Document:

Exhibit 10.2

 
EXHIBIT 10.2

EXECUTION VERSION
    

FOURTH AMENDMENT AND LIMITED WAIVER TO SECOND LIEN CREDIT AGREEMENT

This Fourth Amendment and Limited Waiver (“Agreement”) to Second Lien Credit Agreement is entered into as of January 15, 2013 (the “Fourth Amendment Effective Date”), by and among DIAL GLOBAL, INC. (f/k/a WESTWOOD ONE, INC.), a Delaware corporation (the “Borrower”), and the Lenders party hereto.
RECITALS
WHEREAS, reference is made to that certain Second Lien Credit Agreement, dated as of October 21, 2011 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”; capitalized terms used but not defined herein have the meanings given to such terms in the Credit Agreement), by and among the Borrower, the Lenders, Cortland Capital Market Services, LLC, as administrative agent and collateral agent for the Lenders (in such capacity, and together with its successors and permitted assigns, the “Administrative Agent”), and Macquarie Capital (USA) Inc., as syndication agent (in such capacity, and together with its successors and permitted assigns, the “Syndication Agent”); 
WHEREAS, the Borrower, the Lenders, and the Sponsor entered into that certain Second Amendment and Limited Waiver to Second Lien Credit Agreement, dated as of November 15, 2012 (the “Second Amendment”) to waive certain “Anticipated Defaults” (as defined in the Second Amendment) through December 14, 2012 (the “Initial Waiver Period”); 
WHEREAS, the Borrower, the Lenders, and the Sponsor entered into that certain Third Amendment and Limited Waiver to Second Lien Credit Agreement, dated as of December 14, 2012 (the “Third Amendment”) to waive certain “Specified Defaults” (as defined in the Third Amendment, which definition includes the Anticipated Defaults);
WHEREAS, pursuant to the Third Amendment, the Lenders agreed to extend the Initial Waiver Period through January 15, 2013 upon the terms and subject to the conditions set forth therein;
WHEREAS, the Lenders have again agreed to extend the Initial Waiver Period and thereby temporarily waive the Specified Defaults, and add a supplemental facility (the “Supplemental Loan”) to the Credit Agreement, in each case upon the terms and subject to the conditions set forth herein and in the Credit Agreement as amended hereby;
NOW THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto hereby agree as follows:
Section 1.Section References.  Unless otherwise expressly stated herein, all Section references herein shall refer to Sections of the Credit Agreement.

Section 2.Amendments to Credit Agreement.  Subject to the satisfaction of the conditions precedent set forth in Section 4 hereof, the Credit Agreement is hereby amended as of the Fourth Amendment Effective Date as follows:

2.1    Section 1.1 of the Credit Agreement is hereby amended by adding, or restating, as applicable, the following definitions in the appropriate alphabetical order:
“Annual Budget” has the meaning specified in the Fourth Amendment.
“Book Cash” means cumulative cash from all accounts and near-cash investments, less checks in float.

“Borrowing Request” has the meaning specified in Section 2.3.

“Commitment” means, collectively, the Initial Commitment and the Supplemental Commitment. 
“Fourth Amendment” means that certain Fourth Amendment and Limited Waiver to the Credit Agreement dated as of January 15, 2013, by and among the Borrower and the Lenders party thereto. 
“Fourth Amendment Effective Date” has the meaning specified in the Fourth Amendment.

“Initial Commitment” means, with respect to each Lender, the commitment of such Lender to make Initial Term Loans to the Borrower, which commitment is in the amount set forth opposite such Lender's name on Schedule I under the caption “Commitment”, as amended to reflect Assignments and as such amount may be reduced pursuant to this Agreement.  The aggregate amount of the Initial Commitments on the Closing Date equals $85,000,000.

“Initial Lender” means any Lender that has made an Initial Term Loan or that from time to time becomes a party hereto by execution of an Assignment of an Initial Term Loan, in each case together with its permitted successors and assigns.

“Initial Term Loan” has the meaning specified in Section 2.1.

“Lender” means as applicable, an Initial Lender or a Supplemental Lender, and “Lenders” means the Initial Lenders and the Supplemental Lenders.

“Limited Waiver Termination Date” has the meaning specified in the Fourth Amendment. 
“Minimum Liquidity” means the Borrower's projected Book Cash, plus the undrawn amount of the Supplemental Commitment, on the proposed funding date of a Supplemental Loan, before giving effect to the requested Supplemental Loan.

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“Projected Liquidity” means the difference of (A) the Borrower's Book Cash on the date that a Borrowing Request is submitted minus (B) projected cash disbursements from and after the delivery of the  Borrowing Request to and including the proposed funding date of a Supplemental Loan.

“Required Supplemental Lenders” means at any time, Supplemental Lenders having at such time in excess of 66 2/3% of the aggregate Supplemental Commitments (or, if such Supplemental Commitments are terminated, the Pro Rata Outstandings with respect to the Supplemental Loan) then in effect.

“Supplemental Commitment” means, with respect to each Supplemental Lender, the commitment of such Supplemental Lender to make a Supplemental Loan to the Borrower in the amount specified on Schedule II.  The aggregate amount of the Supplemental Commitments on the Fourth Amendment Effective Date equals $5,000,000.

“Supplemental Lender” means any financial institution or other Person that (a) is listed on the signature pages hereof as a “Supplemental Lender” or (b) from time to time becomes a party hereto in such capacity by execution of an Assignment of a Supplemental Loan, in each case together with its permitted successors and assigns.

“Supplemental Loan” has the meaning specified in Section 2.1.

“Supplemental Loan Maturity Date” means February 28, 2013 or such earlier date on which the Supplemental Loan is accelerated automatically or with the consent of Required Supplemental Lenders upon the occurrence of any Event of Default.
        
“Term Loan” means, as applicable, an Initial Term Loan or a Supplemental Loan and “Term Loans” means the Initial Term Loans and the Supplemental Loans.

“Weekly Budget” means a weekly budget through February 28, 2013 showing anticipated receipts and disbursements.

2.2    Section 2.1 is hereby amended to read in its entirety as follows:

“The Commitments.  On the terms and subject to the conditions contained in this Agreement, each Initial Lender that is listed on the signature pages hereof as a “Lender” severally, but not jointly, agrees to make a loan (each an “Initial Term Loan”) in Dollars to the Borrower on the Closing Date, in an amount not to exceed such Lender's Initial Commitment.  On the terms and subject to the conditions contained in this Agreement, each Supplemental Lender severally, but not jointly, agrees to make supplemental Term Loans (each a “Supplemental Loan”) in Dollars to the Borrower, in an amount not to exceed such Supplemental Lender's Supplemental Commitment.  Amounts of Initial Term Loans and Supplemental Loans repaid may not be reborrowed.”

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2.3    Section 2.3 is hereby amended to read in its entirety as follows:

“Availability of Supplemental Loans.  Supplemental Loans shall only be available upon the satisfaction of all other terms and conditions of this Agreement.  All borrowing requests with respect to the Supplemental Loans shall be in a minimum principal amount of $1,000,000 or the remaining amount of the Supplemental Commitment, if less, and shall be made exactly three (3) Business Days prior to the proposed funding date by written notice to the Syndication Agent and Administrative Agent.  Written notices for all funding requests shall be in the form attached hereto as Schedule III (each, a “Borrowing Request”).”  

2.4    Section 2.5 is hereby amended to read in its entirety as follows:

“Termination of the Commitments.  All outstanding Initial Commitments shall terminate on the Closing Date (after giving effect to the Borrowing occurring on such date).  All outstanding Supplemental Commitments shall terminate on the Supplemental Loan Maturity Date, subject to earlier termination pursuant to Section 9.2(b) hereof.

2.5    Section 2.6 is hereby amended to read in its entirety as follows:

“Repayment of Term Loans.  The Borrower promises to repay the entire unpaid principal amount of the Initial Term Loans and all accrued and unpaid interest on such Initial Term Loans on the Maturity Date.  The Borrower promises to repay the entire unpaid principal amount of the Supplemental Loans and all accrued and unpaid interest on such Supplemental Loans on the Supplemental Loan Maturity Date.”

2.6    Section 2.9 is hereby amended by adding the following paragraph at the end of such section:

“(e)    Interest on Supplemental Loans.  Notwithstanding anything to the contrary contained herein, the Supplemental Loans shall bear interest at the Eurodollar Rate for a one month Interest Period (which for purposes of this Section 2.9(e) shall not be less than 1.5%) plus 11.5%.  The Borrower shall pay such interest payments to the Supplemental Lenders in cash on the last Business Day of each month and on the Supplemental Loan Maturity Date.” 

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2.7    Section 2.10 is hereby amended by adding the following sentence to the end of such section:

“Notwithstanding anything to the contrary contained herein, Supplemental Loans shall be maintained as Eurodollar Rate Loans with a one month Interest Period and may not be converted to Base Rate Loans.  Supplemental Loans funded less than one month prior to the Supplemental Loan Maturity Date shall not be subject to any breakage costs that may otherwise be owing pursuant to Section 2.16(a) upon repayment of such Supplemental Loans on the Supplemental Loan Maturity Date.”

2.8    Section 2.11 is hereby amended by adding the following sentence to the end of such section:

“On the Fourth Amendment Effective Date, the Borrower shall pay to the Lenders a fully earned and nonrefundable fee of $125,000, which fee shall be added to the principal balance of the Supplemental Loans, but for avoidance of doubt shall not reduce the available amount of Supplemental Commitments.”

2.9    Section 2.12 is hereby amended to read in its entirety as follows:  

“(a)     Application of Voluntary Prepayments.  Unless otherwise provided in this Section 2.12 or elsewhere in any Loan Document, all payments and any other amounts received by the Administrative Agent from or for the benefit of the Borrower shall be applied to repay the Obligations the Borrower designates; provided, however that in no event shall any interest (other than interest paid in kind) or principal of any Initial Term Loans be paid prior to payment in full of the Supplemental Loans.

(b)    Application of Mandatory Prepayments.  Subject to the provisions of clause (c) below with respect to the application of payments during the continuance of an Event of Default, any payment made by the Borrower to the Administrative Agent pursuant to Section 2.8 or any other prepayment of the Obligations required to be applied in accordance with this clause (b) shall be applied first, to repay the outstanding principal balance of the Supplemental Loans, second, to repay the outstanding principal balance of the Initial Term Loans, and third, to repay all other Obligations due and payable hereunder and, then, with any excess to be distributed to the Borrower.

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(c)    Application of Payments During an Event of Default.  The Borrower hereby irrevocably waives, and agrees to cause each other Group Member to waive, the right to direct the application during the continuance of an Event of Default of any and all payments in respect of any Obligation and any proceeds of Collateral and agrees that, notwithstanding the provisions of clause (a) above, the Administrative Agent may, and, upon either (A) the direction of the Required Lenders or (B) the acceleration of any Obligation pursuant to Section 9.2, shall, subject to the terms of the Intercreditor Agreement, apply all payments in respect of any Obligation, all funds on deposit in any Cash Collateral Account and all proceeds of Collateral (i) first, to pay Obligations in respect of any cost or expense reimbursements, fees or indemnities then due to the Administrative Agent, (ii) second, to pay Obligations in respect of any cost or expense reimbursements, fees or indemnities then due to the Arranger and the Syndication Agent, (iii) third, to pay Obligations in respect of any cost or expense reimbursements, fees or indemnities then due to the Supplemental Lenders, (iv) fourth, to pay interest then due and payable in respect of the Supplemental Loans, (v) fifth, to repay the outstanding principal amounts of the Supplemental Loans, (vi) sixth, to pay Obligations in respect of any cost or expense reimbursements, fees or indemnities then due to the Initial Lenders, (vii) seventh, to pay interest then due and payable in respect of the Initial Term Loans, (viii) eighth, to repay the outstanding principal amounts of the Initial Term Loans, (ix) ninth, to the ratable payment of all other Obligations, and (x) tenth, to the Borrower or such other Person entitled thereto under applicable law.

(d)    Application of Payments Generally.  All repayments (including prepayments) of any Term Loans shall be applied to repay the Supplemental Loans prior to the Initial Term Loans, and to repay such Initial Term Loans outstanding as Base Rate Loans prior to such Term Loans outstanding as Eurodollar Rate Loans, with those Eurodollar Rate Loans having earlier expiring Interest Periods being repaid prior to those having later expiring Interest Periods.  All repayments of Term Loans shall be allocated ratably among (x) the Supplemental Loans as a single class and (y) the Initial Term Loans as a single class.  If sufficient amounts are not available to repay all outstanding Obligations described in any priority level set forth in this Section 2.12, the available amounts shall be applied, unless otherwise expressly specified herein, to such Obligations ratably based on the proportion of the Secured Parties' interest in such Obligations.  Any priority level set forth in this Section 2.12 that includes interest shall include all such interest, whether or not accruing after the filing of any petition in bankruptcy or the commencement of any insolvency, reorganization or similar proceeding, and whether or not a claim for post-filing or post-petition interest is allowed in any such proceeding.

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(e)    Prepayment Premium.  Each prepayment pursuant to Section 2.7 or Section 2.8(b)(ii) made by the Borrower on or prior to the first anniversary of the Closing Date shall be accompanied by the Make Whole Amount.  Each prepayment pursuant to Section 2.7 or Section 2.8(b)(ii) after the first anniversary of the Closing Date but on or prior to the fourth anniversary of the Closing Date shall be made by Borrower at (i) 103.0% of the principal amount of the Term Loans so prepaid if such prepayment occurs on or prior to the second anniversary of the Closing Date, (ii) 102.0% of the principal amount of the Term Loans so prepaid if such prepayment occurs after the second anniversary of the Closing Date, but on or prior to the third anniversary of the Closing Date and (iii) 101.0% of the principal amount of the Term Loans so prepaid if such prepayment occurs after the third anniversary of the Closing Date, but on or prior to the fourth anniversary of the Closing Date.  Notwithstanding the forgoing, Borrower may prepay Supplemental Loans by paying 103.0% of the principal amount of the Supplemental Loans so prepaid, together with any accrued unpaid interest.”    

2.10    Section 2.13 of the Credit Agreement is hereby amended by adding “and Monday, February 11, 2013” after the phrase “November 9, 2012,” and adding the following provision to the end of such section:
“; provided, however, that the interest payment due on February 11, 2013 may only be paid in kind if no Default is continuing on such date.”
        
2.11    A new Section 3.3 of the Credit Agreement is hereby added which will read in its entirety as follows:

“Section 3.3    Conditions Precedent to Supplemental Loans.
The obligation of each Supplemental Lender to make any Supplemental  Loan on any date is subject to the satisfaction or due waiver of each of the following conditions precedent, unless waived by the Required Supplemental Lenders in their sole and absolute discretion:

(a)    The Borrower shall have delivered the Weekly Budget on or before the Fourth Amendment Effective Date.

(b)    The representations and warranties set forth in any Loan Document (provided that Section 4.5 shall be tested with reference to the Fourth Amendment Effective Date instead of December 31, 2010 and further provided that Section 4.6 is excluded) shall be true and correct in all material respects (but in all respects if such representation or warranty is qualified by “material” or “Material Adverse Effect”) on and as of such date or, to the extent such representations and warranties expressly relate to an earlier date, on and as of such earlier date (but in all respects if such representation or warranty is qualified by “material” or “Material Adverse Effect).

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(c)    No Default shall be continuing. 

(d)    The Administrative Agent and Syndication Agent shall have received a written, timely and duly executed and completed Borrowing Request.

(e)    (i) Projected Liquidity does not exceed $2,500,000, (ii) by 5:00 pm (ET) on the date before the Supplemental Loan is to be funded, the CFO shall have certified that the Borrower's actual Book Cash minus disbursements made or projected to be made through the end of date of such funding is below $2,500,000, (iii) as of the Borrowing Request date, the Minimum Liquidity shall not be projected to be less than $500,000 on the proposed funding date, and (iv) by 5:00 pm (ET) on the date before the Supplemental Loan is to be funded, the CFO shall have certified that the Borrower's Book Cash on the Supplemental Loan funding date will be no greater than $3,500,000 after giving effect to such Supplemental Loan and all projected disbursments on such date; provided, however, that in the event the condition in clause (e)(iv) is the only condition not satisfied, the Supplemental Loan shall be made, but reduced by the amount necessary to comply with such condition.

2.12    Section 7 of the Credit Agreement is hereby amended by adding a new Section 7.17, which shall read in its entirety as follows:

Section 7.17      Budget Covenants.  The Borrower shall operate in compliance with the Annual Budget in all material respects, provided that the Loan Parties may incur reasonable and necessary unanticipated expenditures, including, without limitation, unscheduled maintenance expenses or unscheduled capital expenditure expenses, up to $500,000 in the aggregate.

2.13    Section 9.1(c)(ii) of the Credit Agreement is hereby amended to  add “or 7.17 (Budget Covenants),” after the phrase “6.1(d), (f), (g) or (h) (Financial Statements).”

2.14      Section 9.1 of the Credit Agreement is hereby amended by (i) deleting “or” at the end of clause (h) thereof, (ii) replacing the period at the end of clause (i) thereof with “; or” and  adding the following new clause (j):

“(j)    there occurs any event that would reasonably be expected to result in a Material Adverse Effect, tested with reference to the Fourth Amendment Effective Date as the reference point for comparison, which determination shall be made solely by the Required Lenders in their reasonable discretion.”

2.15    Section 9.2 is hereby amended by adding “(a)” before the first section and adding the following section (b):

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(b)    Suspension or Termination of Supplemental Commitment.  Upon the occurrence of any Default or Event of Default, the Syndication Agent may, and at the request of the Required Supplemental Lenders, the Syndication Agent shall, without notice or demand, immediately suspend or terminate the Supplemental Lenders' obligations to make any additional Supplemental Loans.  

Section 3.Limited Waiver.
3.1    Solely during the Waiver Period (as defined below) and not at any other time, the Lenders hereby agree to temporarily waive the Specified Defaults and the right to accelerate the Obligations as a result thereof.    During the Waiver Period, the Specified Defaults shall be deemed not to have occurred or be continuing, and the Administrative Agent and the Lenders shall have no right to enforce rights or exercise remedies with respect to the Specified Defaults.  The waivers provided pursuant to the terms of this Agreement shall automatically and without further action or notice by any party expire on the Limited Waiver Termination Date (as defined below).  
3.2    No waiver provided herein shall remain in effect after the Limited Waiver Termination Date.  Upon the Limited Waiver Termination Date, (i) the Anticipated Defaults shall be deemed to be Events of Default in full force and effect, having occurred as of September 30, 2012 and continuing uninterrupted thereafter, and (ii) all other Specified Defaults shall be deemed to be Events of Default in full force and effect, having occurred as of December 31, 2012 and continuing uninterrupted thereafter, in each case of clauses (i) and (ii), for all purposes, including, without limitation, for purposes of calculating and charging default interest under Section 2.9(c) of the Credit Agreement, and the Administrative Agent and the Lenders shall retain all of the rights and remedies related thereto.  This Agreement shall not have the effect of tolling or extending any applicable cure period beyond the period that would have applied absent this Agreement.  Nothing in this Agreement shall be deemed to constitute a waiver by the Administrative Agent or the Lenders of any Default, whether now existing or hereafter arising, or of any right or remedy the Administrative Agent or the Lenders may have under any of the Loan Documents or applicable law, except to the extent expressly set forth herein, nor shall the Lenders' execution and delivery of this Agreement establish a course of dealing among the Lenders and the Borrower or in any way obligate the Lenders to hereafter provide any further waiver of any kind, to provide any further time prior to the enforcement of their rights or to provide any other financial accommodations to or on behalf of the Borrower or any other Loan Party.
3.3    Notwithstanding anything to the contrary herein, the Lenders do not now waive, nor do they agree that they will waive in the future, any further Default or Event of Default.  Neither this Agreement nor any course of dealing or delay or failure of the Lenders in exercising any right, remedy, power or privilege under or in connection with any Event of Default shall affect any other or future exercise thereof or the existence of any other right, remedy, power or privilege, except to the extent expressly set forth herein; nor shall any single or partial exercise of any such right, remedy, power or privilege or any abandonment or discontinuance of the steps to enforce any such right, remedy, power or privilege (pursuant to this Agreement or otherwise) preclude any further exercise thereof or of any other right, remedy, power or privilege, except to the extent expressly set forth herein.

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For the purposes hereof,
“Limited Waiver Termination Date” means the earlier to occur of:
(i)  5:00 p.m. (New York city time) on Thursday, February 28, 2013; or
(ii)  the date on which a Limited Waiver Termination Event occurs.
“Limited Waiver Termination Event” means any of the following:
(i)  the occurrence of any Event of Default or Default other than the Specified Defaults;
(ii) any representation or warranty made by any Loan Party in connection with this Agreement shall prove to be false in any material respect (but in all respects if such representation is qualified by “material” or “Material Adverse Effect”) as of the date when made; 
(iii)  the failure of any Loan Party to comply with any term, condition or covenant set forth in this Agreement; 
(iv)  any Loan Party modifies or amends its agreements with CBS Radio Inc., in any material manner that is unacceptable to the Required Lenders and such amendment or modification has not been made acceptable to the Required Lenders within three (3) Business Days after written notice to Borrower of such unacceptability; or
(v) the expiration of the “Waiver Period” under and as defined in the First Lien Limited Waiver (defined below).
“Waiver Period” means the period beginning on the Second Amendment Effective Date and ending on the Limited Waiver Termination Date.
Section 4.Conditions Precedent.  The effectiveness of this Agreement is subject to the following conditions precedent:
4.1    The Administrative Agent shall have received each of the following:
(a)    Agreement.  This Agreement, duly executed and delivered by each Loan Party and the Required Lenders; 

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(b)    First Lien Waiver.  (i) A copy of the waiver to the First Lien Credit Agreement entered into by the Loan Parties and the Required Lenders (as defined in the First Lien Credit Agreement) in the form attached hereto as Exhibit A (the “First Lien Limited Waiver”) and (ii) evidence satisfactory to the Administrative Agent that such waiver has been executed and delivered and is in full force and effect on or prior to the Fourth Amendment Effective Date; 
(c)    Intercreditor Amendment.  An amendment to the Intercreditor Agreement in substantially the form attached hereto as Exhibit B, which shall have been duly executed and delivered by the parties thereto; 
(d)    Payment of Professionals.  The Borrower shall have paid all reasonable and documented accrued and unpaid fees and expenses through the Fourth Amendment Effective Date of Capstone Advisory Group, LLC and Latham & Watkins LLP that have been requested pursuant to an invoice delivered to the Chief Financial Officer of the Borrower on or prior to the Fourth Amendment Effective Date; 
(e)    Weekly Budget.  The Borrower shall have delivered the Weekly Budget to the Syndication Agent; 
(f)    Annual Budget.  The Borrower shall have answered all material questions of Capstone Advisory Group, LLC with respect to the annual budget initially delivered to the Lenders on January 4th and 5th of 2013 (the “Annual Budget”); and 
(g)     Term Sheet.  The Borrower, Sponsor, and Required First Lien Lenders shall have agreed to a non-binding restructuring term sheet in form and substance acceptable to the Required Lenders.
Section 5.Representations and Warranties; Reaffirmation of Grant.  Each Loan Party hereby represents and warrants to the Administrative Agent and the Lenders that, as of the Fourth Amendment Effective Date immediately after giving effect to this Agreement, (a) all representations and warranties of the Loan Parties set forth in the Credit Agreement and in any other Loan Document (provided that Section 4.5 shall be tested with reference to the Third Amendment Effective Date instead of December 31, 2010 (and shall exclude any Material Adverse Effect based on facts disclosed in writing to the Syndication Agent or a representative previously designated by the Lenders to receive such material (the “Lender Designee”) prior to the Fourth Amendment Effective Date) and further provided that Section 4.6 of the Credit Agreement is excluded), are true and correct in all material respects (but in all respects if such representation or warranty is qualified by “material” or “Material Adverse Effect”) on and as of the Fourth Amendment Effective Date to the same extent as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects (but in all respects if such representation or warranty is qualified by “material” or “Material Adverse Effect”) on and as of such earlier date, (b) no Default or Event of Default has occurred and is continuing, (c) the Credit 

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Agreement (as amended by this Agreement) and all other Loan Documents are and remain legally valid, binding obligations of the Loan Parties, enforceable against each such Loan Party in accordance with their respective terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors' rights generally or by equitable principles relating to enforceability, (d) each of the Loan Documents to which such Loan Party is a party pursuant to which a Lien has been granted in favor of the Administrative Agent and all of the Collateral described therein do and shall continue to secure the payment of all Obligations as set forth in such respective Loan Documents, and (e) all contracts that generated more than 5% of the consolidated total revenue of the Borrower and its Subsidiaries for the four quarter period ending on September 30, 2012 have been provided to the Syndication Agent.  Each Loan Party that is a party to the Guaranty and Security Agreement or any of the Loan Documents pursuant to which a Lien has been granted in favor of the Administrative Agent hereby reaffirms its grant of a security interest in the Collateral to the Administrative Agent for the ratable benefit of the Secured Parties, as collateral security for the prompt and complete payment and performance when due of the Obligations.

Section 6.     Release; Covenants; Acknowledgement
6.1    Each Loan Party hereby absolutely and unconditionally releases and forever discharges the Administrative Agent, the Syndication Agent, each Lender and each of their respective Related Persons (each a “Released Party”), from any and all claims, demands or causes of action of any kind, nature or description, whether arising in law or equity or upon contract or tort or under any state or federal law or otherwise, which any Loan Party has had, now has or has made claim to have against any such person for or by reason of any act, omission, matter, cause or thing whatsoever in connection with the Credit Agreement arising from the beginning of time to and including the Fourth Amendment Effective Date, whether such claims, demands and causes of action are matured or unmatured or known or unknown.  It is the intention of each Loan Party in providing this release that the same shall be effective as a bar to each and every claim, demand and cause of action specified in the immediately preceding sentence.  Each Loan Party acknowledges that it may hereafter discover facts different from or in addition to those now known or believed to be true with respect to such claims, demands, or causes of action and agree that this instrument shall be and remain effective in all respects notwithstanding any such differences or additional facts.  Each Loan Party understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.

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6.2    Each Loan Party, on behalf of itself and its successors, assigns, and other legal representatives, hereby absolutely, unconditionally and irrevocably, covenants and agrees with and in favor of each Released Party above that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Released Party on the basis of any claim released, remised and discharged by any Loan Party pursuant to the above release.  If any Loan Party or any of their successors, assigns or other legal representatives violates the foregoing covenant, each Loan Party, for itself and its successors, assigns and legal representatives, agrees to pay, in addition to such other damages as any Released Party may sustain as a result of such violation, all reasonable attorneys' fees and costs incurred by such Released Party as a result of such violation.
6.3    Each Loan Party represents and warrants that, to its knowledge, there are no liabilities, claims, suits, debts, liens, losses, causes of action, demands, rights, damages or costs, or expenses of any kind, character or nature whatsoever, known or unknown, fixed or contingent, which any Loan Party may have or claim to have against any Released Party arising with respect to the Obligations, the Credit Agreement, this Agreement or any other Loan Document.
6.4    Each Released Party agrees that nothing set forth in this Section 6 is intended to, nor shall anything set forth in this Section 6 be construed to, terminate any contractual obligations of the Released Parties to the Loan Parties under the Credit Agreement or the other Loan Documents, which shall remain in full force and effect. 
6.5    Members of management and any financial advisor of any Loan Party will be reasonably available to the Lenders and their advisors on reasonable advance notice and subject to customary confidentiality arrangements to discuss the operations, prospects, and financial status of the Loan Parties in a manner reasonably satisfactory to the Lenders and the Lender Designee.  The Borrower shall (a) conduct onsite in-person weekly meetings with the Lender Designee and representatives separately designated by the First Lien Lenders (collectively with the Lender Designee, the “Lender Designees”) and provide such Lender Designees with daily access to the Chief Executive Officer and Chief Financial Officer of the Borrower on reasonable notice and (b) provide the Syndication Agent with reasonably detailed weekly updates regarding the Borrower's progress on strategic alternatives and restructuring initiatives.  Any failure to comply with any provision of this Section 6.5 shall constitute an immediate Limited Waiver Termination Event.      
Section 7.     Survival.  All representations and warranties made in this Agreement or any other Loan Document shall survive the execution and delivery of this Agreement, and no investigation by the Administrative Agent, Syndication Agent, or the Lenders shall affect the representations and warranties or the right of the Administrative Agent, Syndication Agent, and the Lenders to rely upon them.
 
Section 8.     Reference to Agreement.  The Credit Agreement is hereby amended so that any reference in the Loan Documents to the Credit Agreement, whether direct or indirect, shall mean a reference to the Credit Agreement as amended hereby.  This Agreement shall constitute a Loan Document under the Credit Agreement.

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Section 9.     Costs and Expenses of the Administrative Agent and Syndication Agent.  The Borrower shall pay on demand all reasonable out-of-pocket and documented costs and expenses of the Administrative Agent and Syndication Agent (including the reasonable fees, costs and expenses of counsel to the Administrative Agent and Syndication Agent) incurred in connection with the preparation, execution and delivery of this Agreement.  The Borrower shall continue to pay the fees and expenses of Capstone Advisory Group, LLC in accordance with the Engagement Letter, dated as of November 15, 2012, between Capstone Advisory Group, LLC and Latham & Watkins LLP, as amended.

Section 10.     Governing Law.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE STATE OF NEW YORK.

Section 11.     Execution.  This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of a signature page to this Agreement by telecopier (or electronic mail (in PDF format)) shall be effective as delivery of a manually executed counterpart of this Agreement.

Section 12.     Limited Effect.  This Agreement relates only to the specific matters expressly covered herein, shall not be considered to be a waiver of any rights, claims or remedies any Lender may have under the Credit Agreement or under any other Loan Document (except as expressly set forth herein) or under applicable law, and shall not be considered to create a course of dealing or to otherwise obligate in any respect any Lender to execute similar or other amendments or grant any waivers under the same or similar or other circumstances in the future.

Section 13.     Ratification by Guarantors; Other Matters.
  
13.1        Ratification by Guarantors.  Each of the Guarantors acknowledges that its consent to this Agreement is not required, but each of the undersigned nevertheless does hereby agree and consent to this Agreement and to the documents and agreements referred to herein.  Each of the Guarantors agrees and acknowledges that (i) notwithstanding the effectiveness of this Agreement, such Guarantor's guaranty under the Guaranty and Security Agreement shall remain in full force and effect without modification thereto and (ii) nothing herein shall in any way limit any of the terms or provisions of such Guarantor's guaranty or any other Loan Document executed by such Guarantor (as the same may be amended from time to time), all of which are hereby ratified, confirmed and affirmed in all respects.  Each of the Guarantors hereby agrees and acknowledges that no other agreement, instrument, consent or document shall be required to give effect to this section.  Each of the Guarantors hereby further acknowledges that the Borrower, the Administrative Agent and any Lender may from time to time enter into any further amendments, modifications, terminations and/or waivers of any provisions of the Loan Documents without notice to or consent from such Guarantor and without affecting the validity or enforceability of such Guarantor's guaranty or giving rise to any reduction, limitation, impairment, discharge or termination of such Guarantor's guaranty.

14

13.2    Other Matters.  The Borrower shall (a) not modify or amend any of its material agreements in a manner materially adverse to the Borrower, taken as a whole with respect to each such agreement, (b) provide updates at least once per week on the status of negotiations with CBS Radio Inc., or more frequently if necessary to keep the Lenders informed of all material developments and consult with the Lenders with respect to such negotiations and developments, (c) cause the Required Professional (as defined in the Third Amendment) to provide a sufficiently detailed oral or written weekly report to the Lenders and Capstone Advisory Group, LLC describing his efforts from the prior week, and make the Required Professional available to discuss such efforts with the Lenders and Capstone Advisory Group, LLC with reasonable advance notice, (d) provide a weekly analysis of upfront sales on an account-level basis to the Lender Designees for their eyes only, provided that the Lender Designees may prepare and deliver to the Lenders and First Lien Lenders a high level summary thereof provided that such summary shall have been previously reviewed by, and shall be in form and substance reasonably acceptable to, the Borrower, (e) deliver (i) a final budget for the 2013 calendar year in form, scope and substance acceptable to the Required Lenders in their reasonable discretion, which shall include a monthly income statement, balance sheet and cash flow statement, in each case incorporating revised major contracts terms, revised sales compensation, restructuring costs, and other cost savings and (ii) forecasted quarterly income statements, balance sheet and cash flow statements through the term of the Facilities, in form, scope and substance acceptable to the Required Lenders in their reasonable discretion, in each case, no later than February 1, 2013, including a detailed set of assumptions on which such final budget and forecast are based, (f) deliver a comprehensive summary of requested modifications to the First Lien Credit Agreement by February 1, 2013, (g) execute a binding restructuring support agreement in form, scope and substance acceptable to the Required Lenders by February 22, 2013, and (h) execute and deliver definitive documentation with respect to the “Transaction” as defined in and contemplated by the Term Sheet, all in form, scope and substance acceptable to the Required Lenders, and consummate such Transaction by February 28, 2013.  Any failure to comply with the foregoing provisions of this Section 13.2 shall constitute an immediate Limited Waiver Termination Event.  
Section 14.    Sponsor Agreement.  Each Sponsor agrees, on behalf of itself and the other Affiliated Lenders directly or indirectly controlled by such Sponsor, that for the period beginning on the Fourth Amendment Effective Date and ending on the 100th day following the Limited Waiver Termination Date, it shall not acquire any interest (including any participation interest) in any loan made pursuant to Section 7.16(B) of the Credit Agreement, without (i) first notifying the Syndication Agent in writing ten (10) Business Days prior to making any offer to acquire such interest, and (ii) allowing the Lenders to acquire such interest instead, on terms substantially similar in all material respects to such proposal; provided that, if the Lenders have made such a bona fide and binding matching offer, the Sponsors and the other Affiliated Lenders directly or indirectly controlled by any Sponsor shall not acquire any such interest.

15

Section 15.     Amendment to Intercreditor Agreement.  The Lenders hereby authorize and direct the Administrative Agent to enter into an amendment to the Intercreditor Agreement in substantially the form attached hereto as Exhibit B.

 [signature pages follow]

16

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written. 

DIAL GLOBAL, INC. (f/k/a WESTWOOD ONE, INC.),
as Borrower
 

By:    /S/ SPENCER BROWN                        
Name:  Spencer Brown
Title:    Chief Executive Officer

WESTWOOD ONE PROPERTIES, INC.,
WESTWOOD ONE STATIONS - NYC, INC.,
WESTWOOD ONE RADIO, INC.,
WESTWOOD ONE RADIO NETWORKS, INC.,
WESTWOOD NATIONAL RADIO CORPORATION, 
VERGE MEDIA COMPANIES, LLC, 
VERGE MEDIA GROUP HOLDINGS, INC,.
VERGE MEDIA INTERMEDIATE HOLDINGS, INC.,
VERGE MEDIA, INC.,
VERGE MEDIA SOLUTIONS, LLC, 
EXCELSIOR RADIO NETWORKS, LLC,
EXBT, LLC, 
DIAL COMMUNICATIONS GLOBAL MEDIA, LLC, 
EXCELSIOR NETWORK GROUP, LLC, 
RDG EXCELSIOR HOLDINGS, LLC,
EXCELSIORTM, INC.,
EXCELSIOR MEDIA NETWORKS, LLC, 
JPN, LLC, 
EXCELSIOR RADIO NETWORK VENTURES, LLC, 
EXCELSIOR RADIO HOLDINGS, LLC, 
EXCELSIOR MEDIAAMERICA, INC.,
DG RADIO NETWORKS, LLC,
AMERICAN COMEDY NETWORK, LLC, and
GORADIO, LLC,
as Guarantors 

By:    /S/ SPENCER BROWN                    
     Name:   Spencer Brown     
Title:    Chief Executive Officer

MIHI LLC, as a Lender 

By:    /S/ JOSEPH DITOMASO                    
Name:  Joseph DiTomaso
Title:    Authorized Signatory

By:    /S/ KEVIN S. SMITH                    
Name:  Kevin S. Smith
Title:    Authorized Signatory

 

18

GRACE BAY HOLDINGS II, LLC, as a Lender 

By:    /S/ JOHN BOLDUC                    
Name:  John Bolduc
Title:    Authorized Signatory 

BLACKROCK KELSO CAPITAL CORPORATION, as a Lender and a Supplemental Lender

By:    BlackRock Kelso Capital Advisors LLC
its Investment Advisor

By:    /S/ MICHAEL LAZAR
Name:    Michael Lazar
Title:    Chief Operating Officer

20

OCM Principal Opportunities Fund III, L.P., with respect to Section 14 only

By: OCM Principal Opportunities Fund III GP, L.P.
Its: General Partner

By: Oaktree Fund GP I, L.P.
Its: General Partner

By:    /S/ RICHARD GOLDSTEIN                    
Name:  Richard Goldstein
Title: Authorized Signatory

By:    /S/ DAVID QUICK                    
Name:  David Quick
Title: Authorized Signatory

OCM Principal Opportunities Fund IIIA, L.P., with respect to Section 14 only

By: OCM Principal Opportunities Fund III GP, L.P.
Its: General Partner

By: Oaktree Fund GP I, L.P.
Its: General Partner

By:    /S/ RICHARD GOLDSTEIN                    
Name:  Richard Goldstein
Title: Authorized Signatory

By:    /S/ DAVID QUICK                        
Name:  David Quick
Title: Authorized Signatory

OCM Principal Opportunities Fund IV, L.P., with respect to Section 14 only

By: OCM Principal Opportunities Fund IV GP, L.P.
Its: General Partner

By: OCM Principal Opportunities Fund IV GP, Ltd.
Its: General Partner

By:    /S/ RICHARD GOLDSTEIN                    
Name:  Richard Goldstein
Title: Managing Director

By:    /S/ DAVID QUICK                        
Name:  David Quick
Title: Senior Vice President

22

Gores Radio Holdings, LLC, as a Sponsor and with respect to Section 14 only

By:    /S/ MARK STONE                    
Name:  Mark Stone 
Title:

 
EXHIBIT A 
First Lien Limited Waiver
Refer to Exhibit 10.1

EXHIBIT B
Third Amendment to Intercreditor Agreement 
Intentionally omitted.

SCHEDULE II
Supplemental Loan Commitments

	
		
	Lender
	Supplemental Commitment

	BLACKROCK KELSO CAPITAL CORPORATION
	$5,000,000

SCHEDULE III
Form of Supplemental Loan Borrowing Request

___________, _____

Macquarie Capital
125 West 55th Street 
New York, NY 10019
Attention:  Dial Global Account Manager

Cortland Capital Market Services
225 W. Washington St.
[Suite 1450]
Chicago, IL 60606

Ladies and Gentlemen:

The undersigned representative (“Borrower Representative”) refers to the Second Lien Credit Agreement, dated as of October 21, 2011 (as amended, restated, or otherwise modified from time to time, the “Credit Agreement,” the terms defined therein being used herein as therein defined), by and among Dial Global Inc. (f/k/a Westwood One, Inc.), as Borrower, the other Persons named therein as Loan Parties, Macquarie Capital (USA) Inc., as Syndication Agent, Cortland Capital Market Services LLC, as Administrative Agent, and the Lenders, and hereby irrevocably gives you notice, pursuant to Section 2.3 of the Credit Agreement, that the undersigned hereby requests a Supplemental Loan under the Credit Agreement, and in that connection sets forth below the information relating to such request:
		
	(i)
	The date of the requested borrowing of the Supplemental Loan is __________, ____.

		
	(ii)
	The aggregate amount of the Supplemental Loan requested is $____________.

		
	(iii)
	The requested Supplemental Loan is to be sent to: 

[Name of Bank]
[City of Bank]
Beneficiary:
Account No.:  [number]
ABA No.:  [number]
Attn:  [name]

The undersigned hereby certifies that all of the conditions contained in Section 3.3 of the Credit Agreement are satisfied in all respects on the date hereof, and will be satisfied in all respects on the date of the requested borrowing of Supplemental Loan, before and after giving effect thereto and to the application of the proceeds therefrom.  If this borrowing request is in relation to an expense outside the Weekly Budget, the undersigned hereby certifies that the requested Supplemental Loan shall be used for [________].
[signature page follows]

DIAL GLOBAL, INC. (f/k/a WESTWOOD ONE, INC.),
as Borrower
 

By:                                        
     Name:   Spencer Brown     
Title:    Chief Executive Officer

WESTWOOD ONE PROPERTIES, INC.,
WESTWOOD ONE STATIONS - NYC, INC.,
WESTWOOD ONE RADIO, INC.,
WESTWOOD ONE RADIO NETWORKS, INC.,
WESTWOOD NATIONAL RADIO CORPORATION, 
VERGE MEDIA COMPANIES, LLC, 
VERGE MEDIA GROUP HOLDINGS, INC,.
VERGE MEDIA INTERMEDIATE HOLDINGS, INC.,
VERGE MEDIA, INC.,
VERGE MEDIA SOLUTIONS, LLC, 
EXCELSIOR RADIO NETWORKS, LLC,
EXBT, LLC, 
DIAL COMMUNICATIONS GLOBAL MEDIA, LLC, 
EXCELSIOR NETWORK GROUP, LLC, 
RDG EXCELSIOR HOLDINGS, LLC,
EXCELSIORTM, INC.,
EXCELSIOR MEDIA NETWORKS, LLC, 
JPN, LLC, 
EXCELSIOR RADIO NETWORK VENTURES, LLC, 
EXCELSIOR RADIO HOLDINGS, LLC, 
EXCELSIOR MEDIAAMERICA, INC.,
DG RADIO NETWORKS, LLC,
AMERICAN COMEDY NETWORK, LLC, and
GORADIO, LLC,
as Guarantors 

By:                                        
     Name:   Spencer Brown     
Title:    Chief Executive OfficerExhibit 10.1

EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (as the same may be amended, restated, supplemented or otherwise modified from time to time hereafter, this “Agreement”) is entered into by and between Columbia Laboratories, Inc., a Delaware corporation having its corporate offices at 354 Eisenhower Parkway, Livingston, New Jersey 07039 (the “Company”), and Jonathan B. Lloyd Jones (“Executive”).
WITNESSETH:
WHEREAS, the Company wishes to employ Executive on the terms and conditions set forth in this Agreement; and
WHEREAS, the Company and Executive desire to enter into this Agreement so the rights, duties, benefits, and obligations of each regarding Executive's employment for and by the Company will be fully set forth under the terms and conditions stated within this Agreement; 
NOW THEREFORE, in consideration of the mutual promises and undertakings hereunder, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
1.    At-will.  Executive's employment is “at will.”  Either the Executive or the Company may terminate the Executive's employment with the Company at any time for any or no reason.  Nothing in this Agreement or in any other statement shall be interpreted to be in conflict with or to eliminate or modify in any way the employment-at-will status of the Executive.  

2.    Title, Duties. 

(a)Executive shall be the Vice President, Finance, Chief Financial Officer, Treasurer, and Secretary of the Company. Executive will perform duties customarily associated with such position, including, but not limited to, duties relating to the management of the financial affairs of the Company and its affiliates, investor relations matters, and such other duties commensurate with the job description as may be assigned to him from time to time by the chief executive officer of the Company (the “Company CEO”). Executive shall have an office located in or near Boston, Massachusetts.

(b)Executive agrees to devote his entire business time and attention to the performance of his duties under this Agreement.  He shall perform his duties for the Company to the best of his ability and shall use his best efforts to further the interests of the Company.  Executive shall perform his duties and will be required to travel as reasonably necessary to perform the services required of him under this Agreement.  Executive represents and warrants to the Company that he is able to enter into this Agreement and that his ability to enter into this Agreement and to fully perform his duties hereunder are not limited to or restricted by any agreements or understandings between Executive and any other person.  For the purposes of this Agreement, the term “person” means any natural person, corporation, partnership, limited liability partnership, limited liability company, or any other entity of any nature.  

(c)Executive will observe the reasonable rules, regulations, policies and/or procedures which the Company may now or hereafter establish governing the conduct of its business, except to the extent that any such rules, regulations, policies and/or procedures may be inconsistent with the terms of this Agreement, in which case the terms of this Agreement shall control.  

3.    Employment Contract. The Company and Executive acknowledge that the terms of his employment are set forth in this Agreement.  If Executive's employment terminates for any reason, Executive shall not be entitled to any payments, benefits, damages, awards or compensation other than as provided in this Agreement.

4.    Compensation. 

(a)    Subject to tax withholdings and other legally required deductions, effective January 21, 2013, the Company will pay Executive an annual base compensation of $285,000 per year to be paid in accordance with the Company's normal payroll practices during the term of this Agreement (“Base Salary”).

(b)    In addition to Base Salary, Executive shall be eligible to receive an annual performance bonus as the Company's Board of Directors (“Board”) shall, in its sole discretion, deem appropriate based upon the parameters and criteria contained in the Company's bonus plan and in consultation with the Company CEO, and can range from 0% to 150% of targeted levels, depending on the degree of attainment of pre-established Company goals for a particular year. Executive's target bonus is equal to 40% of his Base Salary as then in effect. Notwithstanding the execution date of this Agreement, the determination of Executive's annual performance bonus for calendar year 2013 shall be based on the period from January 1, 2013 through December 31, 2013.  The bonus if any, shall be paid no later than March 15 following the end of each calendar year.

(c)    Executive shall also be eligible in the sole discretion of the Board or the Compensation Committee of the Board (or any committee of the Board that shall replace such committee) to participate in the Company's stock option plan as is from time to time in effect, subject to the terms and conditions of such plan.  The Executive shall receive on the last date written below (the “Grant Date”) an initial grant of 200,000 options to purchase shares of the Company's stock which options are to have a life of seven years and vest at the rate of one-quarter on each of the first four anniversaries of the Grant Date. 

5.    Benefits.

(a)    Executive and Executive's eligible dependents shall be eligible for all employee benefit programs (including any 401 (k), group life insurance, group medical, dental and vision, and short-term and long-term disability policies, plans and programs) generally available to other executive level employees of the Company.

(b)    Executive shall be entitled to accrue paid time off (“PTO”) during the term of this Agreement in accordance with the Company's standard policy and in an amount commensurate with other executive level employees of the Company.

(c)    Executive shall be entitled to reimbursement for reasonable business expenses for travel and entertainment incurred on behalf of the Company and other business-related expenses, in each case, upon submission of itemized receipts for such expenses.

6.    Termination Upon Death. Executive's employment shall terminate immediately upon his death.

7.    Compensation Upon Termination.

(a)    Subject to Section 7(e), if Executive's employment is terminated by the Executive's death or resignation or if Executive is terminated with or without Cause, Executive shall be entitled to receive (i) the Base Salary through the effective date of termination together with any accrued but unused vacation pay and (ii) in the case of termination without Cause, the Company shall pay to Executive an additional six months of his final Base Salary, which shall be paid to him within 60 days after the date of termination, subject to Paragraph 7(g).  Such payment shall be conditioned upon execution by Executive of a release of the Company which the Company shall present to Executive and which Executive shall sign no later than 30 days after the date of termination.  Executive shall not be entitled to any annual performance bonus for the year in which such termination occurs. 

(b)    For the purposes of clause (a) above, “Cause” shall mean (i) willful misconduct by the Executive which is seriously harmful to the Company's current and lawful business interests, (ii) Executive's conviction of a felony or misdemeanor, or (iii) Executive's refusal to carry out the directives of the Company CEO.

(c)    Subject to Section 7(e), Executive may terminate his employment hereunder with Good Reason as defined below at any time, upon 30 days' notice to the Company. In the event Executive terminates his employment with Good Reason, the Company shall pay to Executive (i) the Base Salary through the effective date of termination together with any accrued but unused vacation pay and (ii) in the case of termination for Good Reason, the Company shall pay to Executive an additional six months of his final Base Salary, which shall be paid to him within 60 days after the date of termination, subject to Paragraph 7(g).  Such payment shall be conditioned upon execution by Executive of a release of the Company which the Company shall present to Executive and which Executive shall sign no later than 30 days after the date of resignation or termination.  Executive shall not be entitled to any annual performance bonus for the year in which such termination occurs. 

(d)    

(e)    If Executive is terminated without Cause or resigns for Good Reason within six months after a Change of Control as defined below, the Company shall pay to Executive: (i) the Base Salary through the effective date of termination together with any accrued but unused vacation pay and (ii) the Company shall pay to Executive an additional six months of his final Base Salary, which shall be 

paid to him within 60 days after the date of termination, subject to Paragraph 7(g).  Such payment shall be conditioned upon execution by Executive of a release of the Company which the Company shall present to Executive and which Executive shall sign no later than 30 days after the date of resignation or termination.  Executive shall not be entitled to any annual performance bonus for the year in which such resignation or termination occurs. 

(f)    For the purposes of clause (e) above, a “Change of Control” shall occur if an entity, or a group of entities acting together, acquires control of 50% or more of the Company's voting securities with the power to elect a majority of the Board of Directors.

(g)    Notwithstanding anything contained herein to the contrary, all payments and benefits under this Paragraph 7 shall be paid or provided only at the time of a termination of the Executive's employment that constitutes a “separation from service” from the Company within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the 'Code”) and the regulations and guidance promulgated thereunder (determined after applying the presumptions set forth in Treas. Reg. Section 1.409A-1(h)(1)). Further, if the Executive is a “specified employee” as such term is defined under Section 409A of the Code, any payments described in this Paragraph 7 shall be delayed for a period of six (6) months following the Executive's separation from service to the extent and up to the amount necessary to ensure such payments are not subject to the penalties and interest under Section 409A of the Code.

8.    No Competition. Executive agrees that during the period of his employment by the Company and for a period of one year after the termination of his employment, Executive will not, without the Company's prior written consent, engage in any employment or other activity for any person, company or entity engaged in any business that is directly competitive with products that the Company is either developing or marketing at the time of the Executive's termination of employment.

9.    Confidentiality. The Employee Proprietary Information and Inventions Agreement to be executed on the date hereof, between the Company and Executive is attached hereto as Exhibit A and incorporated by reference as if fully set forth herein. 

10.    Indemnification.  The Indemnification Agreement executed on the date hereof, between the Company and Executive, is attached hereto as Exhibit B and incorporated by reference as if fully set forth herein.

11.    Cooperation. Executive agrees to cooperate on a reasonable basis in the truthful and honest prosecution and/or defense of any claim in which the Company, its affiliates, and/or its subsidiaries may have an interest (subject to reasonable limitations concerning time and place), which may include without limitation making himself available on a mutually agreed, reasonable basis to participate in any proceeding involving the Company, its affiliates, and/or its subsidiaries, allowing himself to be interviewed by representatives of the Company, its affiliates, and/or its subsidiaries without asserting or claiming any privilege against the Company, its affiliates, and/or its subsidiaries, appearing for depositions and testimony without requiring a subpoena and without asserting or claiming any privilege against the Company, its affiliates, and/or its subsidiaries, and producing and/or providing any documents or names of other persons with relevant information without asserting or claiming any privilege against the Company, its affiliates, and/or its subsidiaries; provided that, if such services are required after termination of this Agreement, the Company, its affiliates, and/or its subsidiaries shall provide Executive with reasonable compensation for the time actually expended in such endeavors and shall pay his reasonable expenses incurred at the prior and specific request of the Company, its affiliates, and/or its subsidiaries.

12.    Remedies. Executive acknowledges and agrees that the Company's remedy at law for a breach or threatened breach of the provisions of this Agreement would be inadequate and, in recognition of this fact, in the event of a breach or threatened breach by Executive of any provision of this Agreement, it is agreed that, in addition to any available remedy at law, the Company shall be entitled to, without posting any bond, specific performance, temporary restraining order, temporary or permanent injunction, or any other equitable relief or remedy which may then be available; provided, however, nothing herein shall be deemed to relieve the Company of its burden to prove grounds warranting such relief nor preclude Executive from contesting such grounds or facts in support thereof.  Nothing herein contained shall be construed as prohibiting the Company from pursuing any other remedies available to it for such breach or threatened breach thereof.

13.    Applicable Laws and Consent to Jurisdiction. The validity, construction, interpretation, and enforceability of this Agreement shall be determined and governed by the laws of the Commonwealth of Massachusetts without giving effect to the principles of conflicts of law.  For the purpose of litigating any dispute that arises under this Agreement, the parties hereby consent to exclusive jurisdiction of, and agree that such litigation shall be conducted in, any state or federal court located in the Commonwealth of Massachusetts.

14.    Severability. The provisions of this Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.  The parties agree that the covenants set forth herein are reasonable.  Without limiting the foregoing, it is the intent of the parties that the covenants set forth herein be enforced to the maximum degree permitted by applicable law.  As such, the parties ask that if any court of competent jurisdiction were to consider any provisions of this Agreement to be overly broad based on the circumstances at the time enforcement is requested, that such court “blue pencil” the provision and enforce the provision to the full extent that such court deems it to be reasonable in scope.

15.    Miscellaneous, Waiver. Executive further agrees that this Agreement, together with the Exhibits incorporated by reference as if fully set forth herein, sets forth the entire employment agreement between the Company and Executive, supersedes any and all prior agreements between the Company and Executive, and shall not be amended or added to accept in writing signed by the Company and Executive.  Executive understands that he may not assign his duties and obligations under this Agreement to any other party and that the Company may, at any time and without further action or the consent of the Executive, assign this Agreement to any of its affiliated companies. 

16.    Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which taken together shall constitute one and the same agreement.

17.    Successors and Assigns. This Agreement shall be binding on the successors and heirs of Executive and shall inure to the benefit of the successors and assigns of the Company.

18.    Notices. Any notice required or permitted hereunder shall be in writing and shall be sufficiently given if personally delivered or if sent by registered or certified mail, postage prepaid, with return receipt requested, addressed:  (a) in the case of the Company, to Columbia Laboratories, Inc., 354 Eisenhower Parkway, Livingston, New Jersey 07039, attn.: Company CEO, and (b) in the case of Executive, to Executive's last known address as reflected in the Company's records, or to such other address as Executive shall designate by written notice to the Company.  Any notice given hereunder shall be deemed given at the time of receipt thereof by the person to whom such notice is given.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the dates set forth below.
	
		
	EXECUTIVE

/S/ Jonathan B. Lloyd Jones
Jonathan B. Lloyd Jones

Date:  January 15, 2013
	COLUMBIA LABORATORIES, INC.

/S/ Frank C. Condella Jr.
Frank C. Condella Jr.
President & CEO

Date:  January 15, 2013

Exhibit A
EMPLOYEE PROPRIETARY INFORMATION
AND INVENTIONS AGREEMENT

This Employee Proprietary Information and Inventions Agreement (the "Agreement") is made as of January 15, 2013, between Jonathan B. Lloyd Jones (referred to below as “I”, “My”, “Myself”, or “Me”) and Columbia Laboratories, Inc., having an office at 354 Eisenhower Parkway, Livingston, NJ 07039 (referred to below together with its subsidiaries and affiliates as the "Company").
    
RECITALS

A.    The Company is engaged in a continuous program of research, development, production, distribution, and marketing with respect to its present and future business; and

B.    I understand that My employment with the Company creates a relationship of confidence and trust between the Company and Me with respect to any information: (a) applicable to the business of the Company, or (b) applicable to the business of any client or customer of the Company, that may be made known to Me by the Company, any client or customer of the Company, or learned by Me during the period of My employment. I understand that this information constitutes a very valuable asset of the Company.

NOW, THEREFORE, in consideration of My employment by the Company and the salary and other employee benefits I will receive from the Company for My service, which in all cases are subject to Section 10(a) of this Agreement, I hereby agree as follows:

1.    Proprietary Information.  The Company possesses and will come to possess information that has been created, discovered or developed, or has otherwise become known to the Company (including without limitation, information created, discovered, developed or made known by or to Me arising out of My employment by the Company), and/or in which property rights have been assigned or otherwise conveyed to the Company, which information has commercial value in the business in which the Company is engaged.  All of the aforementioned information is hereinafter called "Proprietary Information." Any information disclosed to Me or to which I have access (whether I or others originated it) during the time I am employed by the Company, that the Company or I reasonably consider Proprietary Information or that the Company treats as Proprietary Information, will be presumed to be Proprietary Information.

By way of illustration, but not limitation, Proprietary Information includes trade secrets, processes, formulae, data and know-how, improvements, inventions, techniques, marketing plans, strategies, forecasts, customer lists, and finance and business systems.

 (a)    Company as Sole Owner.  I agree and acknowledge that all Proprietary Information, and all Inventions (defined below in Section 5(a) of this Agreement), shall be the sole property of the Company and its assigns, and the Company and its assigns shall be the sole owner of all patents and trade secrets and any other rights in connection therewith.

(b)    Assignment of Rights; Obligation of Confidentiality.  I hereby assign to the Company any rights I may have or acquire in all Proprietary Information.  At all times during My employment by the Company and at all times after termination of such employment, I will keep in confidence and trust all Proprietary Information and, except as I may be authorized to make disclosure in the ordinary course of performing My duties as an employee of the Company, I will not disclose, sell, use, lecture upon or publish any Proprietary Information or anything relating to it without the prior written consent of the Company.

2.    No Competition.  I agree that during the period of My employment by the Company I will not, without the Company's prior written consent, engage in any employment or other activity for any person, company or entity engaged in any business that is competitive with the Company's business.

3.    Other Proprietary Rights.  All documents, data, records, apparatus, equipment, chemicals, molecules, organisms, and other physical property, whether or not pertaining to Proprietary Information, furnished to Me by the Company or produced by Me or others in connection with My employment shall be and remain the sole property of the Company and shall be returned promptly to the Company as and when requested by the Company.  Should the Company not so request, I shall return and deliver all such property upon termination of My employment by Me or the Company for any reason and I will not take with Me any such property or any reproduction of such property upon such termination.

4.    No Solicitation.  I agree that for a period of one (1) year following termination of My employment, I will not solicit or in any manner encourage any employee of the Company to leave the Company's employ.

5.    Obligations Regarding Inventions.

(a)    I will promptly disclose to the Company, or any persons designated by it, and will not use Myself or disclose to anyone else at any time during or after My employment without the prior written consent of the Company, all improvements, inventions, formulae, processes, techniques, know-how and data (whether or not they can be patented, trademarked or copyrighted), made, conceived, reduced to practice or learned by Me, either alone or jointly with others, during the period of My employment, which are related to or useful in the business of the Company, or which the Company would be interested in, or result from tasks assigned to Me by the Company, or result from use of any premises owned, leased or contracted for by the Company (all said improvements, inventions, formulae, processes, techniques, know-how, and data initiated or developed during My employment shall be collectively hereinafter called "Inventions"); such disclosure shall continue after termination of My employment with the Company with respect to any Invention, which in all cases are subject to Section 5(c) of this Agreement.

(b)    Company Sole Owner of Patent Rights.  I will promptly and fully disclose the existence and describe the nature of any such Invention to the Company in writing and without request. I agree that all Inventions shall be the sole property of the Company and its assigns, and the Company and its assigns shall be the sole owner of all patents, copyrights, trade secrets, and other intellectual property rights (collectively, "Patent Rights") in connection therewith. I will, with respect to any such Invention, keep current, accurate and complete records that will belong to the Company and will be kept stored on the Company premises while I am employed by the Company and shall be turned over to the Company immediately upon termination of My employment. 

(c)    Assignment of Inventions and Patent Rights; Duty to Cooperate.  I hereby assign to the Company any rights I may have or acquire in all Inventions.  I further agree as to all Inventions and Proprietary Information to assist the Company in every proper way (but at the Company's expense) to obtain and from time to time enforce Patent Rights regarding the Inventions or Proprietary Information in any and all countries, and to that end I will execute all documents for use in applying for and obtaining such patents or copyrights thereon and enforcing same, as the Company may desire, together with any assignments thereof to the Company or entities or persons designated by it.  I agree further that these obligations to assist the Company in obtaining and enforcing Patent Rights in any and all countries shall continue beyond the termination of My employment, in return for which assistance after termination the Company shall compensate Me at a reasonable rate for time actually spent by Me at the Company's request on such assistance.

6.    Prior Inventions List.  [Please initial one of the following two entries.]

_____ As a matter of record, I have attached hereto a complete list of all inventions or improvements relevant to the subject matter of My employment by the Company which have been made or conceived or first reduced to practice by Me alone or jointly with others prior to My employment by the Company which I desire to remove from the operation of this Agreement; and I warrant that such list is complete.  

_JLJ_ No such list is attached to this Agreement, and I represent that I have made no such inventions or improvements at the time of signing this Agreement.

7.    No Breach of Confidentiality.  I represent that My performance of all terms of this Agreement and that My employment by the Company does not and will not breach any obligation of confidentiality that I have to others, which existed prior to My employment by the Company.  I have not brought or used, and will not bring with Me to the Company or use any equipment, supplies, facility or trade secret information of any former employer or any other person, which information is not generally available to the public, unless I have obtained written authorization for their possession and use, and promptly provided such written authorization to the Company.  I have not entered into, and I agree I will not enter into, any agreement either written or oral in conflict with this Agreement.

8.    Injunctive Relief.  I acknowledge and agree that the Company's remedy at law for a breach or threatened breach of any of the provisions of this Agreement would be inadequate and, in recognition of that fact, in the event of any such breach or threatened breach, I agree that, in addition to its remedy at law, the Company shall be entitled to equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy that may then be available.  Nothing herein contained shall be construed as prohibiting the Company from pursuing any other remedies available to it for such breach or threatened breach.

9.    Not Debarred. I warrant and represent that I have never been, and am not currently an individual who has been, debarred by the United States Food and Drug Administration (“FDA”) pursuant to 21 U.S.C. §335a (a) or (b) (“Debarred Individual”) from providing services in any capacity to a person that has an approved or pending drug product application.  I further warrant and represent that I have no knowledge of any FDA investigations of, or debarment proceedings against, Me or any person or entity with which I am, or have been, associated, and I will immediately notify the Company if I become aware of any such investigations or proceedings during the term of My employment with the Company.
10.    Miscellaneous Provisions.

(a)    Employment.  Nothing in this Agreement shall alter My at will employee status or be construed to create a specific term of employment or a promise of continued employment. Either I or the Company may terminate the employment relationship for any reason at any time, with or without notice.

(b)    Enforceability.  If one or more of the provisions contained in this Agreement shall, for any reason, be held to be excessively broad as to scope, activity, subject or otherwise, so as to be unenforceable at law, such provision or provisions shall be construed by the appropriate judicial body by limiting or reducing it or them, so as to be enforceable to the maximum extent compatible with then applicable law. If any provision of this Agreement shall be declared invalid, illegal or unenforceable, such provision shall be severed and all remaining provisions shall continue in full force and effect.

(c)    Assignment.  This Agreement is not assignable by Me without the written consent of the Company, which consent may be withheld for any reason or no reason.  In light of the very personal and critical nature of this Agreement, I recognize that it is unlikely such consent would ever be granted.

(d)    Entire Agreement.  This Agreement contains the entire agreement between Me and the Company with respect to the subject matter of this Agreement and supersedes all prior or contemporaneous oral or written agreements, statements, representations, or understandings between Me and the Company, or any employee of the Company. This Agreement may be amended only by a written instrument signed by Me and the Company.
(e)    Effective Date.  This Agreement shall be effective as of the first day of My employment by the Company, as affirmed or reaffirmed by my signature below.

(f)    Binding Effect.  This Agreement shall be binding upon Me, My heirs, executors, assigns and administrators and shall inure to the benefit of the Company, its successors and assigns.

(g)    Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey without regard to its rules on conflicts of law.

COLUMBIA LABORATORIES, INC.            EMPLOYEE

/S/ Frank C. Condella Jr.                /S/ Jonathan B. Lloyd Jones    

Frank C. Condella Jr.                    Jonathan B. Lloyd Jones
President & CEO                
                            

Exhibit B
INDEMNIFICATION AGREEMENT

This Agreement (“Agreement”) is made and entered into as of the 15th day of January 2013, by and between Columbia Laboratories, Inc., a Delaware corporation (“Corporation”) and Jonathan B. Lloyd Jones (“Indemnitee”).
    
WHEREAS the Board of Directors (the “Board”) has determined that the best interests of the Corporation require that persons serving as directors of, and in other capacities for, the Corporation receive better protection from the risk of claims and actions against them arising out of their service to and activities on behalf of the Corporation; and

WHEREAS, this Agreement is a supplement to and in furtherance of Article VI of the amended and restated by-laws of the Corporation, any rights granted by the Certification of Incorporation of the Corporation and any resolutions adopted pursuant thereto and shall not be deemed to be a substitute therefore nor to diminish or abrogate any rights of the Indemnitee thereunder; and

WHEREAS, Indemnitee is willing to serve, continue to serve and take on additional service for or on behalf of the Corporation on the condition that Indemnitee be indemnified according to the terms of this Agreement;

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Corporation and Indemnitee do hereby covenant and agree as follows:

Section 1.  Definitions.

For purposes of this Agreement:

(a)    “Change in Control” shall be deemed to have occurred if (a) there shall have consummated (i) any consolidation or merger of Company in which Company is not the continuing or surviving entity or pursuant to which shares of Company's common stock would be converted to cash, securities or other property, other than a merger of Company in which the holders of Company's common stock immediately prior to the merger have the same proportionate ownership of common stock of the surviving entity immediately after the merger, or (ii) any sale, lease, exchange or transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the company; or (b) the stockholders of the Company approve a plan or proposal for the liquidation or dissolution of the Company; or (c) any person (as that term is used in Sections 13(d) and 14(d)(z) of the Securities and Exchange Act, as amended (the “Exchange Act”)) shall become a beneficial owner (within the meaning of Rule 13d-2 under the Exchange Act) of 40% or more of Company's outstanding common stock; or (d) during any period of two consecutive years, individuals who at the beginning of such period constitute the entire Board shall cease for any reason to constitute a majority thereof unless the election, or the nomination for election by Company's stockholders, of each new director was approved by a vote of at least 50% of the directors eligible to vote who were directors at the beginning of the period. 

(b)    “Disinterested Director” means a director of the Corporation who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

(c)    “Effective Date” means the date first written above.

(d)    “Expenses” mean all reasonable attorneys' fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements and expenses of the type customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, or being or preparing to be a witness in a Proceeding.

(e)    “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent:  (i) the Corporation or Indemnitee in any other matter material to either such party, or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder.  Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Corporation or Indemnitee in an action to determine Indemnitee's rights under this Agreement.

(f)    “Proceeding” means an action, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or any other proceeding, whether civil, criminal, administrative or investigative, except one initiated by an Indemnitee pursuant to Section 11 of this Agreement to enforce Indemnitee's rights under this Agreement.

Section 2.  Services by Indemnitee.

Indemnitee agrees to serve as an officer or director of the corporation, and, at its request, as a director, officer, employee, agent or fiduciary of certain other corporations and entities.  Indemnitee may at any time and for any reason resign from any such position (subject to any other contractual obligation or any obligation imposed by operation of law).

Section 3.  Indemnification - General.

The Corporation shall indemnify, and advance Expenses to, Indemnitee as provided in this Agreement to the fullest extent permitted by applicable law in effect on the date hereof and to such greater extent as applicable law may thereafter from time to time permit.  The rights of Indemnitee provided under the preceding sentence shall include, but shall not be limited to, the rights set forth in the other Sections of this Agreement.

Section 4.  Proceeding Other Than Proceedings by or in the Right of the Corporation.

Indemnitee shall be entitled to the rights of indemnification provided in this Section if, by reason of Indemnitee's employment or service as an officer or director, Indemnitee is, or is threatened to be made, a party to any threatened, pending or completed Proceeding, other than a Proceeding brought by or in the right of the Corporation to procure a judgment in its favor.  Pursuant to this Section, Indemnitee shall be indemnified against Expenses, judgments, penalties, fines and amounts paid in settlement, actually and reasonable incurred by Indemnitee or on Indemnitee's behalf in connection with any such Proceeding if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal Proceeding, had no reasonable cause to believe Indemnitee's conduct was unlawful.  

Section 5.  Proceedings by or in the Right of the Corporation.

Indemnitee shall be entitled to the rights of indemnification provided in this Section if, by reason of his Corporate Status, Indemnitee is, or is threatened to be made, a party to any threatened, pending or completed Proceeding brought by or in the right of the Corporation to procure a judgment in its favor.  Pursuant to this Section, Indemnitee shall be indemnified against Expenses, judgments, penalties, fines and amounts 

paid in settlement, actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in connection with any such Proceeding if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation.  Notwithstanding the foregoing, no indemnification against such Expenses shall be made in respect of any claim, issue or matter in any such Proceeding as to which Indemnitee shall have been adjudged to be liable to the Corporation if applicable law prohibits such indemnification unless the Court of Chancery of the State of Delaware, or the court in which such Proceeding shall have been brought or is pending, shall determine that indemnification against Expenses may nevertheless be made by the Corporation.

Section 6.  Indemnification for Expenses of a Party Who is Wholly or Partly Successful.

Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of Indemnitee's employment or service as an officer or director, a party to and is successful, on the merits or otherwise, in any Proceeding, Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in connection therewith.  If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Corporation shall indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in connection with each successfully resolved claim, issue or matter.  For the purposes of this Section and without limiting the foregoing, the termination of any claim, issue or matter in any such Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

Section 7.  Indemnification for Expenses of a Witness.

Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of Indemnitee's employment or service as an officer or director, a witness in any Proceeding, Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in connection therewith. 

Section 8.  Advancement of Expenses.

The Corporation shall advance all Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding within thirty  (30) days after the receipt by the Corporation of a statement or statement from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding.  Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by an undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses.

Section 9.  Procedure for Determination of Entitlement to Indemnification.

(a)    To obtain indemnification under this Agreement in connection with any Proceeding, and for the duration thereof, Indemnitee shall submit to the Corporation a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification.  The Secretary of the Corporation shall, promptly upon receipt of any such request for indemnification, advise the board in writing that Indemnitee has requested indemnification.

(b)    Upon written request by Indemnitee for indemnification pursuant to Section 9(a) hereof, a determination, if required by applicable law, with respect to Indemnitee's entitlement thereto shall be made in such case:  (i) if a Change in Control shall have occurred, by Independent Counsel (unless Indemnitee shall request that such determination be made by the Board or the stockholders in the manner provided for in clauses (ii) or (iii) or this Section 9(b)) in written opinion to the Board, a copy of which shall be delivered to Indemnitee; (ii) if a Change of Control shall not have occurred, (A) by the Board by a majority vote of a quorum consisting of Disinterested Directors, or (B) if a quorum of the Board consisting of Disinterested Directors is not obtainable, or even if such quorum is obtainable, if such quorum of Disinterested Directors so directs, either (x) by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee, or (y) by the stockholders of the Corporation, as determined by such quorum of Disinterested Directors, or a quorum of the Board, as the case may be; or (iii) as provided in Section 10(b) of this Agreement.  If it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within thirty (30) days after such determination.  Indemnitee shall cooperate with the persons or entity making such determination with respect to Indemnitee's entitlement to indemnification, including providing to such persons or entity upon request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination.  Any costs or expenses (including attorneys' fees and disbursements) incurred by Indemnitee in so cooperating with the persons or entity making such determination shall be borne by the Corporation (irrespective of the determination as to Indemnitee's entitlement to indemnification) and the Corporation hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

(c)    If required, Independent Counsel shall be selected as follows:  (i) if a Change of Control shall not have occurred, Independent Counsel shall be selected by the Board by a majority vote of a quorum consisting of Disinterested Directors and the Corporation shall give written notice to Indemnitee advising Indemnitee of the identity of Independent Counsel so selected; or (ii) if a Change of Control shall have occurred, Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the Board, in which event (i) shall apply), and Indemnitee shall give written notice to the Corporation advising it of the identity of Independent Counsel so selected.  In either event, Indemnitee or the Corporation, as the case may be, may, within seven (7) days after such written notice of selection shall have been given, deliver to the Corporation or to Indemnitee, as the case may be, a written objection to such selection.  Such objection may be asserted only on the ground that Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 1 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion.  If such written objection is made, Independent Counsel so selected may not serve as Independent Counsel unless and until a court has determined that such objection is without merit.  If, within twenty (20) days after submission by Indemnitee of a written request for indemnification pursuant to Section 9(a) hereof, no Independent Counsel shall have been selected and not objected to, either the Corporation or Indemnitee may petition the Court of Chancery of the State of Delaware, or any court in the State of New Jersey in which such petition would be cognizable, for resolution of any objection which shall have been made by the Corporation or Indemnitee to the other's selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by such court or by such other person as such court shall designate, and the person with respect to whom an objection is so resolved or the person so appointed shall act as Independent Counsel under Section 9(b) hereof.  The Corporation shall pay any and all reasonable fees and expenses incurred by such Independent Counsel in connection with its actions pursuant to this Agreement, and the Corporation shall pay all reasonable fees and expenses incident to the procedures of this Section 9(c) regardless of the manner in which such Independent Counsel was selected or appointed.  Upon the due commencement date of any judicial proceeding pursuant to Section 11(a)(iii) of this Agreement, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

Section 10.  Presumptions and Effects of Certain Proceedings.

(a)    If a Change in Control shall have occurred, in making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 9(a) of this Agreement, and the Corporation shall have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption.

(b)    The person or entity empowered or selected under Section 8 of this Agreement shall make the determination of whether Indemnitee is entitled to indemnification as soon as practicable after receipt by the Corporation of the request therefore. 

(c)    The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that Indemnitee's conduct was unlawful. 

Section 11.  Remedies of Indemnitee.

(a)    In the event that (i) a determination is made pursuant to Section 9 or 10 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advance-ment of Expenses is not timely made pursuant to Section 8 of this Agreement, (iii) the determination of entitlement to indemnification is made by Independent Counsel pursuant to Section 9 of this Agreement and such determination shall not have been made and delivered in a written opinion within ninety (90) days after receipt by the Corporation of the request for indemnification, (iv)  or (iv) payment of indemnification is not made within thirty (30) days after such determination has been made that Indemnitee is entitled to indemnification or such determination is deemed to have been made pursuant to Sections 9 or 10 of this Agreement, Indemnitee shall be entitled to an adjudication in an appropriate court of the State of Delaware or the State of New Jersey , of Indemnitee's entitlement to such indemnification or advancement of Expenses.  Indemnitee shall commence such proceeding seeking an adjudication or an award within one hundred eighty (180) days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 11(a).

(b)    In the event that a determination shall have been made pursuant to Section 9 of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding commenced pursuant to this Section shall be conducted in all respects as a de novo trial and Indemnitee shall not be prejudiced by any reason of that adverse determination.  If a Change of Control shall have occurred, in any judicial proceeding commenced pursuant to this Section the Corporation shall have the burden of proving that Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.

(c)    If a determination shall have been made or deemed to have been made pursuant to Section 9 or 10 of this Agreement that Indemnitee is entitled to indemnification, the Corporation shall be bound by such determination in any judicial proceeding commenced pursuant to this Section, absent (i) a misstatement by Indemnitee or Indemnitee's representative of a material fact, or an omission of any material fact necessary 

to make Indemnitee's or Indemnitee's representative's statement not materially misleading, in connection with the request for indemnification, or (ii) prohibition of such indemnification under applicable law.

(d)    The Corporation shall be precluded from asserting in any judicial proceeding commenced pursuant to this Section that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court that the Corporation is bound by all the provisions of this Agreement.

(e)    In the event that Indemnitee, pursuant to this Section, seeks a judicial adjudication of Indemnitee's rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Corporation and shall be indemnified by the Corporation against, any and all expenses (of the kinds described in the definition of Expenses) actually and reasonably incurred by Indemnitee in such judicial adjudication, but only if Indemnitee prevails therein.  If it shall be determined that Indemnitee is entitled to receive part but not all of the indemnification or advancement of expenses sought, the expenses incurred by Indemnitee in connection with such judicial adjudication shall be appropriately prorated.

Section 12.  Non-Exclusivity; Survival of Rights; Insurance Subrogation.

(a)    The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the certificate of incorporation or by-laws of the Corporation, any agreement, a vote of stockholders or resolution of directors or otherwise.  No amendment, alteration or repeal of this Agreement or any provision hereof shall be effective as to any Indemnitee with respect to any action taken or omitted by such Indemnitee in Indemnitee's employment or service as an officer or director prior to such amendment, alteration or repeal.

(b)    To the extent that the corporation maintains an insurance policy or policies providing liability insurance for directors, officers, employees, agents or fiduciaries of the corporation or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person serves at the request of the Corporation, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee, agent or fiduciary under such policy or policies.

(c)    In the event of any payment under this Agreement, the Corporation shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Corporation to bring suit to enforce such rights.

(d)    The Corporation shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

Section 13.  Duration of Agreement.

This Agreement shall continue until and terminate upon the later of:  (a) ten (10) years after the date that Indemnitee shall have ceased to serve as a director, officer, employee, agent or fiduciary of the Corporation or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which Indemnitee served at the request of the Corporation; (b) the final termination of all pending Proceedings in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 11 of this Agreement.  This Agreement 

shall be binding upon the Corporation and its successors and assigns and shall inure to the benefit of Indemnitee and Indemnitee's heirs.

Section 14.  Severability.

If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever:  (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.

Section 15.  Exception to Right of Indemnification or Advancement of Expenses.

Except as provided in Section 11(e), Indemnitee shall not be entitled to indemnification or advancement of Expenses under this Agreement with respect to any Proceeding, or any claim therein, brought or made by Indemnitee against the Corporation.  For the purposes of this Section 15, a Proceeding in the right of the Corporation shall not be deemed to constitute a Proceeding brought or made by the Corporation.

Section 16.  Identical Counterparts.

This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement.  Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.

Section 17.  Headings.

The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

Section 18.  Modification and Waiver.

No supplement, modification or amendment to this Agreement shall be binding unless executed in writing by both of the parties hereto.  No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

Section 19.  Notice by Indemnitee.

Indemnitee agrees promptly to notify the Corporation in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder.
                            

COLUMBIA LABORATORIES, INC.

/S/ Jonathan B. Lloyd Jones                By: /S/ Frank C. Condella, Jr.        
Jonathan B. Lloyd Jones, Indemnitee                Name: Frank C. Condella, Jr.
Title:    President and Chief                                             Executive Officer
Signed on January 15, 2013, in 
Livingston, NJ

I, Michael McGrane, Secretary, certify that the Board of Directors has authorized the Corporation to enter into this Agreement by a resolution adopted at a meeting of the Board held on January 15, 2013.

/S/ Michael McGrane        
Michael McGrane
Secretary

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