INVESTOR’S RIGHTS AGREEMENT Dated July 2, 2010
Exhibit 10.1
INVESTOR’S RIGHTS AGREEMENT
Dated July 2, 2010
TABLE OF CONTENTS
| Page | |||
SECTION 1 DEFINITIONS |
1 | ||
1.1 Certain Definitions |
1 | ||
SECTION 2 REGISTRATION RIGHTS |
4 | ||
2.1 Shelf-Registration |
4 | ||
2.2 Expenses |
4 | ||
2.3 Registration Procedures |
4 | ||
2.4 Indemnification |
7 | ||
2.5 Registration Covenants |
9 | ||
2.6 Rule 144 Reporting |
11 | ||
SECTION 3 BOARD OF DIRECTORS |
11 | ||
3.1 Investor Designee |
11 | ||
3.2 Designation |
11 | ||
3.3 Change in Designee |
11 | ||
3.4 Information |
11 | ||
3.5 Termination of Rights |
12 | ||
3.6 No Compensation |
12 | ||
3.7 Confidentiality Agreement |
12 | ||
SECTION 4 LOCK-UP AGREEMENT |
12 | ||
4.1 Lock-Up Agreement |
12 | ||
4.2 Stop-Transfer Instructions |
14 | ||
4.3 Termination of Lock-Up Agreement |
14 | ||
SECTION 5 MISCELLANEOUS |
14 | ||
5.1 Amendment |
14 | ||
5.2 Notices |
14 | ||
5.3 Information |
14 | ||
5.4 Successors and Assigns |
15 | ||
5.5 Entire Agreement |
15 | ||
5.6 Delays or Omissions |
15 | ||
5.7 Severability |
15 | ||
5.8 Titles and Subtitles |
15 | ||
5.9 Counterparts |
16 | ||
5.10 Further Assurances |
16 | ||
5.11 Injunctive Relief |
16 | ||
5.12 Governing Law |
16 | ||
5.13 Arbitration |
16 | ||
5.14 Recapitalization, Exchanges, Etc |
17 | ||
5.15 Conflict |
17 | ||
INVESTOR’S RIGHTS AGREEMENT
This Investor’s Rights Agreement (this “Agreement”) is dated as of July 2, 2010, and is
between Columbia Laboratories, Inc., a Delaware corporation (the “Company”), and Coventry
Acquisition, Inc., a Delaware corporation (the “Investor”). All capitalized terms used and not
defined herein shall have such meanings as set forth in the Purchase and Collaboration Agreement,
dated as of March 3, 2010, by and between the Company and the Investor (the “Purchase and
Collaboration Agreement”).
RECITALS
WHEREAS, the Investor and the Company are parties to the Purchase and Collaboration Agreement
pursuant to which Investor, among other things, acquired from the Company 11,200,000 shares of
Common Stock (the “Shares”); and
WHEREAS, the Company and the Investor are entering into this Agreement pursuant to the
Purchase and Collaboration Agreement.
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the sufficiency of which is acknowledged, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
DEFINITIONS
1.1 Certain Definitions. As used in this Agreement, the following terms shall have the meanings set
forth below:
(a) “AAA” shall have the meaning set forth in Section 5.13(a).
(b) “Affiliate” shall mean, 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).
(c) “Agreement” shall have the meaning set forth in the Preamble.
(d) “Arbitrator” shall have the meaning set forth in Section 5.13(b).
(e) “Board” shall mean the Company’s board of directors.
(f) “Business Day” shall mean a day Monday through Friday on which banks are generally open for
business in New York City.
(g) “Bylaws” shall mean the Company’s Amended and Restated Bylaws, as amended from time to time.
(h) “Certificate” shall mean the Company’s Restated Certificate of Incorporation as filed with the
Secretary of State of the State of Delaware and as amended from time to time.
(i) “Commission” shall mean the Securities and Exchange Commission or any other federal agency at
the time administering the Securities Act.
(j) “Common Stock” shall mean the Company’s common stock, $0.01 par value per share.
(k) “Company” shall have the meaning set forth in the Preamble.
(l) “DGCL” shall mean the General Corporation Law of the State of Delaware.
(m) “Dispute” shall have the meaning set forth in Section 5.13(a).
(n) “Enforcing Court” shall have the meaning set forth in Section 5.13(e).
(o) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, or any similar
successor federal statute and the rules and regulations thereunder, all as the same shall be in
effect from time to time.
(p) “Filing Date” shall have the meaning set forth in Section 2.1(a).
(q) “Financial Statements” shall mean the financial statements of the Company filed with the
Commission in connection with the registration contemplated under this Agreement.
(r) “Indemnified Party” shall have the meaning set forth in Section 2.4(c).
(s) “Indemnifying Party” shall have the meaning set forth in Section 2.4(c).
(t) “Initial Lock-Up Period” shall have the meaning set forth in Section 4.1(a).
(u) “Investor” shall have the meaning set forth in the Preamble.
(v) “Investor Designee” shall have the meaning set forth in Section 3.1.
(w) “Nasdaq Stock Market” shall have the meaning set forth in Section 2.3(i).
(x) “Person” shall mean 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).
(y) “Purchase and Collaboration Agreement” shall have the meaning set forth in the Preamble.
(z) 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 applicable
rules and regulations thereunder, and the declaration or ordering of the effectiveness of such
registration statement.
(aa) “Registrable Securities” shall mean (i) any Shares and (ii) any Common Stock issued as a
dividend or other distribution with respect to or in exchange for or in replacement of the Shares
referenced in (i) above, in each case until Transferred by the Investor to the extent permitted by
this Agreement; provided, however, that Registrable Securities shall not include
any securities described in clause (i) or (ii) above which have previously been registered or which
have been sold to the public either pursuant to a Registration Statement or Rule 144, or which have
been sold in a private transaction.
(bb) “Registration Expenses” shall mean all expenses incurred by the Company in complying with
Section 2.1 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 the Investor).
(cc) “Registration Statement” shall mean any registration statement of the Company filed with the
Commission on the appropriate form pursuant to the Securities Act which covers any Registrable
Securities pursuant to the provisions of this Agreement and all amendments and supplements to any
such Registration Statement, including post-effective amendments, all exhibits thereto and all
materials incorporated by reference therein.
(dd) “Registration Period” shall have the meaning set forth in Section 2.1(b).
(ee) “Rule 144” shall mean Rule 144 as promulgated by the Commission under the Securities Act, as
such Rule may be amended from time to time, or any similar successor rule that may be promulgated
by the Commission.
(ff) “Securities Act” shall mean the Securities Act of 1933, as amended, or any similar successor
federal statute and the rules and regulations thereunder, all as the same shall be in effect from
time to time.
(gg) “Selling Expenses” shall mean all underwriting discounts and the selling commissions and stock
transfer taxes applicable to the sale of Registrable Securities and the fees and disbursements of
counsel for the Investor.
(hh)“Shares” shall have the meaning set forth in the Recitals.
(ii) “Shelf Registration Statement” shall have the meaning set forth in Section 2.1(a).
(jj) “Subsidiary” shall mean, when used with reference to an entity, any other entity of which
(i) securities or other ownership interests having ordinary voting power to elect a majority of the
board of directors or other Persons performing similar functions, or (ii) a majority of the
outstanding securities of which, are owned directly or indirectly by such entity.
(kk)“Transaction Delay Notice” shall have the meaning set forth in Section 2.5(b).
(ll) “Transaction Delay Period” shall have the meaning set forth in Section 2.5(b).
(mm) “Transfer” and “Transferred” shall mean to directly or indirectly sell, transfer, exchange,
assign, pledge, hypothecate, make any short sale of, loan, grant any option for the purchase of, or
otherwise dispose of.
ARTICLE II.
REGISTRATION RIGHTS
REGISTRATION RIGHTS
2.1
Shelf-Registration.
(a) The Company shall use commercially reasonable efforts to file not later than ninety (90) days
before the end of the Initial Lock-Up Period (the “Filing Date”) a Registration Statement pursuant
to Rule 415 under the Securities Act with the Commission covering the resale of the Registrable
Securities on a delayed or continuous basis (the “Shelf Registration Statement”), 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 Registrable Securities as promptly
as possible after the filing thereof. The Shelf 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.
(b) Except for such times as the Company is permitted hereunder to suspend the use of the
prospectus forming part of the Shelf Registration Statement pursuant to Section 2.5, 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, and to keep such Shelf Registration Statement free of any untrue statement of a material
fact or omission to state a material fact required to be stated therein or necessary to make the
statements contained therein not misleading, in light of the circumstances in which they were made,
until the earliest of the following: (i) the date of the fourth (4th) anniversary of
the date on which the Shelf Registration Statement is initially declared effective by the
Commission, (ii) the date all of the Registrable Securities have been Transferred by the Investor
and (iii) the date all of the Registrable Securities then held by the Investor may be sold by the
Investor under Rule 144 during any ninety (90) day period without complying with the provisions of
clause (c) or (f) of Rule 144. The period of time during which the Company is required hereunder
to keep the Shelf Registration Statement effective is referred to herein as the “Registration
Period.” The rights of the Investor under this Section 2 shall terminate on the last day of the
Registration Period.
2.2 Expenses. All Registration Expenses incurred in connection with any registration, qualification,
exemption or compliance pursuant to Section 2, shall be borne by the Company. All Selling Expenses
relating to the sale of Registrable Securities registered hereunder by or on behalf of the Investor
shall be borne by the Investor.
2.3 Registration Procedures. In the case of the registration, qualification, exemption or compliance
effected by the Company pursuant to this Agreement, the Company shall:
(a) notify the Investor within three (3) Business Days:
(i) when the Shelf Registration Statement or any amendment thereto has been filed with the
Commission and when the Shelf Registration Statement or any post-effective amendment thereto has
become effective;
(ii) of any request by the Commission for amendments or supplements to the Shelf Registration
Statement or the prospectus included therein, upon which the Company will use its commercially
reasonable efforts to file the same with the Commission;
(iii) of the issuance by the Commission of any stop order suspending the effectiveness of the Shelf
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, upon which the Company will use its
commercially reasonable efforts promptly to obtain the withdrawal of such suspension or address any
such proceedings, as applicable; and
(v) of the occurrence of any event that requires the making of any changes in the Shelf
Registration Statement or the prospectus forming a part thereof so that, as of such date, the Shelf
Registration Statement and the prospectus forming a part thereof, 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 (provided, that, in no event
shall such notice contain any material, non-public information);
(b) use commercially reasonable efforts to obtain the withdrawal of any order suspending the
effectiveness of the Shelf Registration Statement as soon as reasonably practicable;
(c) promptly furnish the Investor, without charge, at least one copy of the Shelf 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 Commission;
(d) during the Registration Period, promptly deliver to the Investor, without charge, as many
copies of the prospectus included in the Shelf Registration Statement and any amendment or
supplement thereto as the Investor may reasonably request; and, subject to the limitations
contained herein, the Company consents to the use, consistent with the provisions hereof, of the
prospectus or any amendment or supplement thereto by the Investor in connection with the offering
and sale of the Registrable Securities covered by the prospectus forming a part thereof or any
amendment or supplement thereto;
(e) during the Registration Period, if the Investor so requests, deliver to the Investor, without
charge, (i) one copy of the following documents: (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) 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 Shelf 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);
(f) prior to any public offering of Registrable Securities pursuant to the Shelf 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 the Investor reasonably requests 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 the Shelf Registration Statement;
(g) upon the occurrence of any event contemplated by Section 2.3(a)(v) above, except for such times
as the Company is permitted hereunder to suspend the use of the prospectus forming part of the
Shelf Registration Statement, pursuant to Section 2.5, the Company shall use commercially
reasonable efforts to as soon as reasonably practicable prepare a post effective amendment to the
Shelf Registration Statement or a supplement to the prospectus forming a part thereof, or file any
other required document so that, as thereafter delivered to purchasers of the Registrable
Securities included therein, such 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;
(h) otherwise use commercially reasonable efforts to comply in all material respects with all
applicable rules and regulations of the Commission which could affect the sale of the Registrable
Securities;
(i) use commercially reasonable efforts to cause the Registrable Securities included in the Shelf
Registration Statement to be listed on the NASDAQ Global Market (“NASDAQ Stock Market”) or, if the
Common Stock is not then listed on the NASDAQ Stock Market, on the principal national securities
exchange on which the Common Stock is then listed, or if the Common Stock is not then listed on a
national securities exchange, authorized for quotation on any automated quotation system on which
the Common Stock is then quoted;
(j) during the Registration Period, furnish to the Investor, without charge, copies of any
correspondence from the Commission or the staff of the Commission to the Company or its
representatives relating to the Shelf Registration Statement or any document incorporated by
reference therein within five (5) Business Days after the Company’s receipt thereof;
(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 Investor to sell
Registrable Securities under Rule 144; and
(l) if the Investor so requests in writing, permit a single counsel, designated by the Investor to
review and provide reasonable comments to the Shelf Registration Statement and all
amendments and
supplements thereto, within three (3) 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 Shelf Registration Statement or any amendment or supplement thereto to
incorporate any comments to the Shelf Registration Statement or any amendment or supplement thereto
by or on behalf of the Investor if such comments would require or result in a delay in the filing
of the Shelf Registration Statement, amendment or supplement, as the case may be, and the Company
reasonably believes (after consulting with legal counsel) that such comments are not necessary to
incorporate into the Shelf Registration Statement or any amendment or supplement thereto in order
to comply with the Securities Act or (B) to provide, and shall not provide, the Investor or its
representatives with material, non-public information unless the Investor agrees to receive such
information and enters into a written confidentiality agreement with the Company in a form
reasonably acceptable to the Company.
2.4 Indemnification.
(a) To the extent permitted by law, the Company shall (subject to Section 2.4(c) below) indemnify
the Investor, each of its directors and officers, and each person who controls the Investor within
the meaning of Section 15 of the Securities Act, with respect to 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 2.4(c) below), arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in the Shelf 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
the Investor and each person controlling the Investor, 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 is made in reliance upon and in
conformity with written information furnished to the Company by or on behalf of the Investor
specifically for use in preparation of the Shelf Registration Statement, prospectus, amendment or
supplement.
(b) The Investor will 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 2.4(c) below), arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in the Shelf 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 Investor specifically for use in preparation of the Shelf Registration Statement,
prospectus, amendment or supplement. Notwithstanding the foregoing, the Investor’s aggregate
liability pursuant to this Section 2.4(b) and Section 2.4(d) shall be limited to the net amount
received by the Investor from the sale of the Registrable Securities pursuant to the Shelf
Registration Statement.
(c) Each party entitled to indemnification under this Section 2.4 (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, action or litigation as to which
indemnity may be sought, and shall permit the Indemnifying Party (at its expense) to assume the
defense of any such claim, action or litigation resulting therefrom; provided, that counsel
for the Indemnifying Party, who shall conduct the defense of such claim, action 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
after the assumption of the defense of any such claim, action or litigation by the Indemnifying
Party, the Indemnified Party shall not be entitled to reimbursement or indemnification for its
legal or other out-of-pocket expenses incurred in action with investigating or defending any such
claim, action or litigation except for out-of-pocket costs (excluding legal or other professional
fees or expenses) solely to the extent incurred by the Indemnified Party for it to comply with any
order or legally binding determination of a court or other governmental authority or to provide
assistance in the defense or investigation of such claim at the request or direction of the
Indemnifying Party), 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, action or litigation. The Indemnified Party shall not
settle, compromise, or consent to the entry of any judgment with respect to any such claim, action
or litigation without the prior written consent of the Indemnifying Party (which consent will not
be unreasonably withheld) and the Indemnifying Party shall not be liable for any compromise,
settlement or consent to the entry of any judgment with respect to any claim, action or litigation
effected without its prior written consent. No Indemnifying Party, in its defense of any such
claim, action or litigation, shall, except with the consent of each Indemnified Party, settle,
compromise or consent to entry of any judgment 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, action or litigation.
(d) If the indemnification provided for in this Section 2.4 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.
(e) The amount paid or payable by an Indemnified Party as a result of the losses, claims, damages,
and liabilities referred to in this Section 2.4 shall include the reasonable legal or other
expenses reasonably incurred by such Indemnified Party in connection with investigating or
defending any such action or claim, subject to the provisions of Section 2.4(c). No Person guilty
of fraudulent misrepresentation (within the meaning of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent misrepresentation.
(f) The obligations of the Company and the Investor under this Section 2.4 shall survive the
completion of any offering of Registrable Securities under the Shelf Registration Statement.
2.5 Registration Covenants.
(a) The Investor agrees that, upon receipt of any notice from the Company of the happening of any
event:
(i) requiring the preparation of a supplement or amendment to a prospectus relating to Registrable
Securities so that, as thereafter delivered to the Investor, 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, the Investor will forthwith
discontinue offering or Transferring Registrable Securities pursuant to the Shelf Registration
Statement and prospectus forming a part thereof contemplated by Section 2.1 until its receipt of
copies of the supplemented or amended prospectus from the Company and, if so directed by the
Company, the Investor shall deliver to the Company all copies, other than permanent file copies
then in the Investor’s possession, of the prospectus covering such Registrable Securities current
at the time of receipt of such notice;
(ii) contemplated by Section 2.3(a)(iii), the Investor shall forthwith discontinue offering or
Transferring Registrable Securities pursuant to the Shelf Registration Statement and the prospectus
forming a part thereof contemplated by Section 2.1 until its receipt of a notice from the Company
stating that the stop order of the type referred to in Section 2.3(a)(iii) is no longer applicable
or that the Commission will not issue any such stop order pursuant to the proceedings of the type
referred to in Section 2.3(a)(iii); or
(iii) contemplated by Section 2.3(a)(iv), the Investor shall forthwith discontinue offering or
Transferring Registrable Securities pursuant to the Shelf Registration Statement and the prospectus
forming a part thereof contemplated by Section 2.1 until its receipt of a notice from the Company
that any suspension of the type referred to in Section 2.3(a)(iv) is no longer applicable or that
no Person will issue any such suspension pursuant to any proceedings (threatened or initiated) of
the type referred to in Section 2.3(a)(iv).
(b) Notwithstanding anything in this Agreement to the contrary, if the Company delivers to the
Investor a certificate, signed by an officer of the Company (the “Transaction Delay Notice”),
stating that in the good faith judgment of the Board (i) continued use of the Shelf Registration
Statement for purposes of effecting offers or sales of the Registrable Securities pursuant thereto
would require, under the Securities Act or the Exchange Act, premature disclosure in the Shelf
Registration Statement (or the prospectus that is a part thereof or any document that is or would
be incorporated therein) of material, nonpublic information concerning the Company, its business or
prospects or any proposed material transaction involving the Company, (ii) 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) it is therefore desirable to suspend the
use by the Investor of the Shelf Registration Statement (and the prospectus that is a part thereof)
for purposes of effecting offers or sales of the Registrable Securities pursuant thereto, then the
right of the Investor to use the Shelf Registration Statement (and the prospectus that is a part
thereof) for purposes of effecting offers or sales of the Registrable Securities 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 Shelf Registration Statement on more
than two (2) occasions during any twelve (12) month period, and each such suspension shall not be
for more than thirty (30) days per such occasion (the “Transaction Delay Period”). The Investor
hereby covenants and agrees that it will not sell any Registrable Securities pursuant to the Shelf
Registration Statement during the periods the Shelf Registration Statement is withdrawn or the
ability to sell thereunder is suspended as set forth in this Section 2.5(b). During the period the
ability of the Investor to sell Registrable Securities under the Shelf Registration Statement is
suspended pursuant to this Section 2.5(b) the Company shall not file a Registration Statement
during the related Transaction Delay Period for the offer or sale of any securities for its own
account or for the offer or sale of any securities for the account of any stockholder of the
Company.
(c) As a condition to the inclusion of its Registrable Securities, the Investor shall furnish to
the Company such information, including completing an investor questionnaire in the form provided
by the Company, as shall be required in connection with any registration referred to in this
Section 2.
(d) The Investor acknowledges and agrees that the Registrable Securities sold pursuant to the Shelf
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 Transferred in accordance with the Shelf Registration Statement and (ii) the
requirement of delivering a current prospectus has been satisfied.
(e) At the end of the Registration Period the Investor shall discontinue sales of Registrable
Securities pursuant to the Shelf Registration Statement upon receipt of notice from the Company of
its intention to remove from registration the Registrable Securities covered by the Shelf
Registration Statement which remain unsold, and the Investor shall notify the Company of the number
of Registrable Securities registered which remain unsold immediately upon receipt of such notice
from the Company.
2.6 Rule 144 Reporting. With a view to making available the benefits of certain rules and regulations
of the Commission that may permit the sale of the Registrable Securities to the public without
registration, the Company agrees to use its commercially reasonable efforts to:
(a) Make and keep adequate current public information with respect to the Company available in
accordance with Rule 144; and
(b) File with the Commission in a timely manner all reports and other documents required of the
Company under the Securities Act and the Exchange Act.
ARTICLE III.
BOARD OF DIRECTORS
BOARD OF DIRECTORS
3.1 Investor Designee.
(a) Upon execution of this Agreement and in accordance with the terms of this Section 3, the
Investor shall have the right to designate one Person for election to the Board as its nominee in
its sole discretion (the “Investor Designee”). Within five (5) Business Days after the date
hereof, the Company shall take all commercially reasonable actions to expand the Board in
accordance with the Certificate, the Bylaws and the DGCL to create one vacancy on the Board and
appoint the Investor Designee to fill such vacancy.
(b) Subject to Section 3.5, following the appointment of the Investor Designee pursuant to
Section 3.1(a), for applicable subsequent elections of the members of the Board, the Company shall
take all such actions as are commercially reasonable to facilitate the Investor Designee’s
re-election to the Board.
(c) The Investor Designee must be eligible under applicable law and regulations of any national
securities exchange on which Company securities are traded to serve on the Board; provided,
however, that the Investor Designee shall not be required to be “independent” under the
listing rules of any applicable national securities exchange, if any, on which Company securities
are traded.
3.2 Designation. The initial Investor Designee shall be ▇▇▇▇ ▇▇▇▇▇▇▇▇▇.
3.3 Change in Designee. From time to time, subject to Section 3.5, the Investor may, in its sole
discretion, notify the Company in writing of its intention to remove the Investor Designee that is
serving on the Board and/or to select a new Investor Designee for election to the Board (whether to
replace a prior Investor Designee or to fill a vacancy on the Board caused by the resignation or
removal of a prior Investor Designee). Subject to Section 3.5, in the event of such an initiation
of a removal or selection of an Investor Designee under this Section 3.3, the Company shall take
such commercially reasonable actions as are necessary to facilitate such removal or election.
Notwithstanding the foregoing sentence, the Company shall not be required to hold a special meeting
of stockholders to replace an Investor Designee and in no event shall there be more than one
Investor Designee on the Board.
3.4 Information. The Investor shall at the request of the Company provide, and shall cause the
Investor Designee to provide, all information regarding the Investor Designee that the
Company may
reasonably request for inclusion in any proxy statement or other report that is required to contain
such information that the Company is required to file with the Commission or any national
securities exchange on which the Company’s securities are listed. The Investor represents,
warrants and agrees that any such information supplied to the Company will not contain any untrue
statement of a material fact, or omit to state any material fact required to be stated therein in
order to make the statements therein, in light of the circumstances under which they were made, not
misleading.
3.5 Termination of Rights. The rights provided to the Investor under this Section 3 shall terminate at
the first time when the Investor ceases to hold at least ten percent (10%) of the then outstanding
Common Stock; provided, however, that an Investor Designee who is appointed or
elected prior to the time when the Investor ceases to hold at least ten percent (10%) of the then
outstanding Common Stock may continue as a director of the Company until the Company’s next meeting
of stockholders held after the time when the Investor ceases to hold at least ten percent (10%) of
the then outstanding Common Stock at which the stockholders are requested to take action with
respect to the election of directors of the Company. For purposes of this Section 3.5, in
determining, at any time, how many shares of Common Stock the Investor holds, only the Shares then
held by the Investor should be considered and no other shares of Common Stock held by the Investor
shall be considered.
3.6 No Compensation. The Investor Designee shall not be entitled to receive compensation in any form
from the Company in connection with such designation or in respect of his or her position as a
member of the Board.
3.7 Confidentiality Agreement. Notwithstanding anything contained herein to the contrary, no Investor
Designee shall be entitled to become a member of the Board unless and until he or she executes a
confidentiality agreement in a form agreed to by the Company, the Investor and the Investor
Designee, each acting reasonably.
ARTICLE IV.
LOCK-UP AGREEMENT
LOCK-UP AGREEMENT
4.1 Lock-Up Agreement.
(a) Except as otherwise permitted in this Section 4.1, the Investor agrees not to Transfer the
Shares or any legal or beneficial interest therein, without the prior written consent of the
Company, from the date hereof until the date which is six (6) months after the date of this
Agreement (the “Initial Lock-Up Period”); provided that the Investor shall have the right
to participate in any buy-back of Common Stock by the Company, any tender offer or exchange offer
for shares of Common Stock or in any extraordinary business combination or recapitalization
transaction involving the Company that is approved by the stockholders of the Company by a vote
required under applicable law.
(b) Notwithstanding Section 4.1(a), the Investor shall be permitted to Transfer any portion or all
of the Shares at any time to any Affiliate under common control with the Investor;
provided, that any transferee agrees in writing to be bound by the provisions of this
Section 4 to the reasonable
satisfaction of the Company; provided, further that any such
Transfer shall not relieve the Investor from its obligations hereunder.
(c) Following the Initial Lock-Up Period, subject to Sections 4.3 and 5.3, the Investor agrees that
it will not, during any fiscal quarter of the Company, Transfer more than two million (2,000,000)
of the Shares; provided, however, the restrictions in this Section 4.1(c) shall
terminate eighteen (18) months following the date of this Agreement.
(d) In addition to the foregoing Transfer restrictions, the Investor shall not be entitled to
transfer any Registrable Securities at any time if such Transfer would violate the Securities Act,
or any state (or other jurisdiction) securities or “blue sky” laws applicable to the Company or the
applicable Transfer of Registrable Securities.
(e) Each certificate representing the Registrable Securities shall bear the following legend:
THE SALE, ASSIGNMENT, TRANSFER OR OTHER DISPOSITION OF THE
SECURITIES EVIDENCED BY THIS CERTIFICATE IS RESTRICTED BY THE TERMS
OF AN INVESTOR’S RIGHTS AGREEMENT, DATED AS OF JULY 2, 2010, COPIES
OF WHICH ARE ON FILE WITH THE ISSUER OF THIS CERTIFICATE. NO SALE,
ASSIGNMENT, TRANSFER OR OTHER DISPOSITION SHALL BE EFFECTIVE UNLESS
AND UNTIL THE TERMS AND CONDITIONS OF SUCH INVESTOR’S RIGHTS
AGREEMENT HAVE BEEN COMPLIED WITH IN FULL.
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. COLUMBIA LABORATORIES, INC. (THE “COMPANY”) SHALL BE
ENTITLED TO REQUIRE AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
(f) In the event that the restrictive legend set forth in Section 4.1(e) has ceased to be
applicable, the Company shall promptly provide the Investor or its permitted transferee, with new
certificates for such Registrable Securities not bearing the legend with respect to which the
restriction has ceased and terminated.
4.2 Stop-Transfer Instructions. In order to enforce Section 4.1, the Company may impose stop-transfer
instructions with respect to any Company securities owned by the Investor.
4.3 Termination of Lock-Up Agreement. This Section 4 shall terminate at the first time when the
Investor, and its Affiliates (other than the Company), in the aggregate, cease to hold at least ten
percent (10%) of the then outstanding Common Stock. For purposes of this Section 4.3, in
determining, at any time, how many shares of Common Stock the Investor and its Affiliates hold,
only the Shares then held by the Investor and its Affiliates shall be considered and no other
shares of Common Stock held by the Investor and/or its Affiliates shall be considered.
ARTICLE V.
MISCELLANEOUS
MISCELLANEOUS
5.1 Amendment. Except as expressly provided herein, neither this Agreement nor any term hereof may be
amended, waived, discharged or terminated other than by a written instrument referencing this
Agreement and signed by the Company and the Investor.
5.2 Notices. All notices and other communications required or permitted hereunder shall be in writing
and shall be mailed by registered or certified mail, postage prepaid, sent by electronic mail or
otherwise delivered by hand, messenger or courier service addressed:
(a) if to the Investor, to the address or electronic mail address of the Investor set forth beneath
its name on the signature pages hereto, as may be updated in accordance with the provisions hereof,
with a copy (which shall not constitute notice) to ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: R. ▇▇▇▇▇ ▇▇▇▇▇; and
(b) if to the Company, to the address or electronic mail address of the Company set forth beneath
its name on the signature pages hereto, as may be updated in accordance with the provisions hereof,
with a copy (which shall not constitute notice) to ▇▇▇▇ ▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
Each such notice or other communication shall for all purposes of this Agreement be treated as
effective or having been given (i) if delivered by hand, messenger or courier service, when
delivered (or if sent via a nationally-recognized overnight courier service, freight prepaid,
specifying next-business-day delivery, two (2) Business Days after deposit with the courier),
(ii) if sent via registered or certified mail, at the earlier of its receipt or five (5) days after
the same has been deposited in a regularly-maintained receptacle for the deposit of the United
States mail, addressed and mailed as aforesaid, or (iii) if sent via electronic mail, when directed
to the relevant electronic mail address, if sent during normal business hours of the recipient, or
if not sent during normal business hours of the recipient, then on the recipient’s next Business
Day in either case confirmed in writing.
5.3 Information. The Investor hereby acknowledges that it is aware (and the Investor agrees that
any Person, including the Investor Designee, who otherwise receives from
the Investor confidential
non-public information relating to the Company has been and will be advised) that the United States
securities laws restrict any Person who possesses material, non-public information regarding the
Company from purchasing or selling securities of the Company and from communicating such
information to any other Person under circumstances in which it is reasonably foreseeable that such
Person is likely to purchase or sell such securities.
5.4 Successors and Assigns. Except as permitted by Section 4.1(b), this Agreement and the rights and
obligations of the parties hereunder shall not be assignable or otherwise transferred, in whole or
in part, by the Company or the Investor without the written consent of both parties hereto. Any
attempted assignment or transfer of this Agreement shall be null and void.
5.5 Entire Agreement. This Agreement and the exhibits hereto, the Purchase and Collaboration Agreement
and the Other Agreements (as defined in the Purchase and Collaboration Agreement) constitute the
full and entire understanding and agreement between the parties with regard to the subject hereof
and thereof. No party hereto shall be liable or bound to any other party in any manner with regard
to the subjects hereof or thereof by any warranties, representations or covenants except as
specifically set forth herein or therein.
5.6 Delays or Omissions. Except as expressly provided herein, no delay or omission to exercise any
right, power or remedy accruing to any party to this Agreement upon any breach or default of any
other party under this Agreement shall impair any such right, power or remedy of such
non-defaulting party, nor shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of or in any similar breach or default thereafter occurring, nor shall any
waiver of any single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any party of any breach or default under this Agreement, or any waiver on
the part of any party of any provisions or conditions of this Agreement, must be in writing and
shall be effective only to the extent specifically set forth in such writing. All remedies, either
under this Agreement or by law or otherwise afforded to any party to this Agreement, shall be
cumulative and not alternative.
5.7 Severability. If any provision of this Agreement becomes or is declared by a court of competent
jurisdiction to be illegal, unenforceable or void, portions of such provision, or such provision in
its entirety, to the extent necessary, shall be severed from this Agreement, and such court will
replace such illegal, void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the same economic, business and
other purposes of the illegal, void or unenforceable provision. The balance of this Agreement
shall be enforceable in accordance with its terms.
5.8 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience
only and are not to be considered in construing or interpreting this Agreement. All references in
this Agreement to sections, paragraphs and exhibits shall, unless otherwise provided, refer to
sections and paragraphs hereof and exhibits attached hereto.
5.9 Counterparts. This Agreement may be executed and delivered by PDF signature and in any number of
counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
5.10 Further Assurances. Each party hereto agrees to execute and deliver, by the proper exercise of its
corporate, limited liability company, partnership or other powers, all such other and additional
instruments and documents and do all such other acts and things as may be necessary to more fully
effectuate this Agreement.
5.11 Injunctive Relief. The Parties hereto agree that irreparable damage would occur in the event that
any of the provisions of this Agreement were not performed in accordance with their specific terms
or were otherwise breached and that such damages would not be fully compensable by an award of
money damages. It is accordingly agreed that the parties hereto shall be entitled to an injunction
or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and
provisions of this Agreement without posting a bond or other undertaking, this being in addition to
any other remedy to which they are entitled at law or in equity.
5.12 Governing Law. This Agreement (including any claim or controversy arising out of or relating to
this Agreement) shall be governed by and construed in accordance with the laws of the State of
Delaware without regard to conflict of law principles that would result in the application of any
law other than the laws of the State of Delaware.
5.13 Arbitration.
(a) All disputes, differences, controversies and claims of the parties hereto arising out of
or relating to this Agreement (individually, a “Dispute” and, collectively, “Disputes”), except as
otherwise provided under this Agreement, shall be resolved by final and binding arbitration
administered by the American Arbitration Association (“AAA”) under its Commercial Arbitration
Rules, subject to the provisions of this Section 5.13.
(b) Following the delivery of a written demand for arbitration by either party hereto, each of
the Company and Investor shall choose one (1) arbitrator within ten (10) Business Days after the
date of such written demand and the two (2) chosen arbitrators shall mutually, within ten (10)
Business Days after selection, select a third (3rd) arbitrator (each, an “Arbitrator”
and together, the “Arbitrators”), each of whom shall be a retired judge selected from a roster of
arbitrators provided by the AAA. If the third (3rd) Arbitrator is not selected within
fifteen (15) Business Days after the delivery of the written demand for arbitration (or such other
time period as the parties hereto may agree), the parties hereto shall promptly request that the
commercial panel of the AAA select an independent Arbitrator meeting such criteria
(c) The rules of arbitration shall be the Commercial Rules of the American Arbitration
Association; provided, however, that notwithstanding any provisions of the
Commercial Arbitration Rules to the contrary, unless otherwise mutually agreed to by the Company
and the Investor, the sole discovery available to each party hereto shall be its right to conduct
up to two (2) non-expert depositions of no more than three (3) hours of testimony each.
(d) The Arbitrators shall render an award by majority decision within three (3) months after
the date of appointment, unless the parties hereto agree to extend such time. The award shall be
final and binding upon the parties hereto.
(e) Any judicial proceeding arising out of or relating to this Agreement or the relationship
of the parties hereto, including without limitation any proceeding to enforce this Section 5.13, to
review or confirm the award in arbitration, shall be brought exclusively in the Delaware Chancery
Court sitting in the county of New Castle, Delaware (the “Enforcing Court”). By execution and
delivery of this Agreement, each party hereto accepts the jurisdiction of the Enforcing Court.
(f) Each party hereto shall pay its own expenses in connection with the resolution of Disputes
pursuant to this Section 5.13, including attorneys’ fees, unless determined otherwise by the
Arbitrator.
(g) The parties hereto agree that the existence, conduct and content of any arbitration
pursuant to this Section 5.13 shall be kept confidential and no party hereto shall disclose to any
Person any information about such arbitration, except in connection with such arbitration or as may
be required by law or by any court, regulatory or governmental authority (or any exchange on which
such party’s securities are listed) or for financial reporting purposes in such party’s financial
statements.
(h) Notwithstanding the foregoing, none of the provisions of this Agreement (including this
Section 5.13) shall restrict the right of any party hereto to seek injunctive relief or other
equitable remedies, to enjoin any breach or threatened breach of this Agreement or otherwise
specifically enforce any provision of this Agreement.
5.14 Recapitalization, Exchanges, Etc. The provisions of this Agreement shall apply to the full extent
set forth herein with respect to (i) the Registrable Securities, (ii) any and all securities into
which the shares of Common Stock are converted, exchanged or substituted in any recapitalization or
other capital reorganization by the Company and (iii) any and all equity securities of the Company
or any successor or assign of the Company (whether by merger, consolidation or otherwise) which may
be issued in respect of, in conversion of, in exchange for, or in substitution of, the shares of
Common Stock and shall be appropriately adjusted for any stock dividends, splits, reverse splits,
combinations, recapitalizations and the like occurring after the date hereof. The Company shall
cause any successor or assign (whether by merger, consolidation or otherwise) to assume this
Agreement or enter into a new agreement with the Investor on terms substantially the same as this
Agreement as a condition of any such transaction.
5.15 Conflict. In the event of any conflict between the Company’s books and records and this Agreement
or any notice delivered hereunder, the Company’s books and records will control absent fraud or
error.
(signature page follows)
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date
first written above.
| COLUMBIA LABORATORIES, INC. |
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| By: | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. | |||
| Name: | ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. | |||
| Title: | Chief Executive Officer |
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| Address: |
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Plaza 1, Second Floor Livingston, New Jersey 07039 |
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| COVENTRY ACQUISITION, INC. |
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| By: | /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||
| Name: | ▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||
| Title: | President and Chief Executive Officer |
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| Address: |
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ |
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