EX-4.2



 





Exhibit 4.2





THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES. THE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED, HYPOTHECATED, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS OR
UNLESS OFFERED, SOLD, PLEDGED, HYPOTHECATED OR TRANSFERRED PURSUANT TO AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS. THE
COMPANY SHALL BE ENTITLED TO REQUIRE AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED TO THE EXTENT THAT AN OPINION IS
REQUIRED PURSUANT TO THE AGREEMENT UNDER WHICH THE SECURITIES WERE ISSUED.



COLUMBIA LABORATORIES, INC.




WARRANT TO PURCHASE COMMON STOCK




			
	 	 	 
	No. W-          
	 	December 22, 2006






Void After December 22, 2011




     This Certifies That, for value received,
                                        
            
        , with its
principal office at            
              
              
              
       , or its permitted assigns (the
“Holder”), is
entitled to subscribe for and purchase at the Exercise Price (defined below) from Columbia
Laboratories, Inc., a Delaware corporation, with its principal office at 354 Eisenhower Parkway,
Livingston, New Jersey 07039 (the “Company”), up to    
                
  shares of common stock of the
Company, par value $0.01 per share (the “Common Stock”), subject to adjustment as provided herein.
This Warrant is one of a series of Warrants being issued pursuant to the terms of the Securities
Purchase Agreement (the “SPA Warrants”), as of December 22, 2006, by and among the Company and the
original Holder of this Warrant and the other parties named therein (the “Purchase Agreement”).
Capitalized terms not otherwise defined herein shall have the respective meanings ascribed to such
terms in the Purchase Agreement.



     1. Definitions. As used herein, the following terms shall have the
following respective meanings:



          (a) “Business Day” means any day other than Saturday, Sunday or other day on which
commercial banks in The City of New York are authorized or required by law to remain closed.




          (b) “Closing Bid Price” and “Closing Sale Price” means, for any security as
of any
date, the last closing bid price and last closing trade price, respectively, for such security on
the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an
extended hours basis and does not designate the closing bid price or the closing trade price, as
the case may be, then the last bid price or last trade price, respectively, of such security prior
to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal Market is not the
principal securities exchange or trading market for such security, the last closing bid price or
last trade price, respectively, of such security on the principal securities exchange or trading
market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not
apply, the last closing bid price or last trade




1









 







price, respectively, of such security in the over-the-counter market on the electronic
bulletin board for such security as reported by Bloomberg, or, if no closing bid price or last
trade price, respectively, is reported for such security by Bloomberg, the average of the bid
prices, or the ask prices, respectively, of any market makers for such security as reported in the
“pink sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If the Closing
Bid Price or the Closing Sale Price cannot be calculated for a security on a particular date on any
of the foregoing bases, the Closing Bid Price or the Closing Sale Price, as the case may be, of
such security on such date shall be the fair market value as mutually determined by the Company and
the Holder. All such determinations to be appropriately adjusted for any stock dividend, stock
split, stock combination or other similar transaction during the applicable calculation period.




          (c) “Exercise Period” shall mean the period commencing 180 days after the date
hereof and ending at 5:00 p.m., New York time, on December 22, 2011, unless sooner exercised or
terminated as provided below.




          (d) “Exercise Price” shall mean $5.50 per share, subject to adjustment pursuant to
Section 5 below.




          (e) “Exercise Shares” shall mean the shares of the Common Stock issued upon exercise
of this Warrant, subject to adjustment pursuant to the terms herein, including but not limited to
adjustment pursuant to Section 5 below.




          (f) “Principal Market” means the principal securities exchange or securities market
on which the Common Stock is then traded.




          (g) “SPA Securities” means the Notes issued pursuant to the Purchase Agreement.




          (h) “Trading Day” means any day on which the Common Stock is traded on the Principal
Market; provided that “Trading Day” shall not include any day on which the Common Stock is
scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common
Stock is suspended from trading during the final hour of trading on such exchange or market (or if
such exchange or market does not designate in advance the closing time of trading on such exchange
or market, then during the hour ending at 4:00:00 p.m., New York Time).




     2. Exercise of Warrant.



          2.1 Method of Exercise. Subject to the terms and conditions hereof (including,
without limitation, the limitations set forth in Section 2.5), this Warrant may be exercised by the
Holder at any time during the Exercise Period, in whole or in part, by (i) delivery of a written
notice, in the form attached hereto as Exhibit A (the “Exercise Notice”), of the Holder’s election
to exercise this Warrant to the Company and (ii) (A) payment to the Company of an amount equal to
the applicable Exercise Price multiplied by the number of shares of Common Stock as to which this
Warrant is being exercised (the “Aggregate Exercise Price”) in cash or by wire transfer of
immediately available funds or (B) by notifying the Company that this Warrant is being exercised
pursuant to a Cashless Exercise (as defined in Section 2.3). The Holder shall not be required to
deliver the original Warrant in order to effect an exercise hereunder. Execution and delivery of
the Exercise Notice with respect to less than all of the Common Stock shall have the same effect as
cancellation of the original Warrant and




2.









 







issuance of a new Warrant evidencing the right to purchase the remaining number of Exercise
Shares. On or before the first Business Day following the date on which the Company has received
each of the Exercise Notice and the Aggregate Exercise Price (or notice of a Cashless Exercise)
(the “Exercise Delivery Documents”), the Company shall transmit by facsimile an acknowledgment of
confirmation of receipt of the Exercise Delivery Documents to the Holder and the Company’s transfer
agent (the “Transfer Agent”). On or before the third Business Day following the date on which the
Company has received all of the Exercise Delivery Documents (the “Share Delivery Date”), the
Company shall (X) provided that the Transfer Agent is participating in The Depository Trust Company
(“DTC”) Fast Automated Securities Transfer Program, upon the request of the Holder, credit such
aggregate number of Exercise Shares to which the Holder is entitled pursuant to such exercise to
the Holder’s or its designee’s balance account with DTC through its Deposit Withdrawal Agent
Commission system, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated
Securities Transfer Program, issue and dispatch by overnight courier to the address as specified in
the Exercise Notice, a certificate, registered in the Company’s share register in the name of the
Holder or its designee, for the number of Exercise Shares to which the Holder is entitled pursuant
to such exercise which certificates shall not bear any restrictive legends unless required pursuant
to Section 3.6 of the Purchase Agreement. Upon delivery of the Exercise Delivery Documents, the
Holder shall be deemed for all corporate purposes to have become the holder of record of the
Exercise Shares with respect to which this Warrant has been exercised, irrespective of the date
such Exercise Shares are credited to the Holder’s DTC account or the date of delivery of the
certificates evidencing such Exercise Shares as the case may be. If this Warrant is submitted in
connection with any exercise pursuant to this Section 2.1 and the number of Exercise Shares
represented by this Warrant submitted for exercise is greater than the number of Exercise Shares
being acquired upon an exercise, then the Company shall as soon as practicable and in no event
later than three Business Days after any exercise and at its own expense, issue a new Warrant (in
accordance with Section 2.4) representing the right to purchase the number of Exercise Shares
purchasable immediately prior to such exercise under this Warrant, less the number of Exercise
Shares with respect to which this Warrant is exercised. No fractional shares of Common Stock are
to be issued upon the exercise of this Warrant. Fractional shares shall be treated as provided in
Section 6. The Company shall pay any and all taxes which may be payable with respect to the
issuance and delivery of Exercise Shares upon exercise of this Warrant.




          2.2 Company’s Failure to Timely Deliver Securities. If within three Trading Days
after the Company’s receipt of the facsimile copy of a Exercise Notice the Company shall fail to
issue and deliver a certificate to the Holder and register such Exercise Shares on the Company’s
share register or credit the Holder’s balance account with DTC for the number of Exercise Shares to
which the Holder is entitled upon such holder’s exercise hereunder or if the Company fails to
deliver to the Holder the certificate or certificates representing the applicable Exercise Shares
(or credit the Holder’s balance account at DTC with the applicable Exercise Shares) within three
Trading Days after its obligation to do so under clause (ii) below and if on or after such Trading
Day the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to
deliver in satisfaction of a sale by the Holder of Exercise Shares issuable upon such exercise that
the Holder anticipated receiving from the Company (a “Buy-In”), then the Company shall, within
three Business Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash
to the Holder in an amount equal to the Holder’s total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased (the “Buy-In Price”), at which
point the Company’s obligation to deliver such certificate (and to issue such Exercise Shares) or
credit such Holder’s balance account with DTC shall terminate, or (ii) promptly honor its
obligation to deliver to the

3.









 








Holder a certificate or certificates representing such Exercise Shares or credit such Holder’s
balance account with DTC and pay cash to the Holder in an amount equal to the excess (if any) of
the Buy-In Price over the product of (A) such number of Exercise Shares, times (B) the Closing Bid
Price on the date of exercise.




     2.3 Cashless Exercise. Notwithstanding any provisions herein to the contrary, if,
at any time during the Exercise Period, the Current Market Price (as defined below) of one share of
Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in
lieu of exercising this Warrant by payment of cash, the Holder may exercise this Warrant by a
cashless exercise by surrender of this Warrant at the principal office of the Company together with
the properly endorsed Notice of Exercise and the Company shall issue to the Holder a number of
Exercise Shares computed using the following formula:



	 	 	 	 	 
	 

	 	X =
	 	Y (B-A)
	 

	 	 	 	     B
	 
	 	 	 	 
	Where:

	 	X =
	 	the number of Exercise Shares to be issued to the Holder.
	 
	 	 	 	 
	 

	 	Y =
	 	the number of Exercise Shares purchasable upon exercise of
all of the Warrant or, if only a portion of the Warrant is being exercised, the
portion of the Warrant being exercised.






     A = the Exercise Price.



     B = the Current Market Price of one share of Common Stock.



     “Current Market Price” means on any particular date:



               (a) if the Common Stock is traded on the Nasdaq Capital Market, the Nasdaq Global
Market or the Nasdaq Global Select Market (or their successors), the average of the closing prices
of the Common Stock of the Company on such market over the five trading days ending immediately
prior to the applicable date of valuation;



               (b) if the Common Stock is traded on any registered national stock exchange but is
not traded on the Nasdaq Capital Market, the Nasdaq Global Market or the Nasdaq Global Select
Market (or their successors), the average of the closing prices of the Common Stock of the Company
on such exchange over the five trading days ending immediately prior to the applicable date of
valuation;



               (c) if the Common Stock is traded over-the-counter, but not on the Nasdaq Capital
Market, the Nasdaq Global Market, the Nasdaq Global Select Market or a registered national stock
exchange, the average of the closing bid prices over the 30-day period ending immediately prior to
the applicable date of valuation; and



               (d) if there is no active public market for the Common Stock, the value thereof, as
determined in good faith by the Board of Directors of the Company upon due consideration of the
proposed determination thereof by the Holder.



          2.4 Partial Exercise. If this Warrant is exercised in part only, the Company shall,
upon surrender of this Warrant, execute and deliver, within 10 days of the date of exercise, a new
Warrant evidencing the rights of the Holder, or, subject to Section 8, such other

4.









 








person as shall be designated in the Notice of Exercise, to purchase the balance of the
Exercise Shares purchasable hereunder. In no event shall this Warrant be exercised for a
fractional Exercise Share, and the Company shall not distribute a Warrant exercisable for a
fractional Exercise Share. Fractional shares shall be treated as provided in Section 6.




          2.5 Limitations on Exercise.




               (a) The Company shall not effect the exercise of this Warrant, and the Holder shall
not have the right to exercise this Warrant, to the extent that after giving effect to such
exercise, such Person (together with such Person’s affiliates) would beneficially own in excess of
9.99% of the shares of Common Stock outstanding immediately after giving effect to such exercise.
For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially
owned by such Person and its affiliates shall include the number of shares of Common Stock issuable
upon exercise of this Warrant with respect to which the determination of such sentence is being
made, but shall exclude shares of Common Stock which would be issuable upon (i) exercise of the
remaining, unexercised portion of this Warrant beneficially owned by such Person and its affiliates
and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities
of the Company beneficially owned by such Person and its affiliates (including, without limitation,
any convertible notes or convertible preferred stock or warrants) subject to a limitation on
conversion or exercise analogous to the limitation contained herein. Except as set forth in the
preceding sentence, for purposes of this paragraph, beneficial ownership shall be calculated in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended. For purposes of
this Warrant, in determining the number of outstanding shares of Common Stock, the Holder may rely
on the number of outstanding shares of Common Stock as reflected in (1) the Company’s most recent
Form 10-K, Form 10-Q, Current Report on Form 8-K or other public filing with the Securities and
Exchange Commission, as the case may be, (2) a more recent public announcement by the Company or
(3) any other notice by the Company or the Transfer Agent setting forth the number of shares of
Common Stock outstanding. For any reason at any time, upon the written request of the Holder, the
Company shall within one Business Day confirm in writing to the Holder the number of shares of
Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall
be determined after giving effect to the conversion or exercise of securities of the Company,
including the SPA Securities and the SPA Warrants, by the Holder and its affiliates since the date
as of which such number of outstanding shares of Common Stock was reported.



               (b) The Company shall not be obligated to issue any shares of Common Stock upon
exercise of this Warrant, if the issuance of such shares of Common Stock would exceed that number
of shares of Common Stock which the Company may issue upon exercise, redemption or conversion, as
applicable, of the SPA Warrants and SPA Securities or otherwise without breaching the Company’s
obligations under the rules or regulations of the applicable Principal Market (the number of shares
which may be issued without violating such rules and regulations, the “Exchange Cap”), except that
such limitation shall not apply in the event that the Company (A) obtains the approval of its
stockholders as required by the applicable rules of the applicable Principal Market for issuances
of shares of Common Stock in excess of such amount or (B) obtains a written opinion from outside
counsel to the Company that such approval is not required, which opinion shall be reasonably
satisfactory to the holders. Unless and until such approval or written opinion is obtained, no
Holder shall be issued in the aggregate, upon exercise or conversion, as applicable, of any SPA
Warrants or SPA Securities, shares of Common Stock in an amount greater than the product of the
Exchange Cap multiplied by a fraction, the numerator of which is the total number of shares of
Common Stock underlying



5.









 




the SPA Warrants issued to such Holder pursuant to the Purchase Agreement on the Issuance Date
and the denominator of which is the aggregate number of shares of Common Stock underlying the SPA
Warrants issued to the Purchasers pursuant to the Purchase Agreement on the Issuance Date (with
respect to each Purchaser, the “Exchange Cap Allocation”). In the event that any Holder shall sell
or otherwise transfer any of such Holder’s SPA Warrants, the transferee shall be allocated a pro
rata portion of such Holder’s Exchange Cap Allocation, and the restrictions of the prior sentence
shall apply to such transferee with respect to the portion of the Exchange Cap Allocation allocated
to such transferee. In the event that any Holder of SPA Warrants shall exercise all of such
Holder’s SPA Warrants into a number of shares of Common Stock which, in the aggregate, is less than
such Holder’s Exchange Cap Allocation, then the difference between such Holder’s Exchange Cap
Allocation and the number of shares of Common Stock actually issued to such Holder shall be
allocated to the respective Exchange Cap Allocations of the remaining holders of SPA Warrants on a
pro rata basis in proportion to the shares of Common Stock underlying the SPA Warrants then held by
each such holder. In the event that the Company is prohibited from issuing any Warrant Shares for
which an Exercise Notice has been received as a result of the operation of this Section 2.5(b), the
Company shall pay cash in exchange for cancellation of such Warrant Shares, at a price per Warrant
Share equal to the difference between the Closing Sale Price and the Exercise Price as of the date
of the attempted exercise.




          2.6 Insufficient Authorized Shares. If at any time while any of the Warrants remain
outstanding the Company does not have a sufficient number of authorized and unreserved shares of
Common Stock to satisfy its obligation to reserve for issuance upon exercise of the Warrants at
least a number of shares of Common Stock equal to 100% of the number of shares of Common Stock as
shall from time to time be necessary to effect the exercise of all of the Warrants then outstanding
(the “Required Reserve Amount”) (such event an “Authorized Share Failure”), then the Company shall
immediately take all action necessary to increase the Company’s authorized shares of Common Stock
to an amount sufficient to allow the Company to reserve the Required Reserve Amount for the
Warrants then outstanding. Without limiting the generality of the foregoing sentence, as soon as
practicable after the date of the occurrence of an Authorized Share Failure, but in no event later
than 90 days after the occurrence of such Authorized Share Failure, the Company shall hold a
meeting of its stockholders for the approval of an increase in the number of authorized shares of
Common Stock. In connection with such meeting, the Company shall provide each stockholder with a
proxy statement and shall use its best efforts to solicit its stockholders’ approval of such
increase in authorized shares of Common Stock and to cause its board of directors to recommend to
the stockholders that they approve such proposal.




     3. Covenants of the Company.



          3.1 Covenants as to Exercise Shares. The Company covenants and agrees that all
Exercise Shares that may be issued upon the exercise of the rights represented by this Warrant
will, upon issuance, be validly issued and outstanding, fully paid and nonassessable, and free from
all taxes, liens and charges with respect to the issuance thereof. The Company further covenants
and agrees that the Company will at all times during the Exercise Period have authorized and
reserved, free from preemptive rights, a sufficient number of shares of its Common Stock to provide
for the exercise of the rights represented by this Warrant. If at any time during the Exercise
Period the number of authorized but unissued shares of Common Stock shall not be sufficient to
permit exercise of this Warrant, the Company will take such corporate action as may, in the opinion
of its counsel, be necessary to increase its

6.









 








authorized but unissued shares of Common Stock (or other securities as provided herein) to
such number of shares as shall be sufficient for such purposes.




          3.2 Notices of Record Date. In the event of any taking by the Company of a record
of the holders of any class of securities for the purpose of determining the holders thereof who
are entitled to receive any dividend (other than a cash dividend which is the same as cash
dividends paid in previous quarters) or other distribution, the Company shall mail to the Holder,
at least ten days prior to the date specified herein, a notice specifying the date on which any
such record is to be taken for the purpose of such dividend or distribution.




     4. Representations of Holder.



          4.1 Acquisition of Warrant for Personal Account. The Holder represents and warrants
that it is acquiring the Warrant and the Exercise Shares solely for its account for investment and
not with a present view toward the public sale or distribution of said Warrant or Exercise Shares
or any part thereof and has no intention of selling or distributing said Warrant or Exercise Shares
or any arrangement or understanding with any other persons regarding the sale or distribution of
said Warrant or, except in accordance with the provisions of Article 6 of the Purchase Agreement,
the Exercise Shares, and except as would not result in a violation of the Securities Act. The
Holder will not, directly or indirectly, offer, sell, pledge, transfer or otherwise dispose of (or
solicit any offers to buy, purchase or otherwise acquire or take a pledge of) the Warrant except in
accordance with the Securities Act and will not, directly or indirectly, offer, sell, pledge,
transfer or otherwise dispose of (or solicit any offers to buy, purchase or otherwise acquire or
take a pledge of) the Exercise Shares except in accordance with the provisions of Article 6 of the
Purchase Agreement or pursuant to and in accordance with the Securities Act.




          4.2 Securities Are Not Registered.




               (a) The Holder understands that the offer and sale of the Warrant or the Exercise
Shares have not been registered under the Securities Act on the basis that no distribution or
public offering of the Securities of the Company is to be effected and/or pursuant to specific
exemptions from the registration provisions of the Securities Act, which exemptions depend upon,
among other things, the bona fide nature of the Holder’s investment intent as expressed herein.
The Holder realizes that the basis for such exemptions may not be present if, notwithstanding its
representations, the Holder has a present intention of acquiring the securities for a fixed or
determinable period in the future, selling (in connection with a distribution or otherwise),
granting any participation in, or otherwise distributing the securities. The Holder represents and
warrants that it has no such present intention.



               (b) The Holder recognizes that the Warrant and the Exercise Shares must be held
indefinitely unless they are subsequently registered under the Securities Act or an exemption from
such registration is available. The Holder recognizes that the Company has no obligation to
register the Warrant or, except as provided in the Purchase Agreement, the Exercise Shares of the
Company, or to comply with any exemption from such registration.



          4.3 Disposition of Warrant and Exercise Shares.




               (a) The Holder further agrees not to make any disposition of all or any part of the
Warrant or Exercise Shares in any event unless and until:



7.









 





                    (i) There is then in effect a registration statement under
the Securities Act
covering such proposed disposition and such disposition is made in accordance with said
registration statement; or



                    (ii) If reasonably requested by the Company, the Holder
shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company, for the Holder to the
effect that such disposition will not require registration of such Warrant or Exercise Shares under
the Securities Act or any applicable state securities laws; provided, that no opinion shall be
required for any disposition made or to be made in accordance with the provisions of Rule 144.



               (b) The Holder understands and agrees that all certificates evidencing the Exercise
Shares to be issued to the Holder may bear a legend in substantially the following form:




THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES. THE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS, OR UNLESS OFFERED,
SOLD, PLEDGED, HYPOTHECATED OR TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THOSE LAWS. THE COMPANY SHALL BE ENTITLED TO
REQUIRE AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED TO THE EXTENT THAT AN OPINION IS REQUIRED PURSUANT TO THE AGREEMENT
UNDER WHICH THE SECURITIES WERE ISSUED.



     5. Adjustments. In the event of changes in the outstanding Common Stock of
the Company by reason of any stock split, stock dividend, recapitalization, reclassification,
combination or exchange of shares, reorganization, liquidation, dissolution, consolidation or
merger effected by the Company, the number and class of shares available under the Warrant in the
aggregate and the Exercise Price shall be correspondingly adjusted to give the Holder of the
Warrant, on exercise for the same aggregate Exercise Price, the total number, class and kind of
shares or other property, including cash, as the Holder would have owned had the Warrant been
exercised prior to the event and had the Holder continued to hold such shares until after the event
requiring adjustment. The form of this Warrant need not be changed because of any adjustment in
the Exercise Price and/or number, class and kind of shares subject to this Warrant. The Company
shall promptly provide a certificate from its Chief Financial Officer notifying the Holder in
writing of any adjustment in the Exercise Price and/or the total number, class and kind of shares
issuable upon exercise of this Warrant, which certificate shall specify the Exercise Price and
number, class and kind of shares under this Warrant after giving effect to such adjustment. For the
avoidance of doubt, if necessary to effectuate the provisions of this paragraph 5, any successor to
the Company or surviving entity in a reorganization, consolidation or merger effected by the
Company shall deliver to the Holder confirmation (or a new warrant to the effect) that such
successor or surviving entity shall have all of the obligations of the Company under this Warrant
with the same effect as if such successor or surviving entity had been named as the Company herein,
and that there shall be



8.









 




issued upon exercise of this Warrant (or a new warrant) at any time after the consummation of
such reorganization, consolidation or merger, in lieu of the shares of Common Stock issuable upon
the exercise of this Warrant prior to such transaction, the total number, class and kind of shares
or other property, including cash, as the Holder would have owned had the Warrant been exercised
prior to such transaction and had the Holder continued to hold such shares until after such
transaction.




     6. Fractional Shares. No fractional shares shall be issued upon the
exercise of this Warrant as a consequence of any adjustment pursuant hereto. All Exercise Shares
(including fractions) issuable upon exercise of this Warrant may be aggregated for purposes of
determining whether the exercise would result in the issuance of any fractional share. If, after
aggregation, the exercise would result in the issuance of a fractional share, the Company shall, in
lieu of issuance of any fractional share, pay the Holder otherwise entitled to such fraction a sum
in cash equal to the product resulting from multiplying the fair market value of the Common Stock
on the date of exercise of this Warrant by such fraction.



     7. No Stockholder Rights. This Warrant in and of itself shall not entitle
the Holder to any voting rights or other rights as a stockholder of the Company.



     8. Transfer of Warrant. Subject to applicable laws and compliance with
Section 4.3, this Warrant and all rights hereunder are transferable, by the Holder in person or by
duly authorized attorney, upon delivery of this Warrant and the form of assignment attached hereto
to any transferee designated by Holder.



          8.1 Upon such surrender and, if required, such payment, the Company shall execute
and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the
denomination or denominations specified in such instrument of assignment, and shall issue to the
assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant
shall promptly be cancelled. A Warrant, if properly assigned, may be exercised by a new holder for
the purchase of shares of Common Stock without having a new Warrant issued.




          8.2 If, at the time of the surrender of this Warrant in connection with any transfer
of this Warrant, the transfer of this Warrant shall not be registered pursuant to an effective
registration statement under the Securities Act and under applicable state securities or blue sky
laws, the Company may require, as a condition of allowing such transfer (i) that the Holder or
transferee of this Warrant, as the case may be, furnish to the Company a written opinion of counsel
(which opinion shall be in form, substance and scope customary for opinions of counsel in
comparable transactions) to the effect that such transfer may be made without registration under
the Securities Act and under applicable state securities or blue sky laws, (ii) that the holder or
transferee execute and deliver to the Company an investment letter in form and substance acceptable
to the Company and (iii) that the transferee be an “accredited investor” as defined in Rule
501(a)(1), (a)(2), (a)(3), (a)(7), or (a)(8) promulgated under the Securities Act or a “qualified
institutional buyer” as defined in Rule 144A(a) under the Securities Act.




     9. Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant is lost,
stolen, mutilated or destroyed, the Company may, on such terms as to indemnity or otherwise as it
may reasonably impose (which shall, in the case of a mutilated Warrant, include the surrender
thereof), issue a new Warrant of like denomination and tenor as the Warrant so lost, stolen,
mutilated or destroyed. Any such new Warrant shall constitute an original contractual



9.









 




obligation of the Company, whether or not the allegedly lost, stolen, mutilated or destroyed
Warrant shall be at any time enforceable by anyone.




     10. Modifications and Waiver. This Warrant and any provision hereof may be
changed, waived, discharged or terminated only by an instrument in writing signed by the Company
and (i) Purchasers holding Warrants representing at least a majority of the number of Exercise
Shares then issuable upon exercise of any then unexercised Warrants sold in the Offering, provided,
however, that such modification, amendment or waiver is made with respect to all unexercised
Warrants issued in the Offering and does not adversely affect the Holder without adversely
affecting all holders of Warrants in a similar manner; or (ii) the Holder.



     11. Notices, etc. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the party to be
notified, (b) when sent by confirmed email, telex or facsimile if sent during normal business hours
of the recipient, if not, then on the next business day, (c) five days after having been sent by
registered or certified mail, return receipt requested, postage prepaid, or (d) one business day
after deposit with a nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent to the Company at the address
listed on the signature page and to the Holders at the addresses on the Company records, or at such
other address as the Company or Holder may designate by ten days’ advance written notice to the
other party hereto.



     12. Acceptance. Receipt of this Warrant by the Holder shall constitute
acceptance of and agreement to all of the terms and conditions contained herein.



     13. Governing Law. This Warrant and all rights, obligations and
liabilities hereunder shall be governed by the laws of the State of New York without regard to the
principles of conflict of laws.



     14. Descriptive Headings. The descriptive headings of the several
paragraphs of this Warrant are inserted for convenience only and do not constitute a part of this
Warrant. The language in this Warrant shall be construed as to its fair meaning without regard to
which party drafted this Warrant.



     15. Severability.  The invalidity or unenforceability of any provision of
this Warrant in any jurisdiction shall not affect the validity or enforceability of such provision
in any other jurisdiction, or affect any other provision of this Warrant, which shall remain in
full force and effect.



     16. Entire Agreement.  This Warrant constitutes the entire agreement
between the parties pertaining to the subject matter contained in it and supersedes all prior and
contemporaneous agreements, representations, and undertakings of the parties, whether oral or
written, with respect to such subject matter.



     17. Remedies, Other Obligations, Breaches And Injunctive Relief.  The
remedies provided in this Warrant shall be cumulative and in addition to all other remedies
available under this Warrant and the other Transaction Documents, at law or in equity (including a
decree of specific performance and/or other injunctive relief), and nothing herein shall limit the
right of the Holder right to pursue actual damages for any failure by the Company to comply with
the terms of this Warrant. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Holder and that the remedy at law for any such



10.









 







breach may be inadequate. The Company therefore agrees that, in the event of any such breach
or threatened breach, the holder of this Warrant shall be entitled, in addition to all other
available remedies, to an injunction restraining any breach, without the necessity of showing
economic loss and without any bond or other security being required.


[Signature Page Follows]




11.









 








     In Witness Whereof, the Company has caused this Warrant to be executed by its duly
authorized officer as of December 22, 2006.



	 	 	 	 	 	 	 	 	 
	 	 	COLUMBIA LABORATORIES, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	Name: Robert S. Mills	 	 
	 	 	Title: President and Chief Executive Officer	 	 
	 	 	Address:	 	354 Eisenhower Parkway	 	 
	 

	 	 	 	 	 	Livingston, New Jersey 07039	 	 
	 

	 	 	 	 	 	Attention: General Counsel	 	 
	 

	 	 	 	 	 	Facsimile: (973) 994-3001	 	 






12.









 





EXERCISE NOTICE




TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

WARRANT TO PURCHASE COMMON STOCK




COLUMBIA LABORATORIES, INC.




     The undersigned holder hereby exercises the right to purchase
                                        
 of the shares
of Common Stock (“Exercise Shares”) of Columbia Laboratories, Inc., a Delaware corporation (the
“Company”), evidenced by the attached Warrant to Purchase Common Stock (the “Warrant”).
Capitalized terms used herein and not otherwise defined shall have the respective meanings set
forth in the Warrant.



     1. Form of Exercise Price. The Holder intends that payment of the Exercise Price shall be
made as:



                              
a “Cash Exercise” with respect to                                
          Exercise
Shares; and/or




                              
a “Cashless Exercise” with respect to                               
          
Exercise Shares.




     2. Payment of Exercise Price. In the event that the holder has elected a Cash Exercise with
respect to some or all of the Exercise Shares to be issued pursuant hereto, the holder shall pay
the Aggregate Exercise Price in the sum of
$                                       
  to the Company in accordance with
the terms of the Warrant.



     3. Delivery of Exercise Shares. The Company shall deliver to the holder
                     Exercise
Shares in accordance with the terms of the Warrant.



Date:
                                        
      ,           




	 	 	 	 	 
	 	 	 
	   Name of Registered Holder	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 






1.









 





ACKNOWLEDGMENT




     The Company hereby acknowledges this Exercise Notice and, if applicable, hereby directs
American Stock Transfer & Trust Company to issue the above indicated number of shares of Common
Stock in accordance with the Transfer Agent Instructions dated December 21, 2006 from the Company
and acknowledged and agreed to by American Stock Transfer & Trust Company.



	 	 	 	 	 
	 	COLUMBIA LABORATORIES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




1.









 








ASSIGNMENT FORM




(To assign the foregoing Warrant, subject to

compliance with Section 4.3, execute this form and

supply required information. Do not use this form

to purchase shares.)



For Value Received, the foregoing Warrant and all rights evidenced thereby are hereby
assigned to




	 	 	 
	Name:
	 	 
	 

	 	 




(Please Print)




	 	 	 
	Address:
	 	 
	 

	 	 




(Please Print)




Dated:                     , 20__




	 	 	 	 	 
	Holder’s
	 	 	 	 
	Signature:
	 	 	 	 
	 

	 	 

	 	 






	 	 	 	 	 
	Holder’s
	 	 	 	 
	Address:
	 	 	 	 
	 

	 	 

	 	 





NOTE: The signature to this Assignment Form must correspond with the name as it appears on the
face of the Warrant, without alteration or enlargement or any change whatever. Officers of
corporations and those acting in a fiduciary or other representative capacity should file proper
evidence of authority to assign the foregoing Warrant.