exv10w3





Exhibit 10.3









March 3, 2010



Mr. Ron Wooten

PharmaBio Development Inc.

4820 Emperor Blvd.

Durham, North Carolina 27703



	Re: 	 	Contingent Agreement on Final Payment and Termination of the
Striant® Investment and Royalty Agreement




Dear Ron:



     We refer to the Investment and Royalty Agreement between Columbia Laboratories,
Inc. (“Columbia”) and PharmaBio Development Inc. (“PharmaBio”), dated March 5, 2003,
as amended by a letter agreement dated January 26, 2004, supplemented by a letter
agreement dated April 14, 2006 and amended by a second amendment dated July 22, 2009
(the “Agreement”; capitalized terms that are not defined in this letter agreement
shall have the meanings as set forth in the Agreement). The purpose of this letter
agreement is to provide for the early termination of the Agreement by setting forth
the terms and conditions under which Columbia will pay the Minimum Royalty Amount
due at the end of the seventh (7th) Annual Period under Section 2.3 of
the Agreement on a date earlier than otherwise required under such section.


     Pursuant to Section 2.3 of the Agreement, if, by the end of the seventh
(7th) Annual Period (i.e. September 30, 2010), PharmaBio has not
received at least $30 million in aggregate royalties under Section 2.3, then
Columbia is required to pay PharmaBio not later than 60 days following the end of
the fourth calendar quarter of the seventh (7th) Annual Period (i.e.,
November 29, 2010) the difference between the amount of royalties actually received
by PharmaBio and $30 million, which as of the date hereof is $16,526,374 (the “Final
True Up Payment”).


     Subject to the Closing (described below), Columbia will pay the Final True Up
Payment on an accelerated basis via wire transfer in immediately available funds
reduced by royalties paid after the date hereof and then discounted for early
payment to an account designated by PharmaBio. Specifically, Columbia agrees to pay
PharmaBio (in lieu of depositing funds in escrow for the benefit of PharmaBio
pursuant to Section 4.9 of the Agreement) on the date Columbia closes a Transfer of
assets, sale of stock, licensing agreement and/or similar transaction yielding gross
cash proceeds to Columbia of $40 million or more (the “Closing”), an amount equal to
the Final True Up Payment, reduced by royalties paid after the date hereof, and less
a four and six tenths percent (4.6%) annual discount factor (such discount factor to
be calculated based on the actual number of days remaining in the seventh
(7th) Annual Period following the Closing and a 365-day year). In
consideration of such payment, PharmaBio and Columbia agree that Columbia has paid
the Minimum Royalty Amount due at the end of the seventh (7th) Annual
Period under Section 2.3 of the Agreement, and the Agreement is terminated as of the
date of such payment provided that Articles V, IX, XI, XII and XIII shall survive
such termination.


     PharmaBio agrees that, upon receipt of the payment described in the preceding paragraph, it
will provide a written and signed acknowledgement in the form of Exhibit A
 





 








 





PharmaBio Development Inc.
March 3, 2010


Page 2 of 2




 






to this letter agreement and that Columbia is permitted to provide the same to
the holders of its Convertible Subordinated Notes due December 31, 2011.




     This letter agreement and any amendment hereto may be executed in counterparts,
each of which when executed and delivered shall be deemed to be an original and all
of which counterparts taken together shall constitute but one and the same
instrument. The execution of this letter agreement and any such amendment by either
party will not become effective until counterparts hereof have been executed and
delivered by both parties hereto. This letter agreement may be executed by either
party by delivery of such party’s signature thereon by facsimile or by email
transmission in portable digital format or similar format.



     Except as specifically provided herein, the Agreement shall continue to be in
full force and effect and is hereby in all respects ratified and confirmed.



     This letter agreement shall be governed by and construed in accordance with the
Laws of the State of Delaware, as applied to agreements executed and performed
entirely in the State of Delaware, without regard to conflicts of law rules.



     Please acknowledge your agreement to the foregoing by countersigning this
letter agreement below.



	 	 	 	 	 
	 	Sincerely,



COLUMBIA LABORATORIES, INC.

 	 
	 	By:  	/s/ Lawrence A. Gyenes
 	 
	 	 	Name:  	Lawrence A. Gyenes 	 
	 	 	Title:  	Senior Vice President,
Chief Financial Officer and Treasurer 	 
	 








	 	 	 	 	 
	ACKNOWLEDGED AND ACCEPTED:



PHARMABIO DEVELOPMENT INC.

 	 	 
	By:  	/s/ Ron Wooten
 	 	 
	 	Name:  	Ron Wooten 	 	 
	 	Title:  	President