Exhibit 10.3
LICENSE AGREEMENT
          This LICENSE AGREEMENT (the “Agreement”), dated as of July 2, 2010
(the “Effective Date”), is entered into by and between Columbia Laboratories,
Inc., a Delaware corporation, and Columbia Laboratories (Bermuda) Ltd., a
Bermuda corporation (together, “Seller”), and Coventry Acquisition, Inc., a
Delaware corporation (“Buyer”). Seller and Buyer are each referred to herein as
a “Party”, and collectively, as the “Parties.”
RECITALS
          WHEREAS, the Columbia Laboratories, Inc., Watson Pharmaceuticals,
Inc., a Nevada corporation and Buyer have entered into a Purchase and
Collaboration Agreement, dated as of March 3, 2010 (the “PCA”), for the sale by
Seller, and the purchase by Buyer, of the First Closing Date Purchased Assets on
the First Closing Date and the Second Closing Date Purchased Assets on the
Second Closing Date (each as defined in the PCA);
          WHEREAS, pursuant to the PCA, the Parties will collaborate with
respect to certain Development activities relating to the Products (as defined
in the PCA); and
          WHEREAS, as a condition to the First Closing (as defined in the PCA)
under the PCA, Buyer will grant to Seller certain licenses, and Seller will
grant Buyer certain licenses, on the terms and conditions set forth herein.
          NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties agree as
follows:
ARTICLE I.
DEFINITIONS
          For the purposes of this Agreement, the following terms shall have the
following meanings. All other capitalized terms used herein and not defined in
this Agreement shall be as defined in the PCA.
          “Ascend Agreement” means the License and Supply Agreement, dated as of
September 27, 2007, between Columbia Laboratories, Inc. and Ascend Therapeutics,
Inc.
          “Buyer Introduced Technology” means all Patents and Know-How
Controlled by Buyer from time to time during the Joint Development Period
covering technology identified by Buyer in writing for use by Seller in Seller
Development Activities.
          “Buyer Technology” means the Purchased Asset Technology and
Collaboration Technology.

 

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          “Collaboration Invention” shall have the meaning set forth in
Section 3.2(a) hereof.
          “Collaboration Invention Patent” shall have the meaning set forth in
Section 3.2(a) hereof.
          “Collaboration Technology” shall have the meaning set forth in
Section 3.2(a) hereof.
          “Dimera Agreement” means the Reciprocal License Agreement, dated as of
May 19, 2004, among Columbia Laboratories, Inc., Columbia Laboratories (Bermuda)
Ltd. and Dimera Incorporated.
          “Effective Date” means the date set forth in the Preamble.
          “Excluded Asset Patents” shall have the meaning set forth in the
definition of Excluded Asset Technology.
          “Excluded Asset Technology” means (a) the Patents (“Excluded Asset
Patents”) and Know-How Controlled by Seller and/or its Affiliates as of the
First Closing Date which relate primarily to the Products and are not included
in the Purchased Assets, and (b) the Seller Next Generation Delivery System
Patents.
          “Non-US Asset Purchaser” shall have the meaning set forth in
Section 2.3(a) hereof.
          “Non-US Rights to Intellectual Property” shall have the meaning set
forth in Section 2.3(a) hereof.
          “Product Infringement” shall have the meaning set forth in
Section 3.4(a)(i) hereof.
          “Purchased Asset Patents” shall have the meaning set forth in the
definition of Purchased Asset Technology.
          “Purchased Asset Technology” means the Patents (“Purchased Asset
Patents”) and Know-How included in the Purchased Assets.
          “Seller Next Generation Delivery System Invention” shall have the
meaning set forth in Section 3.2(b) hereof.
          “Seller Next Generation Delivery System Patents” means any Patent
Controlled by Seller and/or its Affiliates containing at least one claim that,
without a license thereunder, would be infringed by the manufacture, use,
marketing, importing, exporting, sale, offer for sale or other Commercialization
of any product utilizing a Seller Next Generation Delivery System.

 

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          “Seller Next Generation Delivery System Technology” shall have the
meaning set forth in Section 3.2(b) hereof.
          “Territory” means worldwide.
ARTICLE II.
CERTAIN LICENSES RELATING TO THE PRODUCTS
          2.1 Grant of Licenses.
          (a) Grant of Technology Licenses to Buyer. Subject to the terms and
conditions of this Agreement, the PCA, the Ascend Agreement, the Merck-Serono
Agreement, and the Dimera Agreement, Seller hereby grants to Buyer an exclusive
(even as to Seller and its Affiliates), irrevocable, perpetual, royalty-free and
fully paid-up (except as provided in the PCA) license, with the right to grant
sublicenses subject to Section 2.2, under the Excluded Asset Technology and
Seller Next Generation Delivery System Technology to Develop, manufacture, have
manufactured, use, import, export, market, sell, offer to sell or otherwise
Commercialize the Products in the Territory in any and all fields.
          (b) Grant of Technology Licenses to Seller. Subject to the terms and
conditions of this Agreement and the PCA, including without limitation
Section 8.11 of the PCA, Buyer hereby grants to Seller:
               (i) a non-exclusive, non-transferable (except pursuant to
Section 6.8), royalty-free and fully paid-up license under the Buyer Technology
to manufacture, have manufactured, import and export the Products for the
purpose of supply of such Products to Buyer under the terms and conditions of
the Supply Agreement;
               (ii) a non-exclusive, non-transferable (except pursuant to
Section 6.8), royalty-free and fully paid-up license under the Buyer Technology,
Collaboration Technology and Buyer Introduced Technology for the sole purpose of
conducting the Seller Development Activities during the Joint Development
Period;
               (iii) an exclusive (even as to Buyer and its Affiliates),
irrevocable, perpetual, royalty-free and fully paid-up license, with the right
to grant sublicenses subject to Section 2.2, under (A) the Purchased Asset
Technology and Collaboration Technology (but solely to the extent such
Collaboration Technology arises out of clinical trials conducted by or on behalf
of Seller on the Product known as progesterone/COL-1620 vaginal gel containing
progesterone in a concentration of either four percent (4%) or eight percent
(8%)) to the extent required to permit Seller or its Affiliate to perform under
and comply with the terms of the Merck-Serono Agreement and (B) the Purchased
Asset Technology to the extent required to permit Seller or its Affiliate to
perform under and comply with the terms of the Dimera Agreement; and
               (iv) a non-exclusive, irrevocable, perpetual, royalty-free and
fully paid-up license, with the right to grant sublicenses subject to
Section 2.2, under Collaboration Technology to Develop, manufacture, have
manufactured, use, import, export, market, sell, offer

 

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to sell or otherwise Commercialize the Seller Next Generation Delivery System to
the extent that it incorporates or otherwise delivers any product other than
Products in the Territory in any and all fields.
          2.2 Sublicenses. In the event that a Party shall have the right to
grant sublicenses under licenses granted pursuant to Section 2.1 of this
Agreement, each such Party shall ensure that its sublicensee shall be subject to
a written agreement with terms and condition that are consistent with, and no
less protective of, the other Party than the terms and conditions hereunder,
provided that, it is acknowledged that the Seller shall have no obligation to
amend the Merck-Serono Agreement or the Dimera Agreement notwithstanding that
such agreements include licenses that constitute sublicenses hereunder.
          2.3 Non-U.S. Rights.
          (a) To the extent that rights licensed by Seller hereunder are to be
used in connection with or in order to exploit the Non-United States Purchased
Assets purchased by a wholly-owned Subsidiary of Parent pursuant to Section 11.1
of the PCA (such licensed rights, the “Non-US Rights to Intellectual Property,”
and such wholly-owned Subsidiary, the “Non-US Asset Purchaser”), such Non-US
Rights to Intellectual Property shall be licensed to the Non-US Asset Purchaser.
          (b) To the extent that rights licensed to Seller hereunder are rights
to use the Non-United States Purchased Assets purchased by the Non-US Asset
Purchaser, such rights shall be licensed to Columbia Laboratories (Bermuda) Ltd.
ARTICLE III.
DEVELOPMENT UNDER THE PCA
          3.1 Invention Disclosures. Each Party shall promptly disclose to the
other Party any inventions and other Know-How, including any inventions or other
Know-How related to the Products or any Next Generation Product, arising under
the Parties’ activities conducted pursuant to the PCA during the Joint
Development Period. Such disclosures shall be provided in writing and in
sufficient detail for the other Party to understand the scope and nature of such
inventions and other Know-How. Any such disclosure shall be treated as the
Confidential Information (as defined in the PCA) of the disclosing Party,
subject to the terms of this Article III.
          3.2 Ownership of Inventions. All inventions arising from the Parties’
activities pursuant to the PCA during the Joint Development Period, including
any Patents covering such inventions, shall be owned as follows:
          (a) All inventions arising from the Parties’ activities under the PCA
(each, a “Collaboration Invention”) and any Patent covering any such an
invention (each, a “Collaboration Invention Patent”) and Know-How arising from
the Parties’ activities under the PCA (Collaboration Invention Patents and such
Know-How, collectively, “Collaboration Technology”) shall be owned by Buyer.
Notwithstanding the previous sentence, Collaboration Invention and Collaboration
Technology shall exclude any Seller Next Generation Delivery

 

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System Inventions and Seller Next Generation Delivery System Technology. Seller
and Affiliates of Seller shall assign, and hereby assign, to Buyer all right,
title and interest in and to Collaboration Inventions, and all right, title and
interest in, to and under Collaboration Technology, in each case, held by Seller
and/or Affiliates of Seller. Seller shall, and shall cause its Affiliates to,
cooperate with Buyer and take all reasonable actions and execute agreements,
instruments and documents as may be reasonably required to perfect Buyer’s
right, title and interest in and to Collaboration Inventions and Buyer’s right,
title and interest in, to and under Collaboration Technology.
          (b) All inventions arising from the Parties’ activities under the PCA
that relate solely to the Seller Next Generation Delivery System (each a “Seller
Next Generation Delivery System Invention”) and any Patent covering such an
invention (each such Patent to constitute a Seller Next Generation Delivery
System Patent) and Know-How arising from the Parties’ activities under the PCA
that relates solely to the Seller Next Generation Delivery System (Seller Next
Generation Delivery System Patents and such Know-How, collectively, “Seller Next
Generation Delivery System Technology”) shall be owned by Seller. Buyer and
Affiliates of Buyer shall assign, and hereby assign, to Seller all right, title
and interest in and to Seller Next Generation Delivery System Inventions, and
all right, title and interest in, to and under Seller Next Generation Delivery
System Technology, in each case, held by Buyer and/or Affiliates of Buyer. Buyer
shall, and shall cause its Affiliates to, cooperate with Seller and take all
reasonable actions and execute agreements, instruments and documents as may be
reasonably required to perfect Seller’s right, title and interest in and to
Seller Next Generation Delivery System Inventions and Seller’s right, title and
interest in, to and under Seller Next Generation Delivery System Technology.
          (c) Determination of inventorship shall be made in accordance with
United States patent laws.
          3.3 Patent Prosecution.
          (a) Purchased Asset Patents and Collaboration Invention Patents.
               (i) Subject to Sections 3.3(a)(ii) and 3.3(a)(iii), Buyer will
have the responsibility for, and the obligation with respect to, filing,
prosecuting and maintaining the Purchased Asset Patents and Collaboration
Invention Patents, at Buyer’s sole cost and expense. Seller will fully cooperate
with Buyer, at Buyer’s expense, in connection with the filing, prosecution and
maintenance of such Purchased Asset Patents and such Collaboration Invention
Patents, including by providing access to relevant Persons and executing all
documentation reasonably requested by Buyer or its Affiliates.
               (ii) Buyer will consult with Seller and keep Seller reasonably
informed of the status of the Purchased Asset Patents and Collaboration
Invention Patents, and will provide Seller with all material filings and
correspondences with the patent authorities with respect to such Purchased Asset
Patents and such Collaboration Invention Patents for Seller’s review and
comment; provided that Buyer shall have full and complete control over the
filing, prosecution and maintenance of the Purchased Asset Patents and the
Collaboration Invention Patents.

 

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               (iii) Buyer will notify Seller of any decision not to file
applications for, or to cease prosecution and/or maintenance of, or not to
continue to pay the expenses of prosecution and/or maintenance of, any Purchased
Asset Patent or Collaboration Invention Patent. Buyer will provide such notice
at least sixty (60) days prior to any filing or payment due date, or any other
due date that requires action, in connection with such Purchased Asset Patent or
Collaboration Invention Patent. In such event, Buyer shall permit Seller, at
Seller’s sole discretion and expense, to file or to continue prosecution or
maintenance of such Purchased Asset Patent or such Collaboration Invention
Patent, in each case, in Buyer’s name.
          (b) Excluded Asset Patents and Seller Next Generation Delivery System
Patents. Seller will have the responsibility for, and the obligation with
respect to, filing, prosecuting and maintaining the Excluded Asset Patents and
Seller Next Generation Delivery System Patents at Seller’s sole cost and
expense. Buyer will fully cooperate with Seller, at Seller’s expense, in
connection with the filing, prosecution and maintenance of the Excluded Asset
Patents and Seller Next Generation Delivery System Patents, including by
providing access to relevant Persons and executing all documentation reasonably
requested by Seller or its Affiliates. Seller shall have full and complete
control over the filing, prosecution and maintenance of the Excluded Asset
Patents and Seller Next Generation Delivery Patents; provided that, so long as
Buyer is Developing and/or Commercializing a Product utilizing the Seller Next
Generation Delivery System, Seller will:
               (i) consult with Buyer and keep Buyer reasonably informed of the
status of the Seller Next Generation Delivery System Patents with respect to
such Product, and will provide Buyer with all material filings and
correspondences with the patent authorities with respect to such Seller Next
Generation Delivery System Patents for Buyer’s review and comment; and
               (ii) notify Buyer of any decision not to file applications for,
or to cease prosecution and/or maintenance of, or not to continue to pay the
expenses of prosecution and/or maintenance of, any Seller Next Generation
Delivery System Patents with respect to such Product. Seller will provide such
notice at least sixty (60) days prior to any filing or payment due date, or any
other due date that requires action, in connection with any such Seller Next
Generation Delivery System Patent and Buyer, at Buyer’s sole discretion and
expense, will have a right to file or to continue prosecution or maintenance of
such Seller Next Generation Delivery System Patent in Seller’s name.
          3.4 Patent Infringement.
          (a) Purchased Asset Patents and Collaboration Invention Patents.
               (i) Each Party will notify the other of any infringement by a
Third Party of any of the Purchased Asset Patents, Collaboration Invention
Patents or Seller Next Generation Delivery System Patents that cover a Product
of which such Party becomes aware, including any “patent certification” filed in
the United States under 21 U.S.C. §355(b)(2) or 21 U.S.C. §355(j)(2) or similar
provisions in other jurisdictions and of any declaratory judgment, opposition,
or similar action alleging the invalidity, unenforceability or non-infringement
of any

 

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of the Purchased Asset Patents, Collaboration Invention Patents or Seller Next
Generation Delivery System Patents that cover a Product (collectively “Product
Infringement”).
               (ii) Buyer will have the sole right to bring and control any
legal action in connection with Product Infringement at Buyer’s own expense as
it reasonably determines appropriate, and Seller shall have the right, at
Seller’s own expense, to be represented in any such action by counsel of its own
choice.
               (iii) If Buyer fails to bring an action or proceeding with
respect to, or to terminate, infringement of any Purchased Asset Patents,
Collaboration Invention Patents or Seller Next Generation Delivery System
Patents that cover a Product (A) within ninety (90) days following notice of
alleged infringement or (B) prior to ten (10) days before the time limit, if
any, set forth in the appropriate laws and regulations for the filing of such
actions, whichever comes first, Seller shall have the right, upon prior
consultation with Buyer, to bring and control any such action at Seller’s own
expense and by counsel of its own choice.
               (iv) At the request of the Party prosecuting the Product
Infringement action or proceeding, the other Party, at the prosecuting Party’s
expense, shall provide reasonable assistance in connection therewith, including
by executing reasonably appropriate documents, cooperating in discovery and
joining as a party to the action if required.
               (v) In connection with any such proceeding, Buyer shall not enter
into any settlement admitting the invalidity of, or otherwise impairing the
Purchased Asset Patents, Collaboration Invention Patents or Seller Next
Generation Delivery System Patents that cover a Product in any manner that would
impair royalties payable pursuant to the PCA without the prior written consent
of Seller, which will not be unreasonably withheld or delayed.
               (vi) Any recoveries resulting from an action relating to a claim
of Product Infringement shall be first applied against payment of each Party’s
costs and expenses in connection therewith. Any remainder will be considered Net
Sales for purposes of Section 2.8(d) of the PCA.
          (b) Excluded Asset Patents and Seller Next Generation Delivery System
Patents.
               (i) Each Party will notify the other of any infringement by a
Third Party of any of the Excluded Asset Patents or Seller Next Generation
Delivery System Patents (other than Seller Next Generation Delivery System
Patents that cover a Product, which are included within Section 3.4(a)(i)) of
which such Party becomes aware, including any “patent certification” filed in
the United States under 21 U.S.C. §355(b)(2) or 21 U.S.C. §355(j)(2) or similar
provisions in other jurisdictions and of any declaratory judgment, opposition,
or similar action alleging the invalidity, unenforceability or non-infringement
of any of such Excluded Asset Patent or Seller Next Generation Delivery System
Patent (other than Seller Next Generation Delivery System Patents that cover a
Product, which are included within Section 3.4(a)(i)).
               (ii) Seller will have the sole right to bring and control any
legal action in connection with infringement of any Excluded Asset Patent or
Seller Next Generation

 

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Delivery System Patents (other than Seller Next Generation Delivery System
Patents that cover a Product, which are included within Section 3.4(a)(ii)) at
Seller’s own expense as it reasonably determines appropriate.
               (iii) If Seller fails to bring an action or proceeding with
respect to, or to terminate, infringement of any Excluded Asset Patent or Seller
Next Generation Delivery System Patents (other than Seller Next Generation
Delivery System Patents that cover a Product, which are included within
Section 3.4(a)(iii)) (A) within ninety (90) days following notice of alleged
infringement or (B) prior to ten (10) days before the time limit, if any, set
forth in the appropriate laws and regulations for the filing of such actions,
whichever comes first, Buyer shall have the right, upon prior consultation with
Seller, to bring and control any such action at its own expense and by counsel
of its own choice.
               (iv) At the request of the Party prosecuting the infringement
action or proceeding, the other Party shall provide reasonable assistance in
connection therewith, including by executing reasonably appropriate documents,
cooperating in discovery and joining as a party to the action if required.
               (v) In connection with any such proceeding, the Party prosecuting
the infringement action or proceeding shall not enter into any settlement
admitting the invalidity of, or otherwise impairing any Excluded Asset Patent or
Seller Next Generation Delivery System Patent (other than Seller Next Generation
Delivery System Patents that cover a Product, which are included within Section
3.4(a)(v)) utilized in a Product in any manner that would impair the other
Party’s Development and/or Commercialization of such Product or a product
utilizing the Seller Next Generation Delivery System without the prior written
consent of the other Party, which will not be unreasonably withheld or delayed.
               (vi) Any recoveries resulting from an action relating to a claim
of infringement of any Excluded Asset Patent or Seller Next Generation Delivery
System Patent (other than Seller Next Generation Delivery System Patents that
cover a Product, which are included within Section 3.4(a)(vi)) utilized in a
Product shall be first applied against payment of each Party’s costs and
expenses in connection therewith. Any remainder will be retained by Seller.
          3.5 Third Party Agreements. Each Party shall ensure that any agreement
entered into with Third Parties engaged to perform Development activities
pursuant to the PCA provides for ownership of inventions and other rights in
favor of such Party consistent with this Agreement.
ARTICLE IV.
CONSIDERATION; NO IMPLIED LICENSES
          4.1 Consideration. The rights and obligations provided under this
Agreement are being provided as a condition to the First Closing under the PCA.
As such, no further consideration, financial or otherwise, will be due under
this Agreement, except as expressly provided herein.

 

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          4.2 No Implied Licenses. Any Intellectual Property rights of a Party
not expressly granted to the other Party under the provisions of this Agreement
shall be retained by such Party. Except as expressly provided in this Agreement,
a Party does not grant to the other Party any right or license in any
Intellectual Property right, whether by implication, estoppel or otherwise.
ARTICLE V.
TERM AND TERMINATION
          5.1 Term. The term of this Agreement shall commence on the Effective
Date and shall continue until the Parties mutually agree in writing to terminate
this Agreement.
          5.2 Bankruptcy. Any licenses granted under or pursuant to this
Agreement by either Party to the other Party are, and shall otherwise be deemed
to be, for purposes of Section 365(n) of Title 11, US Code (the “Bankruptcy
Code”), licenses of rights to “intellectual property” as defined under
Section 101(35A) of the Bankruptcy Code. The Parties agree that during the term
of this Agreement, each Party, as a licensee of rights under this Agreement,
shall retain and may fully exercise all of its rights and elections under the
Bankruptcy Code. The Parties further agree that, in the event of the
commencement of a bankruptcy proceeding by or against a Party under the
Bankruptcy Code, then the other Party (which is not a Party to such proceeding)
will be entitled to a complete duplicate of (or complete access to, as
appropriate) any such intellectual property licensed to such other Party under
this Agreement and all embodiments of such intellectual property, and same, if
not already in such other Party’s possession, will be promptly delivered by the
Party to such other Party (a) upon any such commencement of a bankruptcy
proceeding upon its written request therefor, unless the Party subject to such
proceeding elects to continue, and thereafter continues, to perform all of its
obligations under this Agreement, or (b) if not delivered under (a) above,
following the rejection of this Agreement by or on behalf of the Party subject
to such proceeding upon written request therefor by the non-subject Party.
ARTICLE VI.
MISCELLANEOUS
          6.1 Disclaimer of Warranty. EXCEPT FOR THE EXPRESS WARRANTIES SET
FORTH IN THIS AGREEMENT OR THE PCA, NEITHER PARTY MAKES ANY REPRESENTATIONS NOR
GRANTS ANY WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF
LAW, BY STATUTE OR OTHERWISE RELATED TO ANY AND ALL OF THE INTELLECTUAL PROPERTY
LICENSED HEREUNDER, AND EACH PARTY SPECIFICALLY DISCLAIMS ANY OTHER
REPRESENTATIONS AND WARRANTIES, WHETHER WRITTEN OR ORAL, EXPRESS, STATUTORY OR
IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
USE OR PURPOSE.
          6.2 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

 

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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.
          6.3 Waiver. Any term or condition of this Agreement may be waived at
any time by the Party that is entitled to the benefit thereof, but no such
waiver shall be effective unless set forth in a written instrument duly executed
by or on behalf of the party waiving such term or condition. The failure of any
Party to enforce any condition or part of this Agreement at any time shall not
be construed as a waiver of that condition or part, nor shall it forfeit any
rights to future enforcement thereof.
          6.4 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given (a) when received if delivered personally, (b) when transmitted if
telecopied (which is confirmed), (c) upon receipt, if sent by registered or
certified mail (postage prepaid, return receipt requested) and (d) the day after
it is sent, if sent for next-day delivery to a domestic address by overnight
mail or courier, to the Parties at the following addresses:
          If to Seller, to:
Columbia Laboratories, Inc.
354 Eisenhower Parkway
Plaza 1, Second Floor
Livingston, NJ 07039
Attention: General Counsel
Facsimile: 973.994.3001
          with copies (which shall not constitute notice) sent concurrently to:
Kaye Scholer LLP
425 Park Avenue
New York, NY 10022
Attention: Adam H. Golden and Steven G. Canner
Facsimile: 212.836.8689
          If to Buyer, to:
Coventry Acquisition, Inc.
311 Bonnie Circle
Corona, CA 92880
Attention: General Counsel
Facsimile: 951.493.5817

 

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          with copies (which shall not constitute notice) sent concurrently to:
Latham & Watkins LLP
650 Town Center Drive, 20th Floor
Costa Mesa, CA 92626-1925
Attention: R. Scott Shean
Facsimile: 714.755.8290
provided, however, that if any Party shall have designated a different address
by notice to the others, then to the last address so designated.
          6.5 (a) Relationship of the Parties. The Parties are independent
contractors. Nothing herein is intended, or shall be deemed, to constitute a
partnership, agency, joint venture or employment relationship between the
Parties. Neither Party shall be responsible for the other Party’s acts or
omissions; and neither Party shall have authority to speak for, represent or
obligate the other Party in any way without prior written authority from the
other Party. Subject to the terms of this Agreement, the activities and
resources of each Party shall be managed by such Party, acting independently and
in its individual capacity.
          (a) No Third Party Beneficiaries. This Agreement is solely for the
benefit of the Parties hereto and their respective Affiliates and no provision
of this Agreement shall be deemed to confer upon any third parties any remedy,
claim, liability, reimbursement, claim of action or other right in excess of
those existing without reference to this Agreement.
          6.6 Amendment; Entire Agreement. This Agreement may not be amended,
supplemented or otherwise modified except by an instrument in writing signed by
both Parties hereto. This Agreement, the PCA, the Other Agreements and the
Confidentiality Agreement contain the entire agreement of the Parties hereto
with respect to the Transactions, superseding all negotiations, prior
discussions and preliminary agreements made prior to the Effective Date.
          6.7 Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other Regulatory
Authority to be invalid, void, unenforceable or against its regulatory policy
such determination shall not affect the enforceability of any others or of the
remainder of this Agreement.
          6.8 Assignment and Transfer.
          (a) Neither this Agreement nor any right or obligation hereunder may
be assigned or otherwise transferred by either Party without the prior written
consent of the other Party, except that either Party may, without consent of the
other Party, assign or otherwise transfer this Agreement and its rights and
obligations hereunder in whole or in part: (i) to any Affiliate; (ii) in
connection with a merger, reorganization or a sale or transfer of all or
substantially all of the assets to which this Agreement relates. Any attempted
assignment or other transfer not in accordance with this Section 6.8 shall be
void. Any permitted assignee shall assume in writing all assigned obligations of
its assignor under this Agreement. The Party making any assignment or other
transfer permitted under this Section 6.8 shall provide prompt written notice to
the other Party of such assignment or transfer. The assignor shall remain
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and severally liable with any such assignee(s) with respect to all obligations
and liabilities of the assignor hereunder.
          (b) Successors and Assigns. Except as otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of the Parties hereto
and their successors and permitted assigns.
          6.9 Arbitration.
          (a) All disputes, differences, controversies and claims of the Parties
arising out of or relating to the 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 6.9.
          (b) Following the delivery of a written demand for arbitration by
either Party, each of Buyer and Seller shall choose one (1) arbitrator within
ten (10) Business Days after the date of such written demand and the two 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 delivery of the written demand for
arbitration (or such other time period as the Parties may agree), the Parties
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 Buyer and Seller, the sole discovery available to each
Party 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 agree to
extend such time. The award shall be final and binding upon the Parties.
          (e) Any judicial proceeding arising out of or relating to this
Agreement or the relationship of the Parties, including without limitation any
proceeding to enforce this Section 6.9, 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 accepts the jurisdiction of the Enforcing
Court.
          (f) Each Party shall pay its own expenses in connection with the
resolution of Disputes pursuant to this Section 6.9, including attorneys’ fees,
unless determined otherwise by the Arbitrator.
          (g) The Parties agree that the existence, conduct and content of any
arbitration pursuant to this Section 6.9 shall be kept confidential and no Party
shall disclose to any Person

 

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any information about such arbitration, except in connection with such
arbitration or as may be required by Law or by any Regulatory 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
Section 6.9 shall restrict the right of any Party 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.
          6.10 Remedies.
          (a) 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. The parties agree that
notwithstanding Section 6.9, any Action brought for an injunction, or for
specific performance shall be heard and exclusively in the Delaware Chancery
Court sitting in New Castle County and each Party waives any objection which it
may now or hereafter have to the laying of venue of any such proceeding, and
irrevocably submits to the jurisdiction of such courts in any such suit, action
or proceeding.
          (b) Indemnification. Seller represents and warrants to Buyer that,
other than the Non-US Rights to Intellectual Property, any Intellectual Property
licensed by Seller to Buyer hereunder (including without limitation any Excluded
Asset Technology and Seller Next Generation Delivery System Technology licensed
by Seller to Buyer pursuant to Section 2.1(a)) is owned directly by Columbia
Laboratories, Inc., and has not been assigned or otherwise transferred to any
other Person. Seller shall indemnify, reimburse and defend Buyer and its
Affiliates and each of their respective Representatives, successors and assigns
from and against, and hold them harmless from, any Taxes (including without
limitation any withholding Taxes) arising from any breach of the foregoing
representation and warranty.
          6.11 Interpretation. Unless the context of this Agreement otherwise
requires, (a) words of one gender include the other gender; and (b) words using
the singular or plural number also include the plural or singular number,
respectively. Reference to days are to calendar days unless specified otherwise.
References to any statute, act, or regulation are to that statute, act, or
regulation as amended, modified or supplemented from time to time in accordance
with the terms hereof and thereof. The headings contained in this Agreement are
for convenience of reference only and shall not be considered in interpreting
this Agreement. The words “hereof”, “herein” and “hereunder” and words of like
import used in this Agreement shall refer to this Agreement as a whole and not
to any particular provision of this Agreement. Whenever the words “include”,
“includes” or “including” are used in this Agreement, they shall be deemed to be
followed by the words “without limitation”, whether or not they are in fact
followed by those words or words of like import. The language in all parts of
this Agreement shall be construed, in all cases, according to its fair meaning.
The Parties acknowledge that each

 

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Party and its counsel have reviewed and revised this Agreement and that any rule
of construction to the effect that any ambiguities are to be resolved against
the drafting Party shall not be employed in the interpretation of this
Agreement.
          6.12 Counterparts. This Agreement may be executed in two or more
counterparts (including by facsimile or by an electronic scan delivered by
electronic mail), each of which shall be deemed to be an original, but all of
which, taken together, shall constitute one and the same agreement and shall
become effective when counterparts have been signed by each of the Parties
hereto delivered to the other Parties, it being understood that all Parties need
not sign the same counterpart.
          6.13 Further Actions. Each Party will duly execute and deliver, or
cause to be duly executed and delivered, such further instruments and do and
cause to be done such further acts and things, as may be reasonably necessary or
as the other Party may reasonably request in connection with this Agreement in
order to carry out more effectively the provisions and purposes hereof.
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          IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to
be duly executed as of the date first above written.

           
COLUMBIA LABORATORIES, INC.
      By:   /s/ Frank C. Condella, Jr.         Name:   Frank C. Condella, Jr.   
    Title:   Chief Executive Officer        COLUMBIA LABORATORIES (BERMUDA) LTD.
      By:   /s/ Michael McGrane         Name:   Michael McGrane        Title:  
Vice President        COVENTRY ACQUISITION, INC.
      By:   /s/ Paul M. Bisaro         Name:   Paul M. Bisaro        Title:  
President and Chief Executive Officer