxxxx
Xxxxxxxxx, Authorized
Signatory
(print
name and title)
Address:
000
Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx, XX
00000
Facsimile:
(000)
000-0000
SECURITIES
PURCHASE AGREEMENT SIGNATURE PAGE
Purchaser
Xxxxxx
Bay Fund
LP
(investor
name)
By:
/s/
Yoaw
Xxxx
(signature)
Yoaw
Xxxx, Principal and Portfolio Manager
(print
name and title)
Address:
000
Xxxxxxxx, 00xx Xxxxx
Xxx
Xxxx, XX
00000
Facsimile:
(000)
000-0000
SECURITIES
PURCHASE AGREEMENT SIGNATURE PAGE
Purchaser
Nite
Capital
LP
(investor
name)
By:
/s/
Xxxxx X.
Xxxxxxx
(signature)
Xxxxx
X. Xxxxxxx, Manager of the General Partner
(print
name and title)
Address:
000
Xxxx Xxxx Xxxxxx, Xxxxx
000
Xxxxxxxxxxxx,
XX
00000
Facsimile:
(000)
000-0000
SECURITIES
PURCHASE AGREEMENT SIGNATURE PAGE
Purchaser
UBS
X’Xxxxxx LLC fbo X’Xxxxxx PIPEs Corporate Strategies Master
Limited
(investor
name)
By:
/s/
Xxxxxx
Xxxxxxx
(signature)
Xxxxxx
Xxxxxxx, Managing
Director
(print
name and title)
Address:
Xxx
Xxxxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxx,
XX
00000
Facsimile:
(000)
000-0000
SECURITIES
PURCHASE AGREEMENT SIGNATURE PAGE
Purchaser
Enable
Growth Partners
LP
(investor
name)
By:
/s/
Xxxxx
Xxxxxx
(signature)
Xxxxx
Xxxxxx, Managing
Partner
(print
name and title)
Address:
Xxx
Xxxxx Xxxxxxxx, Xxxxx 000
Xxx
Xxxxxxxxx, XX 00000
Facsimile:
(000)
000-0000
SECURITIES
PURCHASE AGREEMENT SIGNATURE PAGE
Purchaser
Enable
Opportunity Partners
LP
(investor
name)
By:
/s/
Xxxxx
Xxxxxx
(signature)
Xxxxx
Xxxxxx, Managing
Partner
(print
name and title)
Address:
Xxx
Xxxxx Xxxxxxxx, Xxxxx 000
Xxx
Xxxxxxxxx, XX 00000
Facsimile:
(000)
000-0000
SECURITIES
PURCHASE AGREEMENT SIGNATURE PAGE
Purchaser
Xxxxxx
Diversified Strategy Master Fund LLC
(investor
name)
By:
/s/
Xxxxx
Xxxxxx
(signature)
Xxxxx
Xxxxxx, Managing
Partner
(print
name and title)
Address:
Xxx
Xxxxx Xxxxxxxx, Xxxxx 000
Xxx
Xxxxxxxxx, XX
00000
Facsimile:
(000)
000-0000
SECURITIES
PURCHASE AGREEMENT SIGNATURE PAGE
Purchaser
Smithfield
Fiduciary
Ltd.
(investor
name)
By:
/s/
Xxxx X.
Chill
(signature)
Xxxx
X. Chill, Authorized
Signatory
(print
name and title)
Address:
c/o
Highbridge Capital Management, LLC
0
Xxxx
00xx Xxxxxx,
00xx Xxxxx
Xxx
Xxxx, XX
00000
Facsimile:
(000)
000-0000
SECURITIES
PURCHASE AGREEMENT SIGNATURE PAGE
Purchaser
Capital
Ventures
International
by:
Heights Capital Management, Inc., its authorized agent
(investor
name)
By:
/s/
(signature)
(print
name and title)
Address:
000
Xxxxxxxxxx Xxxxxx, Xxxxx
0000
Xxx
Xxxxxxxxx, XX
00000
Facsimile:
(000)
000-0000
SECURITIES
PURCHASE AGREEMENT SIGNATURE PAGE
Purchaser
RAQ,
LLC
(investor
name)
By:
/s/
Xxxxxxx X.
Xxxxxxxxx
(signature)
Xxxxxxx
X. Xxxxxxxxx, M.D., Managing Member
(print
name and title)
Address:
000
Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx, XX
00000
Facsimile:
(000)
000-0000
SECURITIES
PURCHASE AGREEMENT SIGNATURE PAGE
Purchaser
Valesco
Healthcare Partners I
LP
(investor
name)
By:
/s/
I.
Xxxxx
Xxxxx
(signature)
I.
Xxxxx Xxxxx, Portfolio
Manager
(print
name and title)
Address:
000
Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx
Xxxx, XX
00000
Facsimile:
(000)
000-0000
SECURITIES
PURCHASE AGREEMENT SIGNATURE PAGE
Purchaser
Valesco
Healthcare Partners II
LP
(investor
name)
By:
/s/
I.
Xxxxx
Xxxxx
(signature)
I.
Xxxxx Xxxxx, Portfolio
Manager
(print
name and title)
Address:
000
Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx
Xxxx, XX
00000
Facsimile:
(000)
000-0000
SECURITIES
PURCHASE AGREEMENT SIGNATURE PAGE
Purchaser
Valesco
Healthcare Overseas Fund, Ltd.
(investor
name)
By:
/s/
I.
Xxxxx
Xxxxx
(signature)
I.
Xxxxx Xxxxx, Portfolio Manager
(print
name and title)
Address:
000
Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx
Xxxx, XX
00000
Facsimile:
(000)
000-0000
SECURITIES
PURCHASE AGREEMENT SIGNATURE PAGE
Purchaser
Xxxxx
X.
Xxxxxxxxxxx
(investor
name)
By:
/s/
Xxxxx X. Xxxxxxxxxxx
(signature)
Xxxxx
X.
Xxxxxxxxxxx
(print
name and title)
Address:
Facsimile:
(000)
000-0000
SECURITIES
PURCHASE AGREEMENT SIGNATURE PAGE
EXHIBIT
A
SCHEDULE
OF PURCHASERS
|
Purchaser
|
Shares
|
Warrants
|
Aggregate
Purchase Price
|
|||||||
|
Xxxxx
Partners, LP
|
1,485,149
|
371,287
|
$
|
6,000,001.96
|
||||||
|
Xxxxx
Bros. Investments, L.P.
|
23,502
|
5,875
|
$
|
94,948.08
|
||||||
|
Xxxxx
Bros. Investments II, L.P.
|
31,298
|
7,824
|
$
|
126,443.92
|
||||||
|
Xxxxx
Biotech Fund I, L.P.
|
48,670
|
12,167
|
$
|
196,626.80
|
||||||
|
Xxxxx
Biotech Fund I, L.P.
|
87,121
|
21,780
|
$
|
351,968.84
|
||||||
|
Xxxxx
Biotech Fund II, L.P.
|
212,361
|
53,090
|
$
|
857,938.44
|
||||||
|
Xxxxx
Biotech Fund II (Z), L.P.
|
41,604
|
10,401
|
$
|
168,080.16
|
||||||
|
Xxxxx
Biotech Fund III, L.P.
|
342,227
|
85,556
|
$
|
1,382,597.08
|
||||||
|
Xxxxx
Biotech Fund III (Z), L.P.
|
55,940
|
13,985
|
$
|
225,997.60
|
||||||
|
14159,
L.P.
|
23,613
|
5,903
|
$
|
95,396.52
|
||||||
|
Harvest
Offshore Investors
|
263,815
|
65,953
|
$
|
1,065,812.60
|
||||||
|
New
Americans LLC
|
42,554
|
10,638
|
$
|
171,918.16
|
||||||
|
Harvest
Capital
|
137,634
|
34,408
|
$
|
556,041.36
|
||||||
|
CL
Harvest LLC
|
26,752
|
6,688
|
$
|
108,078.08
|
||||||
|
Harvest
AA Capital LP
|
19,922
|
4,980
|
$
|
80,484.88
|
||||||
|
TE
Harvest Portfolio Ltd.
|
384,323
|
96,080
|
$
|
1,552,664.92
|
||||||
|
Domain
Public Equity Partners, L.P.
|
618,812
|
154,703
|
$
|
2,500,000.48
|
||||||
|
CastleRock
Partners, L.P.
|
222,772
|
55,693
|
$
|
899,998.88
|
||||||
|
CastleRock
Partners II, L.P.
|
19,802
|
4,950
|
$
|
80,000.08
|
||||||
|
CastleRock
Fund, Ltd.
|
148,515
|
37,128
|
$
|
600,000.60
|
||||||
|
Bermuda
Partners, L.P.
|
29,703
|
7,425
|
$
|
120,000.12
|
||||||
|
HFR
HE Systematic Master Trust
|
74,258
|
18,564
|
$
|
300,002.32
|
||||||
|
Xxxxxx
Partners
|
495,050
|
123,762
|
$
|
2,000,002.00
|
||||||
|
Xxxxxx
Family Partners II
|
198,020
|
49,505
|
$
|
800,000.80
|
||||||
|
Royal
Bank of Canada
|
433,168
|
108,292
|
$
|
1,749,998.72
|
||||||
|
Iroquois
Master Fund Ltd.
|
290,842
|
72,710
|
$
|
1,175,001.68
|
||||||
|
Xxxxxx
Bay Fund LP
|
247,525
|
61,881
|
$
|
1,000,001.00
|
||||||
|
Nite
Capital LP
|
247,525
|
61,881
|
$
|
1,000,001.00
|
||||||
|
UBS
X'Xxxxxx LLC fbo X'Xxxxxx PIPEs Corporate Strategies Master
Limited
|
247,525
|
61,881
|
$
|
1,000,001.00
|
||||||
|
Enable
Growth Partners LP
|
180,693
|
45,173
|
$
|
729,999.72
|
||||||
|
Enable
Opportunity Partners LP
|
29,703
|
7,425
|
$
|
120,000.12
|
||||||
|
Xxxxxx
Diversified Strategy Master Fund LLC
|
37,129
|
9,282
|
$
|
150,001.16
|
||||||
|
Smithfield
Fiduciary Ltd.
|
247,525
|
61,881
|
$
|
1,000,001.00
|
||||||
|
Capital
Ventures International
|
125,000
|
31,250
|
$
|
505,000.00
|
||||||
|
Capital
Ventures International
|
122,525
|
30,631
|
$
|
495,001.00
|
||||||
|
RAQ,
LLC
|
61,881
|
15,470
|
$
|
249,999.24
|
||||||
|
Valesco
Healthcare Partners I LP
|
12,995
|
3,248
|
$
|
52,499.80
|
||||||
|
Valesco
Healthcare Partners II LP
|
27,228
|
6,807
|
$
|
110,001.12
|
||||||
|
Valesco
Healthcare Overseas Fund, Ltd.
|
21,658
|
5,414
|
$
|
87,498.32
|
||||||
|
Xxxxx
X. Xxxxxxxxxxx
|
61,881
|
15,470
|
$
|
249,999.24
|
||||||
|
Total
|
7,428,220
|
1,857,041
|
$
|
30,010,008.80
|
||||||
EXHIBIT
B
WARRANT
THIS
WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED OR THE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES. THE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS
OR
UNLESS OFFERED, SOLD, PLEDGED, HYPOTHECATED OR TRANSFERRED PURSUANT TO AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS. THE
COMPANY SHALL BE ENTITLED TO REQUIRE AN OPINION OF COUNSEL SATISFACTORY TO
THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED TO THE EXTENT THAT AN OPINION
IS
REQUIRED PURSUANT TO THE AGREEMENT UNDER WHICH THE SECURITIES WERE
ISSUED.
COLUMBIA
LABORATORIES, INC.
WARRANT
TO PURCHASE COMMON STOCK
|
No.
W-__
|
March
13, 2006
|
Void
After March 13, 2011
This
Certifies That,
for
value received, __________________________, with its principal office at
__________________________, or its permitted assigns (the “Holder”),
is
entitled to subscribe for and purchase at the Exercise Price (defined below)
from Columbia Laboratories, Inc., a Delaware corporation, with its principal
office at 000 Xxxxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000 (the “Company”),
up to
__________
shares
of
common stock of the Company, par value $0.01 per share (the “Common
Stock”),
subject to adjustment as provided herein. This Warrant is one of a series of
Warrants being issued pursuant to the terms of the Securities Purchase
Agreement, as of March 10, 2006, by and among the Company and the original
Holder of this Warrant and the other parties named therein (the “Purchase
Agreement”).
Capitalized terms not otherwise defined herein shall have the respective
meanings ascribed to such terms in the Purchase Agreement.
1. Definitions.
As
used
herein, the following terms shall have the following respective
meanings:
(a) “Exercise
Period”
shall
mean the period commencing 180 days after the date hereof and ending at 5:00
p.m., New York time, on March
13,
2011,
unless sooner exercised or terminated as provided below.
(b) “Exercise
Price” shall
mean $5.39 per share, subject to adjustment pursuant to Section 5
below.
(c) “Exercise
Shares”
shall
mean the shares of the Common Stock issued upon exercise of this Warrant,
subject to adjustment pursuant to the terms herein, including but not limited
to
adjustment pursuant to Section 5 below.
2. Exercise
of Warrant.
2.1 Method
of Exercise.
The
rights represented by this Warrant may be exercised in whole or in part at
any
time during the Exercise Period, by delivery (by any method permitted under
the
Purchase Agreement) of the following to the Company at its address set forth
above (or at such other address as it may designate by notice in writing to
the
Holder):
(a) An
executed Notice of Exercise in the form attached hereto;
(b) Payment
of the Exercise Price either (i) in cash or by check or wire transfer of
immediately available funds, or (ii) pursuant to a Cashless Exercise, as
described below; and
(c) This
Warrant.
Upon
the
exercise of the rights represented by this Warrant, shares of Common Stock
shall
be issued for the Exercise Shares so purchased, and shall be registered in
the
name of the Holder or persons affiliated with the Holder, if the Holder so
designates, within a reasonable time after the rights represented by this
Warrant shall have been so exercised and shall be issued in certificate form
and
delivered to the Holder, if so requested.
The
person in whose name any Exercise Shares are to be issued upon exercise of
this
Warrant shall be deemed to have become the holder of record of such shares
on
the date on which this Warrant was surrendered and payment of the Exercise
Price
was made, irrespective of the date of issuance of the shares of Common Stock,
except that, if the date of such surrender and payment is a date when the stock
transfer books of the Company are closed, such person shall be deemed to have
become the holder of such shares at the close of business on the next succeeding
date on which the stock transfer books are open.
2.2 Cashless
Exercise. Notwithstanding
any provisions herein to the contrary, if, at any time during the Exercise
Period, the Current Market Price (as defined below) of one share of Common
Stock
is greater than the Exercise Price (at the date of calculation as set forth
below), in lieu of exercising this Warrant by payment of cash, the Holder may
exercise this Warrant by a cashless exercise by surrender of this Warrant at
the
principal office of the Company together with the properly endorsed Notice
of
Exercise and the Company shall issue to the Holder a number of shares of Common
Stock computed using the following formula:
|
X
=
|
Y
(B-A)
B
|
|
|
Where:
|
X
=
|
the
number of shares of Common Stock to be issued to the Holder.
|
|
Y
=
|
the
number of shares of Common Stock purchasable upon exercise of all
of the
Warrant or, if only a portion of the Warrant is being exercised,
the
portion of the Warrant being exercised.
|
|
|
A
=
|
the
Exercise Price.
|
|
|
B
=
|
the Current Market Price of one share of Common Stock. | |
2
“Current
Market Price”
means on
any particular date:
(a) if
the
Common Stock is traded on the Nasdaq SmallCap Market (or its successor) or
the
Nasdaq National Market (or its successor), the average of the closing prices
of
the Common Stock of the Company on such market over the five (5) trading days
ending immediately prior to the applicable date of valuation;
(b) if
the
Common Stock is traded on any registered national stock exchange but is not
traded on the Nasdaq SmallCap Market (or its successor) or the Nasdaq National
Market (or its successor), the average of the closing prices of the Common
Stock
of the Company on such exchange over the five (5) trading days ending
immediately prior to the applicable date of valuation;
(c) if
the
Common Stock is traded over-the-counter, but not on the Nasdaq SmallCap Market,
the Nasdaq National Market or a registered national stock exchange, the average
of the closing bid prices over the 30-day period ending immediately prior to
the
applicable date of valuation; and
(d) if
there
is no active public market for the Common Stock, the value thereof, as
determined in good faith by the Board of Directors of the Company upon due
consideration of the proposed determination thereof by the Holder.
2.3 Partial
Exercise. If
this
Warrant is exercised in part only, the Company shall, upon surrender of this
Warrant, execute and deliver, within 10 days of the date of exercise, a new
Warrant evidencing the rights of the Holder, or, subject to Section 4.3, such
other person as shall be designated in the Notice of Exercise, to purchase
the
balance of the Exercise Shares purchasable hereunder. In no event shall this
Warrant be exercised for a fractional Exercise Share, and the Company shall
not
distribute a Warrant exercisable for a fractional Exercise Share. Fractional
Warrant shares shall be treated as provided in Section 6 hereof.
3. Covenants
of the Company.
3.1 Covenants
as to Exercise Shares.
The
Company covenants and agrees that all Exercise Shares that may be issued upon
the exercise of the rights represented by this Warrant will, upon issuance,
be
validly issued and outstanding, fully paid and nonassessable, and free from
all
taxes, liens and charges with respect to the issuance thereof. The Company
further covenants and agrees that the Company will at all times during the
Exercise Period, have authorized and reserved, free from preemptive rights,
a
sufficient number of shares of its Common Stock to provide for the exercise
of
the rights represented by this Warrant. If at any time during the Exercise
Period the number of authorized but unissued shares of Common Stock shall not
be
sufficient to permit exercise of this Warrant, the Company will take such
corporate action as may, in the opinion of its counsel, be necessary to increase
its authorized but unissued shares of Common Stock (or other securities as
provided herein) to such number of shares as shall be sufficient for such
purposes.
3
3.2 Notices
of Record Date.
In the
event of any taking by the Company of a record of the holders of any class
of
securities for the purpose of determining the holders thereof who are entitled
to receive any dividend (other than a cash dividend which is the same as cash
dividends paid in previous quarters) or other distribution, the Company shall
mail to the Holder, at least ten days prior to the date specified herein, a
notice specifying the date on which any such record is to be taken for the
purpose of such dividend or distribution.
4. Representations
of Holder.
4.1 Acquisition
of Warrant for Personal Account.
The
Holder represents and warrants that it is acquiring the Warrant and the Exercise
Shares solely for its account for investment and not with a present view toward
the public sale or distribution of said Warrant or Exercise Shares or any part
thereof and has no intention of selling or distributing said Warrant or Exercise
Shares or any arrangement or understanding with any other persons regarding
the
sale or distribution of said Warrant or, except in accordance with the
provisions of Article 6 of the Purchase Agreement, the Exercise Shares, and
except as would not result in a violation of the Securities Act. The Holder
will
not, directly or indirectly, offer, sell, pledge, transfer or otherwise dispose
of (or solicit any offers to buy, purchase or otherwise acquire or take a pledge
of) the Warrant except in accordance with the Securities Act and will not,
directly or indirectly, offer, sell, pledge, transfer or otherwise dispose
of
(or solicit any offers to buy, purchase or otherwise acquire or take a pledge
of) the Exercise Shares except in accordance with the provisions of Article
6 of
the Purchase Agreement or pursuant to and in accordance with the Securities
Act.
4.2 Securities
Are Not Registered.
(a) The
Holder understands that the offer and sale of the Warrant or the Exercise Shares
have not been registered under the Securities Act on the basis that no
distribution or public offering of the stock of the Company is to be effected
and/or pursuant to specific exemptions from the registration provisions of
the
Securities Act, which exemptions depend upon, among other things, the bona
fide
nature of the Holder’s investment intent as expressed herein. The Holder
realizes that the basis for such exemptions may not be present if,
notwithstanding its representations, the Holder has a present intention of
acquiring the securities for a fixed or determinable period in the future,
selling (in connection with a distribution or otherwise), granting any
participation in, or otherwise distributing the securities. The Holder
represents and warrants that it has no such present intention.
(b) The
Holder recognizes that the Warrant and the Exercise Shares must be held
indefinitely unless they are subsequently registered under the Securities Act
or
an exemption from such registration is available. The Holder recognizes that
the
Company has no obligation to register the Warrant or, except as provided in
the
Purchase Agreement, the Exercise Shares of the Company, or to comply with any
exemption from such registration.
(c) The
Holder is aware that neither the Warrant nor the Exercise Shares may be sold
pursuant to Rule 144 adopted under the Securities Act unless certain conditions
are met, including, among other things, the existence of a public market for
the
shares, the availability of certain current public information about the
Company, the resale following the required holding period under Rule 144 and
the
number of shares being sold during any three month period not exceeding
specified limitations. Holder is aware that any such sale made in reliance
on
Rule 144, if Rule 144 is available, may be made only in accordance with the
terms of Rule 144.
4
4.3 Disposition
of Warrant and Exercise Shares.
(a) The
Holder further agrees not to make any disposition of all or any part of the
Warrant or Exercise Shares in any event unless and until:
(i) The
Company shall have received a letter secured by the Holder from the SEC stating
that no action will be recommended to the SEC with respect to the proposed
disposition;
(ii) There
is
then in effect a registration statement under the Securities Act covering such
proposed disposition and such disposition is made in accordance with said
registration statement; or
(iii) The
Holder shall have notified the Company of the proposed disposition and shall
have furnished the Company with a detailed statement of the circumstances
surrounding the proposed disposition, and if reasonably requested by the
Company, the Holder shall have furnished the Company with an opinion of counsel,
reasonably satisfactory to the Company, for the Holder to the effect that such
disposition will not require registration of such Warrant or Exercise Shares
under the Securities Act or any applicable state securities laws; provided,
that no
opinion shall be required for any disposition made or to be made in accordance
with the provisions of Rule 144.
(b) The
Holder understands and agrees that all certificates evidencing the Exercise
Shares to be issued to the Holder may bear a legend in substantially the
following form:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OF
THE
UNITED STATES. THE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS,
OR
UNLESS OFFERED, SOLD, PLEDGED, HYPOTHECATED OR TRANSFERRED PURSUANT TO AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS. THE
COMPANY SHALL BE ENTITLED TO REQUIRE AN OPINION OF COUNSEL SATISFACTORY TO
THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED TO THE EXTENT THAT AN OPINION
IS
REQUIRED PURSUANT TO THE AGREEMENT UNDER WHICH THE SECURITIES WERE
ISSUED.
5
5. Adjustments.
In
the
event of changes in the outstanding Common Stock of the Company by reason of
any
stock split, stock dividend, recapitalization, reclassification, combination
or
exchange of shares, reorganization, liquidation, dissolution,
consolidation or merger effected by the Company, the number and class of shares
available under the Warrant in the aggregate and the Exercise Price shall be
correspondingly adjusted to give the Holder of the Warrant, on exercise for
the
same aggregate Exercise Price, the total number, class and kind of shares or
other property, including cash, as the Holder would have owned had the Warrant
been exercised prior to the event and had the Holder continued to hold such
shares until after the event requiring adjustment. The form of this Warrant
need
not be changed because of any adjustment in the Exercise Price and/or number,
class and kind of shares subject to this Warrant. The Company shall promptly
provide a certificate from its Chief Financial Officer notifying the Holder
in
writing of any adjustment in the Exercise Price and/or the total number, class
and kind of shares issuable upon exercise of this Warrant, which certificate
shall specify the Exercise Price and number, class and kind of shares under
this
Warrant after giving effect to such adjustment.
6. Fractional
Shares. No
fractional shares shall be issued upon the exercise of this Warrant as a
consequence of any adjustment pursuant hereto. All Exercise Shares (including
fractions) issuable upon exercise of this Warrant may be aggregated for purposes
of determining whether the exercise would result in the issuance of any
fractional share. If, after aggregation, the exercise would result in the
issuance of a fractional share, the Company shall, in lieu of issuance of any
fractional share, pay the Holder otherwise entitled to such fraction a sum
in
cash equal to the product resulting from multiplying the fair market value
of
the Common Stock on the date of exercise of this Warrant by such
fraction.
7. No
Stockholder Rights. This
Warrant in and of itself shall not entitle the Holder to any voting rights
or
other rights as a stockholder of the Company.
8. Transfer
of Warrant. Subject
to applicable laws and compliance with Section 4.3 hereof, this Warrant and
all
rights hereunder are transferable, by the Holder in person or by duly authorized
attorney, upon delivery of this Warrant and the form of assignment attached
hereto to any transferee designated by Holder. The transferee shall sign an
investment letter in form and substance satisfactory to the
Company.
9. Lost,
Stolen, Mutilated or Destroyed Warrant. If
this
Warrant is lost, stolen, mutilated or destroyed, the Company may, on such terms
as to indemnity or otherwise as it may reasonably impose (which shall, in the
case of a mutilated Warrant, include the surrender thereof), issue a new Warrant
of like denomination and tenor as the Warrant so lost, stolen, mutilated or
destroyed. Any such new Warrant shall constitute an original contractual
obligation of the Company, whether or not the allegedly lost, stolen, mutilated
or destroyed Warrant shall be at any time enforceable by anyone.
10. Modifications
and Waiver.
This
Warrant and any provision hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the Company and
(i) Purchasers holding Warrants representing at least a majority of the
number of Exercise Shares then issuable upon exercise of any then unexercised
Warrants sold in the Offering, provided,
however, that
such
modification, amendment or waiver is made with respect to all unexercised
Warrants issued in the Offering and does not adversely affect the Holder without
adversely affecting all holders of Warrants in a similar manner; or
(ii) the Holder.
6
11. Notices,
etc. All
notices required or permitted hereunder shall be in writing and shall be deemed
effectively given: (a) upon personal delivery to the party to be notified,
(b) when sent by confirmed email, telex or facsimile if sent during normal
business hours of the recipient, if not, then on the next business day,
(c) five days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (d) one business day after
deposit with a nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt. All communications shall be
sent
to the Company at the address listed on the signature page and to the Holders
at
the addresses on the Company records, or at such other address as the Company
or
Holder may designate by ten days’ advance written notice to the other party
hereto.
12. Acceptance.
Receipt
of this Warrant by the Holder shall constitute acceptance of and agreement
to
all of the terms and conditions contained herein.
13. Governing
Law. This
Warrant and all rights, obligations and liabilities hereunder shall be governed
by the laws of the State of New York without regard to the principles of
conflict of laws.
14. Descriptive
Headings.
The
descriptive headings of the several paragraphs of this Warrant are inserted
for
convenience only and do not constitute a part of this Warrant. The language
in
this Warrant shall be construed as to its fair meaning without regard to which
party drafted this Warrant.
15. Severability.
The
invalidity or unenforceability of any provision of this Warrant in any
jurisdiction shall not affect the validity or enforceability of such provision
in any other jurisdiction, or affect any other provision of this Warrant, which
shall remain in full force and effect.
16. Entire
Agreement. This
Warrant constitutes the entire agreement between the parties pertaining to
the
subject matter contained in it and supersedes all prior and contemporaneous
agreements, representations, and undertakings of the parties, whether oral
or
written, with respect to such subject matter.
[Signature
Page Follows]
7
In
Witness Whereof,
the
Company has caused this Warrant to be executed by its duly authorized officer
as
of _________________,
2006.
|
COLUMBIA
LABORATORIES, INC.
|
||
| |
|
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| By: | ||
|
Name:
Xxxxxx X. Xxxxx
Title:
President and Chief Executive Officer
Address: 000
Xxxxxxxxxx Xxxxxxx
Xxxxxxxxxx,
Xxx
Xxxxxx 00000
Attention:
General
Counsel
Facsimile:
(000)
000-0000
|
||
8
NOTICE
OF EXERCISE
TO: COLUMBIA
LABORATORIES, INC.
(1) The
undersigned hereby elects to (check one box only):
q purchase
________ shares of the Common Stock of Columbia Laboratories, Inc. (the
“Company”)
pursuant to the terms of the attached Warrant, and tenders herewith payment
of
the exercise price in full for such shares, together with all applicable
transfer taxes, if any.
q purchase
the number of shares of Common Stock of the Company by cashless exercise
pursuant to the terms of the Warrant as shall be issuable upon cashless exercise
of the portion of the Warrant relating to ________ shares, and shall tender
payment of all applicable transfer taxes, if any.
(2) Please
issue a certificate or certificates representing said shares of Common Stock
in
the name of the undersigned or in such other name as is specified
below:
________________________
(Name)
________________________
________________________
(Address)
(3) The
undersigned represents that (i) the aforesaid shares of Common Stock are being
acquired for the account of the undersigned for investment and not with a view
to, or for resale in connection with, the distribution thereof and that the
undersigned has no present intention of distributing or reselling such shares;
(ii) the undersigned is aware of the Company’s business affairs and financial
condition and has acquired sufficient information about the Company to reach
an
informed and knowledgeable decision regarding its investment in the Company;
(iii) the undersigned is experienced in making investments of this type and
has
such knowledge and background in financial and business matters that the
undersigned is capable of evaluating the merits and risks of this investment
and
protecting the undersigned’s own interests; (iv) the undersigned understands
that the shares of Common Stock issuable upon exercise of this Warrant have
not
been registered under the Securities Act of 1933, as amended (the “Securities
Act”),
by
reason of a specific exemption from the registration provisions of the
Securities Act, which exemption depends upon, among other things, the bona
fide
nature of the investment intent as expressed herein, and, because such
securities have not been registered under the Securities Act, they must be
held
indefinitely unless subsequently registered under the Securities Act or an
exemption from such registration is available; (v) the undersigned is aware
that
the aforesaid shares of Common Stock may not be sold pursuant to Rule 144
adopted under the Securities Act unless certain conditions are met and until
the
undersigned has held the shares for the number of years prescribed by Rule
144,
that among the conditions for use of the Rule is the availability of current
information to the public about the Company and the Company has not made such
information available and has no present plans to do so; and (vi) the
undersigned agrees not to make any disposition of all or any part of the
aforesaid shares of Common Stock unless and until there is then in effect a
registration statement under the Securities Act covering such proposed
disposition and such disposition is made in accordance with said registration
statement, or the undersigned has provided the Company with an opinion of
counsel satisfactory to the Company, stating that such registration is not
required.
|
(Date)
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(Signature) | |
|
(Print
name)
|
2
ASSIGNMENT
FORM
|
(To
assign the foregoing Warrant, subject to compliance with Section
4.3
hereof, execute this form and supply required information. Do not
use this
form to purchase shares.)
|
For
Value Received,
the
foregoing Warrant and all rights evidenced thereby are hereby assigned
to
|
Name:
|
||
|
(Please
Print)
|
||
|
Address:
|
||
|
(Please
Print)
|
Dated: __________, 20__
|
Holder’s
Signature:
|
||
|
|
||
|
Holder’s
Address:
|
||
|
|
NOTE:
The
signature to this Assignment Form must correspond with the name as it appears
on
the face of the Warrant, without alteration or enlargement or any change
whatever. Officers of corporations and those acting in a fiduciary or other
representative capacity should file proper evidence of authority to assign
the
foregoing Warrant.
