Exhibit 10.1

COLLAGENEX PHARMACEUTICALS, INC.

Restructuring and Exchange Agreement

This Restructuring and Exchange Agreement (this “Agreement”) is dated as of
December 15, 2005, by and among CollaGenex Pharmaceuticals, Inc., a Delaware
corporation (the “Company”) and the holders of outstanding Series D Cumulative
Convertible Preferred Stock, $0.01 par value per share (the “Series D Preferred
Stock”) of the Company set forth on the signature pages hereto (each a “Series D
Holder” and collectively the “Series D Holders”).

W I T N E S S E T H:

WHEREAS, as of the date hereof, there are outstanding 200,000 shares of Series D
Preferred Stock held by the Series D Holders; and

WHEREAS, the Series D Holders have agreed to, among other things, waive certain
voting rights pursuant to the terms and conditions more fully set forth in this
Agreement, and in consideration therefor, the Company has agreed to, among other
things, reduce the conversion price of the shares of preferred stock of the
Company held by such Holders from $9.89 to $8.50; and

WHEREAS, in order to achieve the foregoing, each Series D Holder has been
granted the right by the Company to surrender for exchange his, her or its
Series D Preferred for the Company’s Series D-1 Cumulative Convertible Preferred
Stock, par value $0.01 per share (the “Series D-1 Preferred”) on the terms set
forth herein; and

WHEREAS, reference is hereby made to that certain Stockholders and Registration
Rights Agreement, dated as of March 19, 1999, as amended, by and among the
Company, OCM Principal Opportunities Fund, L.P. (“OCM”) and the purchasers named
therein (the “Stockholders Agreement”); and

WHEREAS, reference is hereby made to that certain Stock Purchase Agreement,
dated as of March 19, 1999, by and among the Company, OCM and the purchasers
named therein (the “Stock Purchase Agreement”); and

WHEREAS, pursuant to Section 10 of the Stockholders Agreement (i) any terms and
provisions of the Stockholders Agreement may be modified, amended or waived with
the written consent of the holders of at least sixty-six and 67/100 percent
(66.67%) of the shares of Series D Preferred Stock, and (ii) any rights under
the Stockholders Agreement applicable to OCM may be waived without the consent
of the Company, the other Series D Holders or any other stockholders of the
Company; and

WHEREAS, on September 15, 2005, the Company filed a Registration Statement on
Form S-3 (the “Shelf Registration Statement”) with the Securities and Exchange
Commission (the “Commission”) with respect to a total dollar amount of $50.0
million of common stock, $.01 par value per share (the “Common Stock”), of the
Company (the “Shares”).

NOW, THEREFORE, in consideration of the conditions and mutual covenants set
forth herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the Company,
the Series D Holders, and OCM individually, where applicable, agree as follows:

1.             AGREEMENT TO EXCHANGE SHARES.  PURSUANT TO THE TERMS AND
CONDITIONS SET FORTH IN THIS AGREEMENT, AT THE CLOSING (AS DEFINED IN SECTION
3.1 BELOW), EACH SERIES D HOLDER AGREES TO SURRENDER TO THE COMPANY CERTIFICATES
REPRESENTING THE NUMBER OF SHARES OF SERIES D PREFERRED SET FORTH OPPOSITE SUCH
HOLDER’S NAME ON THE ATTACHED SCHEDULE I, AND THE COMPANY AGREES TO ACCEPT SUCH
CERTIFICATES AND, IN EXCHANGE THEREFOR, ISSUE TO EACH SUCH SERIES D HOLDER THAT
NUMBER OF SHARES OF SERIES D-1 PREFERRED SET FORTH OPPOSITE SUCH HOLDER’S NAME
ON THE ATTACHED SCHEDULE I.

2.             SERIES D-1 PREFERRED.  THE TERMS, LIMITATIONS AND RELATIVE
RIGHTS, PRIVILEGES AND PREFERENCES OF THE SERIES D-1 PREFERRED ISSUED IN
CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY SECTION 1 ARE SET FORTH IN THE
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS OF THE SERIES D-1 CUMULATIVE
CONVERTIBLE PREFERRED STOCK, THE FORM OF WHICH IS ATTACHED HERETO AS EXHIBIT A.

3.             CLOSING, DELIVERY.

3.1           CLOSING.  SUBJECT TO THE TERMS AND CONDITIONS HEREOF, THE CLOSING
OF THE TRANSACTIONS CONTEMPLATED BY SECTION 1 ABOVE (THE “CLOSING”) SHALL BE
MADE AT THE OFFICES OF WILMER CUTLER PICKERING HALE AND DORR, LLP, 60 STATE
STREET, BOSTON, MA  02109 (OR AT SUCH OTHER PLACE AS SHALL BE AGREED UPON BY THE
SERIES D HOLDERS AND THE COMPANY), AT

 

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10:00 A.M., NEW YORK CITY TIME, ON DECEMBER 21, 2005 (UNLESS ANOTHER TIME SHALL
BE AGREED TO BY THE SERIES D HOLDERS AND THE COMPANY).

3.2           DELIVERY.  AT THE CLOSING, SUBJECT TO THE TERMS AND CONDITIONS
HEREOF, EACH SERIES D HOLDER SHALL DELIVER TO THE COMPANY THE CERTIFICATE(S)
EVIDENCING THE OWNERSHIP OF THE SHARES OF SERIES D PREFERRED TO BE SURRENDERED
BY SUCH HOLDER AT THE CLOSING AS SET FORTH OPPOSITE SUCH HOLDER’S NAME ON
SCHEDULE I ATTACHED HERETO AND, ONLY IN EXCHANGE THEREFOR, THE COMPANY SHALL
DELIVER TO EACH SUCH HOLDER THE CERTIFICATE(S) EVIDENCING OWNERSHIP OF THE
NUMBER OF SHARES OF SERIES D-1 PREFERRED TO BE ISSUED TO EACH SUCH HOLDER AT
SUCH CLOSING AS SET FORTH OPPOSITE SUCH HOLDER’S NAME ON SCHEDULE I ATTACHED
HERETO.  IN THE EVENT THAT ANY SERIES D HOLDER THAT IS A PARTY TO THIS AGREEMENT
DOES NOT DELIVER TO THE COMPANY AT THE CLOSING CERTIFICATE(S) EVIDENCING
OWNERSHIP OF THE SERIES D PREFERRED, THE COMPANY SHALL CANCEL ANY SUCH
CERTIFICATES ON THE COMPANY’S BOOKS AND RECORDS AND THE COMPANY SHALL WITHHOLD
DELIVERY TO ANY SUCH HOLDER ANY CERTIFICATES EVIDENCING OWNERSHIP OF THE NUMBER
OF SHARES OF SERIES D-1 PREFERRED TO BE ISSUED TO SUCH HOLDER AT THE CLOSING
UNTIL SUCH TIME AS ANY SUCH HOLDER DELIVERS THE CERTIFICATES FOR THE SERIES D
PREFERRED TO THE COMPANY.

3.3           RETIREMENT.  ALL CERTIFICATES EVIDENCING SERIES D PREFERRED SHALL,
ONCE SURRENDERED TO THE COMPANY FOR EXCHANGE IN ACCORDANCE WITH THIS AGREEMENT,
BE FORTHWITH RETIRED AND CANCELED AND SHALL NOT BE REISSUED, AND, EXCEPT AS
CONTEMPLATED HEREBY, NO OTHER SECURITIES OF THE COMPANY SHALL BE ISSUED IN PLACE
THEREOF, BUT THE COMPANY MAY, NEVERTHELESS, FROM TIME TO TIME THEREAFTER
INCREASE ITS CAPITAL STOCK IN THE MANNER AND TO THE EXTENT PERMITTED BY LAW AND
BY THE COMPANY’S AMENDED AND RESTATED CERTIFICATE OF INCORPORATION, AS AMENDED.

4.             OCM WAIVER OF CERTAIN PROVISIONS OF THE STOCKHOLDER AGREEMENT. 
SUBJECT TO THE TERMS AND CONDITIONS HEREOF, OCM AGREES: (I) TO WAIVE ITS RIGHT
OF FIRST REFUSAL UNDER SECTION 4 OF THE STOCKHOLDERS AGREEMENT, IF ANY, WITH
RESPECT TO THE SALE BY THE COMPANY OF THE SHARES; AND (II) TO WAIVE ANY BREACH
BY THE COMPANY PRIOR TO THE DATE HEREOF, IF ANY, UNDER SECTIONS 2 AND 3 OF THE
STOCKHOLDERS AGREEMENT.  OCM FURTHER AGREES, IF REQUESTED, TO EXECUTE AN
AMENDMENT TO THE STOCKHOLDERS AGREEMENT TO REFLECT THE PROVISIONS OF THIS
SECTION 4.

5.             WAIVER OF REGISTRATION RIGHTS.  SUBJECT TO THE TERMS AND
CONDITIONS HEREOF, EACH SERIES D HOLDER WAIVES THOSE PROVISIONS OF THE
STOCKHOLDERS AGREEMENT WITH RESPECT TO THE UNDERSIGNED’S RIGHT, IF ANY, TO
REGISTER SHARES OF THE COMPANY’S CAPITAL STOCK HELD BY EACH SUCH SERIES D HOLDER
UNDER THE SHELF REGISTRATION STATEMENT OR IN CONNECTION WITH THE SALE OF THE
SHARES.

6.             REGISTRATION OF SHARES OF COMMON STOCK UNDERLYING SERIES D-1
PREFERRED STOCK.  THE COMPANY SHALL USE COMMERCIALLY REASONABLE EFFORTS TO
PREPARE AND FILE WITH THE COMMISSION A REGISTRATION STATEMENT (THE “REGISTRATION
STATEMENT”) WITHIN 100 DAYS OF THE DATE HEREOF COVERING THE RESALE OF ALL OF THE
SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THE SERIES D-1 PREFERRED
STOCK (COLLECTIVELY, THE “CONVERSION SHARES”) AND SHARES OF COMMON STOCK ISSUED
TO THE SERIES D HOLDERS IN CONNECTION WITH CERTAIN DIVIDENDS FOR THE PERIOD MAY
12, 1999 THROUGH JUNE 30, 1999 (THE “DIVIDEND SHARES”).  THE REGISTRATION
STATEMENT REQUIRED HEREUNDER SHALL BE ON FORM S-3 (EXCEPT IF THE COMPANY IS NOT
THEN ELIGIBLE TO REGISTER THE CONVERSION SHARES AND THE DIVIDEND SHARES ON FORM
S-3, IN WHICH CASE SUCH REGISTRATION SHALL BE ON ANOTHER APPROPRIATE FORM IN
ACCORDANCE HEREWITH).  IN ADDITION, THE COMPANY SHALL PREPARE, EXECUTE AND FILE
WITH THE COMMISSION SUCH AMENDMENTS (INCLUDING PRE-EFFECTIVE AND POST-EFFECTIVE
AMENDMENTS) AND SUPPLEMENTS TO THE REGISTRATION STATEMENT, AS MAY BE REQUIRED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”).  THE
COMPANY SHALL USE ITS COMMERCIALLY REASONABLE EFFORTS TO KEEP THE REGISTRATION
STATEMENT EFFECTIVE IN ORDER TO PERMIT THE PROSPECTUS INCLUDED THEREIN TO BE
LAWFULLY DELIVERED BY THE SERIES D HOLDERS UNTIL THE EXPIRATION OF THE HOLDING
PERIOD SET FORTH IN CLAUSE (K) OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT
OR SUCH SHORTER PERIOD IF ALL SUCH CONVERSION SHARES AND DIVIDEND SHARES HAVE
BEEN SOLD PURSUANT TO THE REGISTRATION STATEMENT.   IT IS UNDERSTOOD AND AGREED
BY THE PARTIES HERETO THAT UPON EFFECTIVENESS OF THE AFOREMENTIONED REGISTRATION
STATEMENT THAT THE COMPANY SHALL IMMEDIATELY WITHDRAW THE COMPANY’S REGISTRATION
STATEMENT ON FORM S-3 (REG. NO. 333-88697).

7.             AMENDMENT TO STOCK PURCHASE AGREEMENT AND STOCKHOLDERS
AGREEMENT.  ALL REFERENCES TO “SERIES D PREFERRED STOCK” CONTAINED IN THE STOCK
PURCHASE AGREEMENT AND THE STOCKHOLDERS AGREEMENT, WHERE APPLICABLE, SHALL
HEREAFTER INSTEAD MEAN THE SERIES D-1 PREFERRED STOCK.  ON AND AFTER THE DATE
HEREOF, EACH REFERENCE TO “STOCK PURCHASE AGREEMENT” OR THE “STOCKHOLDERS
AGREEMENT,” AS THE CASE MAY BE, SHALL MEAN AND BE A REFERENCE TO THOSE
AGREEMENTS AS AMENDED HEREBY.  NO REFERENCE TO THIS SECTION 7 NEED BE MADE IN
ANY INSTRUMENT OR DOCUMENT AT ANY TIME REFERRING TO THE STOCK PURCHASE AGREEMENT
OR THE STOCKHOLDERS AGREEMENT, A REFERENCE TO THE STOCK PURCHASE AGREEMENT OR
THE STOCKHOLDERS AGREEMENT, AS APPLICABLE, IN ANY OF SUCH INSTRUMENT OR DOCUMENT
TO BE DEEMED TO BE A REFERENCE TO THE STOCK PURCHASE AGREEMENT AND THE
STOCKHOLDERS AGREEMENT AS AMENDED HEREBY.  EXCEPT AS EXPRESSLY AMENDED BY THIS
SECTION 7, THE PROVISIONS OF THE STOCK PURCHASE AGREEMENT AND THE STOCKHOLDERS
AGREEMENT SHALL REMAIN IN FULL FORCE AND EFFECT.

 

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8.             RESERVATION OF SHARES OF COMMON STOCK.  THE COMPANY SHALL AT ALL
TIMES TAKE APPROPRIATE STEPS TO RESERVE AND KEEP AVAILABLE OUT OF ITS AUTHORIZED
BUT UNISSUED SHARES OF COMMON STOCK, SHARES OF COMMON STOCK FOR THE PURPOSE OF
EFFECTING THE CONVERSION OF THE SHARES OF SERIES D-1 INTO THE CONVERSION
SHARES.  IF AT ANY TIME THE NUMBER OF AUTHORIZED BUT UNISSUED SHARES OF COMMON
STOCK SHALL NOT BE SUFFICIENT TO EFFECT THE CONVERSION OF THE SHARES OF SERIES
D-1 PREFERRED STOCK, THE COMPANY SHALL FORTHWITH TAKE SUCH CORPORATE ACTION AS
MAY BE NECESSARY TO INCREASE ITS AUTHORIZED BUT UNISSUED SHARES OF COMMON STOCK
TO SUCH NUMBER OF SHARES AS SHALL BE SUFFICIENT FOR SUCH PURPOSES. 
NOTWITHSTANDING THE FOREGOING, THE COMPANY AGREES TO SEEK AN INCREASE IN THE
NUMBER OF AUTHORIZED SHARES OF COMMON STOCK AVAILABLE FOR ISSUANCE UNDER ITS
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION, AS AMENDED, AT THE COMPANY’S
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD IN FISCAL YEAR 2006.  EACH SERIES D
HOLDER AGREES TO VOTE, WHETHER IN PERSON OR BY PROXY, IN FAVOR OF SUCH PROPOSAL
WHEN PRESENTED AT THE COMPANY’S ANNUAL MEETING OF STOCKHOLDERS TO BE HELD IN
FISCAL YEAR 2006.

9.             REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

9.1           AUTHORIZATION.  THE COMPANY HAS ALL REQUISITE CORPORATE POWER AND
AUTHORITY TO EXECUTE AND DELIVER THIS AGREEMENT AND ANY AND ALL INSTRUMENTS
NECESSARY OR APPROPRIATE IN ORDER TO EFFECTUATE FULLY THE TERMS AND CONDITIONS
CONTAINED HEREIN AND ALL RELATED TRANSACTIONS AND TO PERFORM ITS OBLIGATIONS
HEREUNDER.  THIS AGREEMENT HAS BEEN DULY AUTHORIZED BY ALL NECESSARY ACTION ON
THE PART OF THE COMPANY, HAS BEEN DULY EXECUTED AND DELIVERED BY THE COMPANY AND
CONSTITUTES THE VALID AND LEGALLY BINDING OBLIGATION OF THE COMPANY ENFORCEABLE
IN ACCORDANCE WITH ITS TERMS AND CONDITIONS.  THE AUTHORIZATION, ISSUANCE,
EXCHANGE AND DELIVERY OF THE SERIES D-1 PREFERRED ISSUED HEREUNDER, THE
RESERVATION OF THE CONVERSION SHARES AND THE DIVIDEND SHARES HAVE BEEN DULY
AUTHORIZED BY ALL REQUISITE CORPORATE ACTION ON THE PART OF THE COMPANY.

9.2           VALID ISSUANCE OF THE SERIES D-1 PREFERRED.  THE SHARES OF SERIES
D-1 PREFERRED, WHEN ISSUED IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT, WILL
BE DULY AND VALIDLY ISSUED, FULLY PAID AND NONASSESSABLE AND, ASSUMING THE
ACCURACY OF THE SERIES D HOLDERS’ REPRESENTATIONS IN THIS AGREEMENT AT THE TIME
OF EACH SUCH ISSUANCE, ISSUED IN COMPLIANCE WITH ALL APPLICABLE FEDERAL AND
STATE SECURITIES LAWS.

10.           REPRESENTATIONS AND WARRANTIES OF THE SERIES D HOLDERS.  EACH
SERIES D HOLDER, SEVERALLY BUT NOT JOINTLY, HEREBY REPRESENTS AND WARRANTS TO
THE COMPANY AS FOLLOWS:

10.1         ENFORCEABILITY.  THIS AGREEMENT AND ANY AND ALL AGREEMENTS TO BE
EXECUTED BY EACH SUCH SERIES D HOLDER PURSUANT TO THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY, WHEN EXECUTED AND DELIVERED BY EACH SUCH
SERIES D HOLDER, WILL CONSTITUTE THE VALID, BINDING AND ENFORCEABLE OBLIGATION
OF EACH SERIES D HOLDER.

10.2         AUTHORIZATION; NO CONTRAVENTION.  THE EXECUTION, DELIVERY AND
PERFORMANCE OF THE OBLIGATIONS OF EACH SERIES D HOLDER HEREUNDER (I) HAS BEEN
DULY AUTHORIZED BY ALL NECESSARY ACTION OF EACH SERIES D HOLDER, (II) DOES NOT
VIOLATE, CONFLICT WITH OR RESULT IN ANY BREACH OR CONTRAVENTION OF, OR THE
CREATION OF ANY LIEN UNDER, ANY MATERIAL CONTRACTUAL OBLIGATION OF EACH SERIES D
HOLDER OR ANY REQUIREMENT OF LAW APPLICABLE TO SUCH SERIES D HOLDER, AND (III)
DOES NOT VIOLATE ANY ORDERS OF ANY GOVERNMENTAL AUTHORITY AGAINST, OR BINDING
UPON, SUCH SERIES D HOLDER.

10.3         GOVERNMENTAL AUTHORIZATION; THIRD PARTY CONSENTS.  NO APPROVAL,
CONSENT, COMPLIANCE, EXEMPTION, AUTHORIZATION OR OTHER ACTION BY, OR NOTICE TO,
OR FILING WITH, ANY GOVERNMENTAL AUTHORITY OR ANY OTHER PERSON, AND NO LAPSE OF
A WAITING PERIOD UNDER ANY REQUIREMENT OF LAW, IS NECESSARY OR REQUIRED IN
CONNECTION WITH THE EXECUTION BY, DELIVERY OR PERFORMANCE BY, OR ENFORCEMENT
AGAINST, THE SERIES D HOLDERS OF THIS AGREEMENT AND EACH OF THE OTHER DOCUMENTS
TO WHICH THEY ARE PARTIES OR THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY.

10.4         OWNERSHIP.  EACH SERIES D HOLDER IS THE LAWFUL RECORD OWNER OF THE
SHARES OF SERIES D PREFERRED STOCK HELD BY SUCH SERIES D HOLDER SUBJECT TO THIS
AGREEMENT, AND OF ALL RIGHTS THERETO, FREE AND CLEAR OF ALL LIENS, CLAIMS,
CHARGES, ENCUMBRANCES, RESTRICTIONS, RIGHTS, OPTIONS TO PURCHASE, PROXIES,
VOTING TRUST AND OTHER VOTING AGREEMENTS, CALLS OR COMMITMENTS OF EVERY KIND,
EXCEPT AS CONTEMPLATED HEREBY.

10.5         INVESTMENT.  EACH SERIES D HOLDER IS ACQUIRING THE SERIES D-1
PREFERRED AND THE CONVERSION SHARES FOR HIS, HER OR ITS OWN ACCOUNT FOR
INVESTMENT AND NOT WITH A VIEW TO, OR FOR SALE IN CONNECTION WITH, ANY
DISTRIBUTION THEREOF, NOR WITH ANY PRESENT INTENTION OF DISTRIBUTING OR SELLING
THE SAME.

10.6         ACCREDITED INVESTOR.  SUCH SERIES D HOLDER IS AN “ACCREDITED
INVESTOR” WITHIN THE MEANING OF REGULATION D UNDER THE SECURITIES ACT.

 

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10.7         LEGENDS.  IT IS UNDERSTOOD THAT THE CERTIFICATES EVIDENCING THE
SERIES D-1 PREFERRED ISSUED HEREUNDER SHALL BEAR A LEGEND SUBSTANTIALLY IN THE
FOLLOWING FORM AND SUCH OTHER LEGENDS THAT MAY BE REQUIRED UNDER THE LAWS OF ANY
APPLICABLE JURISDICTION:

“These securities have not been registered under the Securities Act of 1933. 
They may not be sold, offered for sale, pledged or hypothecated in the absence
of a registration statement in effect with respect to the securities under such
Act or an opinion of counsel satisfactory to the Company that such registration
is not required or unless sold pursuant to Rule 144 of such Act.”

10.8         ACKNOWLEDGEMENTS.

(A)   THE SERIES D HOLDERS ARE FULLY AWARE OF THE COMPANY’S BUSINESS, OPERATIONS
AND FINANCIAL CONDITION AND HAS RECEIVED OR HAVE HAD FULL ACCESS TO ALL OF THE
INFORMATION, INCLUDING THE COMPANY’S FINANCIAL STATEMENTS, THEY CONSIDER
NECESSARY OR APPROPRIATE TO MAKE AN INFORMED DECISION WITH RESPECT TO THE
TRANSACTIONS DISCUSSED ABOVE.

(B)   THE SERIES D HOLDERS HAVE HAD THE OPPORTUNITY TO ASK QUESTIONS OF AND
RECEIVE ANSWERS FROM THE COMPANY AND ITS EXECUTIVE OFFICERS AND FINANCIAL AND
LEGAL ADVISORS CONCERNING THE COMPANY AND HAVE BEEN FURNISHED WITH ALL DOCUMENTS
AND OTHER INFORMATION ABOUT THE COMPANY THAT THEY HAVE REQUESTED.  THE SERIES D
HOLDERS BELIEVE THAT THEY HAVE BEEN FULLY APPRISED OF ALL FACTS AND
CIRCUMSTANCES NECESSARY TO PERMIT THEM TO MAKE AN INFORMED DECISION RELATING TO
THE TRANSACTIONS CONTEMPLATED HEREBY, THAT THEY HAVE SUFFICIENT KNOWLEDGE AND
EXPERIENCE IN BUSINESS AND FINANCIAL MATTERS, ARE CAPABLE OF EVALUATING THE
MERITS AND RISKS OF THE TRANSACTIONS CONTEMPLATED HEREBY AND HAVE THE CAPACITY
TO PROTECT THEIR OWN INTERESTS IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED
HEREBY.

11.           CONDITIONS TO CLOSING.

11.1         CONDITIONS TO EACH SERIES D HOLDER’S OBLIGATIONS AT THE CLOSING. 
EACH SERIES D HOLDER’S OBLIGATIONS TO SURRENDER SHARES OF SERIES D PREFERRED TO
BE EXCHANGED FOR SHARES OF SERIES D-1 PREFERRED ARE SUBJECT TO THE SATISFACTION,
AT OR PRIOR TO THE CLOSING, OF THE FOLLOWING CONDITIONS:

(A)   REPRESENTATIONS AND WARRANTIES.  THE REPRESENTATIONS AND WARRANTIES MADE
BY THE COMPANY IN SECTION 9 HEREOF SHALL BE TRUE AND CORRECT IN ALL MATERIAL
RESPECTS AS OF THE DATE OF CLOSING.

(B)   FILING OF CERTIFICATE OF DESIGNATION.  THE CERTIFICATE OF DESIGNATION,
PREFERENCES AND RIGHTS OF THE SERIES D-1 CUMULATIVE CONVERTIBLE PREFERRED STOCK
SHALL HAVE BEEN FILED WITH THE SECRETARY OF STATE OF THE STATE OF DELAWARE AND
SHALL BE IN FULL FORCE AND EFFECT AND SHALL NOT HAVE BEEN MODIFIED IN ANY
MANNER.

11.2         CONDITIONS TO OBLIGATIONS OF THE COMPANY AT THE CLOSING.  THE
COMPANY’S OBLIGATION (I) TO ACCEPT THE SHARES OF SERIES D PREFERRED SURRENDERED
AT THE CLOSING BY THE SERIES D HOLDERS HEREUNDER AND (II) TO ISSUE SHARES OF THE
SERIES D-1 PREFERRED TO THE SERIES D HOLDERS, IN EXCHANGE THEREFOR, IS SUBJECT
TO THE SATISFACTION, ON OR PRIOR TO THE CLOSING, OF THE FOLLOWING CONDITIONS:

(A)   REPRESENTATIONS AND WARRANTIES.  THE REPRESENTATIONS AND WARRANTIES MADE
BY EACH SERIES D HOLDER IN SECTION 10 HEREOF SHALL BE TRUE AND CORRECT IN ALL
MATERIAL RESPECTS AS OF THE DATE OF  THE CLOSING.

(B)   FILING OF CERTIFICATE OF DESIGNATION.  THE CERTIFICATE OF DESIGNATION,
PREFERENCES AND RIGHTS OF THE SERIES D-1 CUMULATIVE CONVERTIBLE PREFERRED STOCK
SHALL HAVE BEEN FILED WITH THE SECRETARY OF STATE OF THE STATE OF DELAWARE AND
SHALL BE IN FULL FORCE AND EFFECT AND SHALL NOT HAVE BEEN MODIFIED IN ANY
MANNER.

12.           MISCELLANEOUS.

12.1         GOVERNING LAW; JURISDICTION.  THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED ACCORDING TO THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO
THE CONFLICT OF LAWS PROVISIONS THEREOF.  ANY DISPUTE ARISING UNDER OR IN
RELATION TO THIS AGREEMENT SHALL BE RESOLVED IN A COMPETENT COURT IN THE STATE
OF DELAWARE, AND EACH OF THE PARTIES HEREBY SUBMITS IRREVOCABLY TO THE EXCLUSIVE
JURISDICTION OF SUCH COURT.

12.2         SUCCESSORS AND ASSIGNS; ASSIGNMENT.  EXCEPT AS OTHERWISE EXPRESSLY
LIMITED HEREIN, THE PROVISIONS HEREOF SHALL INURE TO THE BENEFIT OF, AND BE
BINDING UPON, THE SUCCESSORS, ASSIGNS, HEIRS, EXECUTORS, AND ADMINISTRATORS OF
THE

 

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PARTIES HERETO.  NONE OF THE RIGHTS, PRIVILEGES, OR OBLIGATIONS SET FORTH IN,
ARISING UNDER, OR CREATED BY THIS AGREEMENT MAY BE ASSIGNED BY A SERIES D HOLDER
WITHOUT THE PRIOR CONSENT IN WRITING OF THE COMPANY.

12.3         ENTIRE AGREEMENT.  THIS AGREEMENT AND ALL EXHIBITS HERETO, CONTAIN
THE ENTIRE UNDERSTANDING OF THE PARTIES HERETO, SHALL BE BINDING ON THE PARTIES
HERETO, THEIR PARENTS, SUBSIDIARIES, AFFILIATES, HEIRS, EXECUTORS,
ADMINISTRATORS AND ASSIGNS.  IT IS THE ONLY AGREEMENT BETWEEN THE PARTIES WITH
RESPECT TO THE SUBJECT MATTER HEREOF AND SHALL NOT BE MODIFIED OR VARIED BY ORAL
UNDERSTANDINGS.  ANY TERM OF THIS AGREEMENT MAY BE AMENDED AND THE OBSERVANCE OF
ANY TERM HEREOF MAY BE WAIVED ONLY WITH THE WRITTEN CONSENT OF THE COMPANY.

12.4         NOTICES, ETC.  ALL NOTICES AND OTHER COMMUNICATIONS REQUIRED OR
PERMITTED HEREUNDER TO BE GIVEN TO A PARTY TO THIS AGREEMENT SHALL BE IN WRITING
AND SHALL BE FAXED OR MAILED BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID,
OR OTHERWISE DELIVERED BY HAND OR BY MESSENGER, ADDRESSED TO SUCH PARTY’S
ADDRESS AS SET FORTH BELOW OR AT SUCH OTHER ADDRESS AS THE PARTY SHALL HAVE
FURNISHED TO EACH OTHER PARTY IN WRITING IN ACCORDANCE WITH THIS PROVISION:

if to a Series D
Holder:                                                                           
To the address or facsimile number set forth on the signature page hereto

if to the
Company:                                                                                          
CollaGenex Pharmaceuticals, Inc.

41 University Drive

Newtown, PA 18940

Facsimile:  (215) 579-7388

Attn:  Andrew K.W. Powell

with a copy to:

Tod Reichert, Esq.

Wilmer Cutler Pickering Hale and Dorr LLP

60 State Street

Boston, MA 02109

Facsimile:  (617) 526-5000

or such other address with respect to a party as such party shall notify each
other party in writing as above provided.  Any notice sent in accordance with
this Section 12.4 shall be effective (i) if mailed, five (5) business days after
mailing, (ii) if sent by messenger, one (1) business day after delivery, and
(iii) if sent via facsimile, one (1) business day after transmission and
electronic confirmation of receipt or (if transmitted and received on a
non-business day) on the second business day following transmission and
electronic confirmation of receipt (provided, however, that any notice of change
of address shall only be valid upon receipt).

12.5         DELAYS OR OMISSIONS.  NO DELAY OR OMISSION TO EXERCISE ANY RIGHT,
POWER, OR REMEDY ACCRUING TO ANY PARTY UPON ANY BREACH OR DEFAULT UNDER THIS
AGREEMENT, SHALL 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 OF THE PARTIES, SHALL BE
CUMULATIVE AND NOT ALTERNATIVE.

12.6         SEVERABILITY.  IF ANY PROVISION OF THIS AGREEMENT IS HELD BY A
COURT OF COMPETENT JURISDICTION TO BE UNENFORCEABLE UNDER APPLICABLE LAW, THEN
SUCH PROVISION SHALL BE EXCLUDED FROM THIS AGREEMENT AND THE REMAINDER OF THIS
AGREEMENT SHALL BE INTERPRETED AS IF SUCH PROVISION WERE SO EXCLUDED AND SHALL
BE ENFORCEABLE IN ACCORDANCE WITH ITS TERMS; PROVIDED, HOWEVER, THAT IN SUCH
EVENT THIS AGREEMENT SHALL BE INTERPRETED SO AS TO GIVE EFFECT, TO THE GREATEST
EXTENT CONSISTENT WITH AND PERMITTED BY APPLICABLE LAW, TO THE MEANING AND
INTENTION OF THE EXCLUDED PROVISION AS DETERMINED BY SUCH COURT OF COMPETENT
JURISDICTION.

12.7         COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN ANY NUMBER OF
COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED AN ORIGINAL AND ENFORCEABLE AGAINST
THE PARTIES ACTUALLY EXECUTING SUCH COUNTERPART, AND ALL OF WHICH TOGETHER SHALL
CONSTITUTE ONE AND THE SAME INSTRUMENT.

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IN WITNESS WHEREOF, the parties have executed this Restructuring and Exchange
Agreement as of the date first herein above set forth.

 

COLLAGENEX PHARMACEUTICALS, INC.

By:

/s/ Nancy C. Broadbent

 

Name: Nancy C. Broadbent

Title: CFO

 

 

 

 

HOLDERS OF SERIES D PREFERRED STOCK:

 

OCM Principal Opportunities Fund, L.P.

 

Pebblebrook Partners Ltd.

By:

Oaktree Capital Management, LLC, its general partner

 

 

 

 

 

 

By:

/s/  Stuart Schube

 

 

 

 

Name: Stuart Schube

By:

/s/  Stephen A. Kaplan

 

 

Title:  General Partner

 

Name:   Stephen A. Kaplan

 

 

Date:

 

Title: Principal

 

 

Facsimile:

 

Date:

 

 

 

 

Facsimile:

 

 

 

 

 

 

 

 

By:

/s/  Vincent J. Cebula

 

 

 

 

Name:   Vincent J. Cebula

 

 

 

 

Title: Managing Director

 

 

 

 

Date:

 

 

 

 

Facsimile:

 

 

 

 

 

 

 

 

MVP II Affiliates Fund, L.P.

 

Marquette Venture Partners II, L.P.

 

 

 

 

 

 

By:

/s/ Lloyd Ruth

 

By:

/s/ Lloyd Ruth

 

Name:   Lloyd Ruth

 

 

Name:  Lloyd Ruth

 

Title: General Partner

 

 

Title: General Partner

 

Date:

 

 

Date:

 

Facsimile:

 

 

Facsimile:

 

 

 

 

 

/s/  Robert J. Easton

 

/s/  Richard A. Horstmann

Robert J. Easton

 

Richard A. Horstmann

Date:

 

Date:

Facsimile:

 

Facsimile:

 

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Schedule I

 

 

 

Name and Address of Series D Holders

 

No. of Shares of
Series D Preferred
Surrendered

 

No. of Shares of
Series D-1 Preferred
Issued in Exchange
for Series D
Preferred

 

OCM Principal Opportunities Fund, L.P.

c/o Oaktree Capital Management, LLC

 

177,000

 

177,000

 

 

 

 

 

 

 

Pebblebrook Partners Ltd.

c/o Stuart Schube

 

1,000

 

1,000

 

 

 

 

 

 

 

MVP II Affiliates Fund, L.P.

Marquette Venture Partners

 

278

 

278

 

 

 

 

 

 

 

Marquette Venture Partners II, L.P.

Marquette Venture Partners

 

9,722

 

9,722

 

 

 

 

 

 

 

Robert J. Easton

 

2,000

 

2,000

 

 

 

 

 

 

 

Richard A. Horstmann

 

10,000

 

10,000

 

 

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